City devolution is exciting for the circular economy
A version of this post first appeared on BusinessGreen.
The 21st century has been widely heralded as the century of the city. 2008 was the tipping point when half of all people lived in urban areas for the first time. This gives cities power, and city governments are asserting their role as international leaders: just compare the ambition and commitments to combating climate change of global city networks like the C40 Cities Climate Leadership Group with the lacklustre efforts of their host nations (fingers crossed for Paris 2015 though).
Rather belatedly, British cities and city regions are looking to join the party. Despite the north east rejecting a regional assembly in 2004, and nine out ten cities refusing the offer of an elected mayor in 2012, the devolution discussion sparked by the Scottish independence referendum has raised expectations that Westminster will give up some of its power. So what does this mean for those interested in the environment and resources, and for the circular economy in particular?
What new city powers could mean for the circular economy
To get a sense of what opportunities there might be, it’s worth considering what powers cities might enjoy. Last week saw the launch of the RSA’s final recommendations from their City Growth Commission, which looked at what powers should be granted to the UK’s 15 largest metropolitan areas, referred to as metros in the jargon borrowed from America and meaning “constellations of cities and towns that constitute a functional economy within built up areas”. Their recommendations focus on tax raising powers, improving digital and physical connectivity between metros, and greater control over skills and higher education budgets to strengthen local labour markets and promote regional specialisms.
All of these bring some potential to encourage metro-scale circular economies. Tax raising powers, such as variable business rates, could be used to encourage repair and refurbishment businesses; digital and physical connectivity should make it easier for unwanted products or materials to move from one owner to the next; and skills development could ensure that design and remanufacturing abilities emerge alongside new manufacturing specialisms. The task for circular economy advocates is to ensure that metros are persuaded of the opportunities and are keen to secure the necessary powers in any devolution discussion.
The potential of decentralisation
But just looking at what powers cities might gain underestimates the potential of a more decentralised political settlement. Strengthened metro and regional voices can bring pressure to bear on central government, and successful metro experiments provide blueprints to expand. This government is famously relaxed about the success of our resource management systems or the need to assess the UK’s exposure to resource risks, but some of the UK’s constituent nations take a different view. As I’ve written about elsewhere, Scotland and Wales are both showing more ambition on resource recovery than the UK as a whole, as well as analysing their exposure to resource risks.
It’s not hard to imagine a coalition of reindustrialised northern cities, Scotland and Wales demanding that central government attends to resource risks to secure the supply of materials that underpin their industries. This reflects the fact that devolution won’t change the economics of international markets: manufacturing value chains will still stretch across borders, and trade in valuable second hand goods and materials will be every bit as international as trade in primary resources. Cities and regions will have to influence the main actors in this system, which are likely to remain nation states.
Why devolution is exciting
But devolution might also pose challenges to a circular economy. An obvious one is increasing the standardisation of resource recovery systems. Last month’s Efra select committee report on waste management was the latest in a series of publications to query the wisdom of allowing up to 400 different collection and recycling systems to exist across England. Our analysis suggests this could be wasting up to £1.7 billion in resource value every year. This raises the question of how increased standardisation sits with greater local autonomy.
Paradoxically, it might be the case that it actually sits very well. One of the reasons for talking about metros rather than cities is that you are thinking at the scale of ‘functional economies’ rather than political boundaries, which in practice means clusters of towns and cities. Acting at the metro level, therefore, has the inevitable consequence of increasing the number of areas over which activity is harmonised.
More fundamentally, one explanation for the current variety in collection systems is that they are one of the few services that district councillors can control. As such, they are disproportionately important to local politics. By devolving genuine power to metros, politicians can compete over strategies to attract high value manufacturing to their areas, rather than what colour the bins should be.
This potential to develop and deliver on ideas is what makes devolution exciting. Having newly empowered metros and regions experimenting with policy to support the circular economy could see cities going further and faster than the UK as a whole, and eventually pulling national policy up behind them.