Debate rages over how to measure resource efficiency

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This article is part of our special report Resource Efficiency.

SPECIAL REPORT / Industrial and environmental groups are lining up to pressure the European Commission on how best to measure resource efficiency. Businesses have warned that a one-size-fits-all approach will hamper economic growth at a time when Europe strives to emerge from its sovereign debt crisis.

The European Commission is to present on 14 December the results of recommendations made by experts on which indicators are the more suitable for monitoring progress under the Resource Efficiency Roadmap set out in September 2011.

Today, each EU citizen consumes 16 tonnes of material annually, of which six tonnes are wasted, with half going to landfills. The aim of the roadmap was to decouple resource use from economic growth.

Resource efficiency means minimising the negative environmental impacts generated by the use of natural resources in a growing economy. To measure it, the EU needs indicators and targets, which will also help to track and guide the progress made up to 2020 and 2050.

"Improved accounting is essential for wise management,” Jacqueline McGlade, executive director the European Environment Agency, told a recent World Resources Forum. "You can't manage what you don't measure."

The EU executive suggested measuring progress by introducing a 'lead' "resource productivity" indicator that would measure GDP against material consumption expressed in euros per tonne. This lead indicator will be complemented by the "dashboard" of indicators – such as for carbon, land and water – which was already proposed in the Resource Efficiency Roadmap.

This approach would serve as a basis for resource efficiency targets.

"This will be a critical exercise for the 27 member states but we've seen the model of effort sharing for the climate targets and that works well," German Social-Democrat MEP Jo Leinen said.

But there is broad disagreement on this measure.

'Severe shortcomings'

Anec, an NGO defending consumer interests in standardisation issues, contends the GDP-linked indicator “suffers from severe shortcomings” because the EU's economies differ greatly.

In a response to the Commission's recent call for consultation on resource efficiency indicators, Anec said the indicator is good for measuring de-industrialisation, “but this is not the objective.”

The European Steel Association, or Eurofer, said "there is no such thing as a one-size-fits-all indicator" and that "it would be dangerous to work with overall indicators."

Other groups – including Orgalime, the European Engineering Industries Association – say indicators need to be based on robust data.

"Resource efficiency indicators need to make sure decisions are based on a deep analysis," Veronique Steukers of the Nickel Institute agreed.

Euromines, the European association of mining industries, says that not all existing indicators for measuring resource efficiency are applicable to extractive operations and may therefore provide a wrong basis for decision making.

Concepts such as “resource use”, “material footprint” and “material intensity” often underweight the importance of stability and durability of materials, according to Euromines.

William Neale, who is responsible for resource efficiency in the European Commission's environmental department, acknowledged that finding the right headline indicator that sets a direction and a goal isn’t easy. “It’s a case of getting the right indicators. It’s a difficult task, intellectually speaking.” he said.

The Commission defends the GDP indicator because it is the one for which all member states have solid data.

Neale also thinks that this indicator could help businesses tap funds necessary for new investments.

"if we say this is the way things are going then companies, investors, funds and so on can start seeing that that is the writing on the wall. That gives increased confidence and predictability in the direction we need to go, rather than then hitting the constraints of supply, and the price volatility and hikes and so on," he said in an interview.

Green groups are wary 

Environmentalists have criticised the indicator, saying it ignores land, water and carbon footprints. Businesses have also complained, claiming that the indicator should also take into account the environmental benefits of raw materials use, not just the damage.

"This indicator cannot be used to achieve the Commission’s vision for 2050, whereby the EU’s economy respects constraints and planetary boundaries,” Friends of the Earth Europe said in documents presented to the Commission.

The GDP measure does not accurately show whether an economy has improved or worsened its resource use," the green campaigners wrote. 

Friends of the Earth Europe suggested the Commission should not set aggregated indicators that combine economic and environmental information. At the moment, the lead indicator does exactly this, since it is the ratio between the environmental impact related to resource use and the overall economic indicator – in this case GDP.

“It is essential that the indicators used are consumption-based, transparent and with a direct link to the statistical system,” Friends of the Earth Europe said.

Ernst Ulrich von Weizsäcker, co-chair of the UN’s International Panel for Sustainable Resource Management, said there is a need for lawmakers to intervene in regulating resource use, as long they are not "too prescriptive". 

"Nothing is moving in the right direction if all is left to the markets," but intervention should not be too bureaucratic," von Weizsäcker said.

"The discussions about having one lead indicator or a set of indicators in the European Semester are ongoing. Indeed, it seems to be impossible to find a "one-size-fits-all" indicator as it will always show an incomplete picture. Either you go for a highly aggregated one which will not be able to reflect the policy performance and progress towards the target; or you go for a set of indicators which might be weaker for political and communication reasons," German social-democrat MEP Jo Leinen said.

"The different data sources might be a challenge. We need to get the process started. We can't wait until we have the perfect data before we set targets and indicators - we would lose too much time and we don't have any time to waste. Setting targets and indicators shall bring the EU on track to become the most resource efficient economy" Leinen added.

Commenting on the use of the lead indicator defined as material resource productivity measured through a consumption-to-GDP, Friends of the Earth Europe said: “By adding different statistical data using weights and proxy converting factors, the result of this indicator is an artificial one that does not reflect Europe's use of resources.”

Orgalime, the European Engineering Association, said: "The proposed lead indicator of Domestic Material Consumption (DMC) shows considerable weaknesses in terms of its capacity to reflect all aspects of Resource Efficiency in an appropriate and reliable manner. This risks leading to misinterpretations in environmental and economic terms and should therefore not be applied."

Martin Lehmann, of the World Resources Forum Secretariat, said the GDP indicator is "better than nothing", but the EU should start looking at the bigger picture and try to include social indicators, such as wellbeing, also in its list. "I think the industry, if they go step by step forward to reach resource efficiency and sustainable development, they will in the end not depend on one indicator – because they will end up performing well in all of them if they reduce material imports, energy use and water use," Lehmann said, adding that he expects the Commission to settle on "five to ten main indicators". 

"Without indicators we are a bit lost, we do things but we don't know whay we are doing and how well."

The Commission launched in June 2012 a Resource Efficiency Platform in a bid to set new standards for resource efficiency in the EU. The platform has been divided into three working groups:

  • Circular economy;
  • Setting objectives and measuring progress;
  • Framework conditions for investment in resource efficiency.

Indicators and targets are needed in all these three groups and hence the next meeting of the platform, on 14 December, will focus mainly on discussing and possibly drawing up a set of indicators. Stakeholders have already sent the platform around 170 responses to the initially proposed indicators.

  • By 2014: Commission asked to revise the 2020 recycling targets set in the Waste Framework Directive
  • Summer 2013: European resource-efficiency platform expected to issue a first set of recommendations for short-term measures that can be adopted in about 12 months
  • By 2014: Commission to revise 2020 recycling targets set in the Waste Framework Directive
  • Mid-2014: Mandate ends, the platform makes recommendations for the longer term

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Business and Industry

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