Every year, more than 1.4 billion units of clothing are imported into Australia, and over 880 million are sent to landfill (more than half the amount imported). The rate at which we’re buying new clothes isn’t changing, even in a cost of living crisis. In fact, Australians buy an average of 56 new items of clothing each year, and are the largest consumers of new clothing per capita in the world.
[Téa van den Brenk is an Economist at Deloitte Access Economics, proponent of feminist economics, and enthusiast for second-hand clothing. This article draws on the thesis she developed for her Honours Degree in Economics, which analysed Australia’s textile waste crisis using feminist economic and policy frameworks. It highlighted why textile waste is often part of women’s ‘invisible mental load’ and argued for economic regulation to change market incentives. Since then, some of those regulations have come into effect.]
Textile waste is a wicked problem. The ‘fast fashion’ industry is enabled by technological advancement in supply chains – but in some cases, also by modern slavery and limited accountability on the supplier in terms of waste management, once products are in the hands (or on the bodies) of consumers.
Textile waste is also an economic problem. Understanding the drivers of the problem using an economic framework is useful because it informs how incentives can be changed to change behaviours – on both the supply side (producers) and the demand side (consumers). Economic frameworks help to define this problem on a few dimensions.
- First, we have too many clothes. In economics, that’s called a ‘surplus’. Supply of the good exceeds need, or demand.
- Secondly, the pace of fashion and social expectations means that we’re throwing away useable clothing because it doesn’t serve us. Economics would call this an issue with ‘utility’ – the value we get from buying new clothes rarely lasts. Because utility or item is low, demand is high – we want a new item of clothing for every event!
- Thirdly, the pace at which goods are thrown away creates a waste problem. In economics, we’d call that an issue with circularity – that is, we’re not good at working out how to reuse the resources in the system to meet more demand.
- Finally, the incentives facing suppliers and consumers to change their behaviour are limited, because the market doesn’t assign economic value to the social and environmental costs of fast fashion. In economics, we call that an issue with externalities – because those issues sit externally to the value which the market assigns products. As with most municipal waste issues, that means we look to non-market (non-commercial) actors to solve the problem – including government solutions like landfill, recycling and community composting, and to not-for-profits, like charity-run op shops.
Put together, this is a nightmare! Or as economics would tactually call it, a ‘market failure: the faulty allocation of resources in a market’. Defining the problem in this way isn’t about jargon. It’s a means to an end – because economics can inform how to address these challenges. To address this market failure, economics tells us to consider a variety of regulatory levers, some of which are outlined below.
Pricing externalities
To build the social and environmental impacts of textile waste into demand and supply behaviours, there are ways to ‘price’ these externalities by reflecting them in the cost of producing and consuming the products. To build these costs into consumption, this may mean regulating fast-fashion imports, or making it more expensive for Australian consumers to purchase fast-fashion from overseas by imposing tariffs. Interestingly, Trump’s current tariffs seem to have had an impact on fashion consumption in the United States, noting the concerning impacts of generalised tariffs on smaller businesses and domestic producers who rely on imported materials. This mechanism may also reduce surplus by reducing the amount of clothing imported.
On the supply-side, textile waste externality pricing in Australia is currently limited to the Seamless product stewardship scheme. The scheme is voluntary, and is funded by a 4 cent levy that is paid by producers for each piece of clothing they put on the market. The scheme became operational on the 1st July 2024, and funds raised are intended to go towards the sorting and collecting of clothing waste and educational campaigns, with intentions for the scheme to become mandatory if less than 60% of producers volunteer. Currently, only 70 companies have volunteered to be a part of the scheme – a fraction of the required total.
In global comparison, a new fast-fashion tax in France proposes a $16 tax per fast fashion garment by 2030, which, alongside constant improvements in modern slavery protections, marks notable improvements to the policy landscape. In the last month, the EU has also approved a new directive that hopes to reduce the footprint of textile waste by having the fashion industry cover all textile recycling costs. In practice, this means brands and manufacturers will fund the collection, sorting, and recycling of all textiles. The initiative aims to shift costs and blame from taxpayers to producers, incentivizing more sustainable product design and ultimately reducing the European Union’s textile waste.
Changing norms, utility, and increasing education
Education and desire for change also plays a role in changing the norms around textile waste, and some campaigns have sought to create change by increasing consumers’ awareness of externalities. This plays out on a vast ethical spectrum. On one end, ethical businesses bring consumers along on the journey of sustainable textiles – what they are, why they matter, and what we can all do to make a difference. On the other end of the spectrum are fast-fashion marketing schemes that inflate the illusion that consumers are to blame. A key example of this is ‘greenwashing’: a marketing strategy where companies communicate high levels of environmental performance whilst actually maintaining low levels of environmental performance. This is seen when companies incentivise consumers to buy pieces from sustainable collections, despite the company’s broad environmental impact being extremely damaging. This creates the illusion that it is the responsibility of the individual to consume ‘sustainable’ products, without there being depth of accountability for companies to commit to consistent sustainable production.
Whilst educating consumers on the gravitas of textile waste and what households should change may be helpful for some, there are core caveats to this having widespread impact:
- Individuals who are price sensitive will keep buying fast-fashion, since it is almost always more affordable than any form of ethical fashion (whether this be second hand or new), especially in the current cost-of-living crisis.
- In some instances, people may not have the freedom to choose their clothes (e.g. uniforms).
- Consumer-centric reforms often place the mental load, blame, and burden of change on individuals within the household who are responsible for the purchasing, maintenance, and disposal of clothing (usually a woman). A note on the feminisation of demand-centred blame: Consumer blame is specifically targeted at young women and their buy-in to trend cycles. This reasoning does not assess the structural and social drivers of this demand, and refuses to recognise the irony of blaming a demographic who have been socially chained to their clothing. Clothing holds social value for all people, but the social importance of clothing is particularly true for young women, for whom clothes are a contentious topic, and a key point of social connection. Similarly, women are often left responsible for the unpaid domestic duties of producing (in modern-slavery environments), purchasing, maintaining, and disposing of clothing (a lens used prolifically in textile management and fashion literature) – an invisible and complex gendered angle that is often left out of the consumer-blame discussion.
These caveats (which are largely issues of equity), mean that changes to consumer attitude will never be enough to create significant change in the textile waste cycle. As such, they justify the application of several, simultaneous interventions – a combination of regulation, education, and investment in circularity.
Invest in circularity
Even in the instance that the levers above are considered or implemented, a problem remains: what about the actors who are unwilling to change, or who are sensitive to price? Despite a lack of government intervention in the textile waste landscape, some organisations within the system are attempting to address this failure.
This mainly occurs through the opportunity-shop model, which has existed in Australia since the 1800s (originally as a way to redistribute textile and homeware goods to those in need). More recently, the Australian op-shop sector has found itself playing an unexpected role in the textile space as the main redistributor of Australian textile waste. Despite the feel-good effects of donating clothing, the direct consumer-to-charity relationship results in a surplus of clothing that charity shops must sort through. This process is burdensome, resulting in stores being overwhelmed with stock and being rendered as disposal sites, rather than redistribution centres. Surplus of clothing that are not sold can end up in domestic landfill, offshore landfill, or are sold to international clothing markets. The majority of donated clothing in Australia ends up in offshore landfill, creating a physical waste crisis in developing countries that contributes to worse health outcomes and qualities of life.
Whilst textile recycling facilities do exist in Australia, they are all are privately owned and operated, and despite private recycling efforts, the recycling rate for textiles is only an estimated 5% nationally. Between current rates of private textile recycling and op-shops being Australia’s most common household textile recycling mechanism, it is clear that government needs to invest in more effective recycling models to address the textile waste that will inevitably continue to exist (due to the caveats listed above), whether this be through domestic recycling infrastructure, or collaboration with offshore recycling facilities, rather than offshore landfill.
What we need
In reality, none of these regulatory levers are enough to tackle the market failure of textile waste on their own. Instead, these interventions are best taken together to change incentives for different types of actors (demand/supply) with different willingness/capacities to pay. Ultimately, and hopefully, a bolder government-intervention would slow the piling issue of textile waste in Australia, and create time and space for a meaningful, circular solution that doesn’t rely on consumers to do all the heavy-lifting.
