Is Amsterdam’s circular economy initiative an example of how one city can lead sustainable change? Or is it an example of creating attention without making a meaningful impact – and in the worst-case, diverting attention away from more meaningful political action? To shed a light on these questions, we have a closer look at Amsterdam’s programme to implement a circular economy, and the challenges it faced so far. This is where the recently published Impact Paper “Sustainable Transformation of Business and Finance: A Challenge for Collective Action and Democratic Governance in an Age of Climate Change and Artificial Intelligence” comes in. It was drafted during this year’s McGill Transformative Business Law Summer Academy, which connected around 50 participants from America, Europe, and Asia, in the common endeavour to develop effective avenues for economic transitions in times of climate change. Through its 25 concrete recommendations, the Paper offers guidance and insights on how the challenges in Amsterdam could be tackled.
Amsterdam’s ambition to become circular by 2050
Since Amsterdam declared its intention to transition to a circular economy in 2020, the proposal (The Circular Strategy) has received a lot of attention (see i.e., articles in Time and Guardian from early 2021, as well as the recent BBC article by Suzanne Bearne). In broad terms, the concept of circular economy implies that the value of raw materials is preserved as much as possible throughout a product’s lifecycle, from design to disposal. This is opposed to the concept of a linear economy which so far dominates economies around the globe. In a linear economy, economic activities follow take-make-dispose or take-make-consume-throw away patterns that favour a mass consumer culture and lead to generation of wastes. Impacts of economic activities on the environment are not accounted for and there is no feedback loop to re-use raw materials instead of disposing them.
After its 2020 declaration to become a circular economy, Amsterdam took several steps: First, the city adopted the Amsterdam Circular Strategy 2020-2025. The strategy focuses on three key value chains; Food and Organic Waste Streams, Consumer Goods and Built Environment. Looking at the Consumer Goods value chain more closely, the City aims to implement by 2030 100% circular procurement and reduce its overall consumption (in terms of consumable and furnishings of premises and public real estate) by 20%. Equally it aims to work with businesses, local initiatives and knowledge institutions to establish an efficient and accessible infrastructure of sharing platforms, second hand shops, online marketplaces and repair services, as well as running campaigns to encourage the people of Amsterdam to change their consumption habits.
Second, the staff of the City worked with Kate Raworth and the Thriving Cities Initiative to create a Amsterdam City Doughnut, the first City Doughnut ever. This economic model connects a social foundation, derived from social priorities of the UN Sustainable Development goals, with an ecological ceiling of the nine planetary boundaries.
Page 14 of Amsterdam Circular Strategy
Third, Amsterdam implemented the Amsterdam Circular Monitor, which charts the extent to which Amsterdam’s Economy has become circular and identifies areas which need improvement. The Monitor’s publication makes Amsterdam the first city in the world to have a detailed insight into how materials flow through its city.
Reality check: Challenges in implementing the Circular Strategy
Cities present unique opportunities to experiment with and learn from circular economy strategies; however, they place complex barriers to ensuring their success and Amsterdam is no different. In the most recent study on Amsterdam’s circular economy (May 2023), Calisto-Friant et al identified three key challenges facing the successful implementation of the Circular Economy Strategy in Amsterdam; a research gap on the implications of implementation of circular economies in the city context, a failure to effectively tackle the growth optimist narrative and overconsumption and emphasis of the economic and waste prevention aspects of the Circular Strategy, to the detriment of social justice policies.
Challenge 1: Research Gaps on Implementation of Circular Economies
Amsterdam’s innovative strategy entails a key challenge; as the first city to implement a circular economy, there is a research gap in how cities can facilitate a transition, with the implementation challenges only beginning to be studied periodically in the last 5 years (Calisto-Friant et al; Vanhuyse et al; Heurkens and Dabrowksi; Campbell-Johnston et al). As noted by Steenmans and Lesnieuwksa, until circular economy laws and policies are adopted for and tested, it is difficult to predict and avoid the potential shortcomings of their implementation.
The City of Amsterdam is itself aware of this knowledge gap, noting in its Circular Strategy that the transition to the circular economy is ‘fraught with uncertainty’ (p. 20) and emphasises its approach of learning by doing. In its Lessons and Recommendations Report, the City reflected on lessons from the first years of the Circular Strategy, noting the success of the publication of the Amsterdam Circular Monitor but cautioned that a lesson learned from its development was the need for more information to transition to a circular economy in targeted fashion. It recommended that the findings of pilots, projects and experiments of the first years be studied and translated into useable data.
The lack of data and universal standards to measure environmental impacts of economic activities was also a focus area of the TBLSA. The Impact Paper recommends the use of new technology like blockchains to improve traceability in Global Value Chains. Making businesses responsible to monitor their global value chain and report on the use of raw material could help to close knowledge gaps for Amsterdam’s circular economy. Furthermore, efforts to increase transparency and gather data in different areas can be combined. The Impact Paper recommends the implementation of a public product rating system which would rank products on ESG (environmental, social, governance) standards. Amsterdam could use existing ESG indices like the AEX® ESG Index from the pan-European market infrastructure Euronext to combine information gathered specifically for the circular economy transformation with other sustainable transparency initiatives.
Challenge 2: Tackling overconsumption and targeting the economic growth paradigm
A key challenge the Amsterdam Circular Economy Strategy faces is that it does not exist in a vacuum; it forms part of and experiences pressures from the global capitalist economic system. Calisto Friant et al note that cities are limited by their territorial context, constrained by policies and regulations established at the national and international level, meaning they face pressure from the global capitalist economic system to adopt growth-driven policies.
The most recent edition of the Monitor found that material use in Amsterdam was between 15 to 61 times higher than previously estimated, confirming that overconsumption remains a key challenge to the success of the Circular Economy Strategy. Figures show that despite initiatives, in 2022 the bulk of the economy was still based on primary material consumption, with the monitor finding that Amsterdam’s Scope 3 emissions are between 70-90% of total emissions. This means that to halve its primary material usage by 2030, consumption of primary materials would need to decrease annually by 2.3 billion kg.
Calisto-Friant et al criticise the Amsterdam Circular Strategy for failing to challenge the growth optimist discourse that equates economic growth and consumption with the success of an economy, with Maldini particularly noting that there are no measures or targets to reduce citizen’s overconsumption in a socially equitable way. Calisto-Friant et al note that the Strategy is mostly defined by waste prevention, with material and efficiency goals being the only measures with clear targets. They argue policies should focus more on reducing consumption rather than recovering waste, through restrictions on advertisements, particularly in public places, promoting community ethics through cultural programmes and creating community owned media outlets. Farné Fratini et al agree, noting that the Circular Economy Strategy does not mention Amsterdam’s 2016 Action Plan on Sharing Economy, which targets overconsumption, and could be linked to the new strategy.
In line with the findings of the Intergovernmental Panel on Climate Change, Chapter 3 of The TBLSA Impact Paper identified unequal overconsumption by the affluent as a key driver of climate change, recommending that the financial sector redefine economic growth and value to capture the limitations of finite resources. The Impact Paper noted that the capitalist economic model is embedded in how our economic system functions, noting that confronting this mindset is no small challenge but is essential to ensuring material reduction in negative climate impact. The City of Amsterdam proved its ambition to redefine economic prosperity by creating the Amsterdam City Doughnut. However, the Lessons and Recommendations (2020-2021) begin with the statement that the City can be proud of the strongest growth in the Netherlands in 2021. Considering the critiques mentioned above, the city must be even bolder in confronting capitalist narratives about the centrality of economic growth, and the problem of over-consumption.
Challenge 3: Embedding the social foundation and ensuring a multi-stakeholder approach
Calisto-Friant et al identified a key challenge to the success of Amsterdam’s circular strategy as lacking transformative social action, instead focusing on economic growth and competitiveness. This is a general issue with city implementation of circular economy, as the study noted the same result in Copenhagen and Glasgow. Without engaging in fundamental social change, the Circular Economy strategy cannot succeed and may entrench and exacerbate existing social inequalities.
The City of Amsterdam has acknowledged this, noting that while the approach and organisation of the Strategy has led to a broad movement, the next steps required cohesion among the various activities and projects. Equally, The City noted it was in the process of developing a system for modelling social well-being and prosperity in the Circular Economy Strategy. However, this was back in 2020 and there has been no update on how this system is progressing. Calisto-Friant note that beyond the Sharing Economy (which as noted above, appears to be independent of the Circular Economy Action Plan and has not been updated in some time) there is no substantial commitment to fostering inclusivity.
What is needed is a greater emphasis on participatory democracy, with Calisto-Friant et al noting that while Amsterdam did have some participatory workshops, these were used a consultation processes, meaning citizens were excluded from the final decisions concerning policies, which remained the prerogative of the municipal government. They recommended the introduction of systems that give citizens tangible power over policy decisions, including participatory budgeting processes, citizens assemblies and deliberative councils.
The TBLSA Impact Paper recommends implementation of the Raworth’s doughnut model as it embeds a social foundation within the circular economy. Equal emphasis on the social aspects of the City Doughnut is essential, with the Impact Paper highlighting that this paradigm shift requires not just participation of state actors and corporations but citizens and those living in communities, particularly those who are most often marginalise. Equally, the Impact Paper recommends the creation of collaborative certification regimes for supply chains. This approach could be expanded to the circular economy: Regulators and NGOs could co-create a certification disclosing which companies fulfil the ambitions of a circular economy. This could be another method of assuring participation in the circular economy transition.
Conclusion
The City of Amsterdam strategy is one of the first of its kind, with the City at the forefront of innovating sustainable ways for cities to not just exist but thrive. So far, the collection of data through the Monitor is one of the most important impacts. It allows the City to have a better understanding of the implications of its initiatives, which is a key insight for Amsterdam itself and for other circular economy projects.
However, Monitor demonstrates that for the Circular Economy Strategy to achieve its goal to have material consumption by 2030, the Strategy will need to do more to effectively tackle the issue of overconsumption. In line with the recommendation of the Impact Paper, this means fundamentally challenging and rejecting the growth optimist narrative and taking concrete steps to reduce consumption of the city’s inhabitants, particularly affluent companies and individuals. In addition, there must be greater democratic participation and stakeholder participation in the governance of the Strategy, to ensure the social foundations of the Amsterdam City Doughnut are embedded in all policies. Despite its challenges, the Circular Strategy is a significant step in facilitating effective economic development and will be an essential study in the steps and challenges of implementing circular economies at the city levels.