Sustainability is smart…smart community!  Communities that adopt sustainability strategies will become thriving, resilient communities where people live fulfilling lives.

Smart, sustainable communities are circular communities.  The world community is becoming increasingly urbanized, so nowhere is the transition to the circular society and economy more important than in our cities, where the fraction of the world’s population passed above 50% in 2007 and is rising every year.  We are at 55% urbanization as of this year (2018), and 68% of our world population is expected to live in urban areas by 2050.  So, nowhere is the transition to the circularity more important than in our cities.  Although this may be to the detriment of rural communities, we must not forget those rural communities.  These communities are the sources of many of the resources upon which cities depend, such as food, fiber, forest products, fuel, and mineral resources.  Cities are engines of innovation due to the almost-infinite interactions between people that occur as a result of continued proximity over time.  On the other hand, cities can tend to exacerbate social stratification, as in many cases, those moving to the cities are the rural poor who hope to improve their standard of living.

The Great Lakes Basin has 21% of the world’s freshwater by volume.  Its population is about 35 million people (US and Canada) – about 10% of the population of the US.  The Detroit metropolitan area is the third largest in the basin, after Chicago and Toronto.  According to the Brookings Institution, if it stood alone as a country, the Great Lakes economy would be one of the largest economic units on earth (with a $4.5-trillion gross regional product).  The Great Lakes region, particularly its metropolitan areas, has significant resources essential to creating the next economy.  The Great Lakes Basin and the Rust Belt still comprise one of the major manufacturing areas of the world.  Leveraging the people, natural resources, and manufacturing history/potential of the Great Lakes Region, and in particular what are its Rust Belt cities like Detroit, Buffalo, and Cleveland to generate a manufacturing renaissance. According to a 2010 report from the Brookings Institution,

“The Great Lakes region, too long tagged with the misleading nickname, The Rust Belt, could show the rest of the country the way forward to the next economy.  Although battered by decades of declining economic health, and particularly by the recession, the nation’s heartland still has many of the fundamental resources—top-ranked universities, companies with deep experience in global trade, innovation infrastructure, and emerging centers of clean energy research to name just a few—necessary to create a better, more sustainable, economic model.”

This is not to disregard the region’s challenges.  Its major metros have neither the economic development strategies nor the transportation infrastructure in place to fully take advantage of their export generating capacity.  Many have inefficient physical development patterns, hollowed out urban neighborhoods, and concentrations of energy-intensive industries, and thus remain the epicenters of the nation’s fossil fuel-reliant economy.  They lack the early-stage capital and other supports needed to strengthen existing firms and encourage start-up enterprises.  And many suffer from deep, entrenched poverty, and have low educational attainment levels compared with their peers nationwide.

So why are we focused on the City of Detroit (besides the fact that we live here)?  Criteria that can be used to evaluate the importance of a problem include the number of people affected, the perceived pain level, the size of the economic impact, and the level of risk.

Many people could be positively affected.  Detroit itself has a population of 673,000 (2016) – down from a peak of 1.8 million in 1950.  The Detroit metropolitan area hosts 4.3 million people.  As stated previously, the population of the Great Lakes Basin is about 35 million (US and Canada) – about 10% of the population of the US.  The Detroit metropolitan area is the third largest in the basin, after Chicago and Toronto.  According to the Brookings Institution, if it stood alone as a country, the Great Lakes economy would be one of the largest economic units on earth (with a $4.5-trillion gross regional product).

The current pain level is very high.  As of November 2017, the Detroit unemployment rate was 7.8% (as compared to 4.6% for Michigan as a whole.).  This equates to about 52,000 people within the city limits of Detroit.  However, the true unemployment rate, including those who have given up searching for work, or who work part-time but want full-time employment, is estimated to be at least twice that number, or in the range of 20%.  This means that up to 135,000 people could be affected by the economic situation in the city.  Over the past 15 years, the median income of Detroit residents has declined. In 2015, the median income in the city was less than half that of the region, with nearly a third of households making less than $15,000 per year and only 6% of households making more than $100,000. In 2000, the median household income for the city’s African American residents was higher than that of its non-Hispanic white residents. Although the median incomes of both groups have fallen since 2010, the decline has been greater for African American Detroiters (-17%) than white residents since 2010 (-8%).  Detroit is a city with an extremely high poverty rate. More than 40% of Detroit residents, and 57% of its children under the age of 18 live below the federal poverty line of $24,339 for a family of four. The poverty rate among Detroit’s seniors is considerably lower, with 20% living below the poverty line. Today, 53% of Detroit residents live in areas of concentrated poverty, typically defined as census tracts with a poverty rate of 40% or more. Research indicates that the negative effects of poverty on neighborhoods are limited below a poverty rate of 10% and increase dramatically between 20% and 40%, after which there is little increase in the negative effects of concentrated poverty.  Detroit residents face many health challenges, suffering from higher rates of disease and other chronic illnesses when compared to the state and the nation as a whole. These include cancer, asthma, infant mortality, HIV, and diabetes. Disparities are particularly acute for conditions such as infant mortality and HIV infection, where Detroit’s rates are more than twice the national average.  In the years since the Great Recession, Detroit has experienced strong growth, with jobs and payroll associated with jobs in the city growing faster than in the U.S. economy as a whole. This growth has been relatively diverse, with jobs added in industries from automobile production to business services. Moreover, investment in the city’s innovation infrastructure appears to be paying off, with the number of venture capital-backed companies increasing by 50% in just three years. As the region’s largest job center, Detroit’s strong economic performance in the post-recession period has contributed to the region’s resurgence. By any standard, much of the economic news has been positive. Still, challenges remain. For example, though strong economic performance has increased the number of jobs per 1,000 city residents, Detroit would need to almost double its job base to provide the same number of jobs per resident as its urban peers across the U.S. In addition, although the recovering economies of both the city and the region have helped to dramatically reduce unemployment among Detroit’s residents, unemployment remains high, especially for African American and Hispanic residents and for job-seekers with low levels of formal education. Physical access to jobs also remains a challenge for Detroiters without vehicles or access to reliable public transportation to regional job centers.  Recent job growth within the city and the region has led to a decline in the city’s unemployment rate, which, according to one source, now sits at about 8%, down from about 25% in 2010. (A second source shows higher absolute unemployment rates but also a significant decline since 2010.) At all levels of educational attainment, Detroiters still have higher rates of unemployment relative to their regional and national peers. Detroit residents with a bachelor’s degree or higher have a higher unemployment rate than U.S. residents with only some college or an associate’s degree. Additionally, Detroit residents without a high school diploma have significantly higher unemployment rates than similar workers in other U.S. cities. Data suggest that Detroit has a lower labor force participation rate than many other U.S. cities.  African American and Hispanic residents have similar rates of labor force participation as white residents; however, they have vastly different employment outcomes, with the unemployment rate for African Americans being 2.5 times that of the white population.

The potential economic impact is large.  In a study for the Ellen MacArthur Foundation, McKinsey estimated a circular economy impact of cost savings of €600 billion a year and €1.8 trillion more in other economic benefits by 2030.  This corresponds to a total estimated impact of about $3 trillion, or about 18% of the 2016 EU total GDP.  If we use the same ration with the estimated 2016 Detroit GDP of $252.69 billion, the potential economic impact would be $45 billion when fully implemented.

There is a high level of risk, demonstrated through examples such as the Flint water crisis, the toxic algae plaguing Lake Erie water supplies due to excess phosphorus discharges, and the multitudes of potential impacts due to climate change.

In response to a linear economy ripe for disruption, circularity for communities economy holds the promise of prosperity that is restorative and regenerative by design.  It relies on three principles, drawn directly from “Cities In The Circular Economy: An Initial Exploration” (Ellen MacArthur Foundation, 2017), which are applicable, at least in part, to communities across the full spectrum from urban to rural:

  1. Design out waste and pollution. Reveal and design out the negative externalities of economic activity that cause damage to human health and natural systems. This includes release of toxic substances, greenhouse gas emissions, air, land and water pollution, traffic congestion.
  2. Keep products, components, and materials at their highest value and in use. This means designing for re-use, remanufacturing, and recycling to keep components and materials circulating in and contributing to the economy. Circular systems favor inner loops to preserve more value, such as embedded energy and labor. Circular systems maximize the use of bio-based materials, extracting valuable bio-chemical feedstocks and cascading them into different applications.
  3. Regenerate natural A circular economy enhances natural capital by encouraging flows of nutrients within the system and creating the conditions for regeneration of, for example, soil.

Again, directly from the MacArthur Foundation:

“A circular city embeds the principles of a circular economy across all its functions, establishing an urban system that is regenerative, accessible and abundant by design. These cities aim to eliminate the concept of waste, keep assets at their highest value at all times, and are enabled by digital technology. A circular city seeks to generate prosperity, increase liveability, and improve resilience for the city and its citizens while aiming to decouple the creation of value from the consumption of finite resources.

A circular city will likely include the following elements:

  1. A built environment that is designed in a modular and flexible manner, sourcing healthy materials that improve the life quality of the residents and minimize virgin material use. It will be built using efficient construction techniques and will be highly utilized thanks to shared, flexible and modular office spaces and housing. Components of buildings will be maintained and renewed when needed, while buildings will be used where possible to generate, rather than consume, power and food by facilitating closed loops of water, nutrients, materials, and energy, to mimic natural cycles.
  2. Energy systems that are resilient, renewable, localized, distributed and allow effective energy use, reducing costs and having a positive impact on the environment.
  3. An urban mobility system that is accessible, affordable, and effective. A multi-modal mobility structure that will incorporate public transportation, with on-demand cars as a flexible last-mile solution. Transportation will be electric-powered, shared, and automated. Air pollution and congestion will belong in the past, and excessive road infrastructure will be converted to serve other needs of citizens. Central to vehicle design will be remanufacturing, durability, efficiency and easy maintenance.
  4. An urban bioeconomy where nutrients will be returned to the soil in an appropriate manner while generating value and minimizing food waste. Nutrients could be captured within the organic fraction of municipal solid waste and wastewater streams and processed to be returned to the soil in forms such as organic fertilizer – used for both urban and rural agriculture. Through urban farming, the city will be able to supply some of its own food, reusing food waste and sewage in closed and local loops to produce vegetables, fruit, and fish. Such a system could also provide a more resilient, diversified and cost-effective energy system in the city through the generation of electricity from wastewater, biofuels, and biorefineries. These will offer additional revenue streams to the city, capitalizing on the utilization of material and nutrients that are already in use.
  5. Production systems that encourage the creation of local value loops. This means more local production and increased and more diverse exchanges of value in local economies. Maker-labs (to encourage local production, repair, and distributive manufacturing), collective resource banks (to even out the demand and supply of materials) and digital applications (to broker the exchange of goods, materials, and services) would feature in these local, circular production systems.”

We envision a Detroit that embeds the principles of the circular economy across all of its functions, establishing an urban system that is regenerative, accessible, resilient, and abundant by design; a city that aims to eliminate the concept of waste, keep assets at their highest value at all times, and is enabled by digital technology; a city that seeks to generate prosperity, increase liveability, and improve resilience for the city and its citizens, while aiming to decouple the creation of value from the consumption of finite resources, and including an urban manufacturing economy that designs out waste and pollution; keeps products, components, and materials at their highest value and in use; and contributes to the regeneration of natural systems.

If you are a community that would like to explore the implementation of these principles, or an organization that would like to contribute to your community in one or more of these areas, please contact us using one of the three methods below.