An economic indicator is a statistic about an economic activity that allows to analyze current performance and predicate the future performance that can be used to measure the change in a phenomenon or process. According to U.N. (2017), “indicators are signposts of change along the development path. They describe how to track intended results and are critical for monitoring and evaluation”. Indicators can lead to simplifying and clarifying information available to policymakers. Therefore, a good Indicator should be clear and concise. 

When dealing with a new concept, identifying the appropriate indicators to measure it is complicated and challenging. The circular economy is a new paradigm focused on 4Rs (Reduce, reuse, recycle and repair) and, as such, aims to optimize production by reducing natural resource utilization and produce minimum pollution, waste, and emission. The circular economy is a multi-stakeholder model that evolved from various schools of thought, such as industrial ecology and resource efficiency, and this characteristic made measuring its progress challenging and complicated. An analysis of 114 definitions by Kirchherr et al. (2017) clearly shows C.E. means different for different people; therefore, Circular Economy indicators can be classified according to different criteria. How a firm, organization, or government chooses to measure its contribution toward a circular economy depends on its objective, scope, and targeted audiences. 

A systematic study by Saidani et al. (2019) classified 55 sets of C-indicators into ten categories as follow: 

  • On the base of Level of implementation (micro, meso, macro); 
  • CE Loops (maintain, reuse/ reman, recycle); 
  • CE performance (intrinsic, impacts); 
  • circularity perspective (actual, potential); 
  • Usages (e.g. improvement, benchmarking, communication); 
  • Transversality (generic, sector-specific); 
  • Dimension (single, multiple); 
  • Units (quantitative, qualitative); 
  • Format (e.g. web-based, Excel, formulas); 
  • Sources (academics, companies, agencies).

The first four categories are specific to the C.E. paradigm, while categories five and six are related to the particular usage of indicators. Categories seven and eight are related to basic features of indicators, category nine is linked to the assessment framework, and category ten specifies the background in which the C-indicator has been developed. 

Veltha (an international research association working for a systematic approach toward the transition to Circular Economy), in partnership with 17 European Regions, has proposed a set of micro-level C-indicators. These indicators are divided into five broad categories: 

  • Production (Circular design; New production process accepting secondary raw material)
  • Consumption (Re-use, re-manufacturing, refurbishment; waste reduction)
  • Disposal (Reuse, re-manufacturing, refurbishment; Project promoting waste recycling)
  • Environmental criteria (Amount of energy saved; Reduction in emissions; Amount of energy saved; Water circularity) and 
  • Social criterion (Net balance of jobs) 

They also proposed that the projects must choose one category from production, consumption, and disposal, while environmental and social criteria must be included since they explore the project’s widespread environmental and social impact. These categories are based on the Circular Economy Indicators proposed by the European Commission on the document issued on the 16th of January 2018 Communication “on a monitoring framework for the Circular Economy.” 

C-indicators are functioning as a backbone for transitioning toward C.E. practices. In general,  indicators can summarize and simplify the complexity of a dynamic environment and create and communicate public awareness on important issues. Furthermore, they provide a standardized language to simplify information understanding and exchange that ease the transition process toward circularity.

References: 

  • Kirchherr, J., Reike, D., Hekkert, M., 2017. Conceptualizing the circular economy: an analysis of 114 definitions. Resour. Conserv. Recycle. 127, 221–232. [Online] Available at:http://www.sciencedirect.com/science/article/pii/S0921344917302835,  
  • Saidani, M., Yannou, B., Leroy, Y., Cluzel, F., Kendall, A. (2019). A taxonomy of circular economy indicators. J. Cleaner Production. 207. P.542-559. 0959-6526. [Online] Available at: https://doi.org/10.1016/j.jclepro.2018.10.014.
  • Khan, Muhammad & Akhtar, Nadia. (2020). Indicators for Circular Economy. [Online] Available at: https://www.researchgate.net/publication/344121488
  • Veltha. (2021). Policy Lab for Circular Economy [Online] Available at: https://www.veltha.eu/wp-content/uploads/2021/02/Policy_Lab_Publication_Vol1-Jan2021-1-2.pdf