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Cities lead the way to a circular economy

A shift towards a circular economy is made in cities. The reason is simple: By 2050, 75% of the population will reside in cities. Cities are also a major engine for economic growth as about 85% of global GDP is generated by cities today. Such rapid growth puts an enormous pressure on urban resources, carrying capacities, and quality of life. Circular economy can generate new business and increase well-being.


Eetu Helminen

Smart & Clean Foundation


Several cities around the world promote a circular economy. A common goal for all is to reduce waste, control climate change and use resources more efficiently. Some also see it is a way to improve residents’ quality of life and create new business opportunities.

“In Helsinki, everything we do aims at better quality of life. This includes easier mobility, better air quality, wasteless city and thriving business,” tells Marja-Leena Rinkineva, Director for Economic and Business Development in Helsinki.

Green economy drives Vancouver

In Vancouver, recycling has been a part of everyday life since the 1970s. However, the city has focused in the circular economy just recently. Vancouver is aiming at being zero-waste by the end of 2040.

“From the Vancouver perspective, the reasons for concentrating on circular economy are to reduce the cost of operations in waste management and reduce the need to purchase more land and move garbage. There are clear savings to be achieved. Another reason is that we know that seven percent of our greenhouse gases come from solid waste. This is a great opportunity to reduce our emissions. These are also tremendous business opportunities,” says Bryan Buggey, who is responsible for economic and business development at the City of Vancouver’s Economic Commission.

In his role as a director, he is leading a team in charge of several initiatives with respect to the low-carbon, knowledge based economy that is an integral part of Vancouver’s future growth.

Vancouver has succeeded in creating environmentally friendly business. In 2010, the city approved the Greenest City 2020 Action Plan with an objective to be the greenest city in the world by 2020.

The results are overwhelming. Vancouver, with only 7% of the Canadian population, hosts 30% of Canada’s cleantech sector. That means 272 pure-play cleantech companies. Furthermore, green jobs have been growing at a rate of 7.8% over the last 3 years, which are outperforming any other sector in the City. Today, there are more than 25,000 green & local food jobs within the city and even more at the metropolitan level. Meanwhile, over the past 10 years, the local GDP has grown more than 26% while the greenhouse gases have fallen by more than 15% proving that implementing environmental controls does not damage the local economy. These are just some examples of the achievements.

In addition to different programs, the city can improve residents’ quality of life and enable new business opportunities by regulation.

“We started a mandatory organics ban from the landfill recently which separates food from the garbage. After the mandatory regulation was passed and the program was implemented, 72 percent of population adopted the practice within four weeks. We are very lucky to have such sustainability-minded citizens. They tell us we can’t be green enough,” Buggey says.

Co-operation is the key to success in Helsinki

Helsinki sees its current historical urban generation as an excellent opportunity to promote the circular economy in its own operations. For example, due to better planning, the city has been able to save 1.4 million litres of fuel and reduce emissions by more than 3,500 carbon dioxide equivalents in management and utilisation of excavated land. Helsinki also enables, for example, the development of applications to reduce food waste. One of them enables restaurants to sell left over lunches at reduced prices. Another new application tested in the Kalasatama district enables residents to sell left over food or ingredients to their neighbours.

“The citizens of Helsinki do a lot by themselves. A good example of this is the Cleaning Day, when the whole city turns to a giant flea market. The residents sell or donate the goods they have no use for any more to other residents. This is a circular economy at its best – and it’s fun,” says Marja-Leena Rinkineva.

The city acts as a platform for new sustainable business in both, Helsinki and Vancouver. Enterprises can develop and try out new solutions and concepts within the city area and use its infrastructure. When these approaches are adopted first in the whole city and then globally, well-being will increase in Helsinki, Vancouver and elsewhere in the world.

Experiences in Helsinki prove the change is achieved through multi party co-operation. Helsinki Metropolitan Smart & Clean Foundation is a five-year change project that was started by Sitra in 2016. It includes cities from the Helsinki metropolitan area: Helsinki, Espoo, Vantaa, Kauniainen and the city of Lahti, the Finnish Innovation Fund Sitra, 12 leading corporations, as well as universities and research institutes. All Smart & Clean partners have committed themselves to making Helsinki Metropolitan the world’s best testbed for smart and clean solutions. A close, target-oriented and fruitful co-operation is unique even globally.

“It is very important for us to have an open conversation between all the stakeholders. We have already noticed the tight co-operation producing results. Building of the world’s first comprehensive city-wide air quality monitoring system, and the decision to change the fuel of Helsinki region’s buses and work machines to biofuels by 2020 are great accomplishments,” tells Marja-Leena Rinkineva, who is also a member of the board of the Smart & Clean Foundation.

Enterprises need cities

One good example of the circular economy in Helsinki is the many wide-ranging smart mobility initiatives to autonomous vehicle development.

Finnish MaaS – mobility as a service – operator and ridesharing provider Tuup are going global from Helsinki. MaaS services give a customer an opportunity to book a trip from door to door with a single application. The means of travel can include, for example, a bus, city bike and an electric car. Services like this reduce the need to own a private car.

“We require an access to the traffic and business data of a public transport operator to make our service successful and attractive to new users. This enables the development of effortless use and a good user experience. It is not ideal for the customer to get ping-ponged back and forth between different applications, but it is better than nothing,” Tuup Chief Executive Officer Pekka Möttö says.

Services like Tuup can be scaled to fit nearly every environment. A solution piloted in one city increases the attractivity of public transportation in all areas that have adopted the new model.

The step towards a circular economy is taken together. Experiences from Vancouver and Helsinki are similar. Co-operation is a must and the circular economy is creating flourishing business.

“From our experience two things are important. One is that regulation stimulates innovation. When cities move to pass predictable environmental policy, it is good for the economy. The other important lesson is to engage the business community. This is vital to getting results. A lot of cities concentrate on their own operations, like changing their city fleet to electric, but they should go beyond this and include the entire business ecosystem,” Bryan Buggey reflects.

“What is most important is to remember that the circular economy improves the people’s quality of life. The city needs to be designed for its citizens,” Marja-Leena Rinkineva concludes the experiences made in Helsinki.

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