Towards circular economy indicators: Evidence from the European Union

Abstract

The European Union (EU) is moving towards sustainable development, and a key role is played by circular economy (CE) models geared towards reducing pressure on natural resources, generating jobs and fostering economic opportunities. Indicators are able to aggregate a variety of information and their use, through the use of multi-criteria decision analysis (MCDA), allows the performance of alternatives to be monitored. This work aims to calculate the performance of the EU27 in the years 2019 and 2020 according to 15 CE indicators available on Eurostat. The results of the Analytic Hierarchy process show that the greatest impact on circularity is determined by the category ‘competitiveness and innovation’, which together with the category ‘global sustainability and resilience’ accounts for two thirds of the overall weight. The MCDA results show that Belgium prevails in both the baseline and alternative scenarios, ahead of Italy and the Netherlands respectively. In general, circular policies see western European countries excel, while the performance of eastern European countries is weaker. The implications of this work highlight the three main barriers to the development of CE models: (i) illegal waste management; (ii) lack of knowledge and low level of investment in circular technologies and (iii) low distribution of value among stakeholders. In this way, resource management based on circularity will enable Europe to meet the challenges of sustainability with less dependence on imported raw materials.