Clothing waste is a major climate culprit. Far more Danes must therefore join the second-hand wave. The responsibility lies with both consumers and politicians. A good place to start would be to deal with the VAT on used goods - let's exempt circular companies that sell used goods from VAT.
The production of clothing accounts for around 10 percent of the world's total CO2 emissions. That's more than aviation and shipping combined (Information, 2019). And the consumption of clothing and shoes is increasing - in fact, it is expected to increase globally by over 60 percent by 2030 (Forbrugerrådet Tænk, 2022). If you take the clothing consumption of Danes alone, it is on average 35 percent higher than the rest of the world's population.
"Clothing production accounts for around 10 percent of the world's total CO2 emissions. That's more than aviation and shipping combined"
In other words, clothing waste is a climate culprit in the heavyweight class. And the responsibility to change it lies first and foremost with us consumers. We need to change our habits; Buy less new clothes, buy clothes of better quality that will last longer and last longer, but not least, instead of buying new, we need to choose more secondhand.
And although secondhand has been on the rise in recent years, especially among women, 64 percent of Danes do not even consider secondhand when shopping for clothes (Yougov/Forbrugerrådet Tænk, 2022). As a “secondhand fashionista”, this annoys me. And it also really surprises me at a time when the climate agenda is so salient.
I recently swapped my career as a consultant at Christiansborg for life as an entrepreneur and owner of the second-hand universe Grade A Copenhagen. The ambition is to set a new standard for second-hand, which can compete with the experience of buying new, so that many more Danes get on the second-hand bandwagon. When you, like me, grew up in the provinces, where second-hand shops are mostly associated with an indefinable smell of estates and wildebeest, and where there is a long way to go between second-hand gold, you know what you are up against.
"Grade A Copenhagen's ambition is to set a new standard for secondhand, one that can rival the experience of buying new, so that far more Danes get on the secondhand bandwagon."
Overcoming existing prejudices and barriers therefore requires not only entrepreneurs with great fighting spirit and a top-notch communication toolbox - it also requires political action. An analysis from the Danish Chamber of Commerce from March this year showed that it is especially the expectation of a good price that tempts consumers to buy second-hand. If more consumers are to look in a more sustainable direction the next time their wardrobe needs to be upgraded, financial incentives are therefore a good place to start. Fortunately, there is a low-hanging fruit just waiting to be picked - or rather abolished - the second-hand VAT scheme.
As it is today, shops that sell second-hand clothes almost never buy goods with VAT on them, which makes it difficult to do business on normal terms with purchase and sales VAT. These companies therefore have the opportunity to use the so-called second-hand VAT scheme, where VAT is paid on the profit instead. But why not simply exempt circular business models from this tax? Since the goods are purchased by private individuals, VAT has already been paid on them once. Add to this the fact that second-hand VAT must be assumed to constitute a relatively small revenue for the treasury, but its abolition would be a strong signal and driving force for the transition to a more circular economy.
"If more consumers are to look in a more sustainable direction, economic incentives are a good place to start. A low-hanging fruit is to abolish the used VAT system."
In an effort to raise awareness of this obvious initiative, I have therefore just submitted a citizens' proposal to abolish the second-hand VAT. Specifically, I imagine that those companies that are currently entitled to use the scheme will be able to apply for exemption in the future.
If we are to take on the task of creating a more sustainable future, then policies need to be pulled in the right direction. And here, carrots rather than sticks are a good way to go. Or as they say in the USA: Money talks.
