Five Ways Government Drives the Circular Economy: A NYC Case Study
Alongside firms, product designers, and manufacturers, government plays an important role in advancing the circular economy. By setting legislative agendas, developing strategic programs and public services, and making smart decisions regarding internal agency operations, government can drive the demand for circular products and influence the way businesses operate. Large municipalities especially, have significant influence over the public and commerce, far-reaching purchasing power, and the ability to impact millions of stakeholders through policies and programs.
As an RRSer on the ground in New York City (NYC), I took a look at how the city is shaping the circular economy through its waste policy and practices.
1. Public Commitments
Two of Mayor De Blasio’s biggest public commitments impacting the circular economy are 0x30 and 80×50. 0x30 aims to achieve zero waste by 2030 and 80×50 calls for the reduction of GHG emissions by 80% by 2050. Ambitious public policy commitments set the stage for shifts in collective thinking around waste, resources, and sustainability and open the floor for business to invent new and unique solutions.
NYC has several laws that lay the foundation for closed loop material systems. Recycling has been a legal mandate since 1989 here, and was expanded over the past decade to include a wide variety of materials (most recently rigid plastics). The next innovation in convenience is single stream recycling, which is slated to occur within the next few years.
Second, several state laws govern extended producer responsibility (EPR) for various products, some of which are accompanied by disposal bans. For example, manufacturers are required to take financial responsibility for the collection and reuse/recycling of their electronic products at the end of the product’s useful life. But not all product stewardship is mandated; companies are increasingly offering stewardship options for their products to customers on their own accord. Voluntary product stewardship allows companies to define the terms themselves – at times by collaborating with their competitors – and find the best business model for doing so.
Third, in his vision for the city, One New York, Mayor de Blasio calls for the development of “an equitable blueprint for a Save-As-You-Throw program to reduce waste.” While EPR programs incentivize producers to make products that are longer-lasting, higher quality, and made from recovered/recoverable materials, a Save-As-You-Throw program might incentivize consumers to buy longer lasting products to offset disposal costs.
3. Collection programs
In addition to curbside recycling, collection program that target specific materials, like organics, electronics (e-cycleNYC), textiles (re-fashioNYC), reuse programs (ReuseNYC), and household hazardous waste (SAFE Events) help to recover materials that might otherwise follow the linear path to the landfill. Together, these programs provide a systemized way to reintroduce unwanted “waste” materials back into markets as renewed products or raw commodities.
Environmentally preferable purchasing (EPP) sets minimum environmental standards for the products that agencies, companies, and organizations can buy. Like many EPP rules, purchasing standards in NYC government address energy and water efficiency, hazardous materials, and recycled content. Any purchase or contract meeting minimum price thresholds must abide by a precise set of environmental rules. EPP policies are a simple tool that any entity can implement. With examples like reprocessed latex paint, minimum recycled content for paper and plastic goods, energy efficient appliances, and minimum warranties, EPP provides a direct demand for closed loop systems and products.
5. Long-term processing contracts
NYC leads a 20-year contract with Sims Municipal Recycling for the processing of recyclables collected from NYC’s residents, agencies, and institutions. While specific and not feasible in all situations, the tactic of entering into a long-term contract with a materials processor can guarantee the viability of a recycling or recovery program by bringing financial stability to a marketplace notoriously characterized by fluctuating commodity prices and market volatility. As we have seen of late, recycling is not a self-sufficient business with the luxury of relying on the revenue from commodity sales alone. Instead, recycling programs are a public service that must be treated and funded as such. Long-term contracts that pre-define cost and revenue sharing agreements serve to mitigate financial risk while also providing the industry with the material supply assurance it needs to invest significant upfront capital into infrastructure development.
NYC is clearly on the path toward circularity by embracing sustainable materials management and cradle to cradle systems. From a business perspective, understanding the policy landscape and lessons learned can help innovate, compete, and avoid risk. Circular economies can exist if all players recognize their ability to play a role in its development and maintenance.