New York City is the second largest city in the world in terms of consumption—$1 trillion worth of products and services in 2015. (First is Tokyo). So for those interested in building a circular economy, from entrepreneurs to civic leaders, it’s a good place to focus on.
With that in mind, a group called the New York Circular City Initiative recently produced “Complex Challenges, Circular Solutions,” a report about, among other things, how to create a circular system in the Big Apple and, by extension, elsewhere in the U.S. and globally. (It’s also where that $1 trillion figure comes from).
The report concludes the circular approach could create over 11,000 new jobs across the income spectrum in New York City, deliver more than $11 billion in economic benefits and reduce waste to zero. “From economic regeneration to addressing income inequality, these are the type of programs New York City is looking hard at,” says Timothy Wilkins, global partner for client sustainability at Freshfields.
Furthermore, the timing might be especially right: Covid has shrunk supply chains, since suppliers need to be closer to one another, creating a need for more-local solutions.
What is a circular economy, anyway? The core idea is that, as the ever-skyrocketing global population puts an increasingly untenable pressure on natural resources, economies have no choice but to overhaul the design, manufacturing and, ultimately, end life of products. In a circular system, goods would be created with the intention of not just recycling, but reusing, them—basically. The result: No more waste. The Ellen MacArthur Foundation, a member of the initiative, describes it as “an industrial system that is restorative or regenerative by design.”
This is a tall order. To achieve it in New York City and elsewhere, the report investigates 10 “levers” that must be tapped—actions and innovations that cut across sectors.
One important lever for New York City, which buys $19 billion worth of goods and services each year, is procurement, according to Oliver Dudok van Heel, head of client sustainability and environment at Freshfields and the report’s lead author. To that end, one move the report suggests is for the city to target 5% of procurement to be made through circular business models. “You’d be unleashing demand for those kinds of products and you could really kickstart the market,” he says.
Also important, says Dudok van Heel, is the idea of a marketplace. That includes two models. One is consumer-oriented, with the creation of what he calls a “circular mall” where everything for sale is “second life” or second-hand.
For a model, you can look at ReTuna, a mall in Eskilstuna, Sweden, where all retailers must sell used and repurposed goods. Residents can also can drop off their recycling and donations, which stores can then resell or reuse. Also, in Sweden, there’s a 25% reduction in the value-added tax on second-hand goods, according to Dudok van Heel.
The other model is b-to-b, what you might call a materials market. Waste, of course isn’t only created when consumers throw away the finished product. The production of goods also results in a large amount of excess stuff. Thus there’s an opportunity for businesses to form marketplaces where waste that would typically be tossed could be traded and bought, creating new value for the material.
A case in point is Queen of Raw, a New York City-based startup with an online marketplace that matches buyers and sellers of unused fabric, from organic cotton to faux fur. Founder Stephanie Benedetto also built MateriaMX, a service for enterprise sellers aimed at helping them find waste in their supply chains in real-time.
Another likely industry: construction, where all waste is usually thrown away because component materials can’t be separated out. If a recycling organization could separate, say, timber from metals, it all could all be traded on a marketplace, turning that unwanted trash into a newly valuable commodity.
With the right industrial planning processes, such an approach could also work among states. So rather than sourcing stuff from the other side of the world, at a significant cost, New York State could engage in a marketplace with, say, Rhode Island.
One city-specific example is in Austin. Through the Austin Materials Marketplace, an online platform launched in 2014, businesses and other groups can trade anything from discarded lumber to towel racks, turning their unwanted waste into someone else’s raw material. “Waste is no longer waste. It’s a resource,” says Dudok van Heel.
Other levers include finance, since these initiatives will all need innovative funding to get off the ground, and education, that is, “getting people to understand how as citizens they can become part of the solution,” he says.