The COVID-19 crisis has raised awareness of the unsustainable nature of certain environmental and social trends and provided renewed momentum for action on production and consumption patterns, in particular by capitalising on the potential of the circular economy. Whilst many firms are already beginning to embrace the benefits of the circular economy, as they move away from “take-make-dispose” linear systems, these efforts need to be supported by policies, governance structures, and legal and regulatory frameworks that are coherent across policy spaces, ensure all stakeholders are engaged, and that can foster innovation.

Like many cities around the world, the COVID-19 pandemic has hit the city of Granada hard, with profound impacts on public health, social well-being and the local economy. As of April 2021, the Autonomous Region of Andalusia, where Granada is located, had the third-highest caseload and number of deaths in the country, after Madrid and Catalonia. The unemployment rate in the city of Granada, already among the highest in the country before the sanitary crisis, reached 28.4% in December 2020. In line with other tourism-dependent provinces, the province of Granada saw a significant fall in gross domestic product (GDP) in Spain (12.6% in 2020), the seventh-highest fall among Spain’s 50 Provinces.

While the COVID-19 crisis put many economic activities on hold, notably tourism, a pillar of Granada’s economy, and significantly affected people’s lives and social well-being, it has also given renewed momentum to deliver more sustainable production and consumption patterns in line with carbon neutrality goals. At the same time, COVID-19 has provided an opportunity to rethink and reshape urban policies, and increased awareness of the circular economy’s role in achieving carbon neutrality goals, whilst also stimulating economic growth, creating jobs, and improving people’s lives and social well-being. The Spanish Recovery, Transformation and Resilience Plan (España Puede) set aside 37% of funds for its green agenda, including three main policy levers: urban and rural agenda and the fight against depopulation; resilient infrastructures and ecosystems; and, just and inclusive energy transition.

This chapter provides an overview of the rationale for the circular economy transition in the city, by looking at the main socio-economic and environmental data, trends and drivers leading to a shift from a linear to a circular economy. The city of Granada is well known for its cultural heritage, which attracts thousands of tourists every year. It is also denominated City of Science and Innovation. As such, tourism and science, especially through digitalisation, can contribute to the economic growth of the city, in accordance with circular economy principles.

This chapter analyses existing initiatives across levels of government related to the circular economy. Applying the 3Ps framework, people, policies and places, the chapter also identifies actors, policies and co‑operation tools across urban and rural areas that can foster the circular economy.

This chapter describes the main challenges that Granada is facing in the transition from a linear to a circular economy. The analysis focuses on five main categories of gaps: policy, awareness, capacity, regulatory and funding. Major issues highlighted in the chapter are related to the weak vertical and horizontal co-ordination, which can inhibit a holistic approach to the circular economy, the need to raise awareness of the circular economy as well as to build capacities across public bodies and the business sector.

In response to the challenges identified in Chapter 3, this chapter suggests policy recommendations to implement the circular economy in the city of Granada, Spain. The city of Granada can act as: i) promoter of a circular economy culture and lead by example; ii) facilitator, for enhancing collaboration across stakeholders and levels of governments; and iii) enabler, for implementing the necessary regulatory and financial conditions, amongst others, in the transition from a linear to a circular economy.