copy the linklink copied!Introduction: The circular economy in cities and regions

The transition to a circular economy is underway and cities and regions are at the centre of it. By 2050, the global population will reach 9 billion people, 70% of which will be living in cities (UN, 2018[1]). The pressure on natural resources will increase, while new infrastructure, services and housing will be needed. Already, cities represent almost two-thirds of global energy demand (IEA, 2016[2]) and produce up to 80% of greenhouse gas emissions (World Bank, 2010[3]). By 2050, urban dwellers will still be the most exposed to high concentrations of air pollutants1 (OCDE, 2012[4]). Cities produce 50% of global waste (UNEP, 2013[5]). It is estimated that globally, by 2050, the levels of municipal solid waste will double (IEA, 2016[2]; UNEP/IWSA, 2015[6]). A total of 80% of food is consumed in cities and compared to today’s levels, 60% more food will be required in the coming decades to feed the population (Ellen MacArthur Foundation, 2019[7]). At the same time, water stress and water consumption will increase by 55% by 2050 (OCDE, 2012[4]). Cities and regions have core responsibilities for local public services such as transport, solid waste, water and energy. As such they are at the centre of key decisions having a strong impact on citizens’ well-being, environmental quality and economic growth.

There is no unique definition for circular economy, which is now facing a validity challenge period. Although there are many definitions of the circular economy, they all include as a basic assumption the recognition of waste as a resource (Box 1.1). The circular economy is about preventing wasted resources through reusing materials, improving design to increase the durability of goods and products, and transforming waste. In cities and regions, the circular economy should ensure that: services (e.g. from water to waste and energy) are provided whilst preventing waste generation, making efficient use of natural resources as primary materials, optimising their reuse and allowing synergies across sectors; economic activities are planned and carried out in a way to close, slow and narrow loops across value chains and infrastructure is designed and built to avoid linear locks-in, which use resources intensively and inefficiently.

The circular economy is not an end per se, but a means to an end: it provides an opportunity to do more with less, to better use available natural resources and to transform waste into new resources, while promoting new jobs opportunities and tackling inequalities (e.g. access to sharing services and commodities, form mobility to agro-food, to buildings). As such, while the environmental narrative, whereby less use of materials implies reduced greenhouse gas (GHG) emissions has been so far predominant in promoting the shift to a circular economy, cities and regions are increasingly paying attention to the social and the economic aspects, as drivers for this transition. According to Blomsma and Brennan (2017[8]), the circular economy is now facing its “validity challenge period” on its way to becoming a robust and consolidated concept, implying a radical shift in consumer behaviour.

The circular economy in cities and regions is expected to generate a positive impact on economic growth, the creation of new jobs and the reduction of negative impacts on the environment. By 2030, shifting from a linear approach of “take, make and dispose” to a circular system is estimated to hold a potential of USD 4.5 trillion for economic growth (Accenture, 2015[14]). Projections show that, by 2030, resource productivity in Europe can improve by 3% and generate a gross domestic product (GDP) increase of up to 7% (McKinsey Centre for Business and Environment, 2016[15]). Projections at the city level show that for example, applying a circular economy approach to the construction chain in the city of Amsterdam (Netherlands) would decrease GHG emissions by half a million tonnes of CO2 per year. In London (United Kingdom), the benefits from circular approaches applied to the built environment, food, textiles, electricals and plastics are estimated at GBP 7 billion every year by 2036.2 About 50 000 jobs related to the circular economy are estimated to be created in the Île-de-France region.3 Environmental benefits consist of: decreased pollution; increased share of renewable or recyclable resources; and reduced consumption of raw materials, water, land and energy (EEA, 20016[16]). Yet, the transition should be “just” by taking into account people’ social well-being, quality of life and equity.

The potential of the circular economy still needs to be unlocked. Today, less than 10% of the global economy is circular (Circle Economy, 2020[17]). Unlocking the potential of the circular economy in cities and regions implies going beyond solely technical aspects and putting the necessary governance in place to create incentives (legal, financial), stimulate innovation (social, institutional) and generate information (data, knowledge, capacities). It would also mean looking at the barriers for businesses to “close the loops”, by re-thinking business models (e.g. leasing and sharing) and analysing the economic instruments that could support the transition in several sectors, including waste, food, built-up environment and water. The circular economy implies governance models based on multi-stakeholder and multi-sectoral approaches. For the circular economy to happen, policies need to be aligned, stakeholders informed and engaged, legal and regulatory frameworks updated and in support of innovation.

copy the linklink copied!The drivers for the circular transition in Umeå, Sweden

The circular economy in Umeå, Sweden, is perceived as a new socioeconomic paradigm leading to new ways of conceiving business, products (design) and consumption (sharing). Figure 1.1 indicates the words that the city through the OECD Survey on the Circular Economy in Cities and Regions most associates with the circular economy concept (the bigger the word in the figure, the higher the importance) (OECD, 2019[18]). These words are: “business model”, “design” and “sharing”. In the fastest-growing urban centre in Northern Sweden, where a number of bottom-up initiatives to increase resource efficiency are flourishing, the circular economy represents a represent a new socioeconomic paradigm through which to stimulate businesses, while achieving the environmental goal of carbon neutrality by 2040.

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Figure 1.1. Tag cloud on the circular economy for Umeå, Sweden

Note: The respondent had to choose the top 5 words most often associated with the circular economy. The answer is based on the following question: “Please indicate the top 5 words from the list suggested below you most often associate with the circular economy in your context, ranking from 1 (most important) to 5 (less important)”.

Source: Own elaboration based on the city of Umeå’s answers to the OECD (2019[18]) OECD Survey on the Circular Economy in Cities and Regions.

The city of Umeå made the circular economy a priority in its Strategic Plan 2016-28. Umeå is the capital of Västerbotten County located in the North of Sweden (Figure 1.2). Västerbotten County encompasses the province of Västerbotten and part of the Lapland and Ångermanland provinces (Box 1.2). It shares borders with the Finnish Vaasa region and Norway. The Strategic Plan 2016-28 Plan states that Umeå should be a role model in the circular economy (Municipality of Umeå, 2016[19]). While the municipality is working on how to concretise this goal, it can build on its long experience in the integrated treatment of the waste, energy and water. Figure 1.3 shows the main drivers for the circular economy transition in Umeå presented in this chapter.

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Figure 1.2. Map of Umeå, Sweden

Source: The Municipality of Umeå (2020[22]) Umeå's location in Sweden's Map.

The circular economy represents a means to achieve Umeå’s environmental goals for 2040. The New Comprehensive Plan for Umeå Municipality (Box 1.3) set the goal for the city to be fossil-free by 2045. However, in February 2020, the city council approved the new environmental goals for the City of Umeå, anticipating the target by 5 years to 2040. As a matter of fact, Some goals included in the aforementioned plan and scheduled to be reached by 2020, have already been successfully achieved (e.g. climate neutrality in the energy system by 2018 and fossil-fuel-free public transport by 2020) and are now under revision for updates. The city is planning a fossil fuel private vehicle fleet by 2030. The goal will be achieved thanks to the pro-environmental attitude of citizens, ranked in 2014 as Europe ́s most environmentally aware citizens by Vienna University of Technology European as part of the “Smart city Ranking of European medium-sized cities” (Municipality of Umeå, 2018[23]).

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copy the linklink copied!Socioeconomic data and trends

The city of Umeå is the most populated city in the Norrland region and the fastest-growing urban centre in Northern Sweden. The city counted 127 000 inhabitants in 2018, corresponding to 50% of Västerbotten County’s population (Regionfakta, 2019[26]; North Sweden Cleantech, 2019[27]) (Figure 1.4). Umeå is the 11th largest city in Sweden and the largest city across the northern counties of Jämtland-Härjedalen, Norrbotten and Västerbotten, which are considered sparsely populated areas. Most of the population in Northern Sweden is concentrated in larger cities along the east coast, where Umeå is located. The city has doubled its population in the last 50 years: since 2001, Umeå’s population has grown by almost 22% (Figure 1.4). Moreover, projections show that, by 2050, Västerbotten County, driven by Umeå, will continue to grow (+3.2% compared to 2016), while the population in the neighbouring counties of Jämtland and Norrbotten will shrink (OECD, 2019[28]).

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Figure 1.4. Trends and projections of population growth in the municipality of Umeå, Sweden, 2001-29

Source: Own elaboration based on data from the Municipality of Umeå (2019).

The city aims to reach a population of 200 000 inhabitants by 2050, with consequences on the use of natural resources and infrastructure needs. The expected population growth (22% higher than the current population) (Municipality of Umeå, 2018[24]) is likely to demand an expansion of infrastructure, including the housing stock, schools, roads and green areas. The city government foresees an increase of 60 000 houses by 2050 in order to meet the growing population goal. The housing stock in Umeå doubled in the last 30 years. Since 2011, a total of 800 new apartments have been built each year (Municipality of Umeå, 2019[29]). More people will mean greater demand for housing, transport and services, while likely to produce more waste. As such, the circular economy can guide decisions towards sustainable use of resources and alignment across policies (e.g. housing, transport, land use, waste management and logistics). A higher population density is expected to favour further development of sharing economy initiatives, especially in the transport sector.

Umeå is a knowledge hub for the region and hosts a young and highly educated community. Umeå is the main education centre in northern Sweden. The city hosts two renowned universities and eight colleges (e.g. technology, architecture, design and fine arts). The Umeå Institute of Design ranked first worldwide in 2019 (Umeå University, 2020[30]). In 2018, the city hosted 34 000 students, corresponding to 25% of the population (Municipality of Umeå, 2018[23]). The average age in Umeå is 38.4 years old, below the national average (41) and the other counties in Northern Sweden (43.2 in Jämtland-Härjedalen and 43.7 in Norrbotten) (OECD, 2019[28]). The city figures in the top ten list among the 290 municipalities in Sweden for the level of education of its population. (North Sweden Cleantech, 2019[27]). A total of 37% of individuals have at least 3 years of post-secondary education, including at postgraduate level (North Sweden Cleantech, 2019[27]).

The business and innovation scene is dynamic and environmentally friendly. Since the 1950s, forestry, energy and mineral exploitation characterised Northern Sweden’s economy. These sectors are still relevant in the provincial economies of Jämtland-Härjedalen, Norrbotten and Västerbotten, representing a quarter of the regional GDP in 2017, behind the services sector (57%) and the goods production sector (32%) (Statistics Sweden, 2016[31]). In 2016, Umeå’s GDP per inhabitant (SEK 416 000) was 5% lower than the Swedish national average (SEK 441 000) and 9% higher than Västerbotten County’s level (SEK 372 000) (Regionfakta, 2019[26]). A total of 12 300 small- and medium-sized enterprises (SMEs) and 650 start-ups are currently based in Umeå. There are five incubators (Uminova Innovation, eXpression Umeå, Umeå Biotech, BIC Factory and Coompanion) involving start-ups, universities, the municipality and public companies. The manufacturing, building and construction sectors, trade, ICT and life science account for 7 000 firms in Umeå. In 2017, employment rate levels have been higher in Västerbotten County and in the neighbouring County of Jämtland than in the rest of the country (68.6% and 68.7% respectively compared to 67.8% at the national level) (Figure 1.5). In 2017, in Västerbotten County, the unemployment rate was 5.3%, below Sweden’s average (6.7%) (OECD, 2019[28]). Regarding environmental aspects, municipal companies apply innovative cleantech solutions, consisting of using alternative clean energy, reducing water consumption, sustainable construction, green chemistry and/or sustainable transport solutions (North Sweden Cleantech, 2019[27]).

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Figure 1.5. Employment rates in Sweden by county, 2005-17

Source: OECD (2019[28]), Linking the Indigenous Sami People with Regional Development in Sweden, https://dx.doi.org/10.1787/9789264310544-en; Statistics Sweden (2020[32]), Labour Market Statistics, http://www.statistikdatabasen.scb.se/pxweb/sv/ssd/ (accessed on 6 February 2020).

copy the linklink copied!Overview of environmental data and trends

Umeå’s CO2 emissions have been historically lower than the national level and the city expects to achieve net-zero emissions by 2050. Total CO2 emissions from fossil fuels (tonnes/capita) have sharply decreased since 1990 (from 6.0 tonnes/capita to 4.5 tonnes/capita) and have remained below the national average, which is approximately 4.7 tonnes of CO2/capita (Municipality of Umeå, 2018[33]). The city expects to achieve net-zero emissions by 2050 following national emission reduction objectives (Municipality of Umeå, 2018[33]).

The transport sector represents the main source of CO2 emissions in Umeå. The greatest challenge for residents is the extensive use of fossil fuels in transport, which in 2013 accounted for more than 50% of total emissions (300 000 tonnes of CO2) (Figure 1.6). However, transport emissions have experienced a slight reduction (4%) between 1990 and 2013 (from 2.6 tonnes/capita in 1990 to 2.5 tonnes/capita in 2013). According to the survey on consumption-based emissions in Umeå (Box 1.4), transport is the sector causing most of the atmospheric emissions (Municipality of Umeå, 2018[33]). The Strategy for Liveable Cities set by the Swedish government encourages cities to take sustainable transport measures (Ministry of the Environment and Energy, 2018[34]). In particular, it sets two interim targets: By 2025, the proportion of passenger transport in Sweden using public transport, cycling and walking (expressed in passenger kilometres) must be at least 25%, with the aim of doubling the proportion of walking, cycling and public transport over time. By 2020, municipalities must have access to a refined method for making use of and integrating urban green spaces and ecosystem services in the planning, building and managing of cities.

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Figure 1.6. Total CO2 emissions by sector in Umeå, Sweden, 1990-2013

Note: Most recent available information dates from 2014.

Source: Municipality of Umeå (2018[33]), EGCA 2018, Umeå, Sweden. Climate Change: Mitigation and Adaption.

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Box 1.4. The survey on consumption-based emissions in Umeå, Sweden

In 2018, the municipality of Umeå launched a survey on consumption-based emissions to analyse environmental impacts due to citizens’ consumption. The survey, based on the IVL Swedish Environmental Research Institute´s climate account, received 1 475 responses (from a total of 4 004). Results, combined with national data, revealed that the average emissions from consumption in Umeå (11.7 tonnes of CO2 per year/person)4 remained above the national average (9 tonnes of CO2 per year/person).5 These levels of emissions stand above those set by the Paris Agreement under the United Nations Framework Convention on Climate Change, which states that emissions per person and year should be on average 1 tonne by 2050 (Naturvårdsverket, 2019[35]).

Consumption-based emissions include emissions that occur at all stages before a product is consumed, regardless of where these emissions occur. The fact that most of the products consumed in Umeå are not locally produced increased their impacts. Based on the results of the survey, transport is the sector producing higher number of emissions in Umeå (32%), followed by private investment (21%), food (17%), public consumption and investment (13%), clothes and gadgets (9%), housing (6%) and others (2%) (Figure 1.7).

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Figure 1.7. Consumption-based emissions by sector in Umeå, Sweden

Source: Naturvårdsverket (2019[35]), Consumption-based Emissions of Greenhouse Gases, http://www.naturvardsverket.se/Sa-mar-miljon/Klimat-och-luft/Klimat/Tre-satt-att-berakna-klimatpaverkande-utslapp/Konsumtionsbaserade-utslapp-av-vaxthusgaser/ (accessed on 29 January 2020).

Key findings from the survey highlight actions needed to substantially reduce atmospheric emissions:

• reduction in air travel and car use

• reduction in meat and dairy consumption and a reduction in food waste

• reduction in domestic energy consumption

• reduction in consumption and increase in the reuse of furniture and clothing.

Source: Stockholm Environment Institute (2018[36]), Consumption-based Emissions in the Municipality of Umeå, http://www.sei.org (accessed on 25 January 2020); Naturvårdsverket (2019[35]), Consumption-based Emissions of Greenhouse Gases, http://www.naturvardsverket.se/Sa-mar-miljon/Klimat-och-luft/Klimat/Tre-satt-att-berakna-klimatpaverkande-utslapp/Konsumtionsbaserade-utslapp-av-vaxthusgaser/ (accessed on 29 January 2020).

District heating increased steadily since 2008. As a consequence of the investments the municipality made in district heating infrastructure since the 1960s, almost 99.8% of all municipal buildings are connected to district heating or rely on renewable energy sources. In 2014, a total of 80% of the district heating system energy derived from renewable resources, including wind, hydropower, biofuels and waste incineration (Figure 1.8).

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Figure 1.8. Share of renewable energy in the district heating system in Umeå, Sweden, 2008-14

Note: The graph is built upon the most recent available information, until 2014.

Source: Municipality of Umeå (2018[33]), EGCA 2018, Umeå, Sweden. Climate Change: Mitigation and Adaption.

The per capita waste generated in Umeå has increased by almost 5% between 2008 and 2018 (Municipality of Umeå, 2018[37]). Umeå’s households generated around 450 kg per year/inhabitant in 2018, which is similar to the Swedish national average, 466 kg per year/inhabitant in 2018. Nonetheless, waste production per inhabitant has been increasing in Umeå between 2008 and 2017. In 2017, incineration concerned a total of 33% of Umeå’s household waste (150 kg/year/inhabitant). Figure 1.9 shows that the share of biologically treated food waste has more than doubled since 2010 (standing at 39% in 2018), while Figure 1.10 reveals that the household waste material collected for recycling has been falling since 2014, reaching in 2018 the same level than in 2011 (since 2014 it has decreased by 5% reaching 27% in 2018). In Sweden, 50% of household waste is used for energy recovery, compared to 30% in the European Union (EU) (Avfall Sverige, 2018[38]). According to the Swedish national survey on the circular economy (2018), there are some difficulties in obtaining differentiated data on the industrial and household waste managed by different companies. At the same time, the survey pointed out that the municipalities should have a clear role in preventing waste production. In 2019, in order to promote separate waste collection, the national government strengthened the Environmental Code towards Packaging and Newspaper Collection Service (FTI) responsible for collecting packaging waste.

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Figure 1.9. Biologically treated food waste in Umeå, Sweden

Percentage of total food waste, 2011-18

Source: Own elaboration based on data from Vakin (2019[39]). Biologically treated food waste in Umeå, Sweden.

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Figure 1.10. Household waste collected for recycling in Umeå, Sweden

Percentage of total household waste, 2010-18

Source: Own elaboration based on data from Vakin (2019[40]). Household waste collected for recycling in Umeå, Sweden.