EU investment needed to develop ‘urban circular economy’

Doing more with fewer resources not only helps create a zero waste society, but could also save Europe’s manufacturing industry €460bn a year, argues Mercedes Bresso.

By Mercedes Bresso

02 Jun 2014

A world booming population and rapid rise in consumption levels, coupled with economic instability, has placed a severe strain on both public services and natural resources. Consequently local and regional authorities have often struggled to decouple economic growth and deliver on their environmental responsibilities. Yet in recent years the notion of a ‘circular economy’ has opened new avenues on how to best exploit and re-use products and, fundamentally, protect our depleting natural resources while boosting growth. By developing an integrative framework that can harness the creative and innovative potential found in our communities, combined with smart regulation, the transition to a more resource efficient, low-carbon society is proving not just feasible but possible.

The economic rationale is compelling: research suggests that if the EU’s manufacturing industry applied the circular economy philosophy, it could save €460bn each year. But businesses cannot go it alone in creating a zero waste society – they need the correct infrastructure, investment opportunities and services locally to bring about change. The EU and national governments must set a coherent framework that encompasses not only eco-innovation, transport, sustainable waste reduction and recycling, but also promotes collaborative working with businesses, local and regional authorities and civil society offering support from the very beginning of the product life cycle.

"It is important to recognise the untapped potential of cities"

It is important to recognise the untapped potential of cities. As a recent report by the UN environment programme’s international resource panel on cities points out, up to half the world’s population live in cities, accounting for 60-80 per cent of global energy consumption, 75 per cent of carbon emissions and more than 75 per cent of the use of the world’s natural resources. Though this poses vast challenges for authorities, given cities create 80 per cent of global GDP, they are also well placed to spearhead innovation and be at the cutting edge of technological advancement. The European green capital award demonstrates that they can set their own sustainable vision balancing economic growth and overall quality of life whilst addressing climate change. In this respect the, EU’s seventh environment action programme’s new emphasis on sustainable cities and the ring-fencing of five per cent of EU regional development funds for sustainable cities, is warmly welcomed. Sufficient investment and a clear direction from the EU will support cities’ push through the sustainable development agenda and further an urban circular economy.

Smart regulation can also make the difference. It is estimated that by recycling 70 per cent of key materials, we can create over 500,000 new jobs by 2025. That is why the Committee of the Regions (CoR) called for ambitious EU targets on waste and a new horizontal target for decoupling growth from the use of natural resources to be taken up by the European commission in its soon to be adopted ‘Circular economy package’. It is staggering to think, that from the 500 kilos each of us throws away in waste every year 37 per cent goes to landfill. This may be a significant improvement from 10 years ago when over 50 per cent went to landfill, but we need to do more. That is why the CoR also wants a complete ban of biodegradable waste being sent to landfill or incineration by 2020.

"It is estimated that by recycling 70 per cent of key materials, we can create over 500,000 new jobs by 2025"

Consumers play a decisive role as demand determines design and availability of products on the market. Spending as much as two trillion euros (two-thirds of all public investment) each year we must not forget that local and regional authorities are themselves important consumers, so they must be encouraged to take up Green public procurement. When making decisions on the purchasing of products or services, we need to think long-term and not simply about short-term economic gains. With the internet revolutionising choice we are better informed than ever before. Quality, durability, cost and environmental impact increasingly influence the decision making of consumers, which is encouraging companies to transform their processes and products and become more aware of their supply chain. Having foresight and awareness about the economic and environmental impact in equal measures can help spark eco-innovation.

Multi-level governance – the process of engaging local and regional representatives in the EU decision making process level and enabling them to be an equal partner – is crucial in making the shift. As a CoR representative, I joined other members of the commission-led European resource efficiency platform (EREP). In our EREP manifesto and policy recommendations we call on Europe to double its resource productivity by 2030 and on all sectors to create a sustainable circular and resource efficient economy involving local and regional authorities.

With global competition increasing and the effects of the crisis still biting, the EU must become more competitive, more systematic and more collaborative. The very concept of the circular economy has shown how simplistic the notion of environmental protection versus business interests is. ‘Doing more with fewer resources’ must drive public policy at all levels of government, and while companies have the uphill task of building more resilient supply chains, the public sector must provide a reliable legal framework and sound infrastructure so businesses can thrive. Using public funds wisely, including EU funds available under the new financing period, can help cities and regions spur innovation and promote the circular economy in their communities.

Read the most recent articles written by Mercedes Bresso - EU needs cross-border solutions to common problems

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