Circle Economy and New York City Economic Development Corporation referenced the work of WRAP, the London Sustainable Development Commission, the Greater London Authority and the London Waste and Recycling Board1, as well as WRAP and Green Alliance’s2 analysis of the potential of circular economy efforts in London and Britain, respectively.
The authors used a similar approach to these studies, estimating amounts of increased circular activity to calculate employment effects. Similar to the Greater London study, the New York City study identifies three levels of circular activity: low adherence to circular economy principles, medium adherence and high adherence. The Greater London study focused on recycling rate, reuse, servitization and remanufacturing, while the Britain study included reuse and biorefining in its analysis of circular activity. The former dimensions are more applicable to New York City’s urban context, while the latter would be relevant to subsequent regional studies. Remanufacturing is in its nascent stages in New York City: while there is potential for this industry to grow, the manufacturing presence in the city is so low that including it in calculations yielded no significant job growth.
Therefore, the most relevant dimensions of circularity for estimating job growth in New York City are recycling, reuse and repair, and servitization. Under the three scenarios – business as usual, some progress toward circularity and circular transformation – multiple industries would be affected, in terms of both employment and output3. These industries were cataloged by dimension of circularity.
Since the EU and the United States use different standards for industry classification, the NACE Rev. 2-NAICS 2017 conversion charts provided by the European Commission to match industry codes were used to determine their applicable US equivalents4. From this conversion, the following NAICS two- and three-digit industry sectors were determined to be relevant to a circular New York City:
Due to the focused geographic locality of the analysis and granularity limitations of available US data, high-level sectors are used rather than their more specific NAICS subsets. Since not all facets of an industry will be impacted by the transition to circularity, some of the increase in circularity calculations are discounted based on the proportions of the 5/6-digit NAICS industries to the 2/3-digit larger categories that were included. For example, in the case of construction, the industry is discounted to get estimates of NAICS 2389 “Other specialty trade contractors” in proportion to NAICS 23 “Construction.” Similar steps were performed for the retail trade industry.
Increases in value added were estimated for each dimension of circularity by the low, medium and high levels of adherence to circular principles: waste diversion to recycling was increased 30 percent, 55 percent or 85 percent over 10 years; reuse and repair was increased 5 percent, 15 percent or 25 percent over 10 years; and servitization was increased 5 percent, 15 percent or 25 percent over 10 years (Exhibit 1). These percentages allow for both new and displaced jobs as a result of circular activity, reflecting net economic activity and job increases. The change in value added (increase in each dimension for each scenario less the baseline) was used to project employment growth over the 10-year period using the Regional Economic Modeling, Inc. 70-sector model for New York City. Exogenous final demand for each of the five identified industries was increased by the change in value added resulting from the increased demand for recycling, repair and rental services.
Exhibit 1: Scenario analysis – characteristics of circular economy development, 2020–2030
Value added was used instead of output to avoid overestimating job creation resulting from a transition to circularity.
This method is applied to each of three scenarios of economic transformation (each level of increased value added for each industry) in each of the dimensions of circularity.
Mitchell, Peter. Employment and the Circular Economy: Job creation through resource efficiency in London. Greater London Authority, 2015. Available online via: https://www.wrap.org.uk/sites/files/wrap/London%20Circular%20Economy%20Jobs%20Report%202015%20Online%20Version%20Final.pdf
Morgan, Julian and Peter Mitchell. Employment and the Circular Economy: Job creation in a more resource efficient Britain. Green Alliance, 2015. Available online via: https://www.wrap.org.uk/sites/files/wrap/Employment%20and%20the%20circular%20economy%20summary.pdf
Most notably, these include waste management, retail trade, and repair and rental of goods.
Available online via Eurostat: “Index of Correspondence Tables,” Reference And Management Of Nomenclatures (RAMON), Eurostat. https://ec.europa.eu/eurostat/ramon/relations/index.cfm?TargetUrl=LST_REL&StrLanguageCode=EN&IntCurrentPage=11