Urban Transformation

The circular economy could save life on Earth – starting with our cities

Bottles waiting to be recycled.

Cities are where we square the circle between consumption and sustainability. Image: Unsplash/Lacey Williams

Luis Bettencourt
Pritzker Director of Mansueto Institute for Urban Innovation, University of Chicago
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Imagine a future where human prosperity does not translate into sacrificing nature.

A world with no wastes, no pollution, where animals and plants on land and in the oceans prosper from the existence of humans as much as we do from the biology and geophysics of the Earth.

Is this impossible? Or must life on Earth be a zero-sum game between humanity and other species?

I’m always surprised by how many people jump to this negative view. They imagine the future as either a bleak scenario in which humanity spirals out of control in an otherwise lifeless world, or one in which human populations and consumption must be drastically curtailed, even at the cost of most human dignity. You’ve seen the movies…

Assuming that these are our only choices is a fundamental failure of the imagination. There is another, better way: it’s called the circular economy.

A new World Economic Forum report showcases many emerging models for making the economy more circular – especially in cities – and points the way forward for how to evolve current economic systems into a comprehensive logic of sustainability.

The rub with the circular economy is that it does not exist today: it needs to be invented and grown. Fast; over the next few decades.

The key is decoupling economic growth and human development from resource extraction and waste generation.

Monitors waiting to be recycled in Guangdong, China.
Monitors waiting to be recycled in Guangdong, China. Image: Reuters/Aly Song

“Bending” the economy from its present linear sequence of resource extraction –> production –> consumption –> waste disposal to become circular and sustainable requires a much more thorough systems approach to goods and services, a reconceptualization of design and production, and the development of technologies and processes that can turn used finished goods back into inputs to production.

These transformations squarely locate the birth of the circular economy in places where our systems of production and consumption most strongly overlap, where the density of complex innovations is fastest, where resources are most limited and where living with the consequences of waste and pollution are direst.

Such places are cities – especially large Cities.

Imagining a more sustainable future

The good news is that much of it is already happening.

The report gives a number of inspiring examples from cities worldwide in areas of water, energy, plastics and waste management, as well as showcasing emerging novel concepts for procurement, finance and design that illustrate how the transition to a more circular economic system is already shaping up and growing.

Cities throughout the world are already increasing their rates and targets for recycling, for example, and finding new uses for wastes arising from their built environment as well as from consumption. By formalizing their sustainability goals, many cities are also increasingly internalizing part of their resource flows, especially in water and high value-added food production, and removing nefarious consequences associated with other needs, such as carbon emissions and pollution from energy consumption.

But there are still many barriers to making the economy comprehensively circular.

Some of these are fundamental and follow from the laws of physics. Others are flexible and wholly dependent on our investments in design, business practices, our consumption preferences and capacity for technological innovation.

The laws of physics tell us that there is always a thermodynamic energy cost in running any complex system, including our cities and the economy at large. This fundamental limitation means that worldwide human development and urbanization will likely be associated with more energy use, not less.

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However, substantial efficiency gains are already in play: the US economy, for example, has not increased its electricity use over the last 10 years, despite substantial population and economic growth.

But most importantly, a majority of energy needs can now be met with renewable sources at lower costs, without generating pollution or greenhouse gas emissions. Here, too, cities are leading the way.

Many recycling and reuse processes are now prohibitive primarily because of energy costs. For example, aluminium is worth recycling financially because of its high-embedded energy, while plastics typically are not. As a result, states the report, “only 14% of plastic packaging is collected for recycling” (Ellen MacArthur Foundation, 2017), while “low rates of collection, reuse and recycling cost the global economy $80–120 billion annually”.

The age of recycling everything

However, in a world of almost free, renewable energy, recycling practically everything becomes possible. This change is coming and is necessary to stimulate the clean energy revolution’s expansion into new, hitherto foreclosed sectors of the economy.

But it is in the area of technological change, design and business practices that more innovation is critically needed and where opportunities are even more spectacular.

The nature of the transition is systemic: it cannot be achieved by any single actor. For this reason, there is a need for collaborations between governments, the nonprofit sector, businesses and citizens to achieve a favourable environment that encourages innovation aligned at once with more sustainable circular practices and steady and equitable economic growth.

We need collaboration between governments, nonprofits, businesses and citizens.
We need collaboration between governments, non-profits, businesses and citizens.

For sure there will be enormous disruption. Many “free” environmental costs will need to be internalized into production and consumption, and the roles of public and private organizations will have to shift substantially. The line between goods and services will be completely blurred. Current public service models associated with energy, water and waste management will become more decentralized and integrated in more dynamic complex networks.

As a consequence the transition to a circular economy needs to be evolved gradually, with close attention to network effects, co-operation among many stakeholders and an eye towards mitigating unintended consequences, especially associated with socioeconomic inequality and the stifling of innovation.

Cities are especially well placed to lead the way.

As we accelerate towards worldwide urbanization and contemplate the possibility of environmental armageddon, only the creative dynamism of people and organizations working together in cities can provide us with the lift-off necessary to chart a new economic trajectory where human prosperity and invention is also a guarantee of the vitality of all life on Earth.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Urban TransformationNature and BiodiversitySustainable Development
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