Can going circular nurture an urban economic recovery?

6 Minutė; -tės; -čių skaitymo 2020-10-23

By learning from circular economies of the past, cities can lead the way to a more sustainable, post-pandemic future.

In brief
  • With a growing global urban population, cities need to act today or risk putting an even bigger strain on the planet tomorrow.
  • By leading the transition to a circular city, city mayors can steer us to a more resilient and sustainable future.
  • Nurturing the circular economy will require a city-wide effort – one that mobilizes stakeholders around a shared, citizen-centric vision.

If the COVID-19 crisis has forced you to rethink how much you consume, join the club. According to the World Economic Forum,lockdowns and the threat of choppy economic times ahead have not surprisingly led to a more cautious consumer. 

When it comes to protecting our health, though, hygiene concerns have trumped everything else. So, around the world, rivers and oceans are filling up with discarded face masks, gloves, plastic bottles and bags. And given that cities produced 50% of the world’s solid waste before the crisis,they’re likely to be responsible for at least half of it. With 68% of the world’s population expected to be urban by 2050,3 cities need to act today or risk putting an even bigger strain on the planet tomorrow, particularly when household consumption returns to more normal levels. 

This gives city mayors the responsibility to steer us to a more resilient and sustainable future. But it also allows them to help their economies recover from the crisis. How? 

By leading the transition to a resilient, circular city. 

Going circular will also bring the jobs, savings and income cities need to recover from the pandemic. 

The cities of the past could hold the key to the cities of the future

The first cities were circular by design. That meant they were self-sustaining and self-regenerating, built on a virtuous cycle of activities that kept products and materials in use. Yet since the Industrial Revolution, the world’s economy has been linear – using primary resources to produce goods, then disposing of the waste. 

This “take-make-waste” approach may have made us richer, but it’s also placed unsustainable demands on finite resources. And each year, just 9% of the 92.8 billion tonnes of minerals, fossil fuels, metals, and biomass that enter the economy are reused.4

Returning to a “reduce-reuse-recycle” model will allow cities to feed, house, and transport citizens in a more sustainable way. For example, the recycling of infrastructure assets or multimodal mobility – or the integration of different transport types such as public transport and cycling – are starting to pick up momentum as circular initiatives.

Going circular will also bring the jobs, savings and income cities need to recover from the pandemic. The OECD estimates that moving to a circular economy could boost employment by up to 2% (pdf).5 Cities and businesses could also make substantial savings from using recycled building materials, turning waste into fuel to power buses and keeping food waste out of landfills.

Progressive cities are already leading the way

Adopting a circular economy is vital for the C40 Mayors’ Agenda for a Green and Just Recovery.6 One of its member cities, Rotterdam, has committed to cutting its use of fossil raw materials by 50% by 2030 and be completely circular by 2050.7 In New Zealand, in Auckland, they are recycling construction waste8 to assist in rebuilding the Pacific Islands affected by cyclone damage.

Cities in the US are also experimenting with circular programs and pilot projects. Both Philadelphia and Portland have adopted Circular Economy Action plans (pdf),9 while 28 cities, to date, have signed C40’s Zero-Waste Initiative10 committing to “reuse and recycle” arrangements, e.g., London’s Circular Economy Route Map that could potentially contribute more than £2.8b a year by 2036.

 So, what can city mayors learn from these and other examples?

The five catalysts for change

In our many conversations with city leaders and our research into circular programs, we’ve identified five key areas that will serve as catalysts in transitioning to a circular economy.

  1. Citizen engagement: Just as with smart cities, citizen engagement will be at the center of the transition. Cities can use mobile technologies to influence consumer behavior and improve feedback loops to support their circular goals. For example, they can use digital nudges for recycling, use direct feedback to evaluate green pilot programs and crowdsource sustainability program ideas.
  2. Waste as a resource: Currently, 91% of the materials we use globally are primary ones that end up in landfills (pdf).11 By contrast, in a circular economy, all products and by-products become assets circulating back into the economy. Cities can drive this transition by going beyond traditional waste disposal and recycling solutions to create sustainable projects – such as a reuse marketplace for building materials.
  3. Circular design: Moving to a circular economy requires us to design, produce and use products in a way that produces zero waste and maximizes resources. For example, a London start-up, Dabbadrop,12 transports ready-made meals to subscribers’ homes in reusable tiffin boxes. The empty container is then picked up, washed and reused. 
  4. New models of procurement: Government procurement and buying rules favor owning, operating and disposing of an asset. The circular approach favors access, such as leasing an asset or switching to service-based operating models. For example, in a circular system of supply, a city may buy light-as-a-service rather than new lamps. In addition to purchasing power, cities can also adopt new standards and frameworks to shape circular procurement policies.13
  5. Support for start-ups: Private and public sector partnerships are crucial, particularly with entrepreneurs. CEO Jan Christian Vestre, the 2020 EY Entrepreneur Of The Year Norway, is creating life-long urban furniture for communal spaces.14 Vestre’s15 manufacturing facilities run on 100% renewable energy and the company is close to producing zero emissions through its entire manufacturing process. As well as collaborating to solve everyday issues, cities need to support entrepreneurs in multiple ways, from access to investment funds and recognition through innovation awards to providing circular economy advisory support. For example, the London Waste and Recycling Board has set up a program to advise SMEs and start-ups on shifting from non-environmentally friendly to environmentally friendly packaging.

Creativity and collaboration are the keys to unlocking funds

The five areas above show where cities use their ingenuity to lead the shift to the circular economy. But while a lack of funding and financing is an even more immense pressure than before the COVID-19 crisis, the economic gains far outweigh the upfront costs. City leaders need to think creatively and work with the private sector to secure the funds for circular programs and better leverage new funding from green recovery schemes, faster. 

These approaches will help: 
  1. Make circular a priority with direct funding and grants: City plans and budgets must also apply circular thinking when factoring in new revenue streams and cost savings.  
  2. Attract private partners through corporate partnerships, alliances and venture funds: Private sector investors are increasingly investing in circular, sustainable initiatives. 
  3. Explore alternative financial models: New financial instruments outside the traditional focus of cities can encourage the transition to the circular economy and fund sustainable infrastructure.
  4. Take advantage of the growth in green, social impact and sustainability bonds: These instruments can bundle together to tackle a broad array of circular initiatives under an umbrella program.

Use blended financial models for promising pilot programs with limited funding: combining investment from international donor organizations, sovereign wealth funds, philanthropic organizations and the private sector can get programs off the ground. The World Bank has pledged US$200b16 in blended financing for climate action in 2021–25, including sustainable urban transport and waste management.

Change won’t be easy, but it will transform life for citizens

In familiar times, shifting from a system that has dominated the global economy for two centuries would be challenging enough but attempting that seems unsurmountable in unfamiliar times. With severe effect, the COVID-19 pandemic has laid bare the vulnerabilities in our cities and how they support those that dwell in them.

One way to nurture a more resilient post-COVID-19 world is to nurture the circular economy. But it will require a city-wide effort – one that mobilizes stakeholders around a long-term shared vision and takes citizen needs into account.

Yet our species' history is a story of success, survival and continuous transformation – much of it incubated in cities. By taking resilience to heart, our cities will lead the shift to a circular economy and a sustainable way of life.

  • Show article references#Hide article references

     
    1. “These charts show how COVID-19 has changed consumer spending around the world,” World Economic Forum website, accessed 19 October 2020.
    2. “What a waste 2.0,” The World Bank website, accessed 19 October 2020.
    3. “68% of the world population projected to live in urban areas by 2050,” United Nations website, accessed 19 October 2020.
    4. “Circularity Gap Report,” The European Union website, accessed 19 October 2020.
    5. “Labour market consequences of a transition to a circular economy,” The OECD website, accessed 19 October 2020.
    6. “C40 Mayors Agenda for a Green and Just Recovery,”, The C40 website, accessed 19 October 2020.
    7. C40 Mayors Agenda for a Green and Just Recovery,”, The C40 website, accessed 19 October 2020.
    8. “Reducing waste and protecting waste workers in the COVID-19 crisis,” The C40 website, accessed 19 October 2020.
    9. “A methodological guide from The Thriving Cities Initiative,” The C40 website, accessed 19 October 2020.
    10. “How cities are building the future we want,” The C40 website, accessed 19 October 2020.
    11. “The Circularity Gap Report 2020,” The Circularity Gap World website, accessed 19 October 2020.
    12. The Dabbadrop website, accessed 19 October 2020.
    13. “Making a city circular,” The Medium website, accessed 19 October 2020.
    14. “Could the toughest times inspire the greatest solutions?,” The ey.com website, accessed 19 October 2020.
    15. The Vestre website, accessed 19 October 2020. 
    16. “World Bank Group Announces $200 billion over Five Years for Climate Action,” The World Bank website, accessed 19 October 2020.

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The COVID-19 pandemic has devastated countries and economies around the world. With 68% of the global population expected to be urban by 205019, city mayors have the opportunity and the responsibility to steer us to a more sustainable, economically resilient future. How? By leading the transition to a circular economy.

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