Waste management and related policies have been moving towards preventive and integrated approaches, emphasising the life-cycle of materials and products. This is reflected in circular economy (CE) initiatives that have emerged at the international, as well as national and sub-national levels across the world. The rise in CE policy initiatives has brought about stronger demands for reliable and more granular information to track progress towards a more resource-efficient and circular economy with improved social and environmental outcomes. It has also raised questions as to the adequacy of the data and indicators currently available.
This report presents a conceptual framework and a set of indicators for monitoring progress towards a resource-efficient and circular economy. The purpose is to provide a harmonised guide for countries seeking to build up a coherent CE monitoring framework and to support international work on the transition to a CE.
As there is great variety in CE definitions, this report proposes a common language and a headline definition that is general enough to serve both measurement and policy needs. It points to three interrelated features and is accompanied by simple explanatory notes and references to the mechanisms and strategies underlying a CE.
A circular economy is an economy where the value of materials in the economy is maximised and maintained for as long as possible; the input of materials and their consumption is minimised; the generation of waste is prevented and negative environmental impacts reduced throughout the life-cycle of materials.
The conceptual monitoring provided in this report is designed to organise thinking about indicators, identify relevant metrics and ensure that nothing important gets overlooked. It links the main features of the CE with the basic principles of accounting and the pressure-state-response (PSR) model used in environmental reporting and assessment. The framework is further designed to be applied at different levels and geographical areas (multilevel monitoring).
The framework has four main interlinked components:
The material life-cycle and value chain component reflects key features and major outcomes of a CE, considering the circularity principle and the various CE mechanisms. It describes the various stages of the material life-cycle and the results of strategies in place to keep the value of materials in the commercial cycle for as long as possible.
The interactions with the environment component describes major environmental and natural resource implications considering the full lifecycle of materials. It links to the ultimate goal of a CE: the preservation of natural capital (natural resources, environmental quality) and human health.
The responses and actions component describes policy responses (environmental, economic, sectoral, social) and other societal responses and actions that could drive the transition to a CE and create opportunities for socio-economic development.
Finally, the socio-economic opportunities component describes the social and economic outcomes of the transition to a CE, taking into account aspects of economic efficiency and social equity that are central to a just transition.
The indicator set provided in this report is defined in a 3-tier structure that assesses each indicator against its relevance, analytical soundness and measurability and categorises them as “core-”, “complementary-” and “contextual indicators”. The proposed core indicators aim to capture key elements of a CE, respond to main CE policy questions and point to developments or changes that may require further analysis and possible action. Complementary indicators accompany the message conveyed by “core” indicators, provide additional detail, or cover additional aspects. Contextual indicators provide background information on socio-economic and environmental variables and facilitate interpretation in the appropriate country context. Whilst countries may consider adapting the set of indicators to their own needs, the size of the set should remain manageable with no more than 20-25 core indicators.
Measurement issues and data gaps exist for several indicators included in the set. As measuring progress towards a CE has become a dynamic field with many national and international initiatives, good international co-ordination is essential. What is needed is a co-ordinated indicator research agenda and a pragmatic, step-wise approach to improving measurement in countries accompanied with statistical guidance and a regular exchange of good practices.
Among the areas to be given priority are improvements in waste statistics and material flow accounts, the production of better data on the various CE business models and their effects, better use of accounting frameworks and the generation of data on upstream actions (e.g. waste prevention, reuse and repair activities).
Other opportunities that countries and international organisations can explore to fill some of the data gaps include (1) strengthening the use and usefulness of official statistics and data sources from international organisations and national administrations; (2) exploiting alternative and novel data sources that go beyond official statistics, such as data from the private sector and trade associations; and (3) making use of innovative data sourcing techniques and data collection tools (e.g. Internet of Things (IoT) devices, web-scraping, digital fingerprints or search engine trends). Insights from these developments will help further refine and specify the indicator set and facilitate its use in policy development and evaluation.
