Four benefits of using ARPA funds to create circular economies

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    There is no shortage of creative ways for state and local governments to spend historic $1.9 trillion US Rescue Plan Act (ARPA) funding. Some financing decisions have been met controversyothers with passionate support from the community.

    Amid the ambiguity surrounding the use of this unprecedented amount of funding, one fact emerges: an account of this magnitude, with more than $500 billion of the credits still up for grabs, according to a report, could best be achieved with a massive solution.

    The circular economy, an increasingly popular framework that emphasizes keeping resources in circulation rather than throwing them away, could be one such solution. Using ARPA funds to implement circular economy strategies — efforts that eliminate waste by keeping items in use within communities — could not only support economic growth, but also combat climate change.

    Given that many state, local and tribal governments are trying to implement programs with effectiveness supported by evidence, circular strategies may be the answer. People want proven solutions that deliver positive outcomes, such as economic recovery and equity in their communities. Resource exchange programs meet these criteria: they have been shown to reduce costs and waste, preserve economic value within communities, create new jobs and create connections that enable future prosperity.

    Below I will explain how keeping materials in circulation can shape a more competitive, resilient and climate positive future for communities.

    1. Government-to-Business Resources Connectivity

    Establishing a coordinated resource exchange strategy between government facilities and local businesses can help strengthen the economy. When companies share excess resources with government, it can help government function more effectively; when governments reinvest resources bought with taxpayers’ money back into the community, they help ensure that the community continues to benefit from the taxes they’ve paid. In both directions, sharing helps create a symbiotic relationship that maintains value within the community.

    Particularly for small businesses, which have been hit hard by the pandemic, there remains a strong need for support and resources. Increasing the results of reuse between your government and small businesses in your community can reverse some of the negative economic effects.

    An example of successful collaboration between governments and companies is: Reuse Minnesota, a member-based nonprofit that aims to build a strong reuse economy in Minnesota. Members include small and large businesses, government and educational organizations, and individuals. The organization 2020 impact report found that Minnesota’s reuse economy generated $5.8 billion a year (or $1,035 per capita). Given those economic benefits, not to mention the potential to reduce greenhouse gas emissions, it’s clear that such partnerships can pay off.

    2. Business-to-Business Resource Connectivity

    Creating such programs can also help strengthen relationships between businesses in a community. Large organizations can sell or share surplus items with small businesses, reducing the need for resources from outside the community; this in turn helps keep small business costs down and preserve value in the community. A strong reuse program can also help large organizations scope 3 reduce emissions

    An example of the power of business-to-business sharing comes from: the Les Deux Rives initiative in Paris, France. Launched by the City of Paris and the RATP Group, the initiative aims to encourage circularity in the city’s Les Deux Rives business district by facilitating connection and collaboration between businesses. A example of the beneficial synergies of the district is the cooperation between a cultural venue and an NGO; the NGO transforms the site’s old delivery pallets into new site furnishings, creating jobs along the way. In circular systems like this, everyone in the community wins.

    3. Gain in Emergency Preparedness

    Building community relationships not only helps to recover from a pandemic disruption, but can also better prepare us for future disruptions.

    Developing a resource sharing program can help a community understand available emergency supplies and identify gaps. With that knowledge, organizations can share it with each other. If the necessary resources are not available within a particular community, they can continue to search for those items so that no one has to scramble in an emergency.

    A successful emergency preparedness initiative was the Chicago PPE Market, an online marketplace built by our company, Rheaply, in collaboration with the City of Chicago and World Business Chicago. In 2020, when PPE shortages were a barrier to Chicago’s small businesses, we launched the marketplace to enable local business-to-business resources for the sharing of protective supplies. The Chicago PPE Market Produced 4,604 transactions, helping 2,245 small businesses and nonprofits reopen safely. This example may prove to be just the tip of the iceberg when it comes to the degree of innovation achievable when governments and businesses work together on circular initiatives.

    4. Income Optimization

    As mentioned before, sharing at every level helps maintain economic value within a community. Especially given the public sector revenues lost during the pandemic, this advantage is extremely important. By implementing a community-wide resource sharing program, a community can quickly recoup lost revenue.

    Such programs generate revenue in two ways. The first relates to ‘found value’. By understanding what resources your government has and what resources are available in your community, you avoid having to buy new items at full price. The savings can then fund strategic economic development initiatives: enabling reinvestment in the community.

    The second involves longer-term steps. It starts with creating a system that continuously injects money back into the community. Establishing interconnected reuse networks and closing material cycles in a sustainable way ensures a continuous source of funds that benefit the economy. There is perhaps no better representation of this kind of systemic change in government than the examples given by C40 Cities. This initiative connects 94 global cities to take bold climate action and enable a healthier, more sustainable future.

    Weigh the options

    The above benefits are just the beginning. Establishing community resource exchange programs has tremendous benefits for all members of the community. By investing ARPA funds to implement circular strategies, our communities can take meaningful steps toward climate resilience, economic growth and equity. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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