3 ways cities can help accelerate the circular economy transition

Beautiful cityscape in Malmo, Sweden; canal at sunset. The city is part of the CircPro project, which applies circular economy principles to government procurement processes.

The process of embedding circular economy principles in cities has been gathering support as an optimal pathway for improving sustainability and resilience without compromising economic growth, wealth and well-being.

For almost a decade, we have witnessed a shift in political priorities and resources towards practices that prioritize sustainability, with the circular economy transition really emerging in the past few years. The European Union is actively participating in this transformation with the EU’s Circular Economy Package (PDF), which consists of the EU Action Plan for the Circular Economy and the Plastics Strategy, which aims to make all plastic packaging recyclable by 2030.

However, such a wholesale transition entails fundamental changes in infrastructure, logistics, social behavioral patterns, business models and spatial organization.

We will have to deal with complex and slow-changing systems that require a re-conceptualization of fundamental activities in cities. This makes the transformation from a linear to a circular economy a highly challenging and time-consuming process that requires the involvement of all actors along the value and supply chain, as well as institutions/governments and citizens.

What is required?

1. Think in material flows and value retention

In a finite-resources world, cities must start thinking and designing circular services and systems. Those should aim to decouple economic growth from virgin material extraction, promoting regenerative resources (biobased materials, renewable energies) and keeping materials in the loops as long as possible.

Urban metabolism analysis can help explain the complexity of materials. This analysis can identify the high leverage points for circular economy models and define the intervention points that require less effort and provide high outputs. Materials’ information and their geographical distribution within cities remain a black box in most places.

Cities must re-evaluate existing stocks and the flow of materials. Ingenuity is required to keep these materials in the loop and maintain their high-value quality. A study for the city of Melbourne shows the material stock and embodied energy across the city. This information should be used to develop optimal strategies to reuse and revalue the material.

Melbourne's embodied energy and material stocks.

2. Work together across diverse stakeholders to close loops

Material and value streams in cities are not only intensive and complex but also involve multiple stakeholders, such as citizens, the industry, retailers, farmers and public authorities. The process of closing material loops requires close collaboration as each stakeholder relies on the other in this process.

For example, in order for manufacturers to create circular products of reused/recycled materials, they require that consumers and retailers return the packaging or items that go into their creation or that waste management agencies provide them with recycled material.

Cities can be the central point in these interchanges. Municipalities have the power to involve citizens in incentivized schemes such as deposit-refund initiatives, already implemented in many European countries and recently approved in England. Urban governments also can promote policies for sharing and leasing instead of buying; provide frameworks for improving collection and sorting capacity; and maximize the use of existing stocks within their geographic boundaries.

3. Offer leadership and creative vision

Current regulatory frameworks are designed with linear processes in mind, which can hinder the adoption of circular economy processes. The European Commission already has prioritized accelerating the transition, now it is time for cities to take the lead within their own neighborhoods.

Cities must embed circularity in their policies and strategies, prioritizing reducing over recycling, upcycling over downcycling and reusing over throwing away. By consulting and collaborating with others, cities and governments can overcome challenges more effectively and can tackle many environmental, social and economic problems. What's more, embracing circular economy principles can provide a framework for stimulating local entrepreneurship and innovation. 

The role of public procurement

The European North Sea Region spends 14 percent of its GDP (PDF) through public procurement mechanisms, so it stands to reason that public procurement processes could be one vehicle that will enable a large-scale transition towards a circular economy.

The challenge is that governmental (and corporate) procurement practices are linear by nature and not generally conducive to circular solutions. That's because procurement agencies are responsible for buying products, but they are usually not involved in how materials and resources are used or disposed of.

The CircPro project (PDF) (an initiative managed by our firm Bax & Co.) was formed with the goal of harmonizing circular procurement practices in the North Sea Region. It includes 12 partners such as Rijkswaterstaat (the Netherlands ministry for infrastructure management), Zero Waste Scotland and the city of Mälmo, Sweden, that have an interest in standardizing practices in similar areas — everything from construction to office furniture.

The project is focused on developing and scaling circular business models as well as expanding the market for providers that can help deliver: the initial goal is to help reduce raw materials consumption, waste and carbon dioxide emissions by 20 percent.

The network will promote the development and adaptation of a common circular procurement framework, business models and a roadmap meant to accelerate the uptake of more circular procurement processes for products and services.

A critical focus on plastics

Europe generates around 16 million metric tons of plastic packaging waste per year, which makes up around 40 percent of all plastic consumption. In 2016, just 41 percent of plastic packaging was recycled, creating a severe gap between the amount of plastic generated and the amount recycled.

Regions in Northwest Europe struggle to generate effective incentives to modify social behavior in order to decrease generation and improve recycling of plastic packaging and other plastic consumer goods waste. Furthermore, it is a challenge to encourage circular innovation in how small and medium enterprises (SMEs) design, produce and treat these materials.

The REWRAP project, currently being considered by Interreg, aims to implement a consistent incentives-based system for individuals to improve their sorting quality and reduce their waste generation. The idea is to create a methodology that will promote and accelerate innovation in hubs across Northwest Europe.

The initiative also will pilot innovative incentive-based technologies, such as smart bins coupled with apps. This should enable cities to engage and incentivize individuals, measure how these systems affect for behavior, and allow the transfer of credits and rewards.

These are the two primary goals:

  • Reduce the volume of waste generated by plastic packaging and plastic consumer goods by 20 percent, by increasing reuse and reducing consumption by 20 percent.
  • Increase the recycling rate of plastic packaging and plastic consumer goods by 20 percent, by making it simpler for individuals to sort items. 

Circular innovation in cities

To overcome the transition challenges and thus accelerate circular economy models in urban and peri-urban areas, we need to adopt new concepts of business creation, business incubation and acceleration of circular solutions.

Applied to circularity, putting the cities at the front and involving the appropriate knowledge partners in the process, a hybrid combination of these methodologies can accelerate the effective and sustained change towards urban sustainability. The behavioral change requires a much higher involvement of citizens, public authorities and industry, but also requires proof of the utility and potential of organic waste — an average of 96 million tons of organic waste is generated yearly in Europe, along with $162 billion in associated costs only for food waste, from which only 32 percent is recycled.

A consortium of six municipalities and 16 industrial and academic leading players is putting together a proposal to accelerate circularity through systemic change by overcoming institutional, governance, behavioral factors and fostering connectivity.

Each area wants to implement a physical circularity innovation hub and execute at least 1 pilot demonstrating advanced technical, digital and social circular innovations. These hubs host and bring together a representative sample of each urban area, connecting them with technical and knowledge experts from multiple disciplines. Their goal is to accelerate circular entrepreneurship — namely, to develop and mainstream circular solutions while learning from practice, demonstrate the circularity potential and share the acquired know-how.

Conclusion

For a fully integrated circular economy, it is becoming increasingly clear that stakeholders all along the supply chain will have to be involved in and collaborate for the transition to happen. We are already seeing how governance is changing the way decisions are taken, with local authorities having more flexibility and taking the lead when it comes to innovation.

All in all, driven by the will of becoming more livable and sustainable, cities recently have become the testing ground for circular initiatives, often inspiring higher levels of governance to follow. However, in order to make the transition effective, all levels of governance need to be aligned — thus ensuring a stimulating and coherent legal framework. Furthermore, to reach substantial change and implement more desirable strategies — such as moving from recycling to design for prevention — consumers, producers and regulators need to work in line.

Circular economy is about the synergies between sectors, actors and stages of the value chain of the materials we use and it is about the design and the efficiency of the logistics that enable these synergies. The slow industrial revolution that we are witnessing — often referred to as Industry 4.0 — is a major opportunity, offering us key technologies and tools based on data to support the logistics required for this transition.