Ranking European countries on the basis of their environmental and circular economy performance: A DEA application in MSW

Highlights

• Belgium is the best environmental and circular economy performing country in Europe.

• Borders between Western and Eastern Europe in environmental performance have fallen.

• Borders between north and south Europe haven’t fallen in environmental performance.

• The same countries perform well in environmental and circular economy performance.

Abstract

The scope of this research is to present a more holistic approach on measuring countries’ performance in managing and exploiting their Municipal Solid Waste (MSW). Specifically, we argue that relying solely on criteria like the recycling and/or the cyclical material use rate, can lead to an overestimation or underestimation of countries’ true performance. That is because the level of waste generation is left unaccounted, despite the fact that low waste generation is an important environmental target, and so is the countries’ true potential, as it is reflected by their economic and social progress.

Instead, we measure the environmental and circular economy performance of 26 European Union countries by implementing Data Envelopment Analysis and tackle the aforementioned problem by using the generated quantity of MSW per capita and the three dimensions of the Social Progress Index as inputs and the recycling and/or the cyclical material use rate as outputs. We do so, using a basic framework and a framework that imposes common weights to enforce a full ranking of the countries.

Our study shows large disparities among European countries, with respect to their performance. Interestingly though, the borders between Western and Eastern Europe have fallen, but not those between the north and the south: old EU members, such as Spain or France, perform significantly worst, both from an environmental and a circular economy perspective, than newer members, such as Slovenia or Poland. Finally, Belgium has been revealed as the best performer, both from an environmental and a cyclical economy perspective.

Introduction

Municipal Solid Waste (MSW) is not only an unavoidable product of our daily life, but also a complex and serious problem for our societies, due to the environmental impacts associated with its management. Ιndustry’s heavy dependence on the extraction and utilization of new materials and resources further exacerbates these environmental problems. Moreover, competition for scarce resources and high prices of raw materials put pressure on the competitiveness of European economies.

In view of these problems, the European Union (EU) faces two key challenges in the waste management sector. Firstly, to diminish the level of waste generation, “approaching production and consumption in a more thoughtful, effective, and responsible manner” (Corvellec et al., 2018), since the environmental benefits of avoiding waste clearly far exceed the environmental impacts of managing it. Secondly, to move waste management up the EU waste hierarchy (WH), by diverting waste towards treatments that allow re-using, recycling, composting and recovering energy from it (European Parliament and Council, 2008).

The transformation of the waste management sector will also be crucial in the transition towards a circular economy (CE), where products and materials are maintained and used for as long as possible, minimizing waste and resource use (European Commission, 2015a, European Commission, 2015b, European Commission, 2015c, European Commission, 2015d, European Commission, 2015e). Towards this end, the EC (2015b) introduced the Circular Economy package “Closing the loop – An EU action plan for the circular economy”, with ambitious targets for waste management, based on the EU WH. The package aims to promote a sustainable economy and alleviate the environmental pressures from waste, while providing European industries with high-quality secondary raw materials to be fed back into the production process.

Indeed, the concept of CE has gained significant prominence in today’s politics, with its supporters emphasizing the economic opportunities it can create (World Economic Forum, 2014, European Commission, 2015c), as well as the expected environmental and societal benefits (MacArthur, 2015, Wijkman and Skånberg, 2015, Reike et al., 2018).

However, CE is also strongly criticized as being merely a concept in early stage (Kirchherr et al., 2017), that lacks sufficient conceptualization (Blomsma and Brennan, 2017) and a proper constructed framework (Lazarevic and Valve, 2017) and for failing to place enough weight on the social dimensions (Murray et al., 2017). Similarly, the EU WH has been criticized, as a concept, for many reasons, such as being inefficient to promote reduction of waste (Kijak and Moy, 2004, Barti, 2014, Ferrari et al., 2016), for not distinguishing different forms of recycling (Pires and Martinho, 2019) and even for its priority options with regards to their environmental impacts (Finnveden et al., 2005, Van Ewijk and Stegemann, 2016).

Despite these concerns, the examination of which is beyond the scope of this article, we believe that promoting efficient and environmentally friendly waste management and some form of circularity in today’s resource strained global economy is important. Therefore, it is vital for policymakers and scientists to be able to measure waste management (hereafter environmental) performance and also to assess if EU countries are on the right track towards a more efficient exploitation of recycled materials (hereafter circular economy performance).

Nevertheless, assessing this progress is not a simple task. Although there are several intergovernmental, national and private initiatives aiming at measuring the progress in the implementation of the WH, in conjunction or not with the transitioning to a circular economy (European Commission, 2018a, European Commission, 2018b, Mayer et al., 2019; Blomsma and Brennan, 2017; Pires and Martinho, 2019, Sassanelli et al., 2019), no commonly accepted framework exists (Bocken et al., 2016, Smol et al., 2017).

Making a step towards this direction, the European Commission (2018b) adopted a monitoring framework for circular economy that comprises ten indicators and serves as a tool for monitoring key trends in the transition and the success of taken measures, with respect to the related targets imposed by the EU legislation (European Commission, 2018a, European Commission, 2018b). However, this set of indicators does not encompass the economic, social, and technical issues of CE in order to provide a holistic evaluation of waste management and economic circularity (see Iacovidou et al., 2017). In other words, although these indicators are useful for measuring the absolute performance of countries with respect to specific targets, they ignore the differences in the managerial abilities of these countries, which are driven by their economic and social status and thus, can lead to an underestimation or overestimation of their performance.

However, it is possible to combine some of these indices and construct a composite indicator (see e.g. Cylus et al., 2017), which can account for these economic and social differences. This is the approach we take in our study by implementing Data Envelopment Analysis (DEA) to measure the relative environmental performance (EP) and the CE performance (CEP) of EU countries. We do so by utilizing three out of the ten indicators adopted by the European Commission for the CE monitoring framework, namely the generation of MSW per capita, the MSW recycling rate (hereafter recycling rate) and CMUr, along with the Social Progress Index (SPI). We only use those three CE indicators, since the others are inappropriate for our analysis, either because they are related to other aspects of the CE like competitiveness and innovation or to a specific waste stream, while the indicator “Trade in recyclable raw materials” is already taken into evaluation in the computation of CMUr.

Summing up, two are the main contributions of our work. Firstly, to the best of our knowledge, this is one of the first attempts in the literature to measure relative EP and CEP, by incorporating in a DEA model, variables capturing social factors. Secondly, the performances calculated by the DEA models can be viewed as composite indicators that better reflect EP and CEP, compared to single indices. Therefore, the proposed framework can be used as a more objective tool for identifying best and worst performing countries and thus, can facilitate the development of relevant policies both at the EU and at a Member State level.

The remainder of the paper is organized as follows. Firstly, we provide a brief overview of MSW management in the EU and the transnational waste trade. In Section 3 we review the state of the existing DEA-literature on MSW. The methodology and the data used in the present study are incorporated in Section 4. Section 5 presents the results, along with some necessary discussion. Finally, Section 6 concludes.