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Environmental economics

Structural Change and the Resource Efficient Economy

Taking the EU Resource Efficiency Agenda Forward - A policymaker and business perspective (2015)

The research undertaken for this report has sought the views of both policymakers and businesses regarding the resource efficiency agenda. For policymakers, the role of the EU was considered to be one of providing a clear policy framework, harmonisation across MSs and contributing to the exchange of best practices. The interviews also pointed to the need to cover the entire material use cycle, with an emphasis on waste prevention and product design. Businesses see the Commission as having the opportunity to facilitate, including  promoting a level playing field internationally, linking value chain partners across borders, and ensuring that information flows properly. Incentives-focused measures and those that address both supply and demand of materials were stressed as key to the transition to a more resource-efficient EU in the future.

The Impact of Accounting Rules and Practices on Resource Efficiency in the EU (2014)

This report analysed whether existing accounting rules can affect decisions by companies about investing in resource efficient assets or selling more resource efficient products. It found that most of the time, accounting rules do not materially influence these decisions. Rather, other factors are prevalent, such as access to finance, tax policies, the ethics of business managers, incentive schemes for staff, the degree of short-termism in companies, and the fact that many environmental resources are either not priced or are underpriced compared to the value which society places on them. In some instances, there is scope for clarifying accounting rules and the report makes recommendations to this effect for Member States and international accounting standard setters to consider in order to ensure that accounting rules do not become an impediment to resource efficient investments in the future.

Cases of implementing resource efficient policies by the EU industry (2014)

The aim of this report was to provide a list of evidence of the measures that he EU industry used to improve its resource efficiency and of the results in terms of economic, social and environmental impacts. The evidence was collected on the basis of 21 cases drawn from eight industrial sectors. The measures taken range from improvements in the production processes, development of new sustainable products and services to valorising material streams and upgrading and reusing waste streams. The study indicated the motivations for applying these methods, factors of success or failure, and provided an indication on the scope for further up-scaling at EU level.

Study on modelling of the economic and environmental impacts of raw material consumption (2014)

This report provides a quantitative analysis of different resource productivity (RP) targets for the EU. Resource productivity in this study is defined as GDP per unit of raw material consumption (RMC), instead of the usual GDP per unit of domestic material consumption (DMC). Resource productivity increased during the period 2001 to 2011 at +1.9% per year on average. A ‘business as usual’ baseline for resource productivity was constructed: the projection is of relative decoupling with resource productivity increasing by an average 0.9% per year until 2030. Modelling was undertaken that suggests that resource productivity improvements of around 2% to 2.5% pa can be achieved with net positive impacts on EU GDP, and creating around 2 million additional jobs. Overall, the study suggests that it is possible to meet RP targets through policies that lead to slightly higher rates of growth and employment across the EU.

Nowcasting of and target setting for resource efficiency indicators (2014)

Indicators' timeliness is vital for allowing quick and adequate policy response by policy makers. Early estimates and nowcasting are emerging techniques that are increasingly being used as a way to bridge the gap between the most recent reported observations of an indicator and its, as yet unreported, or even unmeasured, current value.
For example a GDP flash estimate is produced by Eurostat within 45 days. The third and last revision is produced within three months.
The Beyond GDP communication highlights the need for more inclusive, timely and understandable indicators to inform social and environmental issues. The Resource Efficiency Roadmap foresees the need for indicators and targets as important tools to measure and foster progress  
The purpose of the study is to map the current and potential future availability of resource efficiency indicators, assess their potential for early estimates and nowcasts and target setting.

Assessment of Scenarios and Options towards a Resource Efficient Europe (2014)

This study identifies the potential for improving resource efficiency in the built environment. This includes assessing the economic, social and environmental effects of technical efficiency improvements from both single technical options and more system wide changes. The study finds that significant reductions in resource use (around 10% of the EU's Raw Material Consumption) are possible, with a positive effect on European GDP. However, resource efficiency policies need to be targeted in order to maximise the positive environmental impacts. The positive impacts are possible, at least in part, due to the availability of win-win options, caused by non-financial bottlenecks that hinder implementation of worthwhile technical improvement options.

Steps towards greening in the EU: Member States’ resource efficiency policies (2013)

This study reviews environmental policy in the Member States during 2011-2012. It examines a number of areas of priority in the context of Resource Efficiency and the Europe 2020 Strategy. In particular, it sees what the current position is (providing comparative statistics where possible), and asks what is changing in terms of policies for the following policy areas: economic, fiscal and financial aspects (i.e. budgetary issues, market-based instruments, environmentally harmful subsidies and state aids), waste management, support to SMEs and air quality. These are areas that can enhance growth and job creation and/or contribute to fiscal consolidation in addition to being environmentally beneficial. It identifies a range of both performance and policy approaches.

State-of-play of national-consumption-based indicators (2013)

The present report provides a concise review of the state of the art in the development of footprint-type indicators for materials, water, land and carbon for use on the national level (macro level). Based on a review of a large number of papers and studies published in recent years, the various footprint calculation methodologies along with their key advantages and disadvantages are discussed. In addition, the quality and availability of data to calculate those indicators is assessed and evaluated. In the final chapters, key areas for further improvement of the footprint-type indicators are described, including a first estimation of the required efforts to make them ready for use in the context of EU resource policies.

Sectoral Resource Maps  (2013)

This study examines the resource use of different economic sectors for the EU-27 and each of its Member States. Using data calculated for 1997 and 2007 it examines whether the material resource use of economic sectors is changing (absolute or relative or no decoupling of resource use from growth). It allows the most resource intensive sectors to be identified and also provides some first comparisons of how resource use differs between Member States.

Modelling of milestones for achieving Resource Efficiency (ongoing)

The objective of this study is to provide a view on whether and how the milestones set in the Roadmap on a resource efficient Europe could be used for setting quantified objectives. Task 1 involves an assessment of the different milestones according to whether associated targets would be attainable, relevant, measurable through acceptable indicators and available at EU, Member State or sectoral level. This Task 1 report was taken into account by the Commission in its work to support the European Resource Efficiency Platform. Task 2 continues with a literature review of modelling for a limited selection of indicators and Task 3 will provide additional in-depth modelling of environmental tax reform, environmentally harmful subsidies and food waste.

The opportunities to business of improving resource efficiency (2013)

This study examines resource efficiency measures available to EU companies based on bottom-up industry data and case studies. It finds economic opportunities for businesses in three example sectors (Food and Drink manufacturing, Fabricated Metal Products, and Hospitality and Food Services). Companies in these sectors could do a number of things ranging from better use of ecodesign, waste prevention and reuse: some measures would pay off almost straight away, others require up-front investment. Across industry, the study suggests that the net benefits for business from improved resource efficiency could potentially be in the range €245 billion to €604 billion, representing between 3% and 8% of annual turnover. There would also be environmental benefits from these material savings, for example, a reduction of between 2-4% of total annual greenhouse gas emissions in the EU. However, there are barriers that stop companies from realising these opportunities: these include a lack of access to funding, distorted market demand, lack of knowledge and capability, and a desire to avoid lock-in. The study also looked at information provision programmes, such as knowledge transfer, industrial symbiosis, direct consulting and auditing services, training workshops and self-help tools and guides. In general, these programmes pay off by helping businesses to realise some of these benefits and so delivers savings, and these types of programmes could be more systematically applied.

Mapping resource prices: the past and the future (2012)

This study examines changes in resource prices. On average, real prices increased by more than 300% between 1998 and 2011 for resources. At the same time, resource price volatility has also increased. In general, the prices of commodities are expected to rise due to increased population growth, demand from emerging economies such as China and India, and potentially from increased political risk in producing countries for critical materials. This may impact on the EU's competitiveness: the EU is not self-sufficient in many resources and so the rents from resource production and higher prices increasingly are earned outside the EU. Finally, the study notes higher resource prices only give a partial signal to the market, and by itself will not lead to socially efficient use of resources.

Indicators linking resource use to the economy (2012)

This report provides a first analysis of the macroeconomic indicators best suited to explain and describe the link between resource use and economic activities. Four major links between the economy and resource use are identified and the most relevant indicators to inform these links are selected. The report then points to gaps of the current set of indicators and develops propositions for adaptations and alternative ways to complement it.

Assessment of resource efficiency indicators and targets (2012)

This study investigates how indicators and targets of resource use can be used to increase resource efficiency in the EU as part of the European Commission’s Flagship Initiative for a Resource Efficient Europe. The study analysed several existing indicators that track the different types of resource flows in the economy, such as materials (abiotic and biotic), energy, water and land use. The selected indicators were then evaluated for their appropriateness for target setting at the EU policy level.

The outcome of the study is a framework for a set (or basket) of indicators for resource use and their associated environmental impacts. This basket of indicators was used as a basis for proposing a corresponding set of targets for the EU in 2020 and 2050. The implications of setting resource use targets were evaluated to provide the Commission with possible ideas on how to concentrate their efforts towards setting medium and long-term resource efficiency targets.

Transition Costs (2011)

This paper provides a basis for discussion on structural change and the transition to a resource-efficient economy. It examines the process of economic growth and structural change at a macro-economic and a micro-economic scale so that the costs and benefits of transition can be assessed. It points out that there is no fixed 'status quo' in the economy compared to on-going structural change. It looks at the factors resulting in higher or lower costs of structural change, whether induced by policy or economic conditions. As a result, it provides a basis for reconsidering how to look at the costs and benefits of policy change - suggesting that the costs of transition to a green economy are best compared to alternative scenarios of transition costs, rather than to a 'no cost' scenario.

Lags in the EU Economy's response to change (2011)

This study examines why economies do not always respond optimally to changing economic conditions. In particular, it identifies reasons why the EU economy may be slow in its response to changes in resource scarcity to the detriment of its competitiveness. The analysis of lags to the spread of innovation suggests that some of the existing literature is too simplistic, that the considerations involved are complex, and that smart policies which seek to influence consumer behaviour through differentiated, non-traditional approaches may be needed.

Economic Analysis of Resource Efficiency Policies (2011)

This study identifies existing policies that have successfully optimised the use of resources and estimates their current net benefits to the EU. Based on a literature review and stakeholder consultations, 120 resource efficiency policies were identified in 23 countries. Most policies address either material efficiency of specific resources, such as water and aggregates, or material efficiency in industrial production at a general level. The scope of such policies ranges from improving material efficiency in SMEs through dissemination of information on best practices. A number of projects and schemes were identified in the UK, Germany, Belgium, Finland and the US. The study assesses their value and their potential economic benefits for the EU if applied more widely.