The concept of the circular economy is well understood when it comes to individual products or buildings. The idea is that as many materials or components as possible are reused or recycled and that the energy involved is derived from renewable sources. But it becomes much more complicated when applying circular economy principles to whole cities. Cities, after all, are complex ecosystems with multiple moving parts.
However, that is exactly what many cities around the world are trying to achieve – and with some success. So how can city and business leaders go about developing circular economies at such a large scale?
One of the leading organisations when it comes to researching and promoting circular economy principles is the Ellen MacArthur Foundation (EMF), which was set up by the eponymous sailing legend in 2009 upon her retirement from the sport.
Last year, EMF published the results of its research into what the circular economy in cities looks like, focusing on three “urban systems”: buildings, mobility and products. It identified 10 policy levers that city leaders can use to promote the circular economy, all of which fall into the categories of vision, engagement, urban management, economic incentives and regulation.
According to Sarah O'Carroll, government and cities network manager at EMF, engagement is one of the “biggest enablers for the circular economy in a city”. The point, she says, is that no one individual or organisation has the power, skills or resources to achieve results working in isolation.
“If you take a process like building a circular economy roadmap or strategy, which is something that we think is pretty critical because it helps to set the direction of travel” says O’Carroll, “it helps to state the priorities and the ultimate goals that the city is trying to reach. But to create an effective vision, you need stakeholder buy-in. That creates a relationship with the city and the stakeholders.”
O’Carroll says the aim should be to create a sense of shared endeavour so that businesses don’t think it is just another regulatory burden that they have to shoulder. “In circular economy road-mapping engagement exercises, businesses are coming together with the city and other stakeholders around something that is very positive for the city, and something that can create jobs that can spur economic development,” she says. “It creates new opportunities for businesses, as well as other social and environmental benefits.”
“To create an effective vision, you need stakeholder buy-in” Sarah O’Carroll, EMF
One area in which city authorities can set an example for others is in procurement. By their very nature, city authorities procure a vast amount of goods and services each year, so building circular economy principles into procurement processes can have a big impact. O’Carroll names both Toronto and London as cities that have effective procurement regimes in place and says that it can apply to practically everything a city procures.
“If the city is procuring printers or furniture or carpets, they start to think about how something is manufactured and what happens when they no longer want to use it. Can they rent carpeting or furniture instead of having to purchase it? That all then becomes the responsibility of another company.”
Such approaches are also being adopted by private companies. Phoebe Lewis is a senior sustainability consultant at JLL based in Switzerland and says that the company is increasingly adopting circular economy principles when it comes to its own procurement policies. “When we did our new Manchester office, that was a huge thing for us,” she says.
“Through that process we wanted to make it circular, so we had a big push with procurement for furniture and for electronics. When we got our new electronic equipment, we managed to resell our old equipment. We had about 120 monitor screens that we resold and so we were able to make money off that, but also made sure that they went somewhere local and we weren’t just sending that straight to landfill. It was the same with our furniture.”
At a larger scale, London’s waste and recycling board has set up a team called Resource London, which aims to drive a shift from thinking about waste to thinking about resources. “They've been thinking about analysing all of the waste management infrastructure in London and how that needs to change if we move from a waste management system into a resource management system,” says O’Carroll.
Clearly, city planners have a role to play in such a scenario – if waste isn’t either being delivered to recycling plants or sent to landfill, it needs to be transported and stored ahead of reuse, something known as reverse logistics. “This will be about making sure that materials can move within the city and that it enables reverse logistics, as well as the space that you need to be able to provide,” O’Carroll explains.
Lewis agrees, adding that the role of planning authorities is to enable companies and individuals alike to embrace circularity. “Their role, for me, is really to act as the facilitator and connector,” she says. “You should be able to go to them and ask: ‘We’re doing this, where do I go to resell?’ or ‘What do I do with my electrical equipment, my furniture?’. I think the main role that the city should play is to have that compendium of resources.”
However, planners have a greater role to play. Depending on the regime locally, planning policies can be amended to either push developers towards refurbishing buildings rather than knocking them down and starting again, or specifying previously used or recycled materials. “That’s already happening in California,” says O’Carroll. “We’re seeing some quite successful [conversions of buildings] from office space to residential.”
“The reason the Netherlands have reduced their waste so much is because they can’t afford not to” Phoebe Lewis, JLL
Lewis agrees, pointing to testing targets that are already in place in the Netherlands. “I think that the policy part is absolutely essential,” she says. “I would argue it is the main thing that is driving behaviour change. You just have to look at the Netherlands for that. The reason that they have reduced their waste so much is because they can't afford not to. The policies are in place now. I think that if circular economy really is to take off, these types of policy guidance and structures need to be complemented with hard deadlines.”
Such targets tend to be set at a larger than local level, and Olivia Finch, senior analyst at EMF, agrees that they are important. But she argues that rapid change is more likely to be driven by cities. “I think it’s fair to say that kind of supranational level is setting direction, but it’s actually the cities that are the innovation hubs and are able to adapt more quickly and make changes more quickly,” she says.
One challenge in requiring developers and contractors to reuse materials is their availability. Again, however, things are starting to change. In the Netherlands, for instance, a company called New Horizon is pioneering the concept of “urban mining” – sourcing materials from redundant buildings and selling them on for new projects.
Founder and owner Michel Baars MRICS explained the approach at a recent conference in the country. “We don’t see scrap wood – we see new window frames, dormers, tables and floors,” he said. “We use old concrete to make new concrete. If you look at the built environment that way, you’ll see loads of opportunities. With this approach, we’re already competing with traditional construction companies.”
Another issue for developers is whether adopting circular economy principles adds to their costs. To address this question, EMF teamed up with Arup and identified a series of live projects about which the developers were happy to share their business models. The team then retrofitted circular economy principles to the models and found, to a lesser or greater extent, that the projects could have saved costs or increased profitability. That information was then fed back to the developers.
“In one instance, we presented at a chief financial officer level and they were sufficiently interested and sufficiently engaged with the topic to want to start looking at pilot projects,” says Richard Boyd, senior engineer at Arup.
Then there is the small matter of urban transport systems. Under circular economy model, moving away from the use of fossil fuels is critical, which means going electric or finding other alternatives.
However, it is also critical to reduce the number of private journeys, something that should actually be aided by the rise of ride hailing apps such as Uber. In September, the company announced that 100% of its journeys will be fully electric by 2030 in Canada the US, and Europe, and by 2040 across the rest of the world.
So, a great deal of progress is being made on applying circular economy principles at city scale. However, there is one potentially important – if surprising – distraction. Slowly but surely, countries that have signed up to the Paris Agreement on climate change are legislating to mandate zero carbon targets for different parts of their economies by certain dates.
The fact that new legal requirements are looming is, perhaps, distracting companies from the circular economy. According to one industry source, the momentum that was building around circular economy became diverted when the net zero carbon legislation came into play.
There is, of course, a huge irony there. After all, applying circular economy principles should be an effective means for companies and cities alike to reach net zero. That, perhaps, represents the next big challenge for cities in their engagement strategies.
Download the report From Principles to Practices: Realising the value of circular economy in real estate, led by Arup and the Ellen MacArthur Foundation, with advice from RICS and JLL
Mark Williams 23 May 2023
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