The concept of the circular economy has grown and developed in recent years, and we are beginning to see some interesting and substantive ideas implemented on various levels, most notably at the local level. While regional and national governments are still active in broader strategic planning, we are seeing cities taking the initiative and creating these optimized circular economy hubs for local innovation and action.

“The circular economy is a global aspiration that must be tackled locally.”

Cities are able to provide both the critical mass of resources and people necessary to foster networking, innovation, and collaboration. Moreover, cities aggregate both materials and nutrients, accounting for 75% of natural resource consumption, 50% of global waste production, and 80% of greenhouse gas emissions.  A number of cities are leading the way in the development of these local circular economies in varying applications from strategy and initiative development to the construction of dedicated economic hubs focused on recycling, remanufacturing and energy recovery.

Paris for example has developed a comprehensive approach through their white paper on circular economy, which outlines seven strategies that incorporate public education, public procurement, and tax incentives, as well as the development of energy recovery projects. Each strategy has a varying number of initiatives designed to actualize the strategy. For instance, Strategy 1 is to Encourage and Support Economic Players, which has six associated initiatives, including emphasizing circular economy clauses and eco-design in public procurement contracts, developing new economic models for green construction, and prioritizing recoverable energy by requiring a minimum percentage of recoverable energy in the grid.

London alternatively, has developed a road map towards developing a circular economy, which provides a different approach and outlines substantive opportunities that companies can actually capitalize on. For example, the London report, Towards a Circular Economy – Context and Opportunities includes five business models, namely: Products as services, Renewable inputs, Recover value at end of life, Prolong Product Life, and Sharing Economy. Real-world example companies then follow these models, such as Environcom, which is the United Kingdom’s largest independent electrical, reuse, and recycling specialist of waste electronic and electrical equipment (WEEE); and Uptown Oil, a biofuel producer, now collaborating with PwC to provide a low carbon energy solution for their tri-generator. While both Paris and London are at the beginning of their circular economy journey, the strategies developed provide actionable steps for local government and businesses. Moreover, the London report recognizes that the circular economy has the potential to create over 40,000 gross jobs in circular economy based sectors, such as reuse, remanufacturing, and maintenance. Two other notable cities that are developing circular economy hubs in the US are Phoenix and Austin.

Earlier this year the city of Phoenix in partnership with Arizona State University has launched a public-private incubator with a focus on finding new uses for commonly discarded items, such as textiles, broken furniture, organics, and plastic film to name a few.

“Look to harness momentum around the circular economy or business models built on eliminating waste by continually cycling materials back through supply chains.”

This innovation hub also aligns with the city’s goal to divert 40 percent of waste that would otherwise be destined to landfill by 2020. Notably, the Phoenix program is looking to support “ventures that are focused on waste diversion and improvements in processing or utilization of waste as a raw material for new products or energy.”

Similarly, Texas is in the process of planning a new industrial park dedicated to the recycling and reuse industry. This initiative has both environmental merit, with a focus to boost diversion through material reuse and recycling, as well as a significant economic impact. According to a study commissioned by the program, Austin’s recycling economy (including multiplier effects) accounted for about $720 million and 2,675 permanent jobs.

As the concept of circular economy is developed further, initial trends suggest that other city’s will look to implement a circular economy/innovation hub as part of broader local strategies to drive the economy, provide local jobs, and reduce the external costs (both financial and environmental) related to end-of-life processing.