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The circular economy is an umbrella term for different economic schools of thought. ‘Cradle 2 Cradle’ product design methods avoid toxic materials, while ‘Biomimicry’ incorporates design features and processes observed in nature. ‘Industrial Ecology’ and ‘Blue Economy’ talk about the use and reuse of materials, and their system limits. The ‘performance economy’ school represents circular economy from the ownership perspective, and emphasizes that the sale is not the product itself, but rather the performance it provides, which shifts the responsibilities of the provider of the solution.
The industrial frameworks, regulation and taxation play a crucial role in all schools of circular design thinking. Product is an essential piece of economic processes, but not the only component with the capacity to change the game’s rules. So when we’re talking about the circular economy, we’re talking about a system.
Cities are interesting cases to look at for this reason.
In practice: Cities in transition
In order to identify closed-loop materials, we need to consider what materials are in high demand in a city, and create opportunities for their localized production.
Applying these criteria, Finland developed the first circular economy roadmap. Finland’s Circular Economy Roadmap 2016–2025 sets priorities for industry transformation across the food, transport and logistics systems, and forest-based and technical loops.
Amsterdam, Rotterdam, and London have followed suit, and are now applying circular economy principles as their cities’ economic approach, by taking into consideration the metabolism of their local materials.
These strategies are top-down, meaning governments are taking the lead towards transformation. What should be done for cities which are developing a circular economy from the bottom-up?
Berlin is a good example to look at.
Circular economy mentality and design-thinking is widely present in the city, but remains in a bottom-up heterogenic state. Initiatives have embraced the concept, and are eager to work with it, not waiting for local authorities to take the lead. Circular fashion connects circular design techniques with materials that either follow bio-cycle or are approved by recyclers. Dycle develops diaper inlays that are plastic-free and compostable. Furthermore, through extensive research, Berlin has already developed a good knowledge base to recover nutrients from wastewater.
The gap between circular economy and economy
In Germany and in the case of Berlin, the gap between the circular economy and the economy itself exists due to historical causes. For example, the Circular Economy Regulation was implemented in 1994 to foster an effective waste management system through recycling. On the one hand, it achieved successful results for recycling technologies. On the other hand, it decoupled waste management from the economy. Waste is no longer the next step of industrial processes, but an independent industry in itself.
Such historical development caused a divide between institutions’ responsibilities. Waste management is part of environmental activities, and economic or industry development is the responsibility of economic authorities. This situation creates an extra obstacle to develop full economic loops across an industry in one process: from design to waste as a resource.
If we examine the circular economy in Berlin at an industry level, what industries are the most relevant to begin with?
Berlin is a service-oriented economy that makes up 84% of the city’s GDP. Thus, the material economy only comprises 16%, which comes from construction, pharmaceuticals, biomedical engineering, and cleantech. What differentiates Berlin from other cities is its design and creative scene. These are the industries where circular economy implementation on the city level can work effectively.
However, the challenge is to direct industry toward a circular economy transformation. This is where the current gap is. Construction is a good example of an industry in need of collaboration. One of Berlin’s main city priorities is its affordable housing. However, 75% of the property market is privately owned. What does it mean for the city and circular construction? If the government decides to implement circular construction, only 25% of the properties would be affected. For the rest, a lot of engagement with real estate sector has to be done. Real estate stakeholders need to be on board, as architects and planners — no matter how well they embrace circularity — will no doubt struggle to make a speedy transition alone.
An effective ecosystem for Berlin construction refurbishment and recycling is also needed. The current construction recycling rate is 90%, which is mostly done by crushing concrete and putting it into new roads. It is one way to downcycle the material. The collaboration should be already on new construction sites. Case per case (building per building) solutions for refurbishment of building elements, together with the recycling sector, should be developed.
These are only examples of what needs to change in the system towards a circular economy transformation. If the gap between circular economy and economy can be closed, it lies not only in product redesign, but also in coherent dialogue and interactions between different stakeholders across the value chain and within ecosystems.
[Dina Padalkina is an economist and advisor, working in the area of the circular economy. Her main focus is circular materials, circular city, and strategies towards its transition.]