Tag: economy

A recent report by SINTEF for the Wasted Textiles project looks into the value chains of consumer textiles in Norway and calculates the impacts of different scenarios of Extended Producer Responsibility (EPR) in the Norwegian economy, based on recommendations for a Norwegian EPR scheme.

The main question asked was: what are the impacts of an EPR scheme for Norway based on different fees? The authors further ask: What could be the reduction in the consumption of textile products by households when they become more expensive? And with reduced consumption of textile products, what would be the impacts to the economy, jobs, and carbon emissions?

The authors of the report use SUMS-Norway, a trajectory macroeconomic model, to quantify how the changes in household demand will affect the Norwegian economy. SUMS-Norway is based on the Norwegian ‘supply and use’ table, and represents the interlinkages between industries in the economy, the use of products from all other industries, and how the changes in demand for different products will generate spillovers in the rest of the economy.

Different scenarios with different results

In the report, the authors compare different scenarios that are based on suggestions for the implementation of a Norwegian EPR scheme, with the suggestion of an eco-modulation based on principles suggested by the Wasted Textiles project for a Targeted Producer Responsibility (TPR) scheme. They show that eco-fees that use number of items instead of weight, lead to a higher decrease of synthetic textile products compared to those made of predominantly natural fibres. Scenarios that increase the eco-fee based on predominantly synthetic fibres also lead to significantly higher reduction in the consumption of synthetic textile products and can have important effects on other impacts, such as microplastic pollution and plastic waste in landfills in developing countries.

Some of the most important results highlighted in the report:

• Textile consumption would decrease. Eco-fees would be typically integrated in product prices, indirectly transferring waste management costs to consumers and increasing the prices of textile products. Higher fees would potentially lead to higher decrease of textile purchase by households.
• Money saved by households from a lower textile consumption would be spent elsewhere.
• There will be shifts in the economy due to change in household spendings. This will lead to job losses in the textile industry, but gains in other industries as consumers spend money on other goods and services.
• By shifting consumption from textiles to other goods and services, carbon emissions in Norway would increase. This is because of higher economic activity in other industries, while the carbon emissions decrease linked to textile demand, would occur in other countries.  
• Most of the impacts associated with Norwegian purchase of textile products are felt elsewhere: 88% of the economic value added, 98% of the employment, and 97% of the carbon emissions in the value chain of textiles consumed in Norway happens in other countries, mostly in Asia.

The authors further show that the impacts on the Norwegian economy are heavily dependent on three factors:

• Firstly, the size of the fee. In a situation where the fees are similar to those practiced in France or in the Netherlands, two countries with established EPR schemes, the fees would average 0.61 NOK per item. This would result in a reduction of consumption of 0.6% to 1% in the number of items purchased per year, mostly felt for products made up of mainly synthetic fibres. By 2035, this would lead to households spending 3.6% less in textile products than in a baseline scenario with no eco-fees, corresponding to 1.6 billion NOK, or 0.1% of total household expenditure. This would lead to a loss of 750 million NOK of value added and over 700 jobs disappearing in the Norwegian textile value chain. Most of the economic and job losses would be in the retail industry.
• The second factor is where the eco-fees are invested. In 2035, eco-fees collected would amount to 192 million NOK. The investment of 75% of these eco-fees in textile waste management would lead to an increase of 74 million NOK in value added and 61 new jobs in the waste management industry.
• The third and most important factor is where households would spend the money they saved by purchasing less textile products. If households spend more money on products and services according to the same distribution as they used in 2022, this would result in additional 2 billion NOK in gross domestic products (GDP) across the entire Norwegian economy in 2035, and over 1,500 additional jobs, including the losses from the textile value chain. If households spend the money on services only, job gains could increase to over 2,000. This is because most of textile products are imported, and changes in their demand mostly affect the textile retail industry, while services have a highly integrated value chain, generating spillover effects across multiple Norwegian industries.

Download the report here.