Local government programmes which encourage and support circular economy practices, such as repair, recycling and circular design activities, not only help attract new investment and jobs, but also result in tangible socio-economic benefits for the city and its people, reveals a new report from social enterprise Circle Economy.
The report, titled ‘The role of municipal policy in the circular economy: investment, jobs and social capital in circular cities’, examines the correlation between circular economy policy and job creation in 43 European cities. Published on 28 June to coincide with the Resilient Cities 2019 conference in Bonn, it reveals that cities became more competitive in three main ways by introducing circular economy policies:
1. Sharing practices and networking that boost social capital.
2. Attracting increased investment in areas aligned to the circular economy policy prioritised by the local authorities.
3. Seeing job creation as a result of these increased investments.
Across the 43 cities, from Amsterdam to Zagreb, investments in the circular economy can be categorized as follows: renewable energy (30%), engineering, technical and environmental consultancy services (23%), manufacturing of electric equipment and components (19%), and software and ICT services (11%).
Circle Economy’s CEO, Harald Friedl, comments: “Cities and urban policy makers play a pivotal role in accelerating the circular economy and realising its socio-economic potential. Governments can use the circular economy as an opportunity to ensure the inclusive and sustainable development of their cities.”
Recommendations for governments
The report calls on local governments to take urgent action to move from a linear ‘Take-Make-Waste’ model to a circular economy, to ensure that cities are fit for the future. Adopting circular economy practices creates jobs, boosts innovation and ensures that cities remain liveable without transgressing our planetary boundaries.
Using the policy instruments that cities and urban areas have at their disposal, in enabling regulatory and economic interventions, can directly result in the investments that create circular economy jobs. Specifically:
1. Targeting setting is an important element of regulatory support. A strong circular economy vision from local government helps the local business community to share societal and environmental objectives. This encourages long-term thinking and collaboration over short-term budgeting.
2. Economic support for circular economy activities helps overcome financial barriers. Financial mechanisms (such as subsidies for solar panels or retrofitting of homes) can support demand, by helping lower the barriers to entry for new businesses serving an immature market or settling in a new city.
Soft interventions, such as business networks and awareness raising campaigns, facilitate ongoing circular activities and support existing circular businesses, rather than attracting new investments or jobs.
Case study: Toast Ale
The UK has set a legally binding target to reach net zero carbon emissions by 2050, making Britain the first major economy to do so.
Transitioning to a circular economy will be key to achieving this ambitious goal and London is leading the way, having pledged to make the capital a zero-waste city. Specific targets include cutting food waste by 20% per person by 2025, recycling 65% of London’s municipal waste by 2030 and sending zero biodegradable or recyclable waste to landfill by 2026.
One organisation making significant progress towards the food waste reduction goal is Toast Ale, an innovative brewery launched in 2016 which transforms surplus fresh bread into beer and reinvests profits to combat food waste. The bread replaces one-third of the grain bill, reducing the demand for barley, as well as the carbon footprint of the beer. The spent grains left over at the end of the brewing process are sent to local farms to be used as animal feed or composted.
Toast Ale has directly benefited from the Advance London business support programme, developed by the London Waste and Recycling Board (LWARB) to support SMEs to transition to a circular economy business model.
As well as offering Toast Ale valuable access to a business network and associated speaker opportunities, the Advance London programme also provided practical support, including analysis of the environmental impact of their production processes and the use of cans made from recycled aluminium rather than glass bottles.
When it comes to economic support, Toast Ale has secured a number of nationally tendered innovation grants to bolster private funds. At a municipal level, Toast Ale would benefit from affordable loans to secure the business financially while it scales up and tests new innovations.
Louisa Ziane, Director of Global Brand, Culture and Sustainability at Toast, said: “Since launching three years ago, we’ve had a fantastic response from drinkers who love the circular story behind our great-tasting beers.
“We’ve strived to create a business model that has a positive impact on people and the planet, backed up by our status as a Certified B Corp. Through the support we received from Advance London, we’ve been able to delve deeper into our environmental footprint and identify opportunities to further improve. However, we are a small team of 11 people in the UK, limited in both capacity and funding to be able to make innovative changes to our processes. We support the report’s call for economic support to enable greater impact towards a circular economy.”
The report was produced with the support of The Erasmus Happiness Economics Research Organisation, part of Erasmus University Rotterdam, and the Goldschmeding Foundation.
