Abstract
The purpose of this contribution is to develop a Circular Economy Composite indicator to benchmark EU countries performance. Europe is at the forefront of the global transition towards a sustainable and circular economy. To this end, the European Commission has launched in 2015 a Circular Economy Action Plan including a monitoring framework to measure progress and to assess the effectiveness of initiatives towards the circular economy in the European Union (EU) and Member States. Still, this monitoring framework lacks a composite indicator at the national level to aggregate the circular economy dimensions into a single summary indicator. Although there is a wide range of sustainability composite indicators, no aggregate circular economy index exits to this date. We use a multi-criteria approach to construct a circular economy composite index based on TOPSIS (Technique for Order Preferences by Similarity to Ideal Solutions) methodology. In addition, we introduce a novel aggregation methodology for building a composite indicator where different levels of compensability for the distances to the ideal and anti-ideal (or negative-ideal) values of each indicator are considered. In order to illustrate the advantages of this proposal, we have applied it to evaluate the Circular Economy performance of EU Member States for the year 2016. This proposal can be a valuable tool for identifying areas in which the countries need to concentrate their efforts to boost their circular economy performance.
Highlights
There is growing consensus on the need of a gradual transition to a more sustainable economic growth and most countries are facing this challenge
We face the Sustainability 2020, 12, 618 question of aggregation different criteria into a Circular Economy (CE) composite index looking at the constant elasticity of substitution (CES) [24,25] between the dimensions previously defined in the circular economy monitoring framework
A careful measurement of circular economy performance is needed to provide a foundation for effective policymaking
Summary
There is growing consensus on the need of a gradual transition to a more sustainable economic growth and most countries are facing this challenge. TOPSIS is the acronym of “Technique for Order Preferences by Similarity to Ideal Solutions” [17], and it is based on aggregation functions representing the relative closeness to the ideal and anti-ideal values as reference levels It is broadly used in MCDM frameworks due to its ease of implementation and the ability to consider a non-limited number of alternatives and criteria. We face the Sustainability 2020, 12, 618 question of aggregation different criteria into a CE composite index looking at the constant elasticity of substitution (CES) [24,25] between the dimensions previously defined in the circular economy monitoring framework.
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