Circular Economy without reduction: just a nice word

A Dutch revised version of this article has been published by Federico Savini and Victor de Kok in Het Parool, on 27^th March.

On 8 April, the Municipality of Amsterdam released its strategy ‘Amsterdam circular 2020-2025’. The strategy retires the concept of sustainability and substitutes it with that of circularity, an integrated approach to resource efficiency. Mobility, energy, waste and housing are managed together into three programs: circular food chain, circular consumables and circular built environment. The ambition is push a ‘circular economy’ in Amsterdam: an economy that prospers from the reuse of waste as resource. This is expected to be a sustainable economy because it uses less raw materials, reduces waste, and at the same time generates jobs and business activities. Even The Guardian has celebrated this policy. But, did they read it? Will this strategy actually deliver its ambitions? Will Amsterdam reduce the import of raw materials and reduce its ecological footprint?

There are three factors that will make the difference: reduction, regeneration and redistribution. Without explicitly addressing these three issues, any circular economy strategy would just look like beautiful words in the air.

Reduction: the policy is inspired by the concept of ‘doughnut economy’, coined by Kate Raworth, an Oxford economist. The theory is that the economy of a territory (a city, a country) has to remain within two limits:  a minimum level of well-being and a maximum limit of environmental impact. Amsterdam economy – as that of all global cities –today goes beyond the upper limit, with an excessive impact on the carrying capacity of the planet. The priority should be to reduce this impact and bring the economy within the upper limit. The current strategy however confuses reduction with reuse: reuse of waste to ‘reduce’ import of raw materials is not the same of ‘reducing’ consumption. Reduction means scale down consumption, to reduce energy demand, to produce less waste, to slow down mobility and international travel, to reduce average apartment size. It also means to reduce meat consumption, the most demanding of water, land and energy. A truly circular strategy must first of all fight consumerism and educate to new lifestyles. Reuse of waste is fine. However, if Amsterdam citizens will still consume the same or even more, the overall impact of the economy on the environment will not be reduced.

Regeneration: A doughnut economy, Raworth says in her book, must ‘create to regenerate’. Regeneration (or upcycling) means that all residuals that are produced by an activity needs to sustain that same activity or activities of equal value. Food waste should produce compost to growth more food, demolition waste from houses should help constructing new houses, electronic waste should help make new electronics. The Amsterdam policy for circularity cannot reach this ambition if it does not deal directly and explicitly with policies of energy reduction, overall recycling, housing supply and biomass.

A true circularity will mean less waste to the AEB (the Amsterdam waste-to-energy station, the incinerator). Today, AEB burns 70% of organic waste from the city to produce ‘green’ energy. This waste has to be diverted from AEB or the AEB will continue importing waste from abroad. To reuse food waste means regional food chains, local production chains and less biomass. Local chains impact on the economic performance of the global logistics of the harbor and airports. It will also reduce the fuel for biomass stations. To reuse construction materials will impact on the supply of housing. Today, recycled concrete includes only max 10% of secondary material and requires 90% of raw sand and grind, and virgin wood. It is unlikely that the current ambitions of housing production will keep up a serious policy of building upcycling. If Amsterdam wants to reduce by 50% the use of raw materials by 2030, then it has to reduce its overall need of materials.

Redistribution: The big elephant in the room of circularity is (re)distribution: to take where there is too much to give where there is not enough. Reduction can give opportunities if allows to tax unwanted consumption and promote sustainable ones. The challenge is to enabler financially and politically a transition to circularity. The strategy currently promises a ‘research into the negative and positive fiscal incentives (Onderzoek naar ‘negative en positieve fiscale prikkels). These are the most important element of a circular strategy but are the least explained in the strategy. Circular development involves the setting of limits – in materials, in square meters, in waste, water usage, material imports – in order to redistribute resources to activities that are less aggressive on the environment. It means to disincentive waste production to finance waste reuse. Which economic activities will pay for circularity? This is the crucial choice that any city council engaging with circular economy will have to face.