The indicator-based measurement of the circular economy in the countries of the European Union

Abstract

The circular economy is an integral part of sustainable development as a new economic model, which is the opposite of the linear economy that is still in force today. In terms of its basics, we can speak of a sustainable economic system in which economic growth is completely decoupled from the use of resources, in order to reduce the use of natural resources and recycle them. In the study, the authors present the possibility of measuring the circular economy and establish a ranking for the 28 Member States of the European Union based on the created composite indicators measuring the circular economy. The values of the created CCEI index were compared with rankings produced by other researchers in similar and different ways. The goodness of the presented methodology is examined by comparing previous similar research results.

The primary objective of the study is to create composite indicators and to analyse their comparability. Further aim is to characterise the leading and the tail-ender countries from which conclusions can be drawn regarding ranking and thus make them comparable. The research objective is achieved by using secondary data based on different Eurostat databases related to a sub-sector of the circular economy for the year 2018. The indicators of the circular economy were grouped according to four areas: production and consumption, waste management secondary raw materials, competitiveness and innovation. These areas are adequately show the topics related to the circular economy.

In terms of its structure, the international literature related to the circular economy is reviewed first, followed by the EU strategy and a set of relevant indicators. In the methodological chapter, the methodology of the analysis, the scale coordinate transformation is explained. The research results are compared with the rankings created by other authors and the authors of this study. In this study, the comparison is made from composite indicators using rank correlation, followed by the conclusions.

The research findings of the study highlighted the fact that composite indicators can be created in relation to the circular economy, however, creating and comparing them is not an easy task. The ranking on which the comparison is based shows a very high degree of similarity with the selected rankings. Overall and typically, the leading States, such as Germany, the United Kingdom, the Netherlands and Italy are almost without exception in the top of the rankings in most cases, while the group of tail-enders is led by Malta and Estonia. Based on the results of the macro-level studies, the authors established a kind of competitiveness ranking.