Empirical assessment of the circular economy of selected European countries

Abstract

This research focuses on assessing the results of achieving circular economy (CE) goals in selected European countries for the period from 2010 to 2016. The European Union has imposed ambitious goals regarding sustainable development (SD) and CE as a closely linked concept; so objective comparisons of the efficiency of achieving CE should be performed. Since existing research mostly focuses on measuring the SD, this paper fills the gap in literature by: focusing on the CE goals; utilizing variables which are important according to the European Commission when constructing more complex measures and by comparing the robustness of the results (which is often ignored). Although studies exist on measuring the efficiency of achieving SD goals, there is a lack of research which focuses on CE goals in a similar manner. The methodology utilized in the study is the Grey Relational Analysis as a nonparametric approach of constructing a ranking system between different alternatives. Robust results of the empirical analysis indicate regional discrepancies between the European countries. Namely, the best performing CE countries were Germany, Netherlands, Denmark, France and Italy; with the worst performance of Romania, Greece, Cyprus, Slovakia and Bulgaria. The best performing countries were shown to be those which have greater GDP p.c. (Gross Domestic Product per capita) and have better infrastructure, education and the development of R&D (research and development). Some of the countries found to be the worst-ranked have greater corruption indices in the world rankings, as well as lower government efficiency indices, with worse PISA results in schooling. These results are in line with related research and ranking systems of different world organizations which are based on a more complex approach. Discussion is provided on policy recommendations and future work within this area. Worst performing countries are advised to raise awareness on CE topics, as well as education, minimizing the dependence on raw materials, as well as increasing the withdrawal of funds from relevant financing institutions to aid in achieving CE goals.