Recently, the circular economy (CE) concept has gained the attention of scholars and practitioners as an alternative to the linear economy model, as linear economy’s limitations result in insufficient use of resources and demand fossil fuels consumption [1
]. CE is a completely opposite paradigm which offers an opportunity to rethink existing economic systems in order to increase resource efficiency, turn waste into a resource and implement new approaches to consumption and production based on renting and leasing instead of owning. Such actions should ultimately make economic systems less vulnerable, more sustainable and competitive at micro-level [10
], eco-industrial park level [14
] and macro-level [16
]. In accordance with such objectives, some European governments and local authorities are already taking steps in the direction of CE implementation, national level initiatives represented by a circular economy in the Netherlands by 2050 [18
], Finland’s National Circular Economy Roadmap [19
],f ProgRess II-German Resource Efficiency Programme [20
], Leading the transition: a circular economy action plan for Portugal [21
], Towards a Model of Circular Economy for Italy—Overview and Strategic Framework [22
], France Unveils Circular Economy Roadmap [23
] and Roadmap towards the Circular Economy in Slovenia [24
At the same time, a few initiatives were introduced at regional and local levels as well, such as Promoting Green and Circular Economy in Catalonia: Strategy of the Government of Catalonia [25
], Brussels Region—Programme Régional en Economie Circulaire (2016) [26
], Scotland-Making Things Last: A Circular Economy Strategy for Scotland [27
], Circular Amsterdam [28
], White Paper on the Circular Economy of Greater Paris [29
], Extremadura 2030: Strategy for a Green and Circular Economy [30
], London’s Circular Economy Route Map [31
] and the Circular Flanders kick-off statement [32
Progress toward CE and sustainability has become increasingly important not only for Europe, but also for China and most other countries in the world. The CE concept is observed as a new engine of green growth worldwide [33
]. That is why there are many attempts to apply the CE approach in various areas of business and public management. Recently, a CE evaluation tool was even proposed for sustainable event management for a hypothetical Olympic Village [34
]. Moreover, CE ideas appeared as an urban regeneration model, with universities playing one of the key roles in this process [35
]. Numerous attempts have been made to evaluate how CE-based business models could be applied to industry [10
]. The current study will nevertheless focus mainly on CE in public management, paying the most attention to the theory and practical solutions for EU countries and how these relate to the experiences of other countries.
CE and resource efficiency promotion are in line with the EU’s international commitments like the 2030 Sustainable Agenda, Paris Agreement to combat climate change and G7 Alliance for Resource Efficiency—building more sustainable supply chains and global markets for secondary raw materials.
The EU countries’ deep interest in the CE concept has resulted in realising such framework documents as “Towards a circular economy: A zero-waste program for Europe” [36
] and “Closing the loop-An EU action plan for the Circular Economy” [37
]. Active involvement of the European Commission (EC) in preparing a CE-supporting environment can also be seen among numerous initiatives and actions encouraging CE reported after one year of implementation of the action plan for the circular economy [38
]. One of the most anticipated actions planned by the EC related to CE was presentation of the CE monitoring framework at the end of 2017.
Evaluation of the effectiveness of CE actions is crucial; how to estimate the progress from the linear economy model to the circular economy is a question already appearing in research and practical areas [39
]. Although CE has become an increasingly sound concept seeing active implementation from micro to macro-levels, there are still only a limited number of studies focusing on measuring circularity for European countries, regions, cities, companies or production and consumption processes. In comparison with China, where CE has become a core strategy for national development with a system of evaluation indicators for national and industrial park levels existing since 2007, Europe continues to lack a unified system of indicators. Each European-level initiative, like those mentioned above, has its own system of indicators, causing difficulties in comparing the effects of CE policy and strategy implementation. Most available research proposing indicators for CE evaluation are in fact based on Chinese experience, presenting case studies from Chinese cities and regions [41
]. Yet as Chinese regions have substantial differences in their levels of development, such regions must also adopt differing CE development strategies [46
Chinese regional and national CE practices cannot be directly applied to European realities because, as the recent research of [47
] has shown, while Chinese and European perspectives on CE share a common conceptual basis and exhibit many similar concerns in seeking resource efficiency, they have different focuses framed by different problems. For China, the problem is more generally environmental problems and pollution, while for Europe the focus is on materials usage, resource efficiency, waste management, new business models, new jobs, eco-innovations, social innovations, etc. [11
]. A European system of indicators should therefore take into account the specific European context of CE.
The current study paid special attention to CE indicators for European regions, given that the current activities of the EC regarding a CE monitoring framework relate to the national and the EU levels while paying limited attention to monitoring procedures for regional- and local-level policies. Such actions may leave a gap between policymaking and practical implementation impacting regional stakeholders. This would be a serious omission as regions are the most important units for realising numerous European policies [50
There are a few studies proposing frameworks for transition to the circular economy model based on various incentives and instruments [51
], but there is a lack of a system of indicators for evaluation and monitoring of CE progress at the regional level. Thus the main purpose of the current research was proposing a possible system of such regional level CE evaluation indicators.
To satisfy the above objective, the following issues will be addressed; Section 2
—the concept and method of the study, presenting the authors’ concept for conducting the current research; Section 3
—analysis of existing approaches and indicators of CE-based regional development, analysing the main approaches to CE monitoring and evaluation in the EU and worldwide; Section 4
—a CE system of indicators, assumptions for the design and proposals for European regional indicators, presenting the concept for the CE indicators’ design; Section 5
—Malopolska region case study using CE indicators and CE index, presenting an example of the practical application of a system of evaluation indicators applied to the Malopolska region of Poland; and Section 6
—conclusions from the findings and ideas for future developments.
4. CE System of Indicators: Assumptions for Design and Proposals for European Regional Indicators
As the analysis presented in Section 3
has shown, the EC has already developed general approaches for monitoring and evaluating public policies. Existing approaches are based on systems of indicators, which sometimes have their own hierarchy in order to assess the effectiveness of public policies from various perspectives. Such systems of indicators can be expected to make it possible to monitor movement toward more general and strategic purposes, while at the same time assess operational level achievements. However, as was mentioned above, the complexity could cause difficulties given the volume of data to be interpreted and potential time constraints. An example of such an approach is the set of indicators used for monitoring the Sustainable Development Strategy (SDS) of the EU until 2015. This set included various kinds of indicators responding to different user needs as follows [64
Level 1: ‘Headline indicators’ monitor the overall objectives related to the key challenges of the SDS. They are widely used indicators with a high communicative and educational value. They are robust and available for most EU Member States, generally for a minimum period of five years.
Level 2: ‘Operational indicators’ are related to the operational objectives of the SDS. They are lead indicators in their subthemes. They are robust and available for most EU Member States for a minimum period of three years.
Level 3: ‘Explanatory indicators’ are related to actions described in the SDS or to other issues which are useful for analysing progress towards the strategy’s objectives. Breakdowns of higher level indicators, e.g., by gender or income group, are usually also found at this level.
In addition to the above, the following indicators were also identified (Eurostat, 2015):
‘Contextual indicators’ are part of the set, but either do not monitor directly a particular SDS objective or they are not policy responsive. Generally, they are difficult to interpret in a normative way. However, they provide valuable background information on issues having direct relevance for sustainable development policies and are helpful in understanding the topic.
‘Indicators under development’ either already exist but are of insufficient quality or coverage (e.g., not yet available for three years or for a majority of Member States) or are known to be currently under development. Indicators under development are expected to become available within two years and of adequate quality.
‘Indicators to be developed’ are either known to be currently under development but no final satisfactory result is expected within two years, or they are currently not being developed.
On the basis of more than 130 indicators, the EC (EUROSTAT) produced several biannual monitoring reports on sustainable development, most recently in 2015 [65
]. After 2015, the focus of such monitoring was changed and in 2017 monitoring will be done based on evaluation of EU sustainable development from the Sustainable Development Goals (SDG) perspective set up in the blueprint for global sustainable development—Agenda 2030. The EU SDG indicators set has been developed based on a broad and inclusive process and takes into account input provided by numerous and varied actors, including other services of the EC, EU Member States, international bodies and civil society organisations. This EU SDG indicators set will be used to produce the first EU SDG monitoring report to be released in November 2017 (Eurostat, 2017). Each goal is covered by six indicators, except goals 14 and 17 which only have five indicators. Forty-one indicators are multipurpose indicators (MPIs). These are indicators primarily assigned to one goal but used to monitor other goals as well. Those indicators were simplified and there is no longer a three-level approach. All indicators are headline indicators while some of them play a multipurpose role, assessing more than one SDG.
Indicators management is also important at this point because the abilities and skills of stakeholders to use and interpret the data obtained via the indicator-based analysis is of equal importance. Thus, various tools and methodologies may exist for the application and management of indicators [17
]. For this reason, it was important at this stage of the current research to propose principles for indicator design, specifying their scope and possible types.
The conducted analysis has shown that monitoring procedures should strive toward simplicity and transparency, so it would be reasonable to propose a limited number of indicators concentrating on CE focus areas. With that assumption, a general scheme is presented in Figure 2
showing types of indicators, principles for their design and sources for data collection. The proposed concept of the CE indicators’ design is an original one developed by the authors in order to achieve the research goals. At the same time, it incorporates some elements of approaches used in the EU for monitoring and evaluating the effectiveness of implementation of the sustainable development concept via public policies.
The CE concepts in Europe are diverse in scope, targeting not only primary and secondary resource efficiency, but also a wide spectrum of issues such as innovation, new business models, new patterns of consumption, active implementation of smart solutions, ecodesign, green jobs, etc. Those aspects are indicative of the highly interdisciplinary character of CE at the regional level. The current research identified seven main areas of CE demonstrating regional implications of the new economic model:
economic prosperity economy taking into account financial aspects of environmental actions [36
energy-efficient and renewable energy-based economy [36
spatially effective economy [50
The current research proposes indicators for each of the above-mentioned areas (Table 2
). This includes possible evaluation aspects of monitoring and indicators related to the identified aspects.
The best way to prove the practical application of the proposed approach to CE monitoring based on the indicators system is to prepare a case study for one European region at the NUTS 2 level, as it could help to illustrate the main pros and cons of this monitoring method. It is also helpful for identification of the main barriers and limitations which should be eliminated in order to increase the efficiency of monitoring. Thus, Section 5
of the paper is devoted to the case of CE monitoring in the Malopolska region (southern Poland).
6. Discussion and Conclusions
This study has focused on recent trends in CE indicators as a monitoring tool for supporting European regional development policies. Its findings are intended to help regional policymakers to track the progress towards CE transition in order to achieve smart and sustainable growth. The proposed methodology for monitoring CE using the specific indicators selected within CE-related areas is proposed as the main result of the current research. It is intended to be an additional supporting instrument for developing a variety of monitoring actions to track the effects of CE-based regional development within the European context.
As this analysis has shown, existing approaches for monitoring focus greatly on Chinese CE assumptions and priorities. Thus far, both national level actions and academic research regarding CE-based development strategy propose assessment areas and indicators primarily relevant for the macro and meso-levels of development in China. Existing indicators cover resource efficiency, waste management, water, pollution and some social and economic issues, which are also important for European countries and regions. At the same time, European and Asian priorities differ to an extent, and European monitoring and evaluation need to focus on priorities relevant for its countries and regions. Existing CE monitoring in Europe does not cover such crucial aspects as tracking changes in consumption and production models, the spatial dimension influenced by CE strategies and social, economic and cultural changes caused by reorientation toward CE-based regional development. Nevertheless, the approaches presented in the analysed research for CE indicators’ design can be adapted as a starting point for measuring the European dimensions of CE at national or regional levels.
CE transformation also has a strong rebound effect as in any transformation process. In such a situation, monitoring and tracking changes caused by CE transformation plays an important role by offering policymakers a chance to adapt and correct strategies and actions according to information obtained through regular evaluation. Without regular feedback about CE’s effects, it would be impossible to implement the best CE solutions at the regional level. CE monitoring indicators should be tailored through strategies and action plans specific to each region. The current study proposed general approaches for developing a set of monitoring indicators, but each region will require its own monitoring system considering the specifics and peculiarities of local CE processes. That is why regional authorities should start from the adaptation of existing regional development strategies or develop new ones based on CE’s core concepts. Only after having a CE-focused strategy should a system of CE monitoring indicators be developed.
The CE monitoring framework released by the European Commission at the end of 2017 is not detailed enough for monitoring the effects of important CE areas like social innovations, eco-innovations, sharing economy initiatives, the level of greening of the main economic sectors, new business models’ implementation, ecodesign and architecture initiatives. Yet those aspects were identified in recent research on CE from a European perspective as highly important at the regional and local levels [50
]. For the time being, the European Commission’s monitoring actions were proposed only for the national level, with no proposals for the other operational levels of implementation. Thus, even when first steps towards CE monitoring at the national level are undertaken in the EU, the existing framework would not adequately capture CE effects at the local and regional levels. The region as an administrative unit is, however, vital in the context of European Union development policy, necessitating the selection of the proposed CE monitoring indicators in the above analysis.
Additionally, this research has presented a case study in Section 5
of the paper to serve as a valuable example of the practical application of the proposed indicator system, revealing a continuous, yearly increase in the CE indicator value for Malopolska over a period of 12 years. Comparing the situation in Malopolska with that of the whole country (Poland), it is readily apparent that from 2005 to 2008 the index value for Poland is rising faster than for the Malopolska region. Therefore, it can be assumed that other parts of Poland are developing more rapidly. However, to make more detailed conclusions, further research should be conducted.
Unfortunately, in the current context it must be pointed out that comparisons between regions of different countries are not feasible due to the lack of availability of data. Eventually, analysing CE indexes for selected regions may prove to be the proper method for distinguishing leaders in CE implementation—or those particularly lagging—which could be used as positive or negative examples.
In order to develop the CE index using Principal Component Analysis, the existence of strong correlations between variables was assumed. In this context, further analysis could prove beneficial of the causal relationships between variables, and of the way in which changes in selected components of the index influence the industry of the region, especially consumption and production.
Further research related to CE implementation at the regional level will be devoted to developing a CE regional model in the form of a dynamic stochastic general equilibrium (DSGE) model. DSGE models are useful tools for policymakers because they use modern macroeconomic theory to explain and predict an economy’s response to various policy scenarios, in particular, allowing for the observation of the long term benefits from CE implementation.