Pau Ruiz
Circularity Gap Reporting Initiative
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Cities have the agility to lead the transition to circularity—and already have a body of good practice to show

Our global economy consumes massive amounts of resources year after year—shooting past our planet’s safe limits and raising an increasing number of environmental challenges. The divide between what we extract and use and what our planet can provide is widening. Last year’s Earth Overshoot Day fell on the 28th of July, indicating that we consumed the Earth’s yearly regenerative capacity in a little over half a year, using resources at a pace that would require nearly two planets to sustain. 

Aside from damaging biodiversity and posing a threat to reserves of natural resources, this level of consumption is tightly linked to climate breakdown: around 70% of greenhouse gas (GHG) emissions are tied to the handling and use of materials. To ensure both people and the planet can thrive, we need to usher in a new economic paradigm—one that regenerates nature, designs out waste, and keeps materials in use at the highest value possible for as long as possible. 

This big shift is the circular economy: a powerful toolbox of solutions that have the ability to fulfil people’s needs with just 70% of the materials we currently use, thereby limiting temperature rise and further environmental degradation. But global change requires local action: cities are the future of the circular economy transition. 

Why cities?

As epicentres of innovation, infrastructure, investment and culture, cities are big consumers: in many countries, urban hubs are responsible for the largest portion of material and carbon footprints. According to the Global Footprint Network, by 2050 up to 80% of the world’s population is expected to live in urban areas, which are projected to consume 90 billion tonnes of materials annually. This is despite the fact that urban areas occupy just 3% of the world’s surface

Their massive impact means that cities and regions also boast the power to drive the circular economy transition forward: more agile than national governments and closer in proximity to local initiatives, municipalities can influence a range of critical sectors, from construction to manufacturing. 

‘The global effort for sustainability will be won, or lost, in the world’s cities,’ -Global Footprint Network.

Innovation will bring cities from linear to circular

Cities comprise many complex systems that fulfil residents’ needs, from housing and transport to food and energy. Systemic change must occur across sectors, requiring actors to rethink how they do business and consume resources—and innovation must underpin this, as it does any disruptive transition.  

Defining ‘innovation’ in the context of a circular economy can be tricky—but central are novelty and improvement, value creation and redistribution, and dissemination of ideas and technologies. Innovation can—and should—impact politics and society alike, drawing on social (including organisational) considerations as much as it does technological ones. Innovative circular practices and initiatives range from incremental to radical and can involve a wide range of stakeholders. 

As several cities worldwide start exploring ways to go circular, some are already exploring different ways to leverage innovative practices to implement circular initiatives. 

Mobilise stakeholders

Cities can use various instruments—from awareness-raising campaigns to capacity-building programmes—to engage with and mobilise citizens and other local stakeholders, kickstarting the long-term change that a circular economy entails. By providing the crucial catalyst of shared spaces—variously described as living labs, maker spaces or FabLabs—they can make resources available within the city for the ‘co-creation’ of schemes.

Independent initiatives and new businesses frequently encounter high costs and inadequate public infrastructure and resources. Cities can acquire essential assets for sharing by multiple actors—such as water-cutting or 3D-printing machines—which startups may be unable to afford themselves, thereby surmounting startup barriers and propelling innovation.

In practice: Amsterdam Smart City’s Circle Lab is an open innovation platform promoting collaboration between companies, policymakers and others. It fosters innovation by helping translate Amsterdam’s circular goals from theory into practice—while mobilising other cities, businesses, and citizens to ‘learn by doing’. The lab’s users—which now top 8,000 members and organisations—can meet up to learn about city-wide circular initiatives, share ideas and events and get in touch with other innovators.

Leverage public procurement

As public entities, cities have huge spending power that can be leveraged to support developing and adopting innovative products and services. Through their purchasing decisions, cities can incentivise businesses to rethink their products or services—while also supporting local businesses and startups, shaping a thriving ecosystem for innovation. It also encourages competition among suppliers, which itself can catalyse new, innovative solutions.  

In practice: The City of Toronto’s  Circular Economy Procurement Implementation Plan, a joint effort across the municipality’s departments, aims to spur innovation and create value by engaging directly with local businesses, encouraging the use of new technologies, and developing capacity-building programmes to raise awareness. Since the plan’s launch, city procurement contracts have included circular economy principles and requirements. With a focus on economic benefits, environmental criteria and job creation, the plan drives circular procurement in the city while supporting Toronto’s broader goals of achieving zero waste and enhancing social prosperity.

Use pilot projects to test and validate innovative ideas

Pilot projects are experimental springboards for innovation. By encouraging creativity and out-of-the-box thinking, cities can soften the risks associated with novel, small-scale ideas and test their feasibility. Crucially, pilots allow organisations to learn from their experiences and improve over time—helping them better understand the benefits and limitations of scaling up their innovations. They can also enhance collaboration among various stakeholders as, in their pre-competitive environment, they are often more flexible than larger-scale ventures. This fosters quick, frequent communication between parties and allows for agile adjustments based on feedback. All this induces an environment where circularity can flourish and ideas align with communities’ needs. 

In practice: The O-House, a project launched in Kongsvinger in Norway, is a modular home for young people made from recycled and renewable materials. It can be moved from place to place around the municipality, demonstrating how moveable, sustainable homes could be an affordable option for first-time buyers struggling to enter the housing market. The project demonstrates the potential to reclaim and repurpose local construction materials and the power of circular building design. It brings together a range of actors beyond local government, fostering collaboration and encouraging relatively low-risk innovation, thanks to the public sector’s involvement.

Setting a baseline: The Circularity Gap Report for cities can inform municipal actors where to focus their efforts 

Before launching pilots or embarking on innovative journeys, cities must know where they stand: they need a circular economy ‘report card’ that shows how they’re doing and where they can best focus their action. Circle Economy’s Circularity Gap Reporting Initiative, which has calculated circularity at the national level for years, is now coming to cities with the launch of CGR4cities. Currently being tested in Munich, the programme will show how resources flow through urban systems and contribute to consumption-based emissions. Based on these insights, the analysis can derive a set of circular solutions that can take cities from linear to circular, while shedding light on the impact these solutions could have. By allowing decision-makers to set goals and measure progress over time, CGR4cities can kickstart a city’s circular transition.

Learn more

Circle Economy works with cities around the globe to determine their circular performance and pinpoint key hotspots for action. Get in touch here.

The Circularity Gap Reporting Initiative brings together stakeholders from businesses, governments, academia and NGOs to evaluate findings based on the latest scientific evidence and to design scenarios to inform policy-making and industry strategy. With the use of participatory and multi-stakeholder processes, it ensures that plans lead to sustained actions on the ground. Learn more and request a scan for your city.

This is part of a series on ‘global cities’ supported by the Friedrich Ebert Stiftung.

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