17 September 2021
Promoting better, greener and greater trade in ICT goods

Philip Dunne, Chair of the Environmental Audit Committee, makes a speech to the World Trade Organization Symposium, 25 Years of the Information Technology Agreement.

Presentation to the World Trade Organization Symposium,

25 Years of the Information Technology Agreement,

Geneva, 16 and 17 September 2021

Rt Hon Philip Dunne MP, Chairman, House of Commons Environmental Audit Committee

[Introduction by Ms Katarszyna Stecz, Chairperson, ITA Committee]

Thank you, Katarszyna, for that generous introduction, and congratulations on your election as Chair of the ITA. Congratulations also on the organisation of a comprehensive and highly informative symposium. I am sorry I am unable to be with you live or for the Q&A after my remarks.

Ladies and gentlemen, as I have the honour of speaking at the end of five sessions of intensive discussion to mark 25 years of the Information Technology Agreement, with much focus on its role and relevance for the future, I am not certain I shall be able to offer any strikingly new perspectives.

But I thought I should try, as the World Trade Organization contemplates a further expansion in the Agreement, to put this prospect into the context of the wider debate on climate change and to make some observations about the importance of promoting better, greener and greater trade in ICT goods. As the knowledge economy expands, and more and more goods contain electronics, the impact of hardware production, consumption and disposal at end of life bears increasingly on the global environment, as well as the energy demands to operate such goods.

During 2020 the Environmental Audit Committee of the House of Commons in the United Kingdom, which I chair, conducted a thorough inquiry into the issue of electronic waste and how it is treated in the circular economy. In the UK, as in the rest of the world, we are consuming more and more electrical and electronic goods. This trade is welcome: as we all know, it drives economic opportunities and improves the quality of our lives.

Electronic goods have a key role to play in sustainability. Devices and software connect us like never before. Earlier contributions have rightly highlighted the ways in which ICT products were crucial in combatting the effects of the COVID19 pandemic and in keeping the global economy and society connected. The devices which connect us reduce our dependence on long-distance travel for face to face meetings. They connect us more reliably; the software they run improves our ability to manage our environment, to monitor and control the energy we use and to reduce unwanted and damaging emissions.

There has been a welcome focus on reducing the energy consumption of electronic goods in use. Now we must examine how to reduce the environmental impacts of producing and disposing of these goods, in a way which maintains the innovative genius which animates the global trade in ICT while also minimising the all-too-common environmental damage which arises from the way we consume these goods.

In the coming weeks, the world’s focus will be on sustainability and the contribution we all must make to restoring the health of the planet. The UK and Italy are co-hosting Governments under the United Nations Conference of the Parties in Glasgow to address the negative impacts of climate change, and next year in Kunming, China hosts the conference to address the decline in global biodiversity. We must acknowledge the impact that the manufacture and disposal of ICT products has on the environment: in particular, the dangers of unsustainable and damaging practices in the sourcing of critical and rare minerals on which so much advanced ICT depends.

As you all know, our dependence on these materials is unlikely to diminish. Take lithium: an indispensable component of rechargeable power sources. Global demand for lithium will only increase as markets switch from conventionally-powered vehicles to battery electric vehicles, nudged by governments keen to reduce automotive emissions. New sources of these materials will have to be found: our progress towards net zero depends on it, as does the global trade in ICT. So what solutions can be presented to these challenges? How can we promote better, greener and greater trade in ICT goods?

I believe that the answer lies in the development of a more innovative, circular approach to how we consume and dispose of our devices, building on technological advances in the recycling of ICT and materials recovery.

On my Committee, my colleagues and I were genuinely shocked to learn how much electronic waste is generated in the UK by our patterns of consumption. The United Nations has estimated the amount of e-waste produced per head in the UK to be the second highest in the world: at 23.9 kg it far outstrips the European average of 16.2 kg and the global average of 7.3 kg. Much of it goes to landfill or is incinerated, or dumped overseas: some have estimated that the UK offshores as much as 40 per cent of the e-waste disposed of by consumers. That waste is often dumped, with toxic consequences for the environment and the local population.

The business models and consumer practices which have brought about this tsunami of e-waste are not the subject of my remarks today, although my Committee made some pointed observations about the sustainability of the current position and lack of accountability of internet marketplaces. Instead, I would like to look forward to potential solutions: promoting the development of the electronics industry, and the global trade in ICT, as an inspirer of innovation and a contributor to prosperity and sustainable development.

The colossal quantity of e-waste per capita produced in the UK is indeed shocking: but it has presented business opportunities. The UK Government’s clear focus on tackling the issue, through its Resources and Waste Strategy, building on legacy EU Directives, together with growing public awareness of the environmental challenges of e-waste, has attracted businesses keen to apply innovative approaches to recovering what is termed EEE—end-of-life, non-repairable or reusable electrical equipment. Because of the volume of e-waste produced in the UK, our skilled engineering base and our robust compliance systems, we have begun to attract valuable direct investment in the form of companies which have developed technologies to recycle and extract value from e-waste in an environmentally responsible way.

One such company, which has developed a low-temperature pyrometallurgical technology to recover precious metals and minerals from EEE products, while ensuring safe and secure disposal of any data, has recently established itself in the UK — and is due to open its first recovery facility in my West Midlands constituency, as it happens. The technology involved is more sophisticated than that used by existing bulk processors of e-waste and recovers a significantly greater proportion of high-value materials in a form available to reuse. 

This represents an exciting innovation: and I expect the model, once successfully deployed in the UK, can be rolled out in other jurisdictions to tackle and extract value from electronic waste.

You heard yesterday from Fredrik Forslund, of Blancco Technology, about the use of data protection technology in the ICT circular economy. It is vital for the sector to recognise the potential, and the value, in embracing circular, rather than linear, approaches to ICT products.

But recovering value from end-of-life products is only part of the picture. Because consumers increasingly demand an end to a culture where ICT products are seen as disposable: they are shocked by planned obsolescence as a business model and are dismayed to find that their electronic devices are often put beyond economic repair, even when simple faults develop or batteries cannot be readily changed or upgraded. Consumers are tech-savvy and they are keen to innovate: but they also have a sharp eye for value.

Following a recommendation made by my Committee, in July this year the UK Government brought in a ‘right to repair’ law, mirroring existing EU requirements, which requires manufacturers to make spare parts for certain devices available from a certain point after putting them on sale, and to continue to make them available for a period of between seven and ten years. In the field of ICT, the law at present only applies to television sets and other displays, and not to other popular ICT products in the UK.

There is already considerable pressure for this law to be extended. And this is where the ICT sector can grasp the opportunity. In jurisdictions with strong regulatory and compliance cultures, where governments are developing comprehensive policies to promote a circular economy in all consumables, it surely makes sense to develop an approach which embraces repair and re-use: building brand confidence and brand loyalty, increasing the overall longevity of products, but ultimately securing a more sustainable approach.

Some of us may see risks to current levels of ICT trade in stepping away from a linear model. It is right to acknowledge those risks: and after all, many may be unwilling to change what seems to be a winning formula.

I am calling for you in the next phase of the ITA, to examine opportunities to develop a new model based on a circular economy and sustainable trade in ICT goods.

As I have argued, new circumstances for business encourage fresh thinking, innovative technological approaches and new value propositions. If we value the raw materials in our devices, extraction and salvage approaches will develop. If we value reusable IT, secure data wiping will ensure that laptops can safely be sent for refurbishment and reuse.

A circular approach to consumer use of ICT can lead to significant economies of scale and specialisation, as businesses collaborate at different stages of a product’s lifecycle.

Adopting a circular approach will inevitably lead to better and greener trade: the carbon emissions involved in ICT trade will diminish and the industry’s impact on biodiversity and water resources will lessen.

A circular economy in ICT products will promote the retention of economic value in goods, by keeping valuable and highly manufactured devices working and in circulation: the value of trade in such devices will always be higher than their value to the mineral extractor or the scrap merchant. This is not a new proposition: it was compellingly made by the World Economics Forum, the International Labor Organization and the International Telecommunications Union in their New Circular Vision for Electronics in 2019. But it is one which it is easy to overlook, given the constant drive for innovation in the sector.

The circular economy in ICT will be labour and skills-intensive: repair, re-use and remanufacturing jobs will be to the fore. The potential for skills development and job creation is considerable, as I am sure many of you will appreciate.

If you still need persuading of the merits of a more circular approach to ICT, just pause to think about what might happen if a linear approach to the manufacture and trade in ICT products continues.

It seems to me that the risks of not taking this opportunity, and of continuing a linear approach, all have the capacity to inhibit global trade flows:

The first is perhaps the most obvious. The recent reports from the IPCC are the starkest yet in terms of the risk to the global economy from unmitigated emissions and the climate disruption and environmental damage which may result. The potential of disruption to the global trade in goods from increased climate instability is, in my view, real enough to merit action across all sectors to mitigate this risk.

Environmental and carbon-related regulatory measures will inevitably have an impact on the manufacture of ICT products in those states which introduce such measures, potentially leading to divergence in product standards: should divergence in standards occur, trade flows could be slowed or disrupted.

Thirdly, failure properly to realise the value and the economic potential of re-use of manufactured electronic equipment and materials represents a substantial missed economic opportunity: the linear approach which prevails at present will not unlock the employment opportunities which a circular approach would promote.

And—to state the obvious—trade cannot occur unless there are willing purchasers for goods. In the United Kingdom, we see that consumers are far more prepared to take environmental factors into account when making product choices than they used to be. If manufacturing practices in the sector do not respond to consumer signals demanding greater sustainability, the risk is that consumers in some countries will begin to turn away from internationally-traded ICT products, leading to downturns in trade.

Chair, ladies and gentlemen, I’m going to finish my remarks to the final panel of this excellent symposium on an optimistic note. Trade fuels the global economy and is a remarkable driver of prosperity. The Information Technology Agreement has facilitated genuine progress throughout its 25 years. As participating states contemplate a further expansion to the Agreement, now is the time to ensure that the next chapter in the ITA’s successful history is one of better, greener and greater trade in ICT goods.

Thank you.