Challenges to implementing circular development

Currently, there are pioneering cities across Europe, experimenting with circular development pathways. However, in order for these experiments to sustain and scale-up, some fundamental changes in the development regime will be required. In this chapter we explore the challenges to transformation.

Transforming the economic system

The economic system is a major challenge to the implementation of circular urban development. Resources and ecosystem services are under-valued by the market. The true environmental and social cost of consuming resources (i.e. degradation of ecosystem services; degradation of distant communities; loss of irreplaceable, finite resources) is not paid by the market. This is due to the inherent flaw in neoclassical economic model, which supposes that resources are infinite. Ecosystem services are viewed as a common asset which are non-excludable, so these too are under-valued and often over exploited. A seismic shift towards an economic system which internalises the environmental and social costs of resource consumption and societal benefits offered by circular activities is key to underpinning the success of circular development pathway and a fully functioning circular economy.

Recycled, reused and reprocessed materials; decontaminating brownfield sites; recycling grey-water, maintaining blue and green infrastructure; and constructing adaptable infrastructure all come at an additional cost. Virgin materials, potable water and greenfield sites are comparatively cheap. Blue and green infrastructure, although cheaper than grey infrastructure in terms of capital cost, can be more expensive to manage and maintain long-term. Adaptable infrastructural systems, adopting different technologies and designs, will in the short-term incur additional capital costs. In the long-term it is likely to be cheaper to design adaptably because it avoids the costs of demolition and disposal. However, consumers are not prepared to pay these additional costs.

The challenge is further amplified by consumers’ concern about the quality of reused products and materials; and the operational and commercial performance of repurposed, refurbished and adaptable infrastructure (Bastein et al., 2013; Bullen and Love, 2010; Wilcox et al., 2016). For example, the parity in price for potable and non-potable water in Queen Elizabeth Olympic Park (QEOP) rendered the black to grey-water recycling system financially unviable. Yet the societal costs of drought or sewage contamination of potable water supply during flash-flooding, which could be avoided by adopting this system, are not factored into the decision-making process. Similarly, developers tend to avoid brownfield sites in cities because of the potential cost of decontamination and the difficulties of consolidating sites. The loss of ecosystem services resulting from development on greenfield sites or the cost to society of building in risky areas (e.g. on flood- plains) is never factored into the equation.

Energy recovery from waste appears to be the exception. It is an economically viable alternative to disposal and recycling, as there is a sustained demand for energy. Also in Europe escalating landfill costs and scarcity of landfill sites make disposal an expensive option. The future uncertainty created by resource price volatility (particularly for material recyclates) and changes to global supply chains makes investment in recycling systems riskier (Swickard, 2008; Velis, 2015). So energy recovery systems are seen as a less risky financial investment.

Circular actions produce long-term, societal benefits (under-valued by the market) and require long-term investment. It is often difficult to finance circular projects, because investors and infrastructure providers are looking for shortterm returns, driven by short investment cycles (Bystrom, 2018). This is a major challenge to overcome. For example, building capacity into systems for adaptation and ecological regeneration, through the allocation of space in cities for this purpose, will result in the short-term, economic under-utilisation of land. This will produce low economic yields for investors in the short-term. However, in the longer-term it will provide valuable ecosystem services which have societal benefits. It will also provide room in cities for the expansion or modification of existing infrastructure, which is more cost-effective than demolition, disposal and construction.

Integrating whole life-costing and valuation of ecosystem services into business models could help to overcome this. However, the split-incentive along the value chain tends to undermine this approach. Those making the up-front, capital investment do not profit from the long-term societal benefits. This might be addressed by adopting service-based approaches, which require infrastructure providers to become service providers. For example, house-builders would become responsible for maintaining accommodation long-term, and would benefit from the flexibility spaces for expansion could offer.

Sunk costs in infrastructural systems also prevent replacement. However, in new developments or when decision makers are considering choices for replacement, adopting circular alternatives maybe more financially viable. For example, in Paris the government is considering replacing the existing grey- water infrastructure (grey infrastructure) with blue-green infrastructural solutions. They are already testing these options in parts of the city, including Clichy Batignolles. Nevertheless, the sunk costs are a real challenge in many cities, where infrastructure is not nearing the end of its lifetime. The cost of replacement is a very significant barrier to overcome.

Land value and competition for space in many European cities create a considerable challenge to implementing circular development. Circular land-use is under-valued. The societal benefits otfered by these activities are not factored into their value. Thus, it is impossible for circular activities to compete with high-value activities, such as luxury residential and commercial development. We have seen this in all the case studies. Circular activities are often only granted temporary permissions. This temporality is unlikely to encourage scaling-up and thus to result in new development pathways. Some compromises have been found. For example, the activities in Les Grand Voisins were moved to an adjacent site once the redevelopment started. Another compromise solution was found in Brixton where a high-value, commercial development was built around the urban farm at Loughborough Junction. The challenge is to enable land use which promotes circular activities, to last beyond the temporary permissions, and scale-up across cities.

Globalisation of resource flows and impacts of consumption reduces people’s awareness of the effect of their consumption decisions on society and the environment. The localisation of resource flows and impacts through the creation of local economic systems could help to address this challenge. It will reduce the resources consumed by transportation and associated emissions. It can also help to promote circular activities. The low value of recyclates and reused materials means that looping actions are often locally constrained. However, there are considerable challenges faced in the implementation of a local economic system.

The greatest challenge is the lack of urban producers. Too few urban producers create a problem for local sourcing and resource looping. Often local producers (e.g. industries, urban farmers) cannot compete successfully for space. Yet these actors are needed if “waste” resources heat, materials, goods are going to be reused, recycled or recovered locally. For economic reasons loops have to be closed locally. This creates a major barrier to the adoption of circular development. Of course, planning could intervene in land markets to enable circular activities.

Local currency could be used to encourage circular activities. A local currency is being mobilised in Brixton, but it is a major challenge. The municipality plays a key role in ensuring its success, by generating demand (by paying its workforce and allowing businesses to pay rates using the local currency). Technology has been developed which enables easy transactions. Also a variety of services and goods are provided locally, which accept the currency. The currency supports local production, suppliers and circular activities. However, it takes considerable determination on the part of local actors to make the currency work.

Shifting cultural values

There are major cultural challenges to implementing circular development pathways. Culture influences the values of society, which affect social practices and lifestyles. These influence consumption decisions, environmental praxis and adaptive capacity. There are nine national cultural differences, three of which are likely to effect the implementation of circular development (Hofstede, 2001; Schwartz, 2008). These values are individualism, short-termism and humanity.

Individualism drives resource consumption and wastage. The private consumption of resources (e.g. cars, houses, etc.) demarcates status and provides personal freedom. However, it reduces social capital. This makes collective action to address resource depletion or self-organise to adapt to changing environments more difficult. In contrast, societies with collective values view resources as an asset for the commons, and are concerned about resource over-exploitation. There is greater social capital and willingness to be engaged in community actions for resource stewardship. The social capital helps to build societal resilience and enable self-organisation, learning and a collective response to contextual changes. Thus, circular development sits more easily with collectivist values. Yet, the culture of individualism dominates. However, there are communities of interest through which a collective response is possible (e.g. Transitions Town Brixton, Incredible Edible).

Societal orientation to time will also influence capacity to implement circular development pathways. In western societies, short-termism arguably underpins most political and financial decision-making, largely because of short political and investment cycles. This is a significant challenge to overcome when implementing circular development. A long-term, future-orientated society is more likely to be concerned about futurity and intergenerational equity and the preservation of resources and ecosystems for future generations. This orientation aligns with the goals for circular development. For example, in Sweden, there has been political and financial support for the implementation of closed-loop systems (ECOCYCLES) for 20 years. Circularity has underpinned the cultural values of its institutions during this period, which has manifested in policy and practice.

Societies which are highly humane believe in the importance of “others” (people and nature) and their responsibility to promote well-being. They are motivated by mutual benefit, environmental protection and well-being. Social capital is stronger and social solidarity underpins policy and actions. Linking social solidarity and circular actions has been successfully adopted in Paris. In contrast, societies with a low humane orientation are motivated by power and possessions. In these societies material wealth gives status and social capital is under-developed. The preference for consuming new (and unlimited) resources combines with low adaptive capacity (due to weak social capital) and a lack of concern for the environment. This cultural orientation would make it very difficult to implement circular development.

Culture also influences how society values circular development. Reused or recycled products are often undervalued, because they are perceived to be lower quality, with low performance, safety and health standards. For example, there is public opposition to the reuse of grey-water, because of the perceived risk to public health (Wilcox et al., 2016). Sometimes the distrust arises from past experience, which is then very difficult to shift. In Amsterdam, there is public distrust in grey-water systems because of a historical occurrence of cross-contamination, a valid concern arising from previous experience. This might only be overcome through successful trials and monitoring if it were reintroduced.

Refurbished buildings are also under-valued. Investors, owners and tenants are concerned about building performance (commercial and operational), maintenance costs, risk and uncertainty associated with older building stock (Bul- len and Love, 2010). Building certification systems providing information about quality and performance of buildings, components and materials could help to generate demand for refurbished buildings. Labelling systems for second-hand and refurbished goods (as in Paris) and construction materials (material passports in Amsterdam) have also proved effective in generating demand. Thus, providing information may change values. In other cases, there are cultural taboos which would be difficult to overcome. For example, the recycling of sewage to produce protein for feedstock (as in Power to Protein, Amsterdam) maybe culturally unacceptable. However, no such taboos exist when converting sewage sludge into building materials (e.g. Thames Water, London) or biogas (e.g. ecocycles, Stockholm).

Green spaces and water are culturally valued, usually for their aesthetic appeal and recreational use. There is evidence to support that property prices increase with proximity to green spaces and water (De Groot et al., 2013; Okvat and Zau- tra, 2011; Roy et al., 2012). However, the majority of ecosystem services offered by the blue-green infrastructure appear to be culturally under-valued (in part because they are not understood). There is a public preference for well-managed and maintained blue-green infrastructure. The value falls if the green spaces and waterways are unkempt. Yet the more natural the habitat, the greater the biodiversity. The use of a green index in both Stockholm Royal Seaport and QEOP has helped professionals designing schemes understand the ecosystem service benefits of including green infrastructure into new developments. This has helped to inform the practices of those involved in implementing development.

A lack of connection between those living in cities and the natural environment (Trevors and Saier, 2010) reinforces this current values system. In addition, poor understanding of resource cycles reduces willingness to change (De Flander, 2015). Greater engagement of citizens in the stewardship of the urban ecosystem could help to increase a deeper cultural understanding of the benefits ecosystem services provide. For example, environmental stewardship and a cultural reconnection to local environments has been cultivated in Paris, Amsterdam and London through the urban agriculture movement.

Changing lifestyles and social practices

The local cultural values and systems of provision operating in a city interact, influencing the lifestyles and social practices of those inhabiting the city. Peoples’ values and systems of provision influence their ability and willingness to engage in reuse and recycling practices. For example, community composting schemes and organic waste collection systems have been introduced in Paris to promote recycling behaviours. However, these systems of provision will not be effective if citizens place a low value on the importance of recycling food waste. Of course regulatory incentives can be imposed to address this.

Engagement in circular practices will also be affected by lifestyle and individual attributes. Engaging in circular practices requires time, money, energy, physical capacity, skills and expertise. For example, if waste separation or transferring compost to community facilities is too time-consuming (incompatible with lifestyle) or physically demanding (lack capability), recycling practices will not change. Generally, convenient and low cost, circular practices are preferred.

Circular practices which offer multiple benefits (i.e. are cost saving, provide an income, offer opportunities to socialise, provide health benefits) can also lower thresholds for engagement. For example, the community renewable energy projects in Brixton addressed fuel poverty (reduced costs) and provided an income for those involved. The skills and expertise needed to initiate and manage the scheme were provided by Repower London. Thus, motivations for engaging with the scheme were greater than the transactional costs, and so it has proved successful.

Many circular activities rely on volunteers (e.g. Brixton Pound Cafe). Yet engagement is time and energy consuming and premises are expensive. Thus, the transactional costs are high, making it hard to sustain circular activities. Subsidisation, particularly of those schemes with a solidarity focus (often the least well-funded), maybe needed in order for circular activities to sustain and ensure the knowledge generated and social practices developed aren’t lost.

Passive systems which require minimal engagement from users reduce transactional costs. For example, the closed-loop system in Hammarby is a passive system. However, it requires users to operate the waste disposal facilities effectively. This has minimal transaction cost. Nevertheless, there is still misuse of the system provided (Williams, 2019b). Post-occupancy training in the effective use of systems appears to have had a limited effect (ibid). This suggests that a lack of awareness is not the problem. It is more likely connected to lifestyles and values.

Finally, cities bring together people from a variety of cultures. Cultural diversity will impact on the values, social practices and lifestyles adopted by those living in cities. It can also create variability in the success of adopting pro- environmental behaviours. Thus, a pluralistic approach will be needed to encourage the adoption of circular practices, services and products in cities.

Building social capital

Strong social capital1 increases a community’s capacity to adopt environmental praxis and engage in environmental stewardship (Williams, 2005). It increases the capacity of a community to react to events, collaborate, share resources (expertise, skills, financial, etc.) and learn from each other through strong social networks. It helps to build adaptive capacity in communities. Thus, it is fundamental to the successful implementation of a circular development. Engagement in circular activities can also help to build social capital. Thus, it creates a cycle of positive reinforcement. The challenge is how to build social capital in cultures based largely on individualistic values.

Social capital is greater nowadays amongst interest groups rather than within local communities. However, where local social capital is built in neighbourhoods, through communities of interest (e.g. Brixton Remade, Brixton Energy), collective actions are more easily enabled. This enables activities which promote ecological regeneration (e.g. urban farming). Self-identifying communities ofin- terest sustain for longer (Williams, 2005). Common norms and values are shared within these communities. This enables trust to be built between individuals and encourages reciprocal relationships to develop, resulting in greater engagement in community activities (Metzler 2000; Williams, 2005). This creates the networks which are fundamental to resource looping (urban symbiosis).

It also enables learning within the communities and to an extent a degree of self-policing (ibid). Where social capital is strong, the burden of engagement (in terms of time, energy and finance) can be shared across a community. Thus, communities are able to adapt to contextual change. Building social capital within communities which value resources and ecosystem services will help to implement circular development.

Sharing and localisation have a fundamental role in the building of social capital. Local symbiotic capital (Chapter 2) can develop in communities (Curtis, 2003). For example, in Brixton strong social capital generated by the Transition Towns movement (and associated circular projects) was reinforced through local financial capital (local economic system and currency) producing natural capital (enhanced ecosystem services) and human capital (increase in diversity of local skills).

Equally sharing actions can help to build social capital in communities (e.g. sharing cars, lifts, goods, expertise, spaces) which enable more collective responses and environmental praxis to develop. Infrastructure provided in urban environments may help to build social capital (e.g. co-working and co-living spaces). Cohousing, which engages residents in financing, designing and managing new housing developments, has been extremely successful in building social capital and enabling environmental praxis (Williams, 2005).

New institutional arrangements, enabling community ownership and coprovision of assets help to build local social capital (e.g. social enterprises such as Transition Town Brixton). It is also important to prevent the loss of local social capital and circular expertise within communities, possibly through subsidies (e.g. payment of unpaid volunteers or provision of no/low cost premises) to ensure the transformation is sustained. Linked to this is the importance of keeping communities together. This can be threatened by the financialisation of housing and land speculation.

Cities have transient populations (e.g. students, economic migrants, digital nomads). Their mobility (and potentially limited community engagement) can weaken local symbiotic capital and threaten circular praxis. This is particularly an issue in global cities. Of course, transience does not negate environmental praxis or engage with local communities. However, the limited connection with place can make this shift more challenging. It is important to encourage these groups to engage with the local community and circular activities. This may be partially enabled through co-living and co-working spaces, which have helped to build social capital within some of these more transient communities.

It is also more difficult to encourage circular practices in new communities (e.g. Hammarby). Of the new developments presented in the book, De Ceuvel provides the best example. There were various success factors. A small number of actors were involved in the project. The group had common objectives (rules and norms) which aligned with delivering circular development (reinforced by tenders). The group was self-selecting. All actors were engaged in the design, planning and financing of the project from an early stage. Thus, they had a vested interest in its success. All actors wished to learn from the project, and have created networks through which their knowledge can be disseminated. For some this knowledge had commercial value too. Such an approach is possible for a relatively small-scale, non-residential project like De Ceuvel. However, it is more difficult to replicate for large-scale speculative developments (e.g. Hammarby, SRSP, QEOP and Clichy Batignolles).

Knowledge creation and smart data

Information is critical for the transformation of values, practices and institutions needed to support circular activities. A variety of capacity building programmes have been developed for urban actors engaged in circular development. Amsterdam, London and Paris use urban experiments to test new business models and development trajectories. Discussion forums have been set up in London (Circular Economy Club), Paris (Paris Esprit d’Entreprise) and Amsterdam to learn from participant experience and share knowledge. Skills workshops for infrastructure providers and businesses have been established in Amsterdam, Paris and London to encourage circular development. Engagement in international networks (CEtOO, Eurocities, C40 cities) ensures that knowledge created is spread more widely. However, more data is needed to identify the benefits of adopting circular development.

In the age of smart cities and big data, the amount of information collected is increasing. Data can be used to raise awareness of resource flows in cities.

Information helps to tackle limited public awareness and understanding of resource cycles (water, nutrients and materials), ecosystem services, the future impacts of major events and climate change (Darby, 2006; Fischer, 2008; Ueno et al., 2006). For example, the online data platform REFLOW in Stockholm visualises hidden resource flows in the city and is used as an educational tool to encourage looping practices.

Data also assists urban actors in planning for future catastrophic events. For example, apps draw on a range of data (satellite data, social media, crowd-sourced data, historical data, meteorological data) to predict disastrous events and allow urban populations to prepare for them (e.g. I-React). Other apps allow professionals to identify the best adaptation measures for the local context they are working in (e.g. Climate Adaptation App). Thus, smart data can help build adaptive capacity in cities.

Collecting comprehensive, consistent, useful data in cities is a major challenge. Civil society may provide one solution. Increasing engagement of civil society in the generation of data (crowd-sourced data) can produce smarter communities, who actively participate in the circular transformation process. For example, in Amsterdam, Paris and London, data platforms (populated by user groups) enable the exchange of soil (e.g. Sol-Dating) and concrete (e.g. Sustainability Cloud). They also identify unoccupied sites and buildings for reuse (e.g. LAssociation Plateau Urban) and urban mining opportunities (PUMA). Currently, the engagement of civil society in generating ecosystem service data for cities is limited. More information on urban biodiversity is needed to understand local, city and regional scale relationships between biodiversity and the generation of urban ecosystem services (Anderson et al., 2017; McPhearson et al., 2016). Thus, the role of smart data in the protection of ecosystem services in cities remains under-developed.

Data platforms can also enable engagement in circular activities. For example, in Paris, there are online platforms for locating repair services (e.g. and enabling waste-free shopping (e.g. LOOP). In Amsterdam there are apps for identifying left-over food waste (e.g. “Too good to go”). Product labelling systems operating in Paris (for electronic goods, furniture and textiles) and Amsterdam (for construction waste) enable the reuse of a range of materials and goods. The online lifecycle analysis tool used in Stockholm supports contractors in reducing construction waste generated on building sites. However, there is a challenge to limit the number and diversity of platforms which are available, in order to enable a degree of coordination.

Data provides urban politicians and managers with the technical evidence that transformation is needed and that regulation is effective (Anderson et al., 2017; Bullen and Love, 2010; Lacovidou and Purnell, 2016). However, data monitoring urban metabolism has been collected for only a few cities worldwide. Examples include the Urban Metabolism Platform in Paris and Circle Scan in Amsterdam. Interpretation issues exist due to a lack of common conventions (Browne et al., 2009; Kennedy et al., 2007; Zhang, 2013). Most urban metabolism studies use highly aggregated data - often at the city or regional level - that provides a snapshot of resource or energy use, but no correlation to locations, activities or people (Pincetl et al., 2012). There is a high data requirement for monitoring resource flows, a lack of follow-up and evaluation of the evolution of a city’s urban metabolism and difficulties in identifying cause-and-effect relationships of the metabolic flows (Shahrokni et al., 2014). Data for vacant land and buildings is generally collected separately. Similarly, it is highly aggregated and often incomplete, as exemplified by the London Brownfield Sites Review (ARUP, 2018).

Issues around data ownership, privacy and commercial competitiveness restrict access to urban data (Ehrenfeld and Chertow, 2002; Herold and Hertzog, 2015; Khan et al., 2014). The quality of the data produced is also a concern due to limited coverage, inconsistent monitoring and frameworks (Allwinkle and Cruickshank, 2011; Lacovidou and Purnell, 2016). This reduces trust in the information exchanged (Lenhart et al., 2015). The platforms (virtual or non-virtual) for communicating and sharing data can be useful, but are highly dependent on the quality of the data they provide. Certainly, a lack of both can create a real challenge for circular activities (Boons et al., 2011; Ehrenfeld and Chertow, 2002). Thus, monitoring and managing urban resource flows and ecosystems services is difficult.

Reviewing the regulation

The European policy framework is well developed and supportive of looping actions. Circular economy is the focus for the vision for a competitive Europe (EMF et al., 2015). This is further supported by the Europe 2020 Strategy, the Roadmap for a Resource Efficient Europe initiative, the Zero Waste Programme for Europe and Closing the Loop: an EU Action Plan for Circular Economy. These plans and strategies have led to the production of circular economy strategies for France and the Netherlands. For the UK, circular economy is embedded in the industrial strategy (and thus has a rather narrow focus). For Sweden, resource looping has been reinforced by its voluntary commitments to the Natural Step and Aalborg Charter.

The primary legislation influencing resources at an international level remains sector specific (e.g. the Water Framework Directive, Urban Waste Water Directive, Renewable Energy Directive, Energy Efficiency in Buildings Directive, Waste Framework Directive) rather than integrative. This is often reflected in national legislation. At a local level this regulatory framework tends to reinforce siloed-thinking and sector-specific strategies for managing resources in cities. This creates a barrier to cross-sectoral looping actions and nexus solutions. A key challenge is to create joined-up, cross-sector regulation which is supportive of looping actions.

Regulatory standards can be a useful tool for ensuring quality both in the production and performance of looped resources. This provides certainty for regulators, investors and consumers. For example, the adoption of a publically visible standard with proven credentials has supported improvement in the public perception of grey-water reuse and helped systems scale-up in cities (Wilcox et al., 2016). Equally standards set for urban mining have helped enable repurposing, recycling and reuse of materials and infrastructure in cities (Bastein et al., 2017; Lacovidou and Purnell, 2016; Ortner et al., 2014). However, standards can create a barrier to looping actions. For example, building regulations and conservation standards create regulatory barriers to adaptive reuse of infrastructure (Bullen and Love, 2010). So the challenge is to create a set of standards which indicate the quality of looped resources. This will also help to establish greater economic and cultural value for these resources.

The regulatory framework relating to ecological regeneration in member states is encompassed by the EU 2020 Biodiversity Strategy. However, the strategy does not focus on biodiversity in cities. The Strategy requires that “by 2020, ecosystems and their services are maintained and enhanced by establishing green infrastructure and restoring at least 15% of degraded ecosystems”. It recognises the synergies between green infrastructure and environmental policies such as land use, air quality and water. Several other EU policies and the Green Infrastructure Strategy are working to integrate green infrastructure and harness its potential for agriculture and forestry, climate change mitigation and adaptation and disaster prevention. However, there is no urban focus which encourages green infrastructure provision as a mechanism for improving ecosystem services in cities.

There is a clear regulatory framework for climate mitigation driven by the legally binding Paris targets, agreed through the UN Convention on Climate Change. These cover all sectors of the economy, aiming to achieve at least 40% greenhouse gas emissions reductions by 2030. This legislative framework provides investors with a clear and predictable vision of the way forward. It addresses both structural elements to underpin climate and energy action, and specific provisions for sectoral action where it was needed. The EU is the first major economy to fully implement its Paris Agreement commitments in legally binding domestic laws. The UK was the first member state to adopt legally binding targets for reductions and carbon budgeting through the Climate Change Act in 2008. Links are beginning to be made between circular economy and greenhouse gas emissions (EMF, 2019), which may increase regulatory support for looping actions (via mandatory mitigation targets).

However, the regulatory support for adaptation is less. In 2013 the European Union adopted a Strategy for Adaptation to Climate Change. It encouraged member states to produce climate adaptation plans and many have. It also supports climate adaptation (and mitigation) in cities through the Covenant of Mayors for Climate and Energy Initiative. However, this is a voluntary initiative. Thus, there is no mandatory regulatory framework underpinning measures for climate adaptation in cities. However, there are relevant directives covering flooding, air pollution and water. Thus, the challenge is to create stronger regulatory framework (reinforced by directives), supporting all three circular actions and recognising the synergies between them, in cities.

Many layers of regulation - primary legislation (protocols and treaties; directives and acts) and statutory instruments (building codes, ordinances, contractual agreements and plans) affecting resources, ecosystem services and resilience - coalesce in cities. A range of non-statutory instruments - targets, strategies, policy frameworks - also guide development in cities. The Pact of Amsterdam adopted in 2016 sought to strengthen the urban dimension of EU policies to coordinate EU policies impacting cities and involve cities in EU policy developments. It resulted in the creation of the Urban Agenda which aimed to streamline international, national and local regulation in cities to reduce regulatory conflicts and create greater consistency. It focusses in various priority areas including circular economy (looping), sustainable land use (ecological regeneration) and climate adaptation. Streamlining these regulatory frameworks remains a significant challenge.

Cities have various statutory and non-statutory instruments, which they can use for delivering circular actions. Cities use targets to signal their future vision and outline pathways to achieving those targets. The most common targets, at least across the cities we have considered, relate to waste (e.g. zero waste, Paris and London) and greenhouse gas emissions (e.g. zero carbon, London). One challenge would be to produce a set of targets which helped to encourage all three circular actions, without creating conflicts. Cities also produce strategies for achieving circular economy (Paris and London) or incorporate circular economy into their other strategic plans (Amsterdam and Stockholm). These outline policy goals, strategies and instruments for getting there. However, only in the Paris Circular Economy Plan are clear linkages with adaptation and ecological regeneration made.

The spatial development plan - a statutory instrument - can bring together all three circular actions in a city through the development process. In Amsterdam, the spatial development plan has policies to encourage high-value reuse of buildings, components and materials; the construction of “smart” adaptive buildings and blue-green infrastructure. However, in some plans (e.g. the London Plan) these activities remain separate; thus, the synergistic benefits of adopting looping, adaptive and regenerative strategies together are overlooked. The spatial plan can also be used to ensure urban form and infrastructure support circular activities. For example, in Stockholm, the spatial plan has supported ecocycles by encouraging high density, mixed-use development, alongside the expansion of the district heating and public transport systems (Williams, 2013).

Circular development can also be encouraged through a process of land issue and tendering; the use of environmental performance programmes or application of planning conditions to new development. In Amsterdam a circular land issue and tendering encouraged all three circular actions. However, implementing circular tendering proved challenging. Developers, construction, demolition, disposal companies and planning authorities lacked the expertise to deliver or oversee circular projects. Capacity needs to be built amongst key actors to enable the process.

Clear guidelines for what constitutes circular development; procedures for design, procurement, construction and disposal; and designation of responsibilities for implementation are needed. Tools such as the green space index and Lifecycle

Assessment Analysis used in London and Stockholm could prove useful in creating circular solutions. However, this will also lengthen development timelines and require additional expertise. Lessons from Hammarby suggest that postoccupancy monitoring and enforcement will be required to ensure the goals set by the circular tendering process have been achieved in practice.

Another challenge is to streamline the regulatory framework to enable circular development. De Ceuvel highlighted the need to review planning controls to enable circular development. Similarly, restrictive conditions are placed on the reuse of buildings and grey-water recycling; neighbouring land-use or buildings for multiple uses (due to incompatibility between uses); green and blue infrastructure (perhaps because of the risk they might pose to person or property) often due to health and safety concerns. The problem lies in the prescriptive nature of the guidelines for addressing health and safety considerations. Moving to a performance-based approach, which requires all circular development to be safe, but allows some flexibility in the way this is achieved, is likely to be more successful. In Paris, urban experiments are being used to explore legal barriers to circular development, to enable this streamlining process to begin.

Political challenges

A global shift towards neoliberalism has significantly affected the political framework in which European cities operate. Neoliberalism is associated with laissez-faire economic liberalism and free-market capitalism. Neoliberal policies include privatisation, deregulation, globalisation and reduction in public spending. These policies aim to increase the role of the private sector in the economy and society and reduce the role of the state. Neoliberalism is based on neoclassical economic understandings, and thus does not adequately value or protect resources or ecosystem services. Consequently, neoliberal politics is likely to be in conflict with implementing the circular development, which is an enormous challenge to overcome.

Neoliberalism has influenced policies, instruments and funding decisions in European cities. It has changed the number and diversity of actors involved in service and infrastructure provision; altered power relations between key actors; and shifted the municipalities towards a more facilitative role in urban governance (Williams, 2016). It has also resulted in a reduction in public funding for new development (infrastructural projects) and the privatisation of services (waste, water, energy, transport, etc.). Thus, power has shifted away from local government towards the private sector. Private sector actors tend to prioritise economic goals. They also tend to be more risk averse and less likely to invest in innovation than their public sector counter-parts (Mazzucato, 2011). Thus, circular transformation is extremely challenging in this context.

Globalisation has also increased the percentage of international actors rather than local actors involved in systems of provision in cities. This further reduces the control local government has over the delivery of infrastructure and services.

International actors are likely to be guided by international regulation and economic interests, rather than local, social and environmental interests. Without a strong, supportive regulatory framework, or economic incentives, there is limited market incentive for private actors to protect resources and ecosystem services.

In a neoliberal context “state interference” (regulation and economic incentives) is minimised, and thus there are limited levers for transformation. Neoliberal systems use network governance rather than command and control government to align goals and deliver development. Network governance relies on capacity building to create networks and reciprocity between actors. It is local government’s responsibility to build both. Thus, in the neoliberal context, the role of local government has shifted from one focussed on provision and regulation towards enabling and self-governance (Bulkeley and Kern, 2006). Cities implementing circular development largely rely on enabling tools (e.g. capacity building workshops, skills training, network creation, online skills and networking platforms) and public procurement to deliver the transformation (e.g. exemplified by the London’s approach to circular economy). This approach may produce pockets of innovation, but rarely systemic transformation.

To implement a circular development pathway will require radical economic, cultural, institutional and technological restructuring. Such a transformation will require long-term political support and leadership. This is not encouraged by the current political culture of short-term, market-driven, reactive decisionmaking. Existing cultural values and short-term political cycles underpin this present-orientated view. Thus, it will be hard to shift. However, in order to create policies that support futurity and inter-generational equity, resource protection, ecological regeneration and community adaptiveness, the underlying political culture and systems of operation will need to be addressed. Stockholm provides an example where long-term political support (and public funding) for closed- loop systems and ecological regeneration have produced such a transformation.

Political priorities may sometimes conflict with circular actions and vary between national and local levels of government. For example, in the UK national political support for foreign and corporate investment in property and land markets has prevented the reuse of vacant property and use of land for industrial activities in London. The national economy is very dependent on this investment and thus it is a national political priority to support it. However, at a local level addressing the lack of affordable accommodation, the creation of local jobs and diversification of the economic base in London are higher priority. Of course, this creates conflicting priorities. It also prevents the reuse of infrastructure and allocation of space in the city for low value circular activities. The challenge here is to create political motivation for prioritising circular development goals (Figure 8.1).

In addition, the lack of an integrated approach to policy-making at a local level may also create barriers to the delivery of circular development. Linking circular economy with ecological regeneration and adaptation, as is the case in Paris, helps to maximise the benefits which come from the synergies between these actions. It also expands the potential benefits which accrue from adopting the policies (the win-wins). For example, the policy to reuse food waste in Paris reduces landfill and associated greenhouse gas emissions, whilst redistributing food to those who need it. It has also spawned new businesses (food reuse eateries). In contrast, policies which present the circular actions separately do not benefit from acknowledging the synergies between them (as is the case in London). The challenge is to encourage policy-makers to take a more systemic approach in their policy-making, recognising the synergies particularly between circular actions.

Institutional reform

The current cultural values, economic, political systems and legislative framework greatly influence institutional culture, structures and practices in our cities. Thus, neoliberal politics reduces the role of local state institutions in the circular transformation process, placing the responsibility with private (often global) institutions. Many of these institutions are risk averse and profit-orientated, which creates path dependency and technological lock-in.

Private institutions are poor at engaging non-state actors in projects and less likely to deliver public benefits than public bodies, unless under a service-based contract (Da Cruz and Marques, 2012; Furlong and Bakker, 2010). In some instances, the global nature of private institutions means they are culturally different, have different priorities and are governed by legislative frameworks operating in other spaces. These institutions rely on the privatisation of assets for revenue, which results in difficulties sharing data and resources.

Many institutions are embedded in neoclassical economic thinking. Thus, they undervalue natural resources and ecosystem services. Economic goals are prioritised. Culturally, there is a bias towards short-termism, individualism and materialistic goals, all of which cut against the circular development pathway. Sectoral and professional segregation reinforced by the sector-specific legislative frameworks prevents the integrated, systemic approach needed to encourage circular systems (Roelich et al., 2015; Smith, 2007). In combination, these create major challenges to the emergence of institutions capable of supporting circular development.

Institutional reformation will be required to deliver circular development, although some institutions are already well suited to this paradigm. However, this will also require shifts in economic models, political and cultural values, for example, a shift away from neoclassical economic models to ecological ones. Institutions will need to take a long-term view and invest for the long-term. Investment decisions should take account the societal value of resources and ecosystem services. Institutions will need to take risks, innovate and promote internal cultures enabling this. There will need to be a shift from resource-based to service-based, linear to circular business models. Institutions should empower communities, encourage co-provision and community ownership and create prosumers and environmental stewards. Data should be created and owned by citizens. Instead of actively encouraging individualism as a means of increasing consumption, institutions should support a more collective response to societal problems.

There should also be a shift towards institutions which have greater local responsibility, to whom the local community and environment matter. This could just be a matter of increasing local government intervention, enabling local government to use all of the competencies and levers at their disposal to enable transformation. However, it will also require local government works with and empowers local communities. This will enable communities to take responsibility for the changes taking place. It will mean an expansion in institutions such as cooperatives (e.g. Brixton Transition Town Food Coop), community companies (e.g. Brixton Energy) and social enterprises (e.g. Brixton Transition Town; Our Park Life, Queen Elizabeth Olympic Park). These institutions will also need to become more agile, resilient and able to change with the shifting context. It will involve the growth of more comprehensive interconnectedness, social networks and social learning in cities.

Institutional capacity will need to be built to support circular actions in cities. There will need to be new institutions to produce and enforce standards for recycled and reused resources and adaptable infrastructure; to support new ownership models which allow the reuse of goods and infrastructure (Bastein et al., 2013); to regenerate ecosystem services in cities and monitor the impact and to collect, share, monitor and regulate the use of data needed to encourage recycling of resources (Allwinkle and Cruickshank, 2011; Townsend, 2013). New institutions will be required to support learning within industry, commerce and the community in order to change systems of provision, social practices and lifestyles which undermine circular actions (Barragan-Escandon et al., 2014; Bullen and Love, 2010). Of course there will be institutional (cultural and structural) inertia to change because of vested interests in preserving current practices and minimising risk. These will need to be overcome to facilitate circular actions.

Ecological challenges

The local environment may challenge the implementation of the circular development. The extent to which the urban ecosystem is degraded can affect its capacity to ecologically regenerate and for resources to be looped. For example, land contamination reduces the potential for grey-water reuse and soil recycling (Bullen and Love, 2010; Wilcox et al., 2016). It also inhibits ecosystem services including provisioning services (e.g. urban agriculture and forestry) and regulating services (water storage). Lack of vegetation will influence the ecosystems’ capacity to absorb carbon-dioxide, reduce air pollutants, regulate temperature and store water. These problems will be exacerbated by local climate, relief, topography and hydrology. Thus, circular development pathways will need to appropriate for the local environment in which they are implemented. This is well illustrated by the De Ceuvel case. Water, energy and building systems were designed to work with high levels of soil contamination, whilst using phytoremediation to decontaminate the soil.

De Ceuvel also highlights a second challenge. Ecological regeneration using biological techniques takes longer than more traditional, non-biological approaches. This can be problematic to manage in short political cycles (Anderson and Minor, 2017). Longer-term political support for this approach would be needed to ensure continuity and to secure the funds for the ongoing management of the biological processes. Taking a biological approach may also slow the development process. This may be problematic in land scarce environments, particularly where there is pressure for development. However, temporary permissions for activities which promote ecological regeneration may be popular amongst land owners, as long as the activity provides revenue in the short-term. In the long-term the value of the ecologically regenerated site increases.

A further challenge is presented by the ongoing management and maintenance of blue-green infrastructure. This has usually been the responsibility of the local public authority. However, increasingly this work has been contracted out to private actors. Yet due to the under-valuing of ecosystem services, the financial reward is often insufficient. In some new developments there has been a move towards encouraging residents to take responsibility for blue-green infrastructure within their neighbourhoods (e.g. in Stockholm Royal Seaport and QEOP). This approach is in part to reduce the costs to the state, which is particularly popular during a period of public funding austerity (and fits with the neoliberal model). However, public engagement in the stewardship of the local environment has other benefits too. It helps to address the lack of public connectedness with the local environment. This raises public awareness of environmental problems and solutions, whilst building the expertise and skills needed for environmental stewardship.

The public could be engaged in a range of activities (e.g. community renewable energy generation; conservation of biodiversity, greenways, water ways; gardening, urban agriculture or forestry). Their engagement in these activities will help to regenerate the urban ecosystem services and build social capital which enables collective action. In combination these actions will also increase the adaptive capacity of communities. The major challenge is how to get people to engage in environmental stewardship in their city. There are many transaction costs which may prevent engagement. Thus, financial resources to enable environmental stewardship programmes are needed. Workshops to increase citizens’ expertise or engage experts to work with communities to help them to manage and maintain urban ecosystems will be essential.

Allocating time during the week for these activities is also important. Perhaps, this could be achieved by integrating them into the school curriculum or working week. Alternatively shortening the working/school week could help to enable engagement in circular activities. Motivation to be engaged in schemes might come from positive outcomes, for example, the financial rewards or opportunities to socialise. It equally could be driven by the desire to react to local (e.g. flooding, drought, air pollution) and global environmental problems (e.g. climate change). Reward systems, for example, personal carbon allowances, could also motivate engagement. Of course monitoring the impact of the stewardship programmes could provide motivation, as well as encourage further public investment.

Technical and design challenges

Circular design and thinking has not been incorporated into urban systems. Systems are linear, segregated and use grey infrastructure (Unruh, 2000; Williams, 2016). These systems are locked-in by the vested interests and sunk cost of those providing them. Citizens also develop lifestyles and social practices which fit with grey infrastructure and linear systems. This creates a socio-technical lock-in, which reinforces linear and separated systems of provision, which impedes the implementation of circular solutions.

Even if there is willingness amongst providers to adopt circular systems of provision, it is practically difficult to alter infrastructural systems due to the capital cost and disruption generated by such a radical transformation. New infrastructural systems are often integrated into new developments, when the costs can be borne by the developer or consumer. However, there is limited opportunity for the renewal of infrastructural systems in most cities (certainly in Europe), as development rates are low.

Financing new technical systems can be a major challenge. Utilities prefer to off-load the cost of infrastructure provision onto developers (where possible) creating off-grid alternatives. This was demonstrated in QEOP by the grey-water recycling system. This approach does not support wider community transformations, but it means the existing system is not overloaded by the additional development and the cost is eventually borne by the homeowner.

The replacement of grey infrastructure with blue-green infrastructure may also create a financial challenge. Although it may be cheaper initially to implement in terms of capital cost, the overall operational costs may be higher. The maintenance of these systems requires new skills, which has an associated cost. Green infrastructure also takes longer than grey infrastructure to become established and to operate effectively. Finally designing redundancies in systems, to ensure they are adaptable, also has cost implications. Encouraging investors to consider the future value of these design decisions and technical systems is critical for successful implementation.

There are some separate design tools which enable the whole lifecycle of buildings to be compared; the impact of green infrastructural solutions to be calculated and adaptive design solutions to be tested in different climate scenarios. However, design tools which enable the integrated impact of looping, adaptive and regenerative infrastructural solutions to be compared, are needed. Ideally, this would also be linked to tools which could estimate the future value of the solutions generated, in order to build a case for specific design decisions.


Circular experiments are emerging at a variety of scales, across cities in Europe. However, there is little evidence as yet, that these experiments have transformed the development regime in which they are embedded. There are numerous challenges to transformation (Figure 9.1). The greatest challenges are political, economic and cultural. All three are intrinsically linked and in conflict with circular development.

The neoliberal political system prioritises the economy and relies on the market to deliver the circular transformation, which will benefit society. However, the economic system does not reward these benefits. Thus, there is no incentive for the market to do so. Existing cultural values - individualism, short-termism and materialism - prevalent in a neoliberal society also conflict with circular development. Development regimes which exist in future-oriented, collectivist societies, where socio-ecological benefits are valued, are more likely to transform.

This combination of challenges experienced in the neoliberal context makes it difficult for circular actions to be applied to urban systems, unless they are commercially viable (e.g. generating energy from waste). This is demonstrated in the most neoliberal case study - London. Here circular solidarity experiments (e.g. the Brixton Pound Cafe) and commercially non-viable schemes (e.g. the black-to-grey water recycling scheme in QEOP), which benefit society, cannot be sustained. Thus, the capital generated by these experiments is lost and the development regime remains unchanged.

Amsterdam provides a good example of where commercially viable circular systems have begun to emerge, based on biomass and construction waste. These systems are likely to alter the development regime in the future. However, they have benefited from significant political support (at a national and local level), public investment and regulatory support, which has enabled their development. Less commercially viable projects (e.g. De Ceuvel) have received limited supported on a temporary basis. It remains to be seen whether these experiments will persist and transform the development regime.

Stockholm illustrates how a circular transformation can occur in a more amenable political and cultural context, but can collapse as neoliberal values and policies take-hold. Culturally Swedes value their environment and have adopted a more collectivist approach to society. Ecocycles emerged during a period when a red-green coalition, with strong socio-ecological values, was in power in Stockholm. During this period circular principles were integrated into the thinking of development decision-makers and tested in practice. The more recent shift towards neoliberal politics has resulted in the privatisation of services and replaced local public actors with private (often international) actors. This shift has created difficulties in delivering circular development and ecocycles in Stockholm.

Paris also provides an interesting case. Although operating within a global, neoliberal context, the government still adopts an interventionist approach (using regulation and funding) to development. It also places value on socio-ecological

Challenges to circular development. Source

FIGURE 9.1 Challenges to circular development. Source: Authors own produced by Draught Vision Ltd.

goals. Thus, it is promoting circular development with a socio-ecological focus (e.g. urban agriculture, food-reuse, buildings reuse, decarbonisation of the energy supply) through designation of sites, funding, procurement and the use of local provisioning powers. This has also been supported by regulation at a national level (e.g. supermarket food reuse legislation). Thus, in Paris there seems to be potential for these solidarity, circular experiments to modify the development regime. These findings suggest that even within a wider neoliberal context a circular transformation may be possible within a city, if there is the political will (Figure 9.1).


1 Social capital is the effective functioning of social groups through interpersonal relationships, a shared sense of identity, a shared understanding, shared norms, shared values, trust, cooperation and reciprocity.

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