This chapter collects and analyses measurement frameworks for the circular economy, based on the OECD Inventory of Circular Economy Indicators. It identifies scope and scales of the measurement framework, as well and measurement challenges. It concludes with a selection of indicators to set and implement circular economy strategies.
The Circular Economy in Cities and Regions
Synthesis Report
OECD Urban Studies
5. Measuring the circular economy in cities and regions
Abstract
Why measure the circular economy?
As “one cannot improve what cannot be measured”, policymakers, practitioners and scholars urge the need of measurement frameworks for the circular economy. There are four key objectives in measuring the state of the art, progress and impacts of a circular economy: raise awareness; make the case for the circular economy; trigger actions; monitor performance and evaluate results (Figure 5.1):
Figure 5.1. Main objectives of circular economy measurement frameworks
Raise awareness of the circular economy and related opportunities. Results from the OECD Survey on the Circular Economy in Cities and Regions suggest that the lack of awareness is a relevant obstacle for the implementation of circular economy initiatives for 63% of respondents (OECD, 2020[1]). As such, measuring progress and impacts of circular-economy-related initiatives can help raise awareness towards more sustainable production and consumption patterns.
Make the case for a circular economy. The circular economy is expected to generate jobs, reduce negative environmental impacts while sustaining economic growth and increasing social well-being. A good understanding of benefits and costs by type of activity and/or sectors contributes to establish priorities, allocate financial resources and stimulate innovation and co‑operation. Some key sectors, such as waste, food, the built environment and water hold great potential in applying circular economy principles from an environmental, economic and social point of view (Chapter 3). Moreover, productive processes can benefit from cost-saving and increased resource efficiency.
Trigger actions. Adequate information can help design circular economy strategies and support policymakers in setting policy priorities. For examples, some circular economy strategies have been built on the basis of urban metabolism analyses (Chapter 2).
Monitor performance and evaluate results. Measurement frameworks enable to assess the performance and progress of circular economy initiatives, in order to detect what works, what does not and the state of advancement. The evaluation of the results helps identify what can be improved in the future.
What to measure
The OECD Inventory of Circular Economy Indicators collected more than 400 circular-economy-related indicators, between 2018 and 2020 (Box 5.1). The inventory classifies circular economy indicators into five main categories (Figure 5.2):
Figure 5.2. Categories of circular economy indicators
Note: The graph refers to the 474 indicators belonging to 1 of the 5 categories.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Environment (39%): Collects indicators with a direct impact on the ecosystem, such as emissions, output material process and production and consumption.
Governance (34%): Focuses on indicators related to education, capacity building and regulation, among others.
Economic and business (14%): Includes those indicators expressed in monetary units such as the value-added of the circular economy and the public investment in circular economy projects, as well as those indicators specifically focusing on activities performed by and within companies.
Infrastructure and technology (8%): Covers all the indicators that aim to measure the existence of tools, technologies and spaces that boost the circular economy.
Jobs (5%): Gathers indicators associated with employment and human resources.
Additionally, collected indicators are further classified in 33 sub-categories and 11 sectors (Box 5.1).
Box 5.1. The OECD Inventory of Circular Economy Indicators
The OECD Inventory of Circular Economy Indicators collected 474 circular-economy-related indicators, between 2018 and 2020. Collected indicators belong to 29 circular economy studies of which 8 are applied at the national level, 8 at the regional level and 11 at the local level (Annex 5.A). The OECD inventory includes indicators signalled by respondents of the OECD Survey on the Circular Economy in Cities and Regions (OECD, 2020[1]). As per the geographical scope, most of the indicators are from European sources but the inventory also includes available sources from North and South America (Canada, Chile and Colombia).
The OECD inventory gathers input, process and output indicators employed by governments at different levels, in particular to monitor and evaluate the progress of existing circular economy strategies. The inventory provides an overview of circular economy measurement frameworks. It helps identify measurement gaps and can be a source of inspiration for governments wishing to develop or use indicators to improve circular-economy-related policies.
The inventory is intended to be a dynamic tool to be frequently and regularly updated given the progress made by countries, regions and cities in developing circular economy strategies and related measurement frameworks.
In order to provide a clear reading of the scope of the collected indicators, they have been classified into five main categories (economy and business; environment; governance; infrastructure and technology; and jobs), 33 sub-categories and 11 sectors (Table 5.1).
Table 5.1. Categories and sub-categories of indicators from the OECD Inventory
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
In addition to categories and sub-categories, indicators are categorised according to the sector to which they belong. However, when indicators do not relate to a specific sector or relate to the “circular economy” in general, they have be categorised as “not sector-specific”. Sectors with representation equal or below 1% of the OECD inventory have been included in the “Other” category. The 11 sectors are the following: air; built environment; energy; food; public administration; resources and materials; reuse, repair, share; waste; water; not sector-specific; and other (agriculture, culture, forest, industry, land use, mobility, textile and tourism).
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris; OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris.
According to the sample collected within the OECD Inventory of Circular Economy Indicators, environmental indicators prevail (39%). Environmental indicators have been divided into sub-categories, following the categorisation applied by the European Commission (EC) (2018[3]) and the European Environment Agency (EEA) (2016[4]) as much as possible:
Output material process indicators prevail (36% of all the environmental indicators). This sub‑category includes indicators measuring the various phases of waste and material that can be reused and transformed into resources (e.g. material collected for the reuse of building materials and collection of plastics; objects recovered in reuse centres and materials and waste recovered) (OECD, forthcoming[2]).
Production and consumption (27%) cover materials and resources that have been used in the economy, mostly in the generation of waste measured in several sectors (e.g. construction waste, food waste, waste generation from commerce and industry, municipal waste). The consumption of resources is also included within this sub-category: energy consumption, domestic material consumption, consumption of virgin materials and water consumption.
The sub-category of use (14%) describes those indicators on the utilisation and reuse of resources (e.g. amount of resources used and put back into the system; direct resource use; and direct land use), as well as several use rates (e.g. circular material use rate and reuse of packaging waste).
Savings (12%) refers to indicators mentioning the consumption avoidance and savings of different resources such as energy, food, raw materials and clothing (e.g. food waste avoided through a circular consumption and energy saved by energy efficiency programmes).
Emissions indicators (9%), mainly measure the generation of greenhouse gases and CO2 emissions from different activities. In some cases, these indicators concern the circular economy in a broad sense and do not refer to specific sectors (e.g. CO2 emissions per capita), while other indicators are associated to specific activities and areas (e.g. emissions related with the consumption of materials; CO2 savings as a result of procurement activities the carbon impact of waste generation).
Other indicators from this category analyse efficiency (2%), which measures the achievement of the maximum output from a given level of resources used to carry out an activity (OECD, 2013[5]). Efficiency-related indicators in the sample focus on the energy sector (e.g. energy efficiency, energy intensity and energy efficiency in buildings and homes).
Governance indicators represent approximately one-third of the sample, with the sub-categories of awareness-raising, as well as innovation, pilots and experiments being those with the highest representation (14% each):
Awareness-raising indicators mainly refer to the number of awareness-raising campaigns and events organised for different areas (e.g. food waste reduction, plastic use reduction and water reuse). However, indicators account also for other ways of raising awareness and disseminating circular economy principles in the format of workshops, events, publications, guidelines and platforms.
Regarding innovation, pilots and experiments, these indicators primarily include indicators related to the implementation of research and development (R&D) pilots and projects: e.g. the creation of an innovation platform for the circular economy, the number of experimental and pilot projects, the number of circular-economy-related R&D projects and the number of actors involved in experimental projects.
Strategy and initiatives (12%) indicators generally monitor the number of initiatives adopted (e.g. agro-ecological initiatives, projects incorporating smart design, green and circular initiatives and number of water reuse projects). Furthermore, they analyse the different circular initiatives adopted by local authorities, as well as the steps for their adoption, the level of implementation and the number of documents created.
Public procurement (11%): This category includes indicators linked to the inclusion of circular and green criteria in the purchasing of goods, services and works by governments. Several indicators account for the volume of public procurement that includes circular and/or ecological criteria (measured as a percentage of total procurement, number of tenders or total amount in euros). Other indicators address the number of identified legal barriers for the implementation of green public procurement (GPP), or the number of companies informed about circular-economy-related public procurement opportunities.
Capacity building (9%) indicators address the number of training courses on the circular economy, and the different activities to build knowledge of the circular economy. Indicators distinguish the training courses aimed at municipal staff (e.g. city staff trained in circular economy and circular procurement principles; and the number of training modules created for municipal staff). Other examples of this sub-category are: training courses and their level of implementation in the circular economy, conferences and seminars for improving skills, support programmes and guides.
Regulation (9%): Indicators within this category focus on the creation and update of the existing regulation to boost the circular economy and the identification and removal of identified regulatory barriers. Indicators not only focus on the results and achievements (e.g. new laws and updates to boost the circular economy; removed regulatory barriers the number of legislative obstacles identified and resolved laws and regulation for the adaptation of the private sector to the circular economy) but also on the entire process (e.g. number of working group meetings to work on better legislation and the number of circular policy advisers developing circular regulations).
Education (8%) indicators measure to what extend the circular economy is included in educational policies and curriculum. Examples of this sub-sector are: the number of students trained in the circular economy fields of activity; mainstreaming education for sustainable development into regional education policies; and the number of schools and universities that responded to the call for projects on circular economy education.
Stakeholder engagement (8%) indicators mainly focus on actions to engage with key actors involved in all phases of the circular economy initiative (design, implementation and monitoring). Some examples include: the number of the circular economy vision-forming meetings, the number of actors mobilised, the number of collaborative projects implemented by circular economy networks and the number of meetings for circular projects.
The inventory also collects indicators on collaboration (6%) activities, involving all actions related to co‑operation among different actors (e.g. institutions) for synergies, projects and workshops to boost a circular economy. Indicators measure the way collaboration frameworks are built, by monitoring the number of meetings of working groups to boost the circular economy. Other indicators aim to measure the implementation of the collaboration frameworks such as the number of collaborative projects implemented, or the implementation of identified synergies.
Few indicators deal with the monitoring and evaluation (5%) of circular economy initiatives and actions (e.g. follow-up and monitoring of the results of circular economy programmes and studies of the establishment of charges and life-cycle and cost-benefit studies).
Financing (4%) indicators refer to all the economic support provided by governments to conduct a circular initiative (e.g. financial resources mobilised for experiments, the budget amount assigned to calls for projects and budget of pilot public contracts in the circular economy).
Economy and business indicators specifically tailored to the circular economy represent 14% of the share and include 8 specific sub-indicators:
The sub-category of business (30%) encompasses those indicators that specifically refer to the performance of companies and the introduction of business models such as new revenue models related to the circular economy and the number of companies implementing product-as-a-service business models.
The sub-category indicator of investments (16%) covers the public and private investment in R&D, goods and projects related to the circular economy. Some examples include: public expenditure on R&D related to the circular economy and the amount invested in circular economy projects.
Savings (12%) measures all financial resources saved in certain circular actions (e.g. money saved, in comparison with purchasing new) through the reuse of building materials; reduced costs through the implementation of green procurement; and the economic savings due to the reuse of furniture of the local administration and waste reduction.
Productivity (12%) measures the amount of economic output generated per unit of material.
Added value (11%) incorporates indicators related to the value generation created by the circular economy and circular activities (e.g. the economic value of the resources used and gross value added [GVA] generated).
Economic efficiency (8%) includes materials and energy intensity, measured in monetary terms.
Gains and revenues (6%) measure revenues obtained through performing actions closely related to the circular economy (e.g. turnover on circular products and economic gains of the reduction of the digital impact in the public administration).
Economic structure (5%) includes indicators such as the weight of the green economy in gross domestic product (GDP) and GDP per total greenhouse gas (GHG) emissions.
Infrastructure and technology indicators correspond to 8% of the inventory. Facilities (61%) includes all indicators linked to centres mainly dedicated to reuse, repair and share activities. Some examples include: the number of reuse centres in the city; the number of repair cafés; the number of donation and sharing spaces; and the number of repair and reuse centres created. The area sub-category (18%) aims to measure the space within cities that have adopted any kind of circular initiative or criteria. Examples include the share of the city covered by experimental areas, the districts incorporating circular economy principles and the public space recovered for sustainable models. The primary measurement unit for this sub‑category is the share of space in terms of total local space. Equipment (13%) covers all the devices and bins installed in cities for sustainable waste management (e.g. number of bins allocated, water dispensers installed in the city and waste collection devices). Finally, the remaining indicators address products and services (8%) (e.g. new circular products and share of circular products in the total number).
Indicators related to jobs represent 5% of the sample. These indicators mainly relate to employment and human resources. Indicators distinguish between employment within circular economy generic activities and job creation in specific circular economy sectors such as the sharing economy, the reuse and repair sector and the forestry sector. Most indicators specifically relate to jobs and some examples include: the number of green jobs created and secured, the net circular job growth, and the number of jobseekers having been employed as a result of circular economy training. A few indicators also refer to human resources: human resources mobilised for experiments in the building sector; the number of people actively working on the development of a circular vision; and the number of local co‑ordinators recruited for the development of territorial synergies.
The OECD inventory distinguishes 11 sectors (Table 5.2). Mostly, indicators from the inventory do not refer to any specific sector (not sector-specific, 31% of the OECD inventory) but rather to the circular economy in the broadest sense of the term. Contrary to other indicators, they may be objective-driven rather than data-driven, as they have been created specifically to measure the progress of circular economy initiatives. Examples of these indicators are: the number of companies that received financial assistance related to the circular economy; and the number of city contracts evaluated using circular economy principles. The remaining sectors are the following (Figure 5.3):
Figure 5.3. Indicators by sector
Note: Data refer to 474 collected indicators.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
The waste sector represents 20% of the inventory. Mostly, indicators are related to the environment category (71%; Figure 5.4). Indicators concern both waste generation and management. Waste indicators also distinguish across categories of waste, such as biowaste, plastics and electrical waste. Waste treatment differentiates across landfill, incinerated waste, recycled waste and the number of composting plants created.
Indicators on resources and materials represent 9% of the framework, measuring material flows (exports and imports), the self-sufficiency of materials and the recovery of materials. These indicators are prevalently included in the environmental category (78%).
A total of 8% of the sample refer to repair, reuse and share, which mainly covers the categories of infrastructure and technology (35%), environment (28%) and governance (20%). This sector includes indicators on impacts and results from the reuse and repair of several objects and materials (e.g. objects redirected/repaired from recycling centres; the number of goods reused internally in the local administration; and the ratio of products repaired to new products sold). Additionally, it addresses the infrastructure that promotes and enables repair and reuse. Examples of the latter are: the number of reuse centres in the city; the number of recycling centres organised; and collaborative spaces equipped with materials and equipment to encourage repair. Other indicators cover the governance approach of the sector, including indicators such as the number of meetings of a working group to boost sharing or the number of projects realised for the sharing economy.
A total of 7% of indicators are devoted to the built environment, of which 44% belongs to the governance category (Figure 5.4). Indicators cover the whole life cycle of buildings, from the design (e.g. construction works with circular design and projects incorporating smart design) to end of life (e.g. recovery rate of construction and demolition waste). Other indicators refer to the use and consumption of materials (e.g. construction and demolition waste usage rate, the recovery rate of construction and demolition waste, the recovery rate of construction waste as material). Several indicators also address the existence of circular-economy-related certifications for buildings (e.g. number of companies with certification based on life cycle or eco‑design, percentage of construction projects applying to certification programmes and the inclusion of eco-designed products).
There is a small number of energy-related indicators (7%), most of them classified in the environmental category (85%). The existing indicators mostly relate to energy consumption levels (e.g. biofuel consumption; energy efficiency in buildings and homes; and electrical energy consumption), energy recovery (e.g. percentage of used lubricant oils collected and treated for energy recovery) and energy valorisation (e.g. the number of projects implemented for the valorisation of energy).
Food (7%) is another relevant sector for measuring circularity, especially in terms of waste: the amount of food waste generated, the number of food recovery-redistribution actions and food waste avoided through a circular consumption.
Water-related indicators (3%) mainly focus on water regeneration and wastewater, mainly belonging to the environmental category (46%). Some examples from the inventory are: regenerated water used as a source of water supply; the percentage of urban wastewater treated/total wastewater generated; and the number of approved water reuse projects per year.
Few measurement frameworks have started to monitor the role of the public administration as a driver for the circular economy (3%). Governance is the primary category within this sector (58%). Some examples of the indicators are: the number of municipal staff trained on the circular economy; the economic savings from the reuse of furniture and equipment of the local administration; and the number of municipal staff actively working on the development of a circular vision.
Indicators related to the sub-category air (2%) refers to emissions of CO2 and GHG, and are all included in the environmental category (100%). However, according to the OECD survey, cities and regions tend to have difficulties in the collection of reliable data for measuring emissions.
Other sectors (6%): This group encompasses the sectors with few additional indicators (with representation equal or below 1% of the OECD inventory) and includes the following sectors, ordered by their share in the inventory: land use (e.g. new districts incorporating the principles of the circular economy); textile (e.g. clothing recycled per year and savings made by not replacing items of clothing); culture (e.g. collected materials and objects in pilot projects within cultural facilities and Identification of pilot operations in the cultural sector); industry (e.g. working group meetings with major industry players for better regulatory alignment as a boost to the circular economy); agriculture (seed banks and agro-ecological initiatives); mobility (car sharing and use of private vehicles in cities); forestry (direct jobs associated with the forest/wood sector); and tourism (number of tourism enterprises and productivity of the sustainable tourism sector).
Table 5.2. Examples of indicators by sector
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Figure 5.4 shows the distribution of the sectors across the categories. Energy (85%), resources and materials (78%) and waste (71%) are predominantly included in the “environment” category. Indicators not sector-specific (62%), public administration (58%) and built environment (44%) belongs to the “governance” category. Regarding the category “infrastructure and technology”, indicators refer to reuse, repair and share (35%), food (19%) and built environment (12%). Finally, the “job” category is composed of indicators referring to not sector-specific (12%), public administration (8%) and repair, reuse and share (8%) indicators.
Figure 5.4. Composition of sector indicators by category
Note: The graph refers to the 474 indicators.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
At which scale
The literature refers to three main scales at which measurements are carried out: micro (such as a product or company), meso (such as eco-industrial parks and industrial symbiosis) and macro (such as a city, province, region, or nation) levels (Moraga et al., 2019[6]; Ekins et al., 2019[7]; Alaerts et al., 2018[8]). The following section will focus on the macro-level indicators collected within the OECD Inventory of Circular Economy Indicators. Increasingly, surveyed cities have designed indicators to measure the performance and outputs of their respective action plans, roadmaps and strategies (e.g. Amsterdam [Netherlands], Paris [France] and Toronto [Canada]). At the regional level, some strategies include a set of performance indicators that in many cases are aligned with the Circular Economy Monitoring Framework of the EC. Regarding the national level, some of the recently approved strategies (e.g. Colombia and Spain in 2020) have also included indicators to monitor the results of their initiatives.
National level
The first part of this section focuses on the work carried out by European institutions, collecting data at the national level. The second part will focus on specific country examples.
Following the approval of the Circular Economy Package (EC, 2015[9]), the EC made available in 2018 a monitoring framework that aims to measure the progress of the circular economy in all stages of the life cycle of resources, products and services (Box 5.2). The monitoring framework complements the existing Resource Efficiency Scoreboard (EC, 2014[10]) and Raw Materials Scoreboard (EC, 2016[11]). It does not include social innovations, eco‑innovations, sharing economy initiatives, the level of greening of the main economic sectors, new business models’ implementation, eco-design and architecture initiative (Avdiushchenko, 2018[12]). New data on food waste and GPP are expected to be available in 2022.
The EC New Circular Economy Action Plan launched in 2020, one of the building blocks of the European Green Deal, calls for an update and improvement of the monitoring framework (EC, 2020[13]). As such, it is expected to focus on material footprints, additional critical sectors (e.g. constructions, plastics, textiles, and electronics), the design of sustainable products, innovation, value-added change and its implication on the climate neutrality ambition of the EU (OECD, 2020[14]). This European framework does not concern cities and regions. When it comes to measuring circularity at the subnational scale, there are some considerations to be taken into account, such as: i) the difficulty in applying national indicators (e.g. food production and trade flows) at the local scale; and ii) the lack of suitability of some circular economy national indicators for the local level. However, the inclusion of a chapter on cities and regions in the New Circular Economy Action Plan represents a considerable step towards a deeper understanding of how cities and regions will be able to support the new initiative and vice versa (De la Fuente in OECD (2020[14])).
Box 5.2. The European Commission Circular Economy Monitoring Framework
The monitoring framework is composed of ten indicators, some of which are disaggregated into sub‑indicators, capturing four key areas of the circular economy: production and consumption; waste management; secondary raw materials; and competitiveness and innovation.
Table 5.3. Indicators included in the EC Circular Economy Monitoring Framework
The EEA identifies possible indicators to measure each of the phases related to the use of goods and materials (EEA, 2016[4]):
Material input: Domestic material consumption (DMC) or raw material consumption (RMC); the proportion of material losses in key material cycles; diversion of waste from landfill; share of secondary raw materials in material consumption; and share of sustainability-certified materials in use.
Eco-design: Durability or lifetime compared with an industry average for a similar product; time and number of necessary tools for disassembly; the proportion of recycled material in new products; and share of materials where safe recycling options exist.
Production: Material use for production compared to GDP (potentially by sector); input of substances that are classified as hazardous; waste generation; generation of hazardous waste in production processes; involvement of companies in circular company networks; and share of remanufacturing business in the manufacturing economy.
Consumption: Environmental footprint of consumption; material footprint per euro spent; actual average lifetime of selected products; market share of preparing for reuse; and repair services related to sales of new products and waste generation (consumption activities).
Waste recycling: Recycling rates for different types of wastes/materials; recycled material quality compared with virgin material quality; turnover of key recyclables; and environmental effects and cost/revenues of municipal waste management in Europe.
Although several countries have developed circular economy strategies at a national level, few of them have set up a monitoring framework yet. Generally speaking, many of these indicators focus on waste management. For examples, in France, the “10 Key Indicators for Monitoring the Circular Economy” launched in 2017, includes a set of 10 indicators for waste management, consumer demand and behaviour and supply from economic stakeholders. The measurement framework focuses on waste management (five out of ten indicators). Examples of national monitoring frameworks and related indicators are reported in Table 5.4.
Table 5.4. A selection of indicators from national monitoring frameworks
Note: The Spanish National Circular Economy Strategy, España Circular 2030, includes, together with other indicators, the set of indicators of the EC Circular Economy Monitoring Framework. In order to avoid duplications, those indicators from the EC have not been included in the OECD inventory.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Indicators are generally used to monitor the progress on the targets that have been selected in their corresponding initiatives. In Portugal, the Action Plan for Circular Economy in Portugal 2017-2020 contains indicators to measure the progress of the ten lines of action set out in its strategy for the macro, meso and micro levels (Government of Portugal, 2017[16]). In Colombia, the National Strategy for the Circular Economy presents a series of indicators to measure the progress of the circular economy in the country and the level of execution of the established actions. The indicators are organised within specific areas such as industrial material flow, flow of packaging materials, biomass, energy, water and construction material flow (Government of Colombia, 2019[17]).
Across various European countries, the national monitoring systems are mostly based on the EC Monitoring Framework. In Spain, the Circular Economy Strategy of Spain, approved in 2020, collects a series of indicators proposed by the EU. Furthermore, it also contains two additional indicators compared to the EU framework: the contribution of GHG in the waste sector measured in CO2-eq (kt) and the preparation for reuse of waste (Government of Spain, 2020[18]). In the Netherlands, the monitoring system for the circular economy, “Circular economy: What we want to know and can measure”, is also inspired by EC proposals for monitoring the circular economy (Netherlands Environmental Assessment Agency, 2018[19]). The strategy includes a wide variety of suggested indicators and an overview of relevant indicators to measure progress in the circular transition. Similarly, in Italy, the report Towards a Model of Circular Economy for Italy (Government of Italy, 2017[20]) refers to the set of indicators proposed by the EC for the macro level and suggests a set of aspects that are necessary to be considered for the micro level: environmental impacts, resources used and economic value of resources. The roadmap towards the circular economy in Slovenia also includes the monitoring framework of the EU, in addition to indicators from the Slovenian Development Strategy 2030 (material productivity; share of renewable energy in gross final energy consumption; and GDP per total GHG emissions) (Government of Slovenia, 2018[21]).
Indicator frameworks for some national strategies are yet to be developed or are in development. In Finland, following the Finnish Road Map to a Circular Economy 2016-2025 (SITRA, 2016[22]), circular economy indicators are in development and they aim at describing the progress of Finland’s circular economy. This framework will gather information concerning new perspectives of the circular economy such as the sharing economy, circular economy resource loops and systemic changes. This set of indicators is also part of indicator service that describes social development. In Belgium, the government launched the Federal Roadmap for a Circular Economy strategy (Federal Government of Belgium, 2014[23]), which is a first step in the development of a roadmap for more efficient use of resources. One of the objectives set by the strategy is the development of indicators, target setting and data collection.
Regional level
There are few initiatives and related indicator frameworks at the regional level. Examples form the OECD Inventory indicate that regions rely often on available frameworks (EC monitoring framework and set of indicators of the Sustainable Development Goals, e.g. SDG 12). Examples of indicators are reported in Table 5.5.
Some measurement frameworks are devoted to measuring the “transition” to the circular economy. For example, the Regional Programme in Circular Economy 2016-202” of Brussels-Capital (Belgium) includes a set of 15 proposed indicators (Government of the Brussels-Capital Region, 2016[24]). These frameworks focus on measuring actions that should trigger the transition to the circular economy, such as: the number of companies that have received financial assistance related to the circular economy, the budget allocated to these businesses and the budget and number of pilot public contracts in circular economy developed in the Brussels-Capital region. Other indicators concern the number of legislative and normative obstacles identified and addressed, as well as the number of legislative and normative incentives created, the number of people and students trained in the circular economy fields of activity, the number of seminars organised on the circular economy within the framework of the strategy and the pilot cases implemented through calls for projects. The remaining indicators comprise the number of companies aware of Brussels public procurement opportunities, the number of jobseekers having been employed as a result of circular training and also the number of new districts incorporating the principles of the circular economy. With the support of the United Nations Environment Programme, the Brussels-Capital region is working on the definition of a set of indicators that not only focuses on the actions that trigger the circular transition but also on the way the transition has an impact on resources flow (e.g. total water consumption per capita; percentage of water loss; and per capita generation of construction and demolition waste) and the quality of life of inhabitants (e.g. share of existing circular economy jobs and new created circular economy jobs) (UNEP, 2019[25]).
Table 5.5. A selection of indicators from regional monitoring frameworks
Note: * Suggested indicators.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Several regional indicators aim to measure the results and impacts of their circular economy strategies. The Autonomous Community of Catalonia, Spain, launched in 2015 the Promoting the Green and Circular Economy in Catalonia strategy. Its monitoring system, under development, will distinguish between the result indicators and impact indicators. Result indicators are expected to monitor the progress of the planning and deployment of actions, while impact indicators will assess the impact of the strategy in terms of the green economy. Some indicators are: resource productivity efficiency, green economy weight in GDP, environmental quality, resource productivity efficiency and energy efficiency of buildings (Regional Government of Catalonia, 2015[26]).
Some indicator frameworks relate to the SDGs. This is the case of the Extremadura Green and Circular Economy 2030 strategy, which is endowed with its own monitoring and evaluation model based on the set of indicators from the SDGs monitoring framework (Regional Government of Extremadura, 2017[27]), Furthermore, the Agenda for the Development of the Circular Economy in Navarre 2030 also suggests the use of indicators from SDG 12 for measuring the target of extending the culture of sustainability. The OECD developed indicators to measure progress towards the achievement of the SDG 12 in cities and regions (OECD, 2020[28]).
The waste sector is very relevant for most regional level indicator frameworks (Table 5.5). For example, the Making Things Last: A Circular Economy Strategy for Scotland gathers three waste-related indicators: the total amount of waste produced by sectors (household; commerce and industry; and construction and demolition); the amount of waste produced by sectors per unit of GVA; and the carbon impact of waste (the whole-life impacts of waste including the benefits of prevention and recycling) (Scottish Government, 2016[29]). Similarly, in North Karelia, the Roadmap of the Circular Economy of North Karelia includes four indicators in the field of construction and waste: recovery rate of construction waste as material; recycling rate of construction waste; separate collection rate of construction waste; and construction waste.
The local level
Several circular economy strategies in cities are accompanied by indicator frameworks. Their main purpose is to assess how the city is performing towards the achievement of targets. Specific examples are reported below (Table 5.6).
Table 5.6. A selection of indicators from local monitoring frameworks
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Some cities use impact and performance indicators to measure the achievements of the proposed actions of their strategies. For example, the city of Paris, France proposes a performance indicator for each of the 15 actions included in the 1st Roadmap Paris Circular Economy Plan (City of Paris, 2017[30]), such as: planning and construction; waste reduction, reuse, reuse, reuse or repair; support for local actors; public procurement; and responsible consumption. In the 2nd roadmap, there are 2 indicators for each of the 15 established actions (one achievement indicator and one impact indicator) (City of Paris, 2019[31]). The city of Amsterdam, Netherlands, measures its circularity level through three main indicators: value retention, economic and ecological impacts. Each of these measures is composed of two additional sub-indicators. Value retention is measured by raw material efficiency (understood as the waste reduction in the production of goods, measured in kilograms of waste per EUR 1 000 output) and by the use of renewable resources (percentage of imports consisting of biomass compared to total imports). The economic impact is measured in added value per person and the percentage of circular services in the economy (the proportion of the added value in an economy that is generated by services focused on product design, rental, repair and recycling). The environmental impact is measured by environmental costs (EUR per kilogram), water pollution, CO2 emissions, toxicity and land and by CO2 emissions (CO2 kilograms per person). These three indicators, which have been developed by a programme of the Ministry of Infrastructure and the Environment of the Netherlands, are comparable with the national level (Circle Economy et al., 2016[32]). In Toronto, Canada, the indicators from the Circular Economy Procurement Implementation Plan and Framework focus on the impacts and results of procurement activities. These proposed metrics address the environmental (e.g. CO2 savings as a result of procurement activities), social (e.g. number of green jobs created and secured), economic (e.g. cost savings) and governance areas (e.g. number of city staff trained on circular economy procurement principles).
A variety of cities uses environmental, governance and waste-related indicators. For example, in the Greater Porto Area, Portugal, the Circular Economy Framework Monitoring internal report of the Intermunicipal Waste Management of Greater Porto (LIPOR) includes indicators in terms of governance (number tenders with circular criteria), capacity building (implementation of training plan on the circular economy) and waste (recycling rates). In Milan, Italy, the Contatore Ambientale tool measures some environmental and energy areas (e.g. CO2 emissions, water consumption, electrical energy consumption and consumption of secondary and virgin materials). In Turku, Finland, the municipality has some circular economy indicators available from the Resource Wisdom Roadmap and the Strategic Programme of Competitiveness and Sustainable Growth. Examples are mostly related to the environment (GHG emissions per capita and share of renewable energy in district heating) and waste (waste streams to landfills and exporting landfill waste). Available indicators in Munich (Germany), Peñalolén (Chile) and Tilburg (Netherlands) are mostly focused on waste (e.g. residual waste, waste separation, waste recovery through inclusive recycling programmes, recycling rates and monitoring of results from recycling programmes).
The Urban Agenda Partnership on Circular Economy identified a number of indicators that can be useful for cities to assess their transition to the circular economy. The Urban Agenda Partnership on Circular Economy found 140 indicators for circular economy transition in cities. The categories used to classify the collected indicators correspond to those from the EU Monitoring Framework (Box 5.2) to adapt it at the local level. It also includes two overarching indicators on GHG and the availability of a circular economy strategy at the local level (Urban Agenda Partnership on Circular Economy, 2019[33]).
Main challenges of the existing measurement frameworks
Although the development of measurement frameworks for the circular economy is still incipient, some common obstacles and challenges can be observed, such as:
Lack of an agreed definition of the circular economy. It is difficult to build an indicator framework if it is not clear what it intends to measure. It is important to understand and define what to measure, the reasons for doing it and the target audience before establishing an indicator framework. The different definitions of the circular economy may result in different ways of measuring it.
Lack of harmonisation of indicators. There is no harmonised measurement framework contributing to a deeper understanding of the circular economy and its evaluation over time (Blomsma and Brennan, 2017[34]). The existence of a broad variety of indicators makes it difficult to assess the robustness and reliability of the information provided (OECD, 2020[14]). Although there may be some indicators in common amongst the analysed monitoring frameworks, there is a lack of a sufficiently elaborated and consensual methodology for the monitoring and evaluation of the processes of the circular economy. For instance, several indicators (e.g. on recycling and waste management) may underlie the same or similar messages but be accounted through different methodologies or units (e.g. what is included and excluded in the definition of waste-related areas, such as household and municipal waste, can differ between municipalities).
Incomplete information. There are data gaps and inconsistencies in statistical reporting, mainly due to the fact that some of the dimensions of the circular economy have not historically been reflected in statistical databases (Ekins et al., 2019[7]).
Lack of integration at the macro-micro-meso levels. The lack of integration between the macro-micro-meso levels entails the risk of leading to conflicting strategies (Ekins et al., 2019[7]). There is a need to link indicators from different levels, as it is currently not clear how to connect them.
There is a strong focus on waste but little on closing loops. Most indicator systems are focused on recycling and collection rates as well as on the 3R1 or the 9R2 (Saidani et al., 2019[35]). Some of the indicators used to measure circularity (e.g. waste collection and recycling rate) may give a misleading indication of progress, as they do not necessarily show how the primary consumption of materials is reduced and optimised (Haupt, Vadenbo and Hellweg, 2017[36]). The EEA highlights that the current work on circular indicators has mainly focused on waste management and material resource efficiency. Related to this, the identified statistics on waste and material flows are not enough to assess many of the circular-economy-related aspects such as material losses and the qualitative aspects of recycling. The EEA report also emphasises the need for more consistent data in terms of business trends and eco-design, the sharing economy and repair and reuse. Furthermore, it suggests that counting with better descriptive indicators for industrial symbiosis, waste prevention and social aspects would result in more valuable insights to measure progress (EEA, 2016[4]).
Available indicators are mostly data-driven rather than objective-driven. Several monitoring frameworks are marked by data availability, resulting in some cases in an over-representation of sectors with greater availability of information (e.g. waste-related indicators).
Existing indicators focus mainly on physical characteristics such as design, production and waste management, lacking the analysis of the use of products. Generally, indicators do not focus on the intelligent use of goods (addressing relevant factors such as planned obsolescence and easing repair); instead, they report on the production and wasted resources.
There is a lack of a systemic approach of the circular economy indicators. In order to move towards a system change, it is necessary for indicators to measure and control several factors (e.g. from urban planning to materials consumption) and not limiting to very specific sectors such as waste management (Wijkman in OECD (2020[14]).
Selected indicators for setting and implementing a circular economy strategy
According to the phases of the circular economy strategy, from its development to its implementation, Table 5.7 suggests key indicators contained in the OECD Survey on the Circular Economy in Cities and Regions (2020[1]). As such, when developing a circular economy strategy, it is important to take into account the co-ordination across municipal and regional departments, the involvement of stakeholders for an inclusive and participative process, select several projects for the achievement of established targets and identify sources of funding. When the strategy has been set and implemented, key results concern the creation of businesses and jobs, the number of products procured according to circular criteria, as well as environmental conditions such as waste diverted from landfill.
Table 5.7. Selected indicators for circular economy strategies in cities and regions
Source: OECD (2020[1]), OECD Survey on the Circular Economy in Cities and Regions, OECD, Paris; OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
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Annex 5.A. List of monitoring frameworks included in the OECD Inventory of Circular Economy Indicators
Annex Table 5.A.1. List of monitoring frameworks included in the OECD Inventory of Circular Economy Indicators
Note: The cities of Milan (Italy), Munich (Germany), Quillota (Chile) and Tilburg (Netherlands) provided circular economy indicators through the OECD Survey on the Circular Economy in Cities and Regions (2020[1]). However, indicators are not included in specific strategies/initiatives.
Source: OECD (forthcoming[2]), Inventory of Circular Economy Indicators, OECD, Paris.
Notes
← 1. 3Rs: Reduce, Reuse and Recycle (OECD, 2016[38]).
← 2. 9Rs: Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose and Recycle (European Investment Bank, 2020[37]).