In our world of finite resources, overflowing landfills, and a population anticipated to reach 9.7 billion by 2050, the conventional linear model of make —> use —> discard, which has dominated the global economy since the Industrial Revolution, is being forced to change. A new sheriff is in town and her name is the circular economy.
What’s wrong with conventional linear economies, what exactly is a circular economy, and what does circularity have to do with cities and urban planning?
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Historians will suggest that the onset of the 21st century marked the point in time when the rise in real prices of natural resources started to erase the prior century’s real price declines. The mortgage crisis of ’08-’09 naturally took a hit on global demand but, as shown below, resource prices have rebounded faster than GDP since 2009. The implications? The cost of natural resources have become vitally important.According to McKinsey, by 2030, three billion consumers will depart from the developing world to the middle class. This massive shift, in tandem with depleting resources and increasing and unpredictable commodity prices, intensifies competition among companies to protect valuable natural resources. As such, the make —> use —> discard philosophy has fallen by the wayside as companies are embracing circularity, increasingly innovating to find ways to do more with less and make resources last as long as possible.
The trillion dollar question: Can a circular system decouple economic growth from resource constraints, adding value for both society and business?
The Ellen MacArthur Foundation, an organization working with business, government, and academia to accelerate the transition to a circular economy, defines the circular economy as an economy that is restorative and regenerative by design and aims to keep products, components, and materials at their highest utility and value at all times, whilst distinguishing between technical and biological cycles. It is conceived as a continuous positive development cycle that preserves and enhances natural capital, optimizes resource yields, and minimizes system risks by managing finite stocks and renewable flows.
The Ellen MacArthur Foundation further postulates that embracing circular economy principles has the potential to cut carbon emissions in half, and a McKinsey study shows that circularity could add $1 trillion to the global economy, resulting in at least 10,000 additional jobs.
Embracing Circular Cities:
“A circular city embeds the principles of a circular economy across all its functions, establishing an urban system that is regenerative and restorative by design. These cities aim to eliminate the concept of waste, keep assets at their highest utility at all times, and are enabled by digital technology. A circular city aims to generate prosperity and economic resilience for the city and its citizens, while decoupling this value creation from the consumption of finite resources.” – Ellen MacArthur Foundation & Google
The World Bank has estimated that urban residents will generate at least 2.2 billion tons of waste per year by 2025. It has been stated (by Google and the Ellen MacArthur Foundation) that 54% of the world’s population resides in urban areas accounting for 75% of natural resource consumption, 50% of global waste generation, and 60-80% of greenhouse gas emissions. This same population also accounts for 85% of global GDP production.
To curb emissions in urban cities is to benefit society in a big way.
Digital Technology for the Win:
Ten years ago, the concept of sharing a ride with a stranger or sleeping in a stranger’s house was unheard of. Today, with the help of technology and companies such as Uber and AirBnb, this once taboo concept has become mainstream. Google (Alphabet) and other tech visionaries are using big data, asset tagging, and geospatial information to create unprecedented technologies that are vastly improving the efficiency, connectivity, and sustainability of cities around the world.
A few examples of digital technologies in play that you might have heard of (or perhaps are using) include: the Nest Learning Thermostat designed to map energy savings and reduce consumption, the Waze app used by 80 million drivers for its easy access to traffic information and less-congested routes, and Project Sunroof, an online tool using Google’s 3D imagery and high resolution aerial mapping to help homeowners decide whether or not to deploy solar power by analyzing residential roofs in great detail (sun positions, nearby shadows, solar viability, historical weather patterns, you name it). Flow, a subsidiary company of Alphabet’s Sidewalk Labs, creates digital tools for city planners that enables highly efficient transportation systems by digitizing available parking, traffic light systems and timing, and traffic congestion. Project Air View is a collaboration with the Environmental Defense Fund (EDF) and Aclima, using air sensor technology mounted on Google Street View cars to measure air quality through information on nitrogen dioxide, nitric oxide, carbon and other pollutants. Project Air View provides specific street level data showing how pollution changes block by block, allowing for targeted solutions. The list of impressive technologies continues on.
Circularity in Action
Europe is light years ahead in the race to circularity, with exemplars sprouting up in Amsterdam, London, and Italy, to name a few. Amsterdam has identified that redesigning product and material supply chains can save the city 85 million euros per year in construction costs and 150 million euros per year through use of organic residual streams. While many cities share rides, London has taken the sharing model one step further, introducing a “Library of Things”, where people actually share electronics and appliances, a genius concept extending the useful life of many assets and vastly reducing the quantity of new products purchased and eventually discarded. Italy is focusing its circular efforts on waste management, piloting door-to-door collection and city-wide second-hand markets in a 72,000 populated city called Cremona. The city has also introduced a tariff on any waste that cannot be collected. In just two years, Cremona has increased recycled waste from 53% to 72%.
So there you have it, a circular city creates a win-win for the wallet and the world.