The circular economy opportunity for urban and industrial innovation in China

THECIRCULARECONOMYOPPORTUNITYFORURBAN&INDUSTRIAL1 INNOVATIONINCHINA•ELLENMACARTHURFOUNDATION THECIRCULARECONOMYOPPORTUNITYFORURBAN&INDUSTRIALINNOVATIONINCHINA REPAIR STORE STORE CONTENTS Preface4 Insupportofthisreport5 Acknowledgements6 Executivesummary10 VisionforcircularcitiesinChina12 Opportunities14 Benefits15 Summaryoffindings17 1.Anauspicioustimeforanambitiouscirculareconomyagenda27 2.Circulareconomy-asystemicapproach35 3.Opportunitiesinthreeurbansystemsandtwoindustrysectors41 Builtenvironment:designingbuildingstobemodular,shareable,andreusable43 Mobility:shiftingthefocustomovingpeoplenotvehicles57 Nutrition:creatingaregenerativeurbanfoodsystem71 Textiles:maximisingtheutilisationandvalueoffabrics89 Electronics:redesigningproductsforreuseandrecovery105 4.Howtorealisetheopportunitiesincities117 TechnicalAppendix132 Endnotes155 PREFACE Throughouttheirhistory,China’scitieshavebeenimportantcentresofground-breakingideasintechnologyandurbanplanning.EstablishedintheearlyMingdynasty,Beijing’soriginallysquareurbanformdrewontheteachingsoftheKaogongJi,aConfuciantextdatingfromthefifthcenturyBCthatprovidedguidanceonthesize,orientation,andshapeof cities,whichitdeemedshouldbedesignedasdirectrepresentationsofthecosmos. Today,Chinaisagainhometosomeofthelargestcitiesintheworld,playingleadingrolesintheglobaleconomy.Itistemptingtoholdontorecentimages,embeddedinthecollectivepsyche,ofthesemetropolisesasthrivingepicentresofeconomicdynamismwhileatthesametimefacingsignificantenvironmentalchallengesasaresultofindustrialisation.Thesecharacteristicsarestillverymuchinevidence,andthisreportacknowledgesthemandoffersarangeofsystematicremedies.However,oneofitsconclusionsisthatChina’scitiesareshowingsignsthattheyarealreadyontheirwaytoregainingtheirmantleasinnovationhubs.Forexample,inChinathevolumeofmobilepaymentsfarexceedsthoseoftheUS,anditssharingeconomyisprojectedtoaccountforover10%ofGDPby2020.Indeed,inthebroadsweepofhistory,itistobehopedthattheperiodofindustrialcatch-upinChinawillbeamerebliponthewaytowardsapositiveandresilientmodelofgrowth. ThisreportoffersalensthroughwhichtoviewandactuponthisgoalforurbanChina’sfuture.Itoffersaframeworkthatharnessestheheritage ofinnovativeandsystemicthinkinginChina,andappliesittoabroadconceptionofacirculareconomy,onethatcanredefineeconomicvaluegenerationinChina’scities,andatthesametimemakethemmoreliveablefortheircitizens.MarcoPolodescribedtheBeijingofthe13thcentury as“sovast,sorichandsobeautiful,thatnomanonearthcoulddesignanythingsuperiortoit.”Indeed,China’scitiesofthe21stcenturycannowbuildontheirheritagetorealiseasuperiorfuturebasedoncircularprinciples. DameEllenMacArthur Founder EllenMacArthurFoundation JonathanWoetzel SeniorPartnerMcKinsey&Company LucasAssunção Head Trade,Environment,ClimateChangeandSustainableDevelopmentBranchUNCTAD MichaelKwok EastAsiaRegionChairman ARUP INSUPPORTOFTHISREPORT With3,500yearsofhistory,WuhanisacriticalcityincentralChina. Itstraditionalindustrialbaseisinsteel,carsandtextiles,withnewdevelopmentareasinelectronics,energyservices,andthebio-economy.CircularEconomyisinlinewithsustainabledevelopmentgoals.Itisanewsocialeconomydevelopmentpathwhichcanleadtobotheconomicandsocialbenefitsandisanimportantwaytosolveresourcescarcityproblems.Besidesbeinganimportantelementofanecologicalsociety,weshouldalsodevelopthecirculareconomythroughtechnologicalinnovation. YanTian,DirectorofResourceConservationandEnvironmentalProtectionDepartment,WuhanDevelopmentandReformCommission CircularEconomyisanimportantwaytoachieveanecologically-civilizedsociety.PromotingcirculareconomyisoneoftheimportantgoalsinHangzhou’s13thFiveYearPlan.Hangzhouisgoingtocomprehensivelyimprovecirculareconomydevelopmentinthecitythroughfurtheradvancingpilotprojectsandincreasingresourceutilisationrates. QunyingLai,DirectorofResourceConservationandEnvironmentalProtectionDepartment,HangzhouDevelopmentandReformCommission C40’sresearch,Deadline2020:Howcitieswillgetthejobdone,calculatedthatdeliveringontheambitionoftheParisAgreementonclimatechangerequirestheworld’smegacitiestoactwithurgencytopeakemissionsby2020andthennearlyhalvecarbonemissionsforeverycitizen,fromanaverageof5tonnesCO2epercapitatodayto3tonnesCO2epercapita by2030.Toachievethiswillrequireeverycityaroundtheworld,aswellastheircitizens,toreconsiderhowtheymaximisethepotentialofeveryresourceandcuttheamountofpollutionandwastetotheabsoluteminimum.AsChinesecitiescontinuetogrowthereisahugeopportunitytocreateanewmodelofsustainableandprosperousurbandevelopment,basedoncirculareconomies.Iftheysucceed,asthisreportsuggeststheycan,itwillmakeahugecontributiontowardsdeliveringthegoalsoftheParisAgreementandpreventingcatastrophicclimatechange. MarkWatts,ExecutiveDirector,C40CitiesClimateLeadershipGroup Whilemanyadvancementshavebeenmadeoverthepastfewdecadesofrapid,double-digitGDPgrowthinChina,ithascomewithsomeconsequences.Environmentalconditions,foodsafety,andstressedurbaninfrastructure,arebutafewofthesystemicchallengesthatdesignandcirculareconomythinkingcanaddress,toenablemoresusta