A versatile approach to assess circularity: The case of decoupling

Abstract

Building on the empirical use of the IPAT, we develop a versatile approach to assess the environmental performance of circular economy (CE) strategies. Our proposition can distinguish activities by region, industry, process, or any other, and the product of environmental efficiency factors illustrating key drivers for CE implementation, e.g. GHG/materials and materials/product. CE is often linked to decoupling the economic activity from the degradation of natural capital. Hence, we illustrate our approach through the specific case of decoupling assessment. When combined with the Index Decomposition Analysis (IDA), we can quantify how much a single improvement towards material circularity contributes to an overall decoupling pathway. We tested the results provided in a Material Economics’ report to assess the potential for CE opportunities to reduce GHG emissions in four industries by 2050 in the EU. Our results reveal the progress expected from each CE opportunity in each industry to reach the reported conclusions, e.g., the contribution to reducing GHG emissions by 69 MtCO2 from the steel industry requires the overall environmental efficiency to improve by 67% from the baseline scenario. We also deduce the maximal increase in production for each material that would offset the benefits from implementing CE strategies.