2. Cities and regions going circular: Circular economy vision, policies and tools
This chapter provides an overview of roles and responsibilities at the national, regional and local levels of government, co-ordination mechanisms and circular economy long-term visions, based on survey information and desk research. It also provides an overview of the financial and regulatory tools, capacity-building programmes, data and information, stakeholder engagement and business models applied by surveyed cities and regions.
Climate, green and sustainable strategies are linked to the circular economy in 70% of the cities and regions surveyed (OECD, 2020[1]). In Tampere, Finland, much like Helsinki and Oulu, the circular economy is included in the sustainability policy plan of the city, the Carbon-neutral Tampere 2030 Action Plan. In Umeå, Sweden, the circular economy is a means to achieve the city’s goal to be fossil-free by 2040, while enhancing innovation and creating the enabling environment for new business models. Transitioning towards a circular economy has been a political priority for the city since the Strategic Plan 2016-28, setting the objective for the city of Umeå to become a circular economy leader. The city of Oslo, Norway, developed an overall vision based on four key issues: public procurement, climate adaptation, waste and consumption. At the national level, Sweden’s Rural Policy incorporates the circular economy in one of its four objectives (Ministry of Enterprise and Innovation, 2015[2]).
First attempts to include circular economy principles in policies and strategies relate to waste management or resource management plans. For example, the Resource Efficiency Roadmap to 2030 in Vantaa, Finland, incorporates the notion of the circular economy related to the development of new business models, the built environment sector, the sharing economy and public procurement. Similarly, the Regional Action Plan for the Circular Economy (Plan Régional d'Action en faveur de l'Economie Circulaire) of the Centre Val-de-Loire region in France is included within the Regional Plan for Waste Prevention and Management (PRPGD). The waste management corporation of Munich, Germany (Abfallwirtschaftsbetrieb München, AWM), in charge of the collection and management of household and commercial waste, has extended its core business of waste management into a resource-efficient circular economy approach in recent years. In North America, some cities have started their transition to the circular economy with a strong focus on the waste sector. Toronto, Canada, has embraced the circular economy as a goal in its Long Term Waste Management Strategy; Phoenix, United States (US), created Reimagine Phoenix to increase the city’s waste diversion rate to 40% by 2020 and Austin, also in the US, is advancing towards zero waste through the Austin Resource Recovery Master Plan.
At the regional level, circular-related objectives are included in green growth and regional development agendas. For example, in 2016, the Flemish government, Belgium, adopted the cross-cutting Policy Paper Vision 2050, which is based on seven transition priorities, one of which is the structural transition towards the circular economy. Region Västerbotten, Sweden, initiated several initiatives to promote the circular economy. In October 2019, the County Administrative Board launched the Climate and Energy Strategy, which includes the circular economy as one of the focus areas. Moreover, the circular economy will be part of the Regional Development Strategy of Region Västerbotten, currently under development. In 2018, the Autonomous Region of Andalusia approved the Strategy for Sustainable Development (Estrategia de Desarrollo Sostenible 2030) that foresees the transition to the circular economy as one of its objectives. The strategy conceives the circular economy as an opportunity to achieve sustainable goals at the regional level and as a key element of the Green Economy (Regional Government of Andalusia, 2018[3]). In Japan, the 5th Basic Environment Plan foresees a “Regional Circular and Ecological Sphere” to help achieve Sustainable Development Goal (SDG) 11, based on policy coherence and climate-related initiatives.
The following section discusses roles and responsibilities, processes, objectives and actions of dedicated circular economy strategies at the national, regional and local levels of government.
Several governments at various levels have been establishing a circular economy long-term vision. These have taken various forms, such as: strategies (Colombia, Denmark, Finland, the Netherlands, Spain and Sweden, Amsterdam [Netherlands], Paris [France]); roadmaps (Belgium, Chile France and Slovenia, Nantes Metropolitan Area [France], Valladolid [Spain]); action plans (Portugal), frameworks (Italy), white papers (Norway); bills (France) and programmes (e.g. Barcelona Metropolitan Area [Spain], Rotterdam [Netherlands]). The common point across national, regional or local initiatives is the long-term view, expressed in some cases through specific targets. For example, the Netherlands aims to be fully circular by 2050 and Finland aims to become a world leader in the circular economy by 2025 (Annex 2.A). Circular economy dedicated initiatives, including strategies, are in place in 37% of surveyed cities and regions, while half of the sample is looking forward to developing one (OECD Survey (2020[1]), Figure 2.1).
Note: Results based on a sample of 51 respondents that responded “Yes”, “Not yet, but under development” and “No, and not planned” to the question on the existence of a circular economy initiative (e.g. a strategy, plan, programme, road map, etc.), intended as a set of actions designed to achieve circular economy long-term goals.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
According to the OECD survey (2020[1]), most of the responding cities and regions perceive themselves at the initial phases of the transition. Only 10% of surveyed cities and regions defined themselves as “advanced”, while 39% as “in progress”, 57% as “newcomers” and 4% of surveyed cities and regions described the transition towards the circular economy as “not in place” (Figure 2.2, Table 2.1).
“Advanced” are those cities and regions that have developed strategies or roadmaps and engaged a variety of stakeholders. Cities and regions “in progress” are those taking action towards the circular economy, following ad hoc initiatives. Cities or regions in this cluster have recently set specific programmes on the circular economy and/or are starting their implementation. “Newcomers” are cities or regions that recognise the relevance and potential of the circular economy and are exploring options for implementation. These cities have already achieved good results in waste recycling levels (Munich or Phoenix); water reuse (Granada); have signed political commitments to advance towards the circular economy (Milan, Prato); are starting to develop a circular economy strategy (Groningen, Umeå); or have included the circular economy in broader policy plans (Oulu). These cities see in the circular economy a means for reducing environmental impacts while increasing attractiveness and competitiveness.
Note: Results based on a sample of 51 respondents that responded “Advanced”, “In progress” “Newcomers” and “Not in place” to the question: “What is the level of advancement of the transition from linear to circular in your city or region?”.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Who does what
Although the circular economy is not conceptually new, governments at various levels are gradually approaching the development and implementation of long-term strategies for a circular economy. As such, understanding how roles and responsibilities for designing, financing, implementing and monitoring circular economy initiatives are allocated across national, regional and local governments can help identify potential gaps and suggest effective ways forward towards the circular transition. Based on the results of the OECD survey (2020[1]), ministries of the environment in collaboration with other ministries and national agencies have a key role in developing and implementing national circular economy initiatives (e.g. Belgium, Chile, Colombia, Italy, Japan, New Zealand). At the regional level, technical working groups have been created to kick off the process to develop circular initiatives. This is the case in Catalonia (Spain), Centre Val-de-Loire (France), Scotland (United Kingdom [UK]) and Southwest Finland. At the local level, the increasing number of specific circular economy managers shows the growing relevance of the circular economy in cities (Amsterdam, Netherlands; Brussels, Belgium; Ljubljana, Slovenia; London, United Kingdom; Paris, France; and Rotterdam, Netherlands). The section below provides further details on roles and responsibilities at various levels of government and co-ordination mechanisms.
Often, ministries of the environment have a central role in the circular economy in more than half of the surveyed countries (OECD, 2020[1]). In Chile, Japan and New Zealand, the ministry of the environment is the main body responsible for the circular economy. In other countries, this ministry shares the responsibility with: the Ministry of Industry (Colombia and Denmark); the Ministry of the Economy (Italy); or the Federal Ministry of Jobs, Economy and Consumers (Belgium). In the Netherlands, the Ministry of Infrastructure and Water Management alongside the Ministry of Economic Affairs are the main responsible authorities. The Ministry of Ecological and Solidarity Transition has taken the lead in France while, in Finland, the Finnish Innovation Fund (SITRA) plays a key role. In Australia, there is no national agency responsible for the circular economy – although both the Department of Industry, Science, Energy and Resources (DISER) and the Department of Agriculture, Water and the Environment (DAWE) develop and implement policies consistent with circular economy principles. Local governments generally work in collaboration with state governments under an overarching waste management strategy, although generally there is no explicit reference to the “circular economy”.
Given the holistic characteristics of the circular economy, some countries developed co-ordination bodies across ministries, including also other key stakeholders. An inter-ministerial commission was created in Spain to develop a circular economy strategy towards 2030 (Box 2.1). In 2019, a National Delegation for the Circular Economy was created in Sweden. The delegation is an advisory body to the government and brings together representatives from the public sector, businesses and academia. In Portugal, the action plan was first designed and developed by a technical inter-ministerial group and was later submitted for public consultation before being approved by the Council of Ministers in December 2017.
National circularity strategy processes often involve consultation with subnational and local entities. This is the case of Spain, where, in 2018, the Spanish Circular Economy Strategy incorporated almost 2 000 observations from autonomous regions, the Spanish Federation of Municipalities and Provinces and citizens. In Slovenia, regional consultations and meetings with stakeholders formed the core basis of the circular economy roadmap: the preliminary process included 12 regional consultations, organised in co-operation with the Office of the Prime Minister of Slovenia and the Ministry of the Environment and Spatial Planning, which was further expanded upon through dialogues with carefully chosen stakeholder representatives. In this manner, the roadmap collected almost 100 good practices from all over Slovenia relating to the circular economy. In France, the local administration was one of the major counterparts in its 2018 Roadmap for the Circular Economy. According to the OECD survey (2020[1]), almost two-thirds of respondents considered that frameworks on the circular economy developed by other levels of governments are inspirational for transitioning from linear to a circular economy at the subnational level. They can help build capacities and skills (29%), also provide financial support to set up circular initiatives (27%) and push for data and information at the subnational level (22%).
At the regional level, according to respondents of the survey, the circular economy is driven by public environmental organisations, waste management agencies and economic development organisations. The regional governments that answered the OECD survey (2020[1]) have allocated the responsibility of guiding the circular transition mainly to: regional councils (North Karelia, Finland, through the Regional Council of North Karelia); publicly funded, not-for-profit environmental organisations (Scotland, UK, through Zero Waste Scotland); and public waste agencies (Flanders, Belgium, through the Public Waste Agency of Flanders OVAM).
The Spanish Circular Economy Strategy (España Circular 2030) was jointly promoted in 2018 by the Ministry of Agriculture and Fisheries, Food and the Environment (Ministerio de Agricultura, Pesca y Alimentación) and the Ministry of Economy, Industry and Competitiveness (Ministerio de Economía y Competitividad, MINECO). An inter-ministerial commission formed by nine ministries and the Economic Office of the President at that time contributed to it, together with the autonomous communities and the Spanish Federation of Municipalities and Provinces (FEMP). After the election in November 2019, the inter-ministerial committee added new ministries (e.g. the Ministry of Education and Vocational Training, Ministerio de Educación y Formación Profesional) to the nine previous ones.
The new composition is the following: the Ministry of Agriculture, Fisheries and Food; the Ministry for Ecological Transition and the Demographic Challenge; the Ministry of Economic Affairs and Digital Transformation; the Ministry of Education and Vocational Training; the Ministry of Finance; the Ministry of Health; the Ministry of Industry, Trade and Tourism; the Ministry of the Interior; the Ministry of Labour and Social Economy; the Ministry of Presidency, Relations with Parliament and Democratic Memory; the Ministry of Science and Innovation; the Ministry of Territorial Policy and Civil Service; the Ministry of Transport, Mobility and Urban Agenda; and the Ministry of Universities.
The inter-ministerial commission will continue to meet at least once a year to evaluate and monitor the implementation of the national strategy. The inter-ministerial commission created a working group for autonomous regions responsible for forming other working groups to further implement the strategy.
The Spanish Strategy on the Circular Economy was approved in June 2020 by the Council of Ministers. The strategy is one of the key elements of the Circular Economy Framework (Marco de Economía Circular), one of the government’s projects that aims to be a lever for economic recovery after the COVID-19 health crisis. The adoption of the Spanish Circular Economy Strategy was foreseen in the Declaration of Climate and Environmental Emergency approved in January 2020, making it one of the priority lines of action, and is consistent with the draft bill on Climate Change and Energy Transition, which sets the goal of achieving climate neutrality by 2050.
In addition, on 2 June 2020, the Council of Ministers approved the draft bill on Waste and Contaminated Soils, which will also addresses the challenge of single-use plastics, and a royal decree to improve the traceability and control of waste shipments.
Source: Government of Spain (2020[4]), España Circular 2030, Estrategia Española de Economía Circular, https://www.miteco.gob.es/es/calidad-y-evaluacion-ambiental/temas/economia-circular/espanacircular2030_def1_tcm30-509532.PDF; and OECD (2020[5]), The Circular Economy in Valladolid, Spain, https://doi.org/10.1787/95b1d56e-en.
Regional circular economy action plans and roadmaps also usually benefit from technical working groups. Between 2017 and 2018, in Catalonia, Spain, a working group formed by the Government of Catalonia, administrations and agents developed the Regional Circular Economy Action Plan (Estrategia de Impulso a la economía verde y a la economía circular). In the Brussels Region, the Programme for the Circular Economy 2016-20 is co-ordinated by three ministers and four regional administrative bodies (Government of the Brussels-Capital Region, 2016[6]); in 2018, the Public Waste Agency of Flanders (OVAM) set up a national platform for the circular economy, through which the top levels of federal and regional environment departments, economy/innovation departments and finance departments meet twice a year to take decisions in priority policy fields. In North Karelia, Finland, the Regional Council is responsible for the development of the regional circular economy roadmap, in co-ordination with a regional group, composed of representatives from private companies, knowledge institutions and other civil society organisations.
According to the respondents of the OECD 2020 Survey, the circular economy in cities is led by environmental departments. Beyond environmental departments, respondents flagged responsibilities across economic development and urban planning departments, sustainability and waste management utilities and/or related public agencies. The city council or the central municipal administration also hold responsibilities, as well as innovation area offices and public works departments. In Amsterdam and Paris, the transition is led by urban planning and sustainability areas. In London, UK, this responsibility is assigned to the London Waste and Recovery Board (LWARB). The city of Kitakyushu, Japan, has designated the Environmental Industry Promotion Division for the task. Cities under each category are detailed in Table 2.2.
In cities, city managers dedicated to the circular economy are flourishing. The increasing importance of the circular economy is visible by the fact that there are specific circular economy managers in cities (Amsterdam, Netherlands; Brussels, Belgium; Ljubljana, Slovenia; London, United Kingdom; Paris, France; and Rotterdam, Netherlands). Circular economy managers are in charge of promoting the setting and implementation of circular strategies, while also building relations with external actors.
Co-ordination amongst municipal departments is key to implement circular economy initiatives. The interdisciplinary characteristic of the circular economy requires cities to avoid working in siloes. Some cities have created dedicated horizontal working groups (Melbourne, Oulu and Toronto). The city of Toronto, Canada, through the Circular Economy and Innovation (CEI) Unit, formed a Cross-Divisional Circular Economy Working Group to co-ordinate and increase the capacity of the City Divisions to implement circular economy initiatives. The working group currently comprises 11 divisions (Solid Waste Management Services, Purchasing and Materials Management, Environment and Energy, Parks, Forestry and Recreation, City Planning, Economic Development and Culture, Corporate Real Estate Management, Toronto Public Health, Transportation Services, Toronto Water, and Engineering and Construction Services). The Metropolitan Area of Barcelona, Spain, created a “Roundtable for the circular economy” (Mesa de economía circular) where the city and the metropolitan area co-ordinate actions. The city of Rotterdam, Netherlands, co-created its four-year-long programme on the circular economy, involving all the departments concerned with circularity in the municipality. The Department of Economy in the city of Groningen, Netherlands, is working hand in hand with the water, waste and international affairs Departments to develop a circular economy strategy.
Objectives
Circular economy initiatives can have multiple objectives. According to the OECD survey (2020[1]), cities and regions ranked proposed objectives of the circular economy in the following order: first, to rethink production and consumption patterns; second, to improve environmental quality; third, to create new business models; fourth, to favour behavioural change; and fifth, to boost innovation.
The promotion of sustainable development is a common aim of various national circular economy initiatives, notably within the framework of national and global sustainability agendas such as the SDGs. In the case of Denmark, the circular economy is considered a key step in the government’s plan of action to contribute ambitiously to the attainment of all 17 SDGs. In Italy, the circular economy strategic framework positions on the issue, in continuity with the commitments adopted under the Paris Climate Change Agreement, the United Nations Agenda 2030 on Sustainable Development, the G7 Communiqué and within the European Union (EU). The circular economy strategy is part of the implementation of the wider National Strategy for Sustainable Development, adopted in 2017, contributing to the objectives of more efficient use of resources and more circular and sustainable patterns of production and consumption. The Slovenian circular economy roadmap is also closely tied to the SDGs and forms a key component of national strategy documents such as A Vision for Slovenia in 2050 (2020[7]) and the Slovenian Development Strategy 2030 (2018[8]) as well as Slovenia’s Smart Specialisation Strategy (2015[9]).
Waste reduction and more efficient and optimal use of resources are key goals in the majority of strategies hereby assessed, with expected positive impacts on the environment and the economy. Among the main environmental goals, waste reduction is the most prominent (e.g. France, the Netherlands, Portugal, Slovenia, Spain). In the Netherlands, the circular economy strategy envisages an (interim) objective of a 50% reduction in the use of primary raw materials (minerals, fossil and metals) by 2030 and a goal to use and reuse raw materials efficiently without any harmful emissions to the environment by 2050. The Netherlands aims to promote the high-quality use of raw materials in existing supply chains and, in cases in which new raw materials are needed, fossil-based, critical and non-sustainably produced raw materials are to be replaced by sustainably produced, renewable and generally available raw materials. France aims to reduce natural resource use related to French consumption by 30% in relation to gross domestic product (GDP) between 2010 and 2030, the amount of non-hazardous waste by 50% between 2010 and 2025, recycle 100% of plastics by 2021 and, in doing so, avoid 8 million additional tons of CO2 emissions every year. Spain aims to reduce food waste generation in 50% per capita at household and retail level and 20% in production and supply chains starting in 2020, and improve water use efficiency by 10%. One of the main goals of the Slovenian circular economy roadmap is to achieve more self-sufficiency in the provision of raw materials, given the fact that Slovenia is currently importing 71% of the raw materials that are consumed domestically. Through its circular economy strategy, Scotland, UK, aims to reduce its food waste target by 33%. Amsterdam, Netherlands, has established a target of becoming completely circular by 2050 and halving the use of new raw materials and food waste by 50% by 2030, as is the case in Rotterdam, Netherlands.
Carbon neutrality is also a prevailing long-term goal for survey respondents. London, UK, is pursuing circularity in order to make a substantial contribution to the mayor’s aspiration to become a zero-carbon city by 2050. The city of Oulu, Finland, is developing a new environmental programme that sets the goal to become carbon-neutral by 2040. The development process of the new plan involved the organisation of several workshops for politicians, officeholders, specialists and residents and the need for creating a circular economy road map has been identified as a priority for the near future. The city of Joensuu, Finland, is planning circular economy actions within the ongoing climate programme that aims to transform Joensuu into a carbon-neutral city by 2025. In Scotland, UK, it is estimated that a more circular economy could reduce carbon emissions by 11 million tonnes per year by 2050.
Stimulating employment is one of the aims of several national, regional and local circular economy strategies. Some countries explicitly recognise the employment benefits that a circular economy industry can offer: estimates in France have shown that up to 300 000 additional jobs may be created, in many cases, through completely new and original professions (French Government, 2018[10]). The entrepreneurial value of creating a critical mass of new business models and structures as well as infrastructure, with a focus on local production and small- and medium-sized enterprises (SMEs), is explicitly recognised by Colombia and Italy in their respective circular economy initiatives. In the case of Rotterdam, Netherlands, 10% of all current jobs are circular, which is higher than the national average of 8.1% and estimations suggest that between 3 500 and 7 000 new jobs will directly contribute to the circular economy. In London, it is estimated that 40 000 new jobs (12 000 net additional jobs) will be created by 2036 in the areas of reuse, remanufacturing and materials innovation (London Waste and Recycling Board, 2017[11]).
Circular economy strategies can pave the way for innovation and expected economic benefits. Some projections show the positive economic impact that the circular economy can have in the economy (e.g. Colombia, Finland, France, Italy) while innovation and social positive effects are also highlighted by a number of strategies. It is estimated that in Scotland, UK, action across eight manufacturing sub-sectors could result in annual cost savings of GBP 0.8-1.5 billion. In the case of Extremadura, Spain, the circular economy strategy is seen as an opportunity to transform industry through the attraction of both national and international investments, strengthen tourism, ensure sustainable rural development, land use planning, urban planning and construction, and improve transport networks and services. London, UK, could receive a net benefit of up to GBP 7 billion a year by 2036 if it accelerates the transition (London Waste and Recycling Board, 2017[11]).
Process
The role of bottom-up public consultation mechanisms is significant on the road to circularity, as a starting point to collect ideas and proposals from stakeholders. In the case of the Finnish roadmap to a circular economy, the process started in 2016 with a general invitation to all citizens to participate in identifying the best pilots, trial ideas and practices. Hundreds of ideas were collected from participants from different sectors, including trade unions, organisations and the corporate field, the Ministry of the Environment, the Ministry of Agriculture and Forestry, the Ministry of Economic Affairs and Employment, environmental organisations, consumers and other stakeholders. This broad stakeholder engagement formed the basis for the key policies, projects and pilots proposed in the initial roadmap published in 2016. Consultation with stakeholders from a wide variety of stakeholders from different sectors was also a key component of the 2019 revision to the plan. The Italian Ministry of the Environment promoted a two-month online consultation on the national strategic document on the circular economy. About 3 900 people took part in the consultations and 300 organisations and institutions provided specific comments on the proposed text. A key step for the development of the Spanish Strategy on the Circular Economy was the “Pact for a circular economy”, engaging the main economic and social stakeholders in Spain towards circular business models. By September 2019, a total of 347 stakeholders had adhered to the pact. The signatories to the “Pact for a circular economy” committed to boosting the transition to the circular economy through ten actions (Government of Spain, 2020[4]). The Circular Economy Strategy of Greater Paris (France) was developed by 240 stakeholders from over 120 different organisations. They were divided in working groups and defined 65 proposals. In Brussels, Belgium, consultations across stakeholder allowed the identification of priority areas for circular economy projects.
In particular, stakeholders from the waste, water and food sector are significant counterparts in many national circular economy initiatives because of their essential role in managing waste. Portugal has carried out extensive dialogue with public entities managing waste, waste management operators, the Portuguese Water Partnership (PPA), the Portuguese Soil Partnership (PPS), water resource planners, river basin managers, water sector managers, irrigator associations, the National Commission to Fight Food Waste and the Directorate General of Food and Veterinary Medicine (DGAV). Spain has engaged in dialogue with waste managers. In Belgium, the Federal Public Services of Public Health and Economy have been integrated into the external working group "actors of the waste policy" of the European Consumer Centre in order to provide a forum for exchange between the federal and regional levels of government and business federations, with a view to strengthening the coherence of waste policies.
Businesses and other economic agents are also usually involved in the development of circular economy strategies. Finland’s 2019 revision to its circular economy strategy has focused on companies and how they can shift from linear to circular business models. The role of unions and employer associations as counterparts in dialogue has also been recognised by Portugal and Spain, amongst others. In the case of Portugal, the financial sector has also been involved in discussions, in particular the commercial and investment-banking sector. Consultation processes also provide transparency and openness, which foster citizen debate, awareness-raising and the promotion of research and private sector action.
The public consultation process often took different forms, from open stakeholder meetings to digital platforms. For the development of the circular economy roadmap for France, stakeholders worked for two months in four workshops organised around the categories “territories”, “plastics”, “sustainable consumption and production” and “economic instruments”. In parallel to this technical work, an online platform was opened to collect citizens’ opinions, which gathered nearly 1 800 contributions and more than 16 000 votes. In the case of Slovenia, 7 meetings took place physically in 12 different regions, in addition to 7 interactive stakeholder workshops. The roadmap was also presented for consultation at various events in nine European countries. Over 3 000 stakeholders took part in the design of the roadmap, with communication taking place within the framework of the Partnership for Green Economy and through an electronic newsletter. The public consultation process was reinforced through 19 structured interviews with key stakeholders from government departments, economic agents, interest groups and experts from individual fields.
Priorities and actions
The identification of priority areas for action is the result of both public consultations and technical studies. Beyond the public consultation processes described above and further developed in Chapters 2 and 3, governments at various levels and analysed in this report have developed technical studies, in particular on material flows, to identify priority areas. For example, metabolism analyses aim to identify material flows, quantity, imports and exports. Countries that have performed this kind of diagnosis are Colombia, Italy, Portugal, Slovenia and Sweden. At the subnational level, the city of Paris, France, and the city of Rotterdam, Netherlands, have identified priority flows that highly impact the metabolism of the city (Circular Metabolism, 2017[12]; Municipality of Rotterdam, 2013[13]). In 2018, the Northern Netherlands Region carried out a material flow analysis to identify priority areas for the circular economy, showing relevant opportunities for the circular economy across provinces. Many other cities and regions have performed these analyses.
Priority areas can be established by sector or can be transversal in nature, for example:
In the case of Colombia, there are six lines of action in its 2019 National Strategy for the Circular Economy based on metabolism analyses: i) flow of industrial materials and mass consumption products; ii) flow of packaging materials; iii) flow of biomass; iv) energy sources and flows; v) flow of water; and vi) flow of construction materials.
The “Circular Economy in the Netherlands by 2050” is based on five priorities: biomass and food; plastics; manufacturing industry; construction sector and consumer goods.
The Regional Programme for the Circular economy 2016-20 (PREC) in the Brussels-Capital programme includes 111 measures across 4 strategic areas: cross-functional measures (a favourable regulatory framework, direct and indirect aid, innovation, procurement contracts, employment, training, education); sector-based measures (construction, resources and waste, trade, logistics, food); territorial measures; and governance measures (strengthened co-operation between administrations).
In 2015, the city of Paris held the General Assembly on the Circular Economy, presenting the White Paper on the Circular Economy of Greater Paris, followed by the Circular Economy Plan 2017-20. The plan contained 65 action proposals based on 7 strategies: encourage and support economic players; innovate and experiment; scale up and establish momentum in the region; change attitudes and practices; involve local authorities, businesses and citizens; create a network linking players; and change legislation. In parallel, the city has worked on urban metabolism, through which the following sectors have been identified as highly strategic for the circular economy: the built environment, food, water and energy. The 1st Roadmap adopted in 2017, encompasses 15 actions for: planning and construction; reduction, reuse, repair; support for actors; public procurement and responsible consumption. The 2nd Roadmap was adopted in November 2018. This new roadmap defined 15 actions organised in 5 new themes: exemplary administration; culture; events; sustainable consumption; and education (City of Paris, 2017[14]).
Developed in 2016, the vision and action agenda “Circular Amsterdam” (Circle Economy et al., 2016[15]) identified two key sectors for which a circular system could hold the greatest economic, social and environmental benefits: construction chain and organic residual streams chain. The city developed the Circular Innovation Program (CIP) with businesses and research institutes and “Amsterdam Circular: learning by doing” with municipal departments. With the Amsterdam Circular 2020-2025, the city of Amsterdam plans to move towards a circular economy by 2050 and aims to use 50% fewer primary raw materials by 2030. The strategy focuses on three value chains to shape the circular economy actions in the city: food and organic waste streams; consumer goods; and built environment (City of Amsterdam, 2020[16]). In addition, the report The Amsterdam City Doughnut. A Tool for Transformative Action (2020[17]) defines six key principles for the city: i) embrace the 21st-century goal (meet the needs of all people within the means of the living planet); ii) recognise the potential roles of the household, the commons, the market and the state – and their many synergies – in transforming economies; iii) promote diversity, participation, collaboration and reciprocity; iii) experiment, learn, adapt, evolve and aim for continuous improvement; iv) work in the spirit of open design and share the value created with all who co-create it; v) aim to work with and within the cycles of the living world; vi) do not let growth become a goal in itself.
In 2017, upon the request of the Mayor of London, the LWARB developed a roadmap to a circular economy by 2036. This date reflected the end date of the London Plan, now updated to 2041. The built environment, food, textiles, electricals and plastics have been chosen as focus areas due to their high environmental impact, retained financial value and potential for reuse. For each sector, the roadmap identified cross-cutting themes, activities, resources and champions.
Circular Flanders (Flanders Region, Belgium) is a partnership of public authorities, companies, civil society and research institutions created in 2016. In the cross-cutting policy paper “Vision 2050. A long-term strategy for Flanders”, the Flemish government has defined six key activities: building networks and co-operation among stakeholders; reducing experimentation risks in the circular economy; developing research through the Policy Research Centre for the Circular Economy; fostering policy co-ordination; stimulating innovation and entrepreneurship; and up-scaling circular economy projects. There focus areas are: i) circular purchasing; ii) circular cities; and iii) circular entrepreneurship.
The city of Rotterdam, Netherlands, recently launched the Rotterdam Circularity Programme 2019-2023. The four-year programme focuses on four streams: agro-food and green streams; construction; consumer products (e.g. single-use plastics); and healthcare.
The following key actions are often implemented to set up a circular economy system:
Improvement of product design, extending the useful life of products: Italy’s circular economy strategic framework focuses on product eco-design whereby material resources are rationalised by replacing non-renewable materials with renewable, recycled, permanent, biodegradable, non-hazardous and compostable materials; and recreating production processes so that more products are made that are able to be easily disassembled, recycled, modular (replacement of parts, the recovery and reuse of systems and sub-systems) and repairable. A similar emphasis is placed on efficient and circular product design in Portugal’s circular economy action plan, with a particular focus on boosting manufacturer innovation and responsibility in order to manufacture products that are “designed to last” by encouraging strategies to extend product working life, support the development of a network of repair facilities by establishing partnerships with municipalities to train and disseminate repair and reuse networks. The city of Paris, France, emphasises the need to facilitate the extension of product life cycle and has implemented measures to recover information technology (IT) and telephone equipment and furniture. It has also promoted the adoption of a charter in cultural venues for the design of eco-responsible events.
Repurposing: Many strategies foresee opportunities for repurposing empty building to reduce the use of raw material to build new buildings and extend the life of existing buildings. For example, Portugal promotes the use of “empty” built space. There are several examples of repurposing at city level, as the city of Prato in Italy (Chapter 3).
Sharing: In the case of Amsterdam, Netherlands, and Paris, France, the local governments have supported local repair and restoration centres and expanded facilities for sharing products amongst citizens. Cities investing in circular transport have focused on shared municipal fleets of cars and bicycles, as well as on developing urban logistic spaces, increasing the attractiveness of the use of public transport, widening sustainable transportation options and building additional bicycle lanes.
Redistributing: London, UK, supports local supermarkets and businesses that redistribute surplus food; the city of Paris, France, supports non-profit organisations collecting unsold food items and redistributing them.
Service-based initiatives: In Rotterdam, Netherlands, the city is promoting circular services through circular procurement. For example, every municipal public tender should challenge businesses and entrepreneurs to supply circular products or services. In a similar way, Nantes Metropolitan Area, France, has included in its circular economy roadmap actions aiming to transform services publicly purchased, promoting the economy of functionality.
Sustainable supply: Paris’ (France) 1st Circular Economy Roadmap set the objective of promoting sustainable, organic and responsible product supplies in public entity canteens (e.g. in schools). This objective is linked to the implementation of a more socially and environmentally responsible public procurement scheme and the goal of expanding urban agriculture practices in the city. Scotland’s circular economy strategy Making Things Last aims to work with the whole supply chain to investigate, pilot and implement improvements to recovering value from biological resources and providing more sustainable products to improve the economics and environmental impact of the industry. In 2018, the city of Amsterdam, Netherlands, launched the Circular Hotels Leaders Group (Kloplopergroep). A total of 12 hotels have started co-operating with actors along their different value chains to incorporate circular principles in their business models (e.g. by exchanging knowledge; joint purchasing and bundling of waste streams for useful applications; using furniture and (replaceable) carpet tiles made from recycled material; repair and reuse of beds; replacing buffet breakfasts by a la carte schemes; making the best of circular purchasing power through collaboration with other hotels, for example contracting rental services of sustainable linen and laundry). The city of Maribor, Slovenia, focuses on sustainable supply in the transport sector. It is planning the creation of a distribution centre for local supply in the city’s downtown (already closed to traffic), using alternative delivery forms. Rotterdam, Netherlands, is using a digital market place for building materials, bringing supply and demand of building components together and promoting sustainable supply in the construction sector through it. In London, UK, with the inclusion of the circular economy in the textile supply chain and the reuse and recycling of clothing, the city aims at: reducing the number of textiles sent for disposal; becoming a hub for textile collection, reuse and recycling; and being recognised as a well-known circular economy textile design centre.
Responsible consumption: The Galician Strategy of Circular Economy 2019-2030 (Galicia, Spain) promotes the responsible consumption of resources through the use of products made of recycled or reused materials. To achieve this goal, the region is increasing the visibility of repairing activities, promoting specialised training for the repair of products, and fostering the creation of collaborative spaces to increase the functionality of materials and products. The region of Navarra, Spain, identified the promotion of responsible consumption in the public and private sectors as a key goal of its “Agenda for the development of the Circular Economy 2019-2030”. The region intends to: introduce advanced environmental criteria in public procurement processes to lead by example; promote the shift from private car use to alternative means of transport; and encourage the consumption of products with a low ecological footprint considering their lifecycle.
The economics of the circular economy can spur new opportunities for growth and innovation. National governments are using favourable tax schemes, phasing out harmful subsidies, and coherently promoting socially responsible purchasing. In the case of Portugal, tax incentives are being assessed to evaluate if they are helpful in reducing the consumption of plastic bags and is considering its extension to other disposable plastic-based products of fossil-fuel origin. It is also analysing the introduction of consumer and/or business subsidies for labour-intensive repair services and the sale of second-hand products, for accredited International Organization for Standardization (ISO)-certified organisations under the Portuguese Quality System (SPQ) and products with accredited certification or eco-labelling (e.g. environmental labels, cradle-to-cradle design). Furthermore, other fiscal action focuses on the discouragement of non-renewable and polluting raw materials. In this vein, Italy is considering the implementation of taxation on carbon emissions (carbon tax), on landfill disposal (landfill tax) and on pollution in general (pollution tax), to encourage the transition to less impactful technologies, promoting reuse, recovery and recycling.
The private sector, and particularly SMEs, are considered a potential driving force for the circular transition; therefore, many dedicated actions promote circular business development. One of the main measures is to expand access to financing for those companies that are adopting circular business models. Portugal, for example, is assessing the introduction of financial allocations to award the implementation of circular requirements into products, such as eco-labelling, consumer information on the period of availability of spare parts and repair services, the possibility of repairs by independent bodies or repair manuals for the final consumer, software or product update options, product return incentives and easy repair design. France and the Netherlands made available dedicated funding to the circular economy, by supporting private sector initiatives through the development of circular revenue models and catalysing private funding.
There are several initiatives at the international, national and local levels that seek to accelerate the transition to the circular economy by improving access to finance for circular economy projects:
Loans: The European Investment Bank (EIB) offers medium- and long-term loans for large-scale circular economy projects and indirect financing through local banks and other agents for smaller projects, particularly related to SMEs. Circular economy project models can also be financed by the European Fund for Strategic Investments (EFSI),1 InnovFin2 and other specific financial instruments. Catalonia’s Finance Institute (Institut Català de Finances) (Spain) through the “ICF EcoVerde” loan line offers loans targeted to natural or legal entities with headquarters or operations in Catalonia to carry out sustainable and environmentally friendly investments that promote green economy, circular economy and energy efficiency projects, among others (ICT, 2020[18]).
Grants: In 2019, the Ministry of Economic Affairs and Employment of Finland opened a round of applications for development and innovation grants for the circular economy. Some of the more than 100 projects that received economic support are: the introduction of circular economy teaching for all levels of education, which provided more than 70 000 children and students with the opportunity to study the circular economy in 2018-19, and the Kemi-Tornio’s circular economy industrial park which is promoting its circular model for heavy industry throughout the country (SITRA, 2019[19]). Between 2017 and 2020, the municipality of Valladolid, Spain, launched three calls for projects to finance circular economy initiatives aiming to stimulate local businesses and entrepreneurial activities, while raising awareness on the circular economy. The local government financed a total of 61 projects (22 and 39 respectively in 2017 and 2018) allocating a budget of EUR 960 000 (EUR 400 000 and EUR 560 000 respectively in 2017 and 2018). An additional EUR 600 000 were allocated in 2019. The municipality finances between 40% and 85% of the project’s total cost. The beneficiaries of the grants are private companies and associations of private companies (OECD, 2020[5]).
Revolving funds: The city of Amsterdam, Netherlands, through the Amsterdam Climate and Energy Fund (ACEF) and the Sustainability Fund invested in more than 65 projects related to climate, sustainability and air quality for a total of EUR 30 million. These are revolving funds, allowing to reinvest revenues within 15 years to fund additional sustainable energy production, energy efficiency or circular economy projects. Each of the funded projects must contribute to the aims of the sustainability agenda approved by the city council in 2015. Regarding the nature of the financing, the ACEF provides funding in the form of loans, warranties and/or share capital, subject to a maximum of EUR 5 million per project.
Venture capital and growth capital: The LWARB supports circular business through the Circular Economy Business Support Programme. The venture capital fund supports circular economy SMEs for scaling up businesses that are already in the market. Moreover, the LWARB through the Circularity European Growth Fund 1, operated by Circularity Capital, seeks investment opportunities in circular businesses with proven cash flow and profit, which need significant capital to scale.
There is a similar share of cities and regions responding to the OECD survey with dedicated budgets for the circular economy (39%) and those without one (41%), while the remaining 20% aims of having it soon (Figure 2.3, Table 2.3).
Note: Results based on a sample of 51 respondents that responded “Yes”, “Expected soon” and “No, and not planned” to the question on the existence of a dedicated budget for the circular economy.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Economic instruments can be tools for incentivising or discouraging specific behaviours. For example, they could induce more sustainable consumption by means of higher/lower prices; exemptions on VAT can help business use green technologies; incentives on renewable energy can support its wider use. The Extended Producer Responsibility (EPR) schemes can help develop programmes to reuse material or spur innovation. However, according to the European Agency (2016[20]), to date, the efforts have been fundamentally focused on the area of energy, transport and climate, with limited action in relation to issues of pollution and resource use. Some tools are listed below:
Discounts on taxes: To address food waste, in 2018, the city of Milan, Italy, implemented a 20% discount on waste tax for businesses (supermarkets, restaurants, canteens, producers, etc.) that donated their food waste to charities. The action is co-ordinated by different departments of the municipality (fiscal, environmental, food policy). Around 10 000 businesses have benefitted from the tax reduction, with an impact of EUR 1.8 million (OECD, 2020[1]). The city of San Francisco, US, granted discounts on waste fees to businesses using separate sorting collection bins. The city managed to become the one sending the least amount of waste to landfills. With the aim of stimulating the separate disposal of food waste, the city of San Sebastian, Spain, provided households with a specific organic waste bin located in the street and unlockable through a personal magnetic card. The use of this special bin is associated with a 15% bonus on the fee to be paid for the provision of the garbage collection service. In order to get the discount, users have to use this container at least 4 times a month for 10 of the 12 months of the year. The city of Austin, US, offers the opportunity for customers to lower refuse bills by reducing refuse services, providing every household with a large recycling bin and rolling out compost cart services to all customers.
Environmental tax: Kitakyushu City, Japan, applies the “environmental future tax” imposed on the landfill of industrial waste. Since the tax is not levied on intermediate treatments, it is also expected to promote company recycling activities and reduce any waste generated by them. Revenues are used for an environmental technology development grant.
Differentiated tariffs: The Dutch government implements the DIFTAR system, a collecting scheme based on differentiated tariffs, which provides incentives to improve waste separation at source. This scheme enables authorities to charge for the amount of waste generated, while rewarding the effort of people who minimise waste and maximise separate collection. The system has been introduced in several small villages in the Netherlands, as well as in some urban municipalities with over 100 000 inhabitants such as Apeldoorn, Maastricht and Nijmegen.
In some countries, there are legislative frameworks promoting the circular economy. In Japan, the Fundamental Law for Establishing a Sound Material-Cycle Society (basic framework law) and the Law for the Promotion of Effective Utilisation of Resources are established at the national level. Under this framework there are specific regulations such as the Containers and Packaging Recycling Law, the Home Appliance Recycling Law, the Food Recycling Law, the Construction Material Recycling Law, the End-of-Life Vehicles Recycling Law and the Recycling Promotion Law of Used Home Appliances. These are legislation and policies to promote the creation of a 3R-oriented society and implement eco-town projects. In France, three consecutive laws, promulgated in 2015 and 2016, made the country the first to ban supermarkets from throwing away or destroying unsold food. The Anti-Waste Law for a Circular Economy, enacted in February 2020, defines four main orientations: i) prevent waste to preserve resources; ii) mobilise industrial businesses to transform production methods; iii) inform for more sustainable consumption patterns; and iv) improve waste collection to combat illegal disposal (Ministry for an Ecological and Inclusive Transition, 2020[21]). The entry into force of these laws increased the amount of food collected by the associations, from 36 000 tonnes in 2015 to 46 000 tonnes in 2017. The food is distributed by charities and food banks. Regulatory amendment aiming to promote the adoption of circular and sustainable models of production and consumption by an environmental tax reform has been signalled as an area of focus in Italy’s 2017 strategic framework. The Netherlands aims to foster legislation and regulations that promote flexible and innovative circular economy models and implement producer responsibility in priority sectors. Belgium is focusing on audits of all existing legislation and regulations in order to remove any possible normative obstacles or inconsistencies, as well as on reinforcing control and inspection processes to improve competition conditions between Belgians and third parties.
One of the most powerful tools for the circular economy is public procurement. According to the European Commission (EC), the impact of public procurement on the transition to a circular economy is worth around EUR 2 trillion in the EU, around 14% of GDP (EC, 2016[22]). Sustainable procurement taking into account circular criteria can be defined as the process by which public authorities purchase works, goods or services that seek to contribute to closed energy and material loops within supply chains, whilst minimising and, in the best case, avoiding negative environmental impacts and waste creation across their whole life cycle (EU, 2017[23]). Green or sustainable procurement has been adopted in the majority of the OECD countries but circular criteria still need to be developed. Public procurement accounts for approximately 12% of GDP in OECD member countries and subnational governments, including cities, are responsible for around 63% of public procurement (OECD, 2020[24]). As such, regulatory frameworks should be adequate to “increase participation in doing business with the public sector and are key starting points to assure sustainable and efficient public procurement systems” (OECD, 2015[25]). A total of 69% of OECD countries are measuring results of GPP policies and strategies, through the number of public organisations that submit an implementation plan and performance records; the total amount of annual green procurement in economic value and units.
Green public procurement can be an essential tool for the implementation of national, regional and local circular economy initiatives. Almost all OECD countries have developed strategies or policies to support GPP in high-impact sectors such as buildings, food and catering, vehicles and energy-using products. For example:
One of Denmark’s focus in its 2018 circular economy strategy is to develop a partnership for GPP and a forum on sustainable procurement. These two initiatives have recently been appointed a joint secretariat for procurement in order to ensure co-ordination. An additional task force on green procurement is planned to be developed to focus on the circular economy and will be expanded to aim – in addition to public institutions – at private enterprises, with the additional creation of an online portal called “The responsible procurer”. The Danish government is set to prepare a number of new total cost and life-cycle tools and will incorporate costs or revenues from waste management and resale in existing and new tools.
Portugal’s circular economy action plan recognises the need to implement a support structure for collaborative development of solutions that adopt circularity principles, their experimentation and monitoring of environmental and economic impacts compared to traditional alternatives, involving all players in the value chain (e.g. through a circular agreement), especially in priority sectors such as the construction sector. This support structure would entail the analysis of the integration of criteria promoting resource circularity in the list of priority goods and services established by the working groups of the National Strategy for Green Public Procurement (ENCPE 2020).
The region of Flanders, Belgium, implemented the Green Deal Circular Procurement (GDCP) between 2017 and 2019. Inspired by the Dutch Green Deal on Circular Purchasing (launched in 2013), the joint project was signed by 162 participants (companies and organisations), the Flemish Minister of Environment and its initiators Circular Flanders, The Shift, the Association of Flemish Cities and Municipalities (VVSG) and the Federation for a Better Environment (BBL). In total, 108 purchasing organisations, local authorities, companies, financial institutions and 54 facilitators have been involved. During the 2 years of the initiative, the signatories of the GDCP conducted more than 100 circular procurement pilot experimentations, building knowledge and experience, and testing tools and methodologies and new forms of chain co-operation.
In June 2018, in Toronto, Canada, the Solid Waste Management Services and Purchasing and Material Management Divisions, in consultation with the Cross-Divisional Circular Economy Working Group, developed a Circular Economy Procurement Framework to outline how the city may leverage its purchasing power to advance a circular economy. The framework outlines preliminary economic, social and environmental measures of circularity. Potential areas of focus for the development and refinement of measurement tools include the percentage of waste diversion from landfill as a result of procurement activities, CO2 emission savings, raw materials avoided, the percentage of recycled content and the number of associated jobs created, the number of city staff who have received circular economy training, and the number of asset-sharing activities.
Almost half of the cities and regions surveyed (47%) are incorporating circular economy criteria in their purchase decisions, while 39% stated that they plan to do it and 14% do not (OECD (2020[1]), Figure 2.4, Table 2.4).
Note: Results based on a sample of 51 respondents that responded “Yes”, “Not yet but expected soon” and “No” to the existence of criteria related to the circular economy included in the purchasing decisions.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Cities are increasingly including circular-related requirements in tenders. For example, public procurement has been applied to:
Promote circular economy building developments: Amsterdam, Netherlands developed the Roadmap for Circular Land Tendering (2017[31]) that includes 32 performance-based indicators for circular economy building developments. Paris, France, is developing a deconstruction/demolition framework agreement, which establishes a deconstruction methodology for construction waste management. Construction tender selection criteria could entail: sorting organisation internally on site; transport of waste to a recycling platform; traceability of the disposal of construction waste; the rate of recovery of construction waste specifying the nature of waste, the sectors and suppliers. Lisbon’s (Portugal) Strategic Plan for Public Procurement is launching building construction contests, public space interventions and increasing the introduction of recycled materials in new constructions.
Encourage the use of circular business models: The city of Ljubljana, Slovenia, aims to foster “product as a service schemes” by renting printers, electric lamps or furniture instead of buying them. The municipality of Bollnäs, Sweden, has applied what the local government calls “functional public procurement” (funktionsupphandlingen) to rent light as a service in municipal pre‐schools and schools. The service is provided by a start-up that received support from Umeå’s BIC Factory business incubator.
Incorporate secondary materials, repair and reuse: In Paris, France, in 2018, 43% of the city’s purchases were linked to the circular economy and 14% of them included “circular economy” criteria. Some examples are: price criteria on household appliances assessed in terms of user cost over eight years (water and energy); reuse/recycling process of used equipment (audiovisual, curtains, clothing); recovery of deposited kitchen equipment; computer recycling market; modular demountable nurseries; retreated tires and eco-responsible office supplies (recyclable and/or rechargeable). Copenhagen, Denmark, and Kitakyushu, Japan, are promoting the use of recycled materials and the extension of the “in-use phase” of uniforms and work-clothes through procurement. In the city of Ljubljana, Slovenia, the public tender for the selection of suppliers of hygienic paper products included the “zero waste” criterion, whereby the hygienic material had to be made of cardboard packaging or cardboard hollow packaging collected in the city.
Some cities adopted specific public procurement provisions to favour the involvement of SMEs and start-ups. Some cities use a modular approach (Antwerp), others engage with local suppliers to help them build capacities (Melbourne) or highly prioritise local job creation (Dunedin). For example:
In 2015, the city of Antwerp, Belgium, created the Buy-from-Start-up initiative to promote purchases from start-ups. The initiative aimed to innovate traditional tenders, mostly accessible to large companies endowed with resources and capacities to write extensive bids. The initiative encouraged small innovative companies in participating in tenders, unable to do so in traditional tendering process (Open Source Observatory, 2019[26]).
In Australia, the city of Melbourne’s procurement policy stipulates that the council should use procurement to support local businesses and economic diversity by: generating local employment; taking into account the life-cycle impacts of products purchased (purchase, operation and disposal); building relationships and encouraging purchasing from local suppliers, including social enterprises to help build their capacity; exploring, where appropriate and possible, the opportunity to maximise the social benefits of a contract by offering social tenders; and fostering innovation and emerging sectors.
The Valladolid, Spain, municipal ordinance “1/2018 to Promote Social Efficient Procurement: Strategic, exhaustive and sustainable” includes some specific rules and recommendations to increase the number of SMEs in municipal contracting (Art. 32 and following), such as: providing training and skills to SMEs in public procurement; publishing better information about tendering processes; and breaking the contracts into smaller lots to adapt them to SME management capacity.
Dunedin City Council, New Zealand, sustainable procurement and contract management practices aims to give preference to those suppliers that can evidence a positive economic footprint in the region. This includes contributing to the sustainability of the local economy, supporting job or market growth, as well as fostering opportunities for SMEs. Nonetheless, currently, any consideration or weighted attribute assigned to sustainable procurement cannot be below 10% of the total.
A total of 55% of surveyed cities and regions are implementing capacity-building initiatives as a necessary condition to advance in the circular economy transition. Cities and regions are targeting capacity-building activities inside their own administration (e.g. through public procurement) and towards different stakeholders (e.g. businesses, entrepreneurs or start-ups). For example, the municipality of Umeå, Sweden, supported capacity-building events for public officials, entrepreneurs and the local community. A series of training events “Circular business models strengthen Northern Sweden’s competitiveness” took place during 2017-19. Around 50 advisors in circular business and sustainability have been trained in Skelleftea and Umeå, Sweden. Circular Flanders, Belgium, offers a Masterclass on Circular Economy. In four half-day sessions, participants discover the opportunities for their business in a circular economy. The target audience is company directors, sustainability managers, start-ups, entrepreneurs and innovators from all sectors. The Flemish government set incentives to SMEs that participate. Topics discussed during the masterclass are: what is the circular economy, why the circular economy, evolution and policy, key drivers, financing, etc.
Specific skills will be needed for future circular economy-related jobs. The Amsterdam Metropolitan Area (AMA), Netherlands, identified six groups of skills relevant for future circular jobs: basic skills (capacities that facilitate acquiring new knowledge); complex problem solving (abilities to solve new, complex problems in real-world settings); resource management skills (capacities for efficient resource allocation); social skills (abilities to work with people towards achieving common goals); system skills (capacities to understand, evaluate and enhance “sociotechnical systems”; and technical skills (competencies to design, arrange, use and repair machines and technological systems) (Economy Circle / EHERO, 2018[27]). In 2016, the city of Paris, France, conducted research on the current levels of circular economy jobs at the local level. The research identified 66 500 full-time jobs related to the circular economy. Mostly, jobs are associated with energy management, renewable energies, waste incineration with energy recovery and part of the activities related to transport infrastructure (City of Paris, 2019[28]). The Amsterdam Metropolitan Area (AMA), Netherlands, identified digital technology, circular design and lifetime extension as the most relevant sectors for the circular economy in the metropolitan area. The AMA defined seven key circular elements for “directly circular jobs”, divided into “core circular jobs” and “enabling circular jobs”. “Core circular jobs” are related to activities that prioritise regenerative resources (e.g. renewable energy sector); preserve and extend what is already made (e.g. repair sector); use waste as a resource (e.g. recycling); and rethink business models (e.g. renting or leasing activities). “Enabling circular jobs” aim to create joint value from collaborations (e.g. professional and networking associations); design for the future (e.g. architecture or industrial design); and incorporate digital technology (e.g. digital innovation). “Indirectly circular jobs” are also identified and refer to all other sectors that offer services to circular jobs activities and that create supporting circular activities (e.g. education, government and professional services).
National, regional and local scales co-operate to enhance capacities and learn from good practices. In the Netherlands, the Circular City Deal, promoted by the city of Amsterdam in 2016, aims to strengthen co-operation across cities and the national government. In 2018, the Italian Cities of Bari, Milan and Prato signed a Pact for Circular Economy with the Ministry of Environment, to put in place circular economy strategies and scale up successful practices. The region of Lapland, Finland, is looking for expanding circular and bioeconomy activities in Northern Finland, Northern Norway and Northern Sweden, building bridges for co-operation. In Scotland, UK, Zero Waste Scotland is co-ordinating the development of cross-regional projects and sharing best practice across cities and regions (e.g. Edinburgh, Glasgow, North East Scotland and Tayside).
City-to-city co-operation is a source of inspiration for developing circular economy initiatives and sharing skills. For example, Valladolid, Spain, has benefitted from the exchange with other cities in different networks (e.g. Covenant of Mayors, Eurocities, Michelin Cities, Spanish Network of Intelligent Cities-RECI, etc.). In particular, since 2019, the Circular Lab project benefits from exchanges with other cities in Portugal and Spain, providing entrepreneurs and start-ups specialised in circular economy business models with operational resources (physical spaces, networking, etc.). It helps develop adequate skills and promotes the integration of the circular economy in the entrepreneurial culture and innovative ideas in all phases of the value chains.
Results from the OECD survey show that 85% of respondents consider the emergence of new business models as a very relevant or relevant driver (Chapter 1). Drawing from OECD (2019[29]), the results of the OECD survey (2020[1]) and desk research, the business models applied in cities and regions consist of circular supply and collaborative consumption models, service systems, resource recovery business models, hire and leasing:
Circular supply models replace traditional inputs with secondary material. For example, in 2018, the city of San Francisco, US, approved that all carpets installed in city departments would have a “cradle-to-cradle” design. This initiative was approved as part of its objective of reducing the amount of discarded carpets sent to landfill (OECD, 2019[29]).
Collaborative consumption is based on the rental or sharing of products or services across citizens. More than half of the cities and regions with available data responding the survey expressed that their circular economy strategies have incorporated collaborative consumption (57%) and production models such as sharing economy, product-as-a-service, crowdfunding, etc. Twenty-nine percent of cities stated that they plan to include them in the short term and 9% do not foresee that possibility (the list is provided in Table 2.5). Several cities have sharing mobility in place (e.g. Antwerp, Belgium; Lappeenranta, Finland; Lisbon, Portugal; Malmö, Sweden; Milan, Italy; and Paris, France).
The service system model is about paying for the service rather than for the property of the product. The Amsterdam Airport Schiphol rents light as a service, instead of the traditional model of buying light bulbs: Schiphol pays for the light it uses while Philips, the provider, is the owner of all installations and is responsible for performance and durability (Circular Economy Club, 2019[30]).
Hire or leasing of products serves to lengthen their lives for repeated use according to the original objective of their use, before becoming different products through recycling, when possible. For example, for the celebration of the 2021 Olympic Games, the city of Tokyo, Japan, aims at renting and leasing materials after the games. In Oulu, Finland, public libraries have extended their services from borrowing traditional items (e.g. books, e-books, audiobooks, music, films, etc.) to skis, skates and other sports equipment.
Digitalisation is one of the enablers of the circular economy. More than half of the surveyed cities and regions consider that digitalisation helps foster the actions foreseen in the circular economy initiatives. While 51% of cities and regions use digital tools to enable the circular economy, 33% of cities and regions are planning to link digitalisation and their circular economy initiatives in the short term (Figure 2.5).
Note: Results based on a sample of 43 respondents that responded “Yes”, “Not yet, but expected soon” and “Not in place” to the use of digital tools to foster the circular economy transition.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Table 2.6 shows the initiatives mentioned in the OECD survey, such as: material exchange platforms; tracking of waste for better collection and recycling; open-access tools; raising awareness platforms; and tools to connect business to business and experts. Some cities and regions have developed online platforms on the circular economy (Paris, France; Regional Government of Catalonia, Spain) or to share waste-related information in real time (Milan, Italy; North Karelia, Finland). Austin, US, tested a materials marketplace to foster secondary materials exchanges. Phoenix, US, developed an online Recycle Right Wizard to provide recycling information to local residents and has also launched a digital educational website, Recycle+, which promotes a digital interaction with the residents on recycling best practices through activities, games, resource guides and educational videos. Antwerp, Belgium, is investigating how to link the Internet of Things (IoT) and artificial intelligence (AI) to foster the circular economy transition in particular for the energy and construction sectors and Flanders, Belgium, has developed an online open-access calculation tool to promote deconstruction in the construction sector.
Circular economy strategies and projects in surveyed cities and regions are often based on experimentation and pilots. Pilots, contrary to long-term strategies and infrastructure, can be a quick source of learning from success and failures that can stimulate circular economy practices now and in the future. This is both an opportunity for creating new knowledge and information, but also a challenge in terms of the human and technical capital needed to design and implement sustainable, efficient and effective circular economy policies. A total of 84% of respondents are using pilots and experimentation as a way to foster the circular economy (Figure 2.6). The pilots presented below aim to test new technologies to foster innovation (Austin), raise awareness (Valladolid), minimise food waste (Dunedin) and encourage public procurement (North Karelia). As a result, the objective is to scale up the experiences and enable them to be financially sustainable after the pilots are over.
Note: Results based on a sample of 49 respondents that responded “Yes”, “Not yet, but there will be” and “No” to the existence of pilots and experimentations for the circular economy.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Some examples include:
The city of Phoenix, US, collaborates with Arizona State University on circular economy projects. Recent projects include “Reclaimed Asphalt Pavement (RAP)”, “Water Conservation Potential of Compost in Parks”, “Plastics 3-7 to 3D Filament” and the “Food Waste Reduction Pilot”. The purpose of the latter is to reduce food waste and demonstrate how comprehensive multimedia interventions can lead to behaviour change.
In 2018, the City Council of Valladolid, Spain, and Ecoembes, a non-profit environmental organisation responsible for promoting and managing the system for recycling household packaging waste, started a pilot project of the circular economy in the neighbourhood of La Victoria. The objective of the project was to achieve separate collection by 60% by 2030, in line with European objectives. The initiative began in March 2018 and concluded in February 2019. During this time the percentage of waste disposed of by selective collection rose from 32.8% to 43.5%.
Since 2012, the city of Dunedin, New Zealand, has been funding waste minimisation pilots such as FoodShare (later called KiwiHarvest).
The government of North Karelia, Finland, has promoted a co-operation pilot at the procurement process of a student housing building as part of the Circwaste project. Criteria about waste management at the construction site were set in the early phase of the procurement process.
The production, update and sharing of timely, consistent, comparable policy-relevant and circular-economy-related data and information is key to inform policymaking and implementation. A total of 14% of the surveyed cities and regions has an information system for the circular economy while 27% of respondents are expecting to have one in the future; the remaining 59% do not have a specific information system (OECD (2020[1]), Table 2.7). Systematic data collection could allow to take circular decisions, measure progress and improve implementation. For instance, in the case of the building sector, data on material for construction would help understand what kind of materials are used for building and how they can be used in the future. Mapping empty buildings would help avoid new constructions and plan alternative use of existing ones; mapping input and output of material flows would help establish priority actions. Overall, improving data and information would help reach a better understanding of what the circular economy is and improve policymaking and implementation. Circular data can create value for local economic development (Box 2.2) and raise awareness. For example, Portugal’s circular economy action plans foresee the development of specific tools to communicate to consumers the benefits of extending the useful life of goods/equipment, e.g. information on warranties, repair instructions, replacement parts and eco-labelling.
In general, cities and regions collect data on energy consumption, air quality, waste production and recycling, and the level CO2 emissions (See Chapter 5); however, the circular economy-related monitoring frameworks that are comparable among cities or regions is still widely missing. Some examples are available: the Circular Economy framework Monitoring report by the Greater Porto Area, Portugal, includes indicators such as: the number of tender books with circular criteria (production and consumption); the level of implementation of the Environmental Action Plan; the level of implementation of the training plan; the level of implementation of the biowaste strategy; the recycling rate. Flanders Region, Belgium, developed a monitoring tool to help GDCP buyers to determine circular goals and accompanying strategies for their circular procurement projects, keep track of progress and visualise the effects of their circular procurement projects. Circular Flanders, Belgium, also developed an indicators inventory identifying relevant indicators to monitor the transition to a circular economy and to measure effects of new policy and trends (Circular Flanders, 2019[31]). More information on measurement frameworks is provided in Chapter 5.
Within the New Lab, the largest urban technological incubator in New York City, three start-ups working on waste collection and mobility and three city agencies working on the same fields took part in a pilot project on circular data. The challenge was to create an incentive system whereby city agencies could access data that start-ups collected. One of the start-ups was able to produce a technologically advanced micro-level mapping of transportation by taxis and of garbage collection through real-time data. These data can inform policymakers and tackle many complex urban challenges. “Circular data” refers to the collection, production, and exchange of data and business insights between a series of collaborators around a shared set of inquiries. Data may be produced by start-ups or by the city and available to the public, start-ups or enterprise companies.
Source: New Lab City (2019[32]), The Circular City Research Programme. Vol I., https://e025fd80-ac50-4e14-b81f-a09b2649b87f.filesusr.com/ugd/c3ad88_696d642dd4cc436dad96afe0369a1877.pdf; OECD (2019[33]), 1st OECD Roundtable on the Circular Economy in Cities and Regions, http://www.oecd.org/cfe/regionaldevelopment/Round-circul-eco-Highlights.pdf
The circular economy calls for systemic change, where all players from the public and private sector, from citizens to knowledge institutions play a role. Particularly, the role of citizens as consumers is identified as a major bulwark for the success of circular economy actions. The Netherlands considers citizens a major stakeholder in its 2019 revision of its circular economy roadmap, because of the impact that they can have when adopting more sustainable consumption habits and behaviours. The role of consumer protection organisations and associations are thus significant, as relevant counterparts to national governments in the development of circular economy plans, as is the case in Italy, Portugal and Spain. Consumer-oriented public communication campaigns is essential to raise awareness and include wider segments of the population in a circular action. Countries have also engaged with experts from different fields, research laboratories and centres, academia and technology centres for innovative and evidence-based approaches to the transition to circularity. Chapter 3 provides an in-depth review of stakeholder groups playing a role within the transition to a circular economy.
Engaging stakeholder is key for inclusive and transparent decision-making. Stakeholder engagement “encompasses different levels of governments (multi-level governance), the private sector, regulators, service providers, donor agencies, investors, civil society in its different forms (e.g. citizens, non-governmental organisations, users’ movements, etc.) and other relevant constituencies” (OECD, 2015[34]). The involvement of all stakeholders requires active, specific and tailored communication strategies. However, information is not enough; raising awareness about circular economy costs, benefits, challenges and opportunities is equally important. Stakeholders need to be engaged in the projects in order to secure their buy-in, trust and acceptance. Several actors (business, government and civil society) have divergent objectives in moving towards the circular economy. For this purpose, it is important to motivate stakeholders towards common aims; create incentives and framework conditions for building synergies at the right scale and minimising future liabilities for society at large.
Note: Results based on a sample of 48 respondents that responded “Yes, delivered” and “Yes, ongoing” to the type of stakeholder engagement implemented in cities and regions for circular economy-related initiatives.
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
Cities and regions apply different typologies of stakeholder engagement towards the circular transition but mainly stakeholders are engaged through consultation. There are various types of stakeholder engagement: communication (aims to make the targeted audience more knowledgeable and sensitive to a specific issue); consultation (aims at gathering stakeholders’ comments, perceptions, information, advice, experiences and ideas); participation (stakeholders are associated with the decision-making process and take part in discussions and activities); representation (attempts to develop a collective choice by aggregating preferences from various stakeholders, often consists in having stakeholders’ perspectives and interests officially represented in the management of a project or of an organisation); partnership (consists of an agreed-upon collaboration between institutions, organisations or citizen fora to combine resources and competencies in relation to a common project or challenge to solve); and co-decision and co-production (the ultimate levels of stakeholder engagement as they are characterised by a balanced share of power over the policy or project decision-making process) (OECD, 2015[35]). The consultation type of engagement has been described above and an analysis of each group of stakeholders will be provided in Chapter 3. From the cities and regions surveyed (OECD, 2020[1]), 27% have organised consultation activities, followed by communication (25%), participation (19%), partnership (13%) and only represent 10% for co-decision and co-production initiatives (Figure 2.7).
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