There’s a growing belief that cities are taking the place of nations as the dominant economic and political entities of our times. As well as being concentrators of money, knowledge, skills and services, their sheer scale can be mindblowing. Some megacities or ‘urban archipelagos’ can accommodate the bulk of a nation’s population, like Japan’s Taiheiyo Belt: home for two-thirds of Japanese people, the area also accounts for a similar share of the country’s economic output.
With great power comes great responsibility. These leading cities carry a larger share of a nation’s economic load and are obligated to provide a safe and livable home for a greater proportion of the population.
At the same time, the challenges facing cities – food, energy, transport, pollution and so on – have been well-explored, but there doesn’t seem to be a cohesive vision of how they’ll be addressed. Many are still yet to grasp that the risks to the future prosperity of cities and the countries they support are closely linked to the conditions present during years of rapid growth. Here we’re talking about the linear economy: a model based on the process of take-make-dispose, facilitated by the availability of cheap resources, plentiful energy and lots of places to put stuff where we’re done using it. For the most part, those conditions can’t be relied on in the 21st century. If cities are to remain livable and competitive, their leaders will need to develop a new approach that accounts for and even thrives in the current context.
A tale of two (circular) cities
The cities of London and New York aren’t going anywhere soon. Both have seen centuries of expansion while enduring their share of destruction, depression and disease. But cities are founded on more than just a patch of land: they’re also built on ideas and worldviews, and the prevailing linear mindset is etched in their bricks and roads. Today, the governments of London and New York know that change is essential.
Without a shift in perspective, the related challenges of housing shortfall, transport systems under pressure and increased pollution could have a major impact on livability. In the long term, this could hit a city where it hurts, undermining competitiveness and prosperity.
“Some of the big challenges for London relate to infrastructure”, says Clare Ollerenshaw, Circular Economy Manager at the London Waste and Recycling Board (LWARB). Specifically, affordable housing is in demand, with over 40,000 new units of housing required each year over the next 10 years to keep up with population growth. Right now, a lack of options in the property market is causing deeper issues, as “Londoners who grew up in the city are unable to rent or buy, and parents are forced to raise children in homes that are too small”, says Ollerenshaw.
So why not just live a bit further outside of the city, where housing is more widely accessible – isn’t that how cities grow? Well this approach can actually exacerbate existing infrastructure problems, with Londoners facing far longer and more expensive commutes. Not only is this undesirable to most, it also puts a strain on public transport systems, which in turn has knock-on effects such as increased pollution.
With more pressure on roads and rail designed hundreds of years ago, the tangible impacts of bad air quality are now being felt by citizens. “London’s air quality is dangerously poor”, explains Clare Ollerenshaw. “The equivalent of nearly 9,500 Londoners are dying each year because of it, older people and people already suffering from lung or heart issues are particularly vulnerable, and 25 per cent of schools in London are in areas with unhealthily high levels of air pollution”. For the UK as a whole, it’s been estimated that the public health costs caused by pollution amount to more than GBP 20 billion per year, which is just under 16% of the current annual NHS budget. That’s a cost most governments could do without, and a reminder that such complex challenges have far-reaching implications.
These interconnected issues are also the focus of Kate Daly’s work at New York City’s Economic Development Corporation. Daly explains that as “a coastal city of more than eight million people, a growing population and aging infrastructure”, New York faces similar knotty problems to London. Take transport for example – it was recently estimated that New York’s congestion costs the city almost USD 17 billion a year, in fuel, time and business costs wasted. Something’s got to give, and simply repeating previous patterns of growth isn’t sufficient considering today’s constraints around resources, energy and waste. What’s needed is some development ju-jitsu, unlocking new opportunities for growth and prosperity within these modern day constraints.
London and New York need to attract a modern and diverse population in order to prosper, and to do that they’ll need to be livable, a designation the Economist Intelligence Unit’s evaluates based on a city’s stability, healthcare, culture, environment, education and infrastructure. So if neglected, these current issues of expensive housing, high cost of living, longer commutes and air quality may become a growing obstacle, and Clare Ollerenshaw says that “businesses in London already struggle to recruit and retain the people they need.”
This is set against the backdrop of a changing global economy that won’t have much respect for heritage and history, considering the fast growing competition for business, talent, and culture from emerging market cities. Cities that do suffer from the effects of ‘linear lock in’ could find themselves becoming less attractive – and hence less competitive – in the future.
Applying ‘circular’ thinking
A host of cities in a similar position are starting to use circular economy thinking to frame problems and inform decision-making. The vision for a ‘circular city’ is helping to identify new opportunities for jobs and growth, while simultaneously addressing the complex urban problems outlined above, and as such has become a pillar of development strategy in for London and New York.
Since affordable housing has been highlighted as a primary need, it’s been one of the first areas in which London have been applying a circular design lens, aiming to create a housing stock that’s fit for a future population. This means re-thinking notions of urban space, from the building to borough level. “Embedding circular economy principles can make housing more flexible and adaptable”, says Clare Ollerenshaw. Designing with modularity in mind, she describes a future in which “the layout of flats in particular can be altered and number of bedrooms increased or decreased as housing needs change”. On a larger scale, employing this same thinking to ‘meanwhile sites’ – often derelict areas awaiting redevelopment – can help make the city more dynamic and accessible. One existing example is Place/Ladywell in Lewisham , a temporary housing development planned and constructed in just 9 months that “will remain on site for between 1-4 years, providing 24 homes for local people in housing need” as well as non-residential units for community and business use. The buildings have been designed to be fully demountable, meaning they could be moved to another ‘meanwhile’ development where there is a housing shortfall. This approach understands that encouraging the flow of resources is vital for a healthy economy, and there’s idling capacity in empty space that should be providing value.
The circular economy is helping the New York Economic Development Corporation reach some ambitious waste and emissions targets, but this goes beyond simply mitigating the negatives, and is seen as fundamental to the city’s future competitiveness. Kate Daly told us, “We are already shaping a circular economy in New York City via waste policy and regulations that lay the foundation for closed loop material systems and new business models, but on top of that we believe our general approach to economic development will only be enhanced when the principles and practice of circular thinking can be applied to the challenges we face.”
Kate is seeing this as the lens required to find new growth prospects within a problematic population, mobility, energy and housing outlook. “The circular economy has the potential to become a macro trend capable of creating new opportunities for tech and innovation within the sectors NYCEDC supports.” It’s a smart move long term, as studies on the circular economy have suggested that companies that optimise the use of resources and energy could be more resilient and productive than their linear counterparts. That sounds like a good foundation on which to base a city’s economy.
Fortunately, Kate and Clare, are not starting from scratch. Since it’s become increasingly clear that the circular economy makes business sense, some companies are already showing how it’s done, and both London and New York are tapping into existing entrepreneurial appetite for this new way of thinking.
In New York, officials have been applying the ReSOLVE framework, developed in the Growth Within report,(2015), to map circular activities, locate hotspots and identify ways that the city can encourage businesses to develop a more circular flow of energy, materials and information. Renewables has been one area of rich innovation, and the city boasts a range of demonstrator projects that integrate sensor-enabled feedback, solar power and energy storage. Later this year, the NYEDC aim to launch a circular economy challenge for local tech entrepreneurs working to transform the built environment.
In London, there’s also a big focus on supporting SMEs, which Clare Ollerenshaw says “are at the heart of the circular economy, as they can make changes quickly and large companies are looking to them for new, innovative ways of working.” The Advance London programme works with startups already showing that the circular economy makes good business sense, for instance through re-use, remanufacture, or resource exchange, or where digital technologies are enabling new web platforms that support sharing, better maintenance and communications. LWARB knows that examples of startups that had the luxury of a blank slate can only go so far, and are searching for the next wave of circular economy pioneers: those grounded in a traditional business model, but eager to make the transition based on circular principles.
As the circular economy gains momentum, cities have a trio of opportunity ahead of them. Firstly, by mapping and valuing the flows of ‘stuff’ that concentrate in cities, places like London and New York can address some of the challenges they face in terms of infrastructure, health and quality of life. In doing this, they also build cities of better growth and greater opportunity, attracting the world’s best and brightest. Finally, it’s been estimated that 600 urban centres generate about 60 percent of global GDP. If city governments can take the lead, they have the potential to shift a huge part of the world’s economy to a new model that is regenerative and restorative by design.
London and New York are part of the Ellen MacArthur Foundation’s Circular Cities Network, a knowledge exchange platform for pioneering cities which are embedding circular economy into their urban operations.