Regenerative eco-innovation, regulation and the circular economy

The limitations of a linear economy are widely recognised and government policies to support the Circular Economy (CE) potentially offer a way of maintaining resources in the long term and reducing economic, social and environmental costs (Ghisellini et al., 2016; Leider and Rashid, 2016). One target for policy makers is to stimulate eco-innovation (Rennings, 2000). There is much evidence that regulation drives eco-innovation (e.g. Demirel and Kesidou, 2011; Horbach, 2016). However, there is no one size fits all regulation, nor one type of eco-innovation.

Despite proposed ‘principles for environmental regulatory quality’ (Ribeiro and Kruglianskas, 2015), designing effective environmental regulation remains a complex task for policy makers. Moreover, the most promising type of eco-innovation for the CE is arguably regenerative eco-innovation (Hofstra and Huisingh, 2014), which also happens to be the most challenging to develop and diffuse (ibid.). This challenge needs to be most urgently addressed in sectors where the impacts on the environment are greatest and where the rate of innovation is slow. Construction is one such sector. The sector is the largest consumer of natural resources, generating between 25-30% of all waste in the EU (Eurostat, 2016), and projects are typically destructive for the natural environment.

To support the transition to a CE, and the broader target of the UN 2015 Sustainable Development Goal 9 (UN, 2015), it is vital that construction projects are sensitive to the natural and human capital. Further insights are needed to help shape environmental regulation and stimulate regenerative eco-innovation in the construction and demolition sector. In this paper we focus on waste recovery and disposal in the UK. Recent and planned large construction projects have brought into the foreground innovative uses of spoil to offer a net positive environmental impact. But existing Environment Agency regulation on waste recovery and disposal, linked to the EC Waste Directive, appears to be hindering the eco-innovative use of spoil. We consider the wider ramifications of the current regulation and its unintended consequence in hampering regenerative eco-innovation. We inform the study with an extensive review of the secondary literature and interviews with key construction industry stakeholders affected by the regulation.