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Material flows and resource productivity - OECD work and international developments Conferenza “Impronta ambientale, analisi e contabilità dei flussi di materia ed energia nel contesto della sfida dell’economia circolare” 23 October 2015, Siracusa Myriam Linster, OECD OECD work on material flows and resource productivity Background • Initiated in 2000 • Embedded in work with environmental information and reporting – Data, reporting, information systems: since the late 1970s – Accounting : since the mid-1980s – Indicators: since the late 1980s • Embedded in work on green growth – Green growth strategy initiated in 2009, delivered in 2011 – Monitoring progress at core of strategy: frameworks and indicators • Contributes to fact-based policy analysis and evaluation – At core of the OECD’s metier, founded on solid information basis – Country reviews: environmental performance reviews since the early 1990s – Environmental policies and economy-environment policy integration 2 OECD work on material flows and resource productivity Demand and mandate • Requests by OECD Council – Council Recommendation (April 2004) • Improve information and develop common measurement systems, including accounts and indicators – Council Recommendation (March 2008) • Analysis of MF and environmental impacts • Policies for improving RP • Requests by G8 / G7 Heads of State and Government • • • • 2003 (Evian): develop common knowledge base 2004 (Sea Island): 3R initiative by Japan 2008: G8 Kobe 3R Action Plan monitor progress with RP 2015: G7 initiative to establish a Resource Efficiency Alliance OECD work on Material Flows and Resource Productivity Purpose and foundations • Recognition that – Natural resources are fundamental for the economy and well-being – Resource efficiency and sustainable use of natural resources are central to green growth, to sustainable development and to ensuring appropriate supply of resources – Information exists on some resources: energy, water, forests – But no integrated view of material flows, no good understanding of the economy’s resource base, of factors that drive productivity,.. • Purpose – Support OECD policy analysis and evaluation – Improve knowledge and develop common measurement systems and indicators – Contribute to international policy debates and to the G8 3R initiative • Foundations – Member countries initiatives, research work initiated in the 1990s – International work: Eurostat, SEEA OECD work on Material Flows & Resource Productivity Main streams of work and building blocks Common knowledge base (quantitative and analytical base) Measurement and reporting Information base: data, indicators Fact-based analysis and reporting Methods, principles and guidance Material flow analysis Indicator development, use and interpretation Business applications Policy analysis, evaluation & guidance Policy instruments and practices Policy principles and guidelines Sustainable materials management Eco-innovation, trade Sustainable manufacturing Green growth Policy assessments and recommendations Country peer reviews International work and initiatives OECD Council Recommendations OECD Green Growth Strategy G8 / G7 initiatives: 3R Action Plan UNEP International Resource Panel EU Resource efficiency roadmap / circular economy package System of environmental-economic accounting (SEEA) Sustainable development goals Business sector OECD work on Material Flows and Resource Productivity Co-operation and co-ordination • Within the OECD – Horizontal programmes on Green growth and on measuring wellbeing and the progress of societies – Environmental accounting & the implementation of the SEEA – CIRCLE project: cost of inaction and resource scarcity – consequences for long-term economic growth – Work on global value chains and globalisation, Trade in value added (TiVA) • Global coherence through international co-operation and joint work – European Union: Eurostat, DG ENV, European Environment Agency – United Nations: UNEP and International Resource Panel; UNSD and UNCEEA • Research institutes – Wuppertal Institute, Vienna University, IFF Vienna, Charles University (Prague), CSIRO (Australia), WRI, … OECD work on Material Flows and Resource Productivity Approach • Broad international context – Globalisation and global value and supply chains – Supply security issues • Broad perspective on materials – Quantitative and qualitative aspects – Full life-cycle perspective • Pragmatic approach – Core work: joint work within OECD and in countries; of common relevance – Additional more detailed work: by countries • Concrete outputs and results OECD work on Material Flows & Resource Productivity Main outputs : Methods, principles and guidance • An OECD guide on measuring material flows and resource productivity (2008) – Accessible guide for non-expert audience – Framework for MF analysis • Measurement & analytical tools • Indicator development and use – Accounting framework for national MF accounts that links the concept of systems analysis and environmental-economic accounting (SEEA) – Inventory of country activities to promote exchange of information and experience OECD work on Material Flows & Resource Productivity Main outputs: Information basis • Data – Database on material flows (macro-level): EU data, expanded to OECD member and partner countries – Data on waste flows and waste management – Data on material resource stocks and reserves • Indicators – – – – A set of material flow and resource productivity indicators OECD Core set of environmental indicators OECD green growth indicators Green growth headline indicator: (Raw) Material productivity OECD work on Material Flows & Resource Productivity Main outputs : Analysis and reporting • OECD report to G8 (2011) • Follow up on G8 3R Action Plan • Report “Material resources, productivity and the environment” (2014) • Consolidated factual basis for policy work and for identifying main challenges • Integrated overview of natural resource use, material consumption and productivity, their environmental implications, economic aspects • Report to the OECD Council on the implementation of the Recommendation on resource productivity (2014) OECD work on Material Flows & Resource Productivity Main outputs: Policy guidance and assessment • Sustainable materials management • Extended producer responsibility (EPR) • Case studies based on life-cycle analysis of selected products and materials – mobile phones and critical metals construction materials, wood fibres, plastics • Country environmental performance reviews – Key environmental trends – In-depth analysis of waste & materials management policies Analysing material flows: a tool for decision making 12 What is material flow analysis? Purpose and characteristics • Main characteristics – Helps understand the material basis of the economy – Provides an integrated (holistic) view of resource flows through the economy – Captures flows that do not physically enter the economy but are relevant from an environmental point of view – Helps identify inefficient use of natural resources, energy and materials in the economy, in process chains • Useful for examining trade-offs between policies, and analysing cross-cutting issues Policy areas and issues to which MFA can best contribute – Economic, trade, technology development policies – Natural resource management policies – Environmental policies: waste and materials management, … 13 Material flow analysis An integrated approach: commercial cycle The commercial material cycle, resource productivity and the 3Rs: closing the loop Reduce Releases to the environment (pollution, waste) Land use, habitat alteration, … Resource Extraction Processing Manufacture Use Recycle Re-manufacture Re-use Final disposal Material flow analysis An integrated approach: economy-wide material balance Rest of the world environment and economy Imports Domestic environment Raw materials, processed materials, materials embodied in goods Indirect flows of imports Used materials Unused materials Domestic extraction Used materials Man made stocks Net additions to stocks Exports Raw materials, processed materials, materials embodied in goods Domestic production Recycling, re-use, re-manufacturing, substitution Domestic outputs to nature Pollutants, waste and consumption processes Domestic extraction Unused materials Extraction or movement of materials not used in the economy (returns to nature) Domestic extraction Unused materials Material flow analysis: a family of tools • Overall framework for MFA • Two main elements – Material flow accounts – Material flow indicators • Several types of accounts and levels of application: a family of tools 16 Material flow analysis Architecture and level of application of MFA tools Economy-wide MF Analysis and accounts OECD focus Materials, material groups Input-Output Analysis By economic activity, industry Business level MF Analysis Establishment, enterprise Material System Analysis particular materials, natural resources Local Systems Analysis (LSA) City, region, river basin, … Life Cycle Assessment (LCA) Substance Flow Analysis (SFA) Particular products Particular substances Specification according to economic concepts (activities, products) Specification according to natural science concepts (material, territory) Measuring progress: material flow and resource productivity indicators 18 Measuring MF and RP: OECD indicators For which purpose are they used? • A set of MF and RP indicators for use in OECD work – To monitor progress with resource productivity and the state of material resources – To monitoring progress with green growth: move to a low-carbon and resource efficient economy – To monitor environmental progress and performance • To support policy analyses and assessments – Country reviews: Environmental performance reviews; Economic surveys – Sustainable materials management • To support public communication and information – Inform about major trend and changes • Integrated in other OECD indicators sets – Environment core set, green growth indicators 19 Measuring MF and RP: OECD indicators Characteristics • • • • • Pragmatic, flexible approach Closeness to policy demands and analysis A balanced set National in scope, or issues of national significance Level of detail and aggregation – Aggregate totals – Materials mix: • Metallic minerals, construction minerals, industrial minerals, energy carriers, biomass for food and feed, wood • Biotic, abiotic • Primary raw materials, secondary raw materials (not yet feasible) – Materials or substances of particular concern – Breakdown by major industries (ISIC/NACE) 20 Measuring MF and RP: OECD indicators Criteria for selecting indicators • Policy relevance • • • • • • representative picture easy to interpret, transparent responsive to changes threshold or reference value basis for international comparisons national in scope • Analytical soundness • theoretically well founded • international consensus • link with economic models, forecasting, information systems • Measurability Data underlying the indicators should be: • readily available (cost/benefit ratio) • well documented, of known quality • regularly updated 21 Measuring MF and RP: OECD indicators Main themes for indicator set • Monitoring the material basis of the economy • Monitoring the material productivity of the economy • Monitoring interactions of trade and globalisation with MF • Monitoring the environmental and natural resource implications of materials use • Monitoring the management of selected natural resources and materials Environmental Performance and Information Division Environment Directorate 22 Measuring MF and RP: OECD indicators The material basis of economies MAIN INDICATORS Other useful indicators • Material inputs • Material consumption • Production-based domestic material consumption • Demand-based raw material consumption • Share of materials from renewable natural stocks • Share of recyclable or recycled materials • Intensity of material inputs in economic activities • Material extraction from natural stocks – Materials mix – Sectoral breakdown 23 Measuring MF and RP: OECD indicators The material productivity of economies MAIN INDICATORS Other useful indicators • Material productivity • Production-based domestic material productivity (GDP/DMC) • Demand-based material productivity (real disposable income/TMC) • Environmentally adjusted multi-factor productivity – Materials mix – Sectoral breakdown 24 Measuring MF and RP: OECD indicators The interactions of trade and globalisation with MF MAIN INDICATORS Other useful indicators • Domestic material autonomy • Material intensity of trade flows • Trade in recycled (secondary raw) materials • Physical trade balance (with and without indirect flows) – Synergies with conventional trade indicators and with commodity prices – Materials mix 25 Measuring MF and RP: OECD indicators The environmental implications of MF MAIN INDICATORS Other useful indicators 1. Resource aspects • 2. Environmental aspects • Trends in waste • Intensity of use of natural material generation stocks • Trends in air and GHG • Changes in natural stocks (global) of emissions mineral resources • Changes in man-made stocks of mineral resources – Synergies with other environmental and natural resource indicators 26 Measuring MF and RP: OECD indicators The management efficiency of materials MAIN INDICATORS Other useful indicators 1. Environmental outcomes • Share of recycled materials (secondary raw materials) in material inputs or consumption for selected materials or material groups • Amounts of materials leaving the economic cycle, i.e. going to final disposal • Efficiency of materials use in primary production and in construction: unused materials compared to material inputs or related to value added • Recycling rates for selected waste streams or materials 2. Policy instruments • Subsidies encouraging unsustainable use of extraction of materials – Materials mix and selected materials – Sectoral breakdown – Synergies with conventional waste indicators 27 Environmental Pressures Environmental ConditionsCore Societal Responses Material flow indicators in the OECD Set of Energy intensity Index of GHG emissions Atmospheric concentrations (fossil fuels, other) environmental indicators (production-based; demand-based of GHG Issue Climate change R) o CO2 emissions (production-based; demandbased) Environmental Pressures Global mean temperature Indicators for consideration in country reviews – expenditure, aid, transfers: taxes, subsidies; carbon Issue Environmental Conditions Societal prices;Responses R&D, patents Climate intensity Material Recycling and recovery rates Index of GHG emissions stocks Atmospheric concentrations Intensity of use of natural Changes in natural stocks of Energy (fossil fuels, other) change Resources for selected materials (production-based; demand-based of GHG resources [R] [R] mineral R) Indicators for consideration Global mean temperature depletion ratios; extraction over Trends in proven reserves: (supported with Indicators consideration in country for reviews change-in-proven-reserves over a volume and total number of o CO2 emissions a larger set of in country reviews – expenditure, aid, transfers: given time period demandyears' supply available each (production-based; indicators) – (removal of) subsidies year. taxes, subsidies; carbon based) Material consumption encouraging unsustainable prices; R&D, patents Production-based; demand-based Changes in man-made stocks use or extraction of Material and recovery rates R; materials mix; ratios. Changes of mineral [R] of Recycling Intensity of use ofintensity natural stocks inresources natural stocks materials [R] Resources for selected materials [R] mineral resources [R] – Supplementary indicators and indicators for consideration in country Core indicator o Proxy indicators depletion ratios; extraction over (supported with reviews. Trends in proven reserves: Indicators for consideration change-in-proven-reserves over a volume and total number of a setincluded of :larger indicators in the small set of OECD Key Environmental Indicators endorsed by Environment Ministers in 2001reviews in country given time period years' supply available each indicators) R: area that requires further work; R: area for further work and research by the OECD. – (removal of) subsidies year. Material consumption encouraging unsustainable Production-based; demand-based Changes in man-made stocks use or extraction of R; materials mix; intensity ratios. of mineral resources [R] materials [R] Core indicator o Proxy indicators – Supplementary indicators and indicators for consideration in country reviews. : indicators included in the small set of OECD Key Environmental Indicators endorsed by Environment Ministers in 2001 R: area that requires further work; R: area for further work and research by the OECD. 28 Material flow indicators in the set of green growth indicators 1 economy becoming greener? More • Carbon and energy productivity The environmental and resource• Is the resource efficient? • Resource productivity: materials, nutrients, water productivity of the economy • How• does this affect the productivity of the Multi-factor productivity economy? 2 The natural asset base of the economy • Renewable stocks:base water,preserved? forest, fish resources • Is the natural asset • Non-renewable stocks: mineral resources • Are there risks and of future shocks to growth? • Biodiversity ecosystems 3 The environmental dimension of quality of life • Environmental health and risks • Environmental and amenities • Do people benefit services from greener growth? Economic opportunities and policy responses • Technology and innovation • Are we taking the right measures to • Environmental goodsand & services catalyse investments innovation for • International financial greening the economy?flows • Prices and transfers • Is greening the economy opening up new • Skills training sources ofand growth? • Regulations and management approaches Socio-economic context and characteristics of growth • Economic growth and structure • What• Productivity are the growth characteristics of the and trade economy? social context? • Labour its markets, education and income • Socio-demographic patterns 4 Material flow indicators in the small set of Green Growth Headline Indicators Environmental and resource productivity 1. CO2 productivity (production-based, demand-based) Carbon productivity Resource productivity 2. Non-energy material productivity (production-based, demand-based) Multifactor productivity 3. Multifactor productivity including environmental services DMC, RMC The natural asset base Renewable and non-renewable stocks Biodiversity and ecosystems 4. Natural resource index 5. Changes in land use and cover Environmental quality of life Environmental health and risks 6. Air pollution (population exposure to PM 2.5) Economic opportunities and policy responses Technology and innovation, environmental goods and services, prices and transfers, etc. Placeholder – no indicator specified “Green” difficult to isolate Diversity of country circumstances, of instruments countries to choose OECD material flow and resource productivity indicators Indicator hierarchy (Raw) Material productivity (intensity) (Raw) Material productivity total, non energy, by material group Energy and carbon productivity Water productivity, Waste generation and recovery rates, Nutrient flows Headline indicator Green Growth indicators (Raw) Material consumption intensity Core Set of by material group environmental Intensity of use of natural resource stocks Changes in natural stocks of mineral resources indicators Changes in man-made stocks of mineral resources Recycling and recovery rates for selected materials Economic instruments: e.g. subsidies Larger thematic set of MF and RP indicators 31 Material flow indicators How are they used? • Guiding principles for using indicators in country reviews – Only one tool : interpretation in context – Additional information and analysis: contextual information, country specific indicators, qualitative analysis – Inter-country comparison and standardisation • No unique way of standardisation: several denominators and units • International indicators versus country-specific indicators • Productivity ratios versus absolute trends – Interpretation: choice of reference period; level of aggregation – Link to results, progress, objectives • Use a suite of indicators – Present aggregated indicators with info about constituent variables – Convey “right” message e.g. material flow indicators are not to be used as “impact” indicators – Use in combination with indicators on waste, waste management, energy, water, land 32 Measuring progress: key messages from OECD work 33 Key messages from OECD report Material in the OECD • consumption Unprecedented • growth in demands for raw materials world-wide Slower growth in OECD countries; first signs of decoupling change, 1990-2011 Global extraction of%material resources Global extraction of material resources billion tonnes (Gt) 70 1% %Biomass change, 1980-2010 60 13% 50 48% 24% 30 Fossil fuels -3% 175 150 material consumption 125 Metals Metals Construction & industrial minerals 202% 10 Construction & industrial minerals 0 100 75 50 1980 2000 1990 2000 2005 Material consumption in the2010 OECD 2011 2005 Material consumption, OECD Material consumption inchange, the OECD % 1990-2011 1990 1995 2005 2010 OECD 25 1% 20 13% 15 24% 10 5 -3% 0 1990 2000 Index 1990=100 200 billion tonnes (Gt)) 1980 GDP World Fossil energy carriers 87% 20 1990 Biomass 66% 40 Index 1990=100 200 2000 2005 2011 % change, 1990-2011 175 1% Biomass 150 fuels Fossil fuels 125 Biomass Fossil 13% 24% Metals -3% Construction & industrial minerals Metals Construction & industrial minerals GDP 100 material consumption 75 50 1990 1995 2000 2005 2010 34 Key messages from OECD report • • Material productivity improved in many (most) OECD countries OECD countries generate 30% more economic value per unit of resources used than in 2000, and 50% more than in 1990 USD/tonne 4000 Material productivity, OECD 3500 3000 2500 2000 1500 1000 500 0 2011 or latest available year tonne/cap 2000 Material consumption per capita, OECD 50 40 30 20 10 0 per capita, 2011 per capita, 2000 35 Key messages from OECD report • But material consumption in OECD countries is still 60% higher than the world average Material consumption in kg per person per day Material consumption kg per person per day 2010 OECD 2000 1980 World 0 10 20 30 40 50 60 36 Key messages from OECD report • Recent developments indicate that policies implemented show results in several countries, but not in all Many other factors play a role: • The rise of the service sector • Increased fragmentation of production and off-shoring • The economic crisis with reduced industrial output and construction activity • Material consumption by type Decoupling trends, OECD Biomass 200 200 DMC Metals & industrial minerals Fossil energy carriers 200 200 175 175 175 175 150 150 150 150 125 125 125 125 100 100 100 100 75 75 75 75 50 50 50 50 25 25 25 25 0 1995 2000 2005 2010 0 1995 2000 2005 2010 0 1995 2000 2005 2010 0 GDP Construction minerals 1995 2000 2005 2010 37 Key messages from OECD report • • • About one fifth of the materials extracted world-wide end up as waste and may get lost to the economy if not recovered, recycled, re-used Efforts to transform waste into a valuable resource show first results High recycling rates for large volume materials (glass, aluminium, paper, plastics); low rates for other valuable materials, including precious and speciality metals. Municipal waste Decoupling trends, OECD Municipal waste Recovery and disposal shares, OECD GDP 160 600 520 560 560 560 530 58% 53% 48% 500 Amounts in kg per capita 140 400 64% 120 Municipal waste 300 Share in % going to : 200 100 100 // 800 1990 1995 2000 2005 2010 19% 25% 30% 33% 16% 16% 17% 19% 1995 2000 2005 2011 Disposal Material recovery Energy recovery 0 38 Measuring progress: lessons learned and areas for progress 39 Lessons learned • Current information basis not yet sufficient to enable a more detailed analysis of trends and of resource productivity analyses remain limited to the broad picture • Not all proposed indicators can be measured today • Further efforts needed to improve the availability and quality of underlying data and accounts – Foster the implementation of MF accounting and MF indicators (national, international level) – Further improve the knowledge base • Ultimately MF information should be as good as the economic and financial information at the disposal of governments and businesses 40 Data gaps and areas for progress • Indirect and unused flows – Material footprints, hidden flows – Coherent data on trade flows by origin and destination; • Industry-level information Input-Output tables • Flows of importance to the 3Rs and a circular economy – Waste flows, recycled materials (secondary raw materials), recyclable materials – Coherence between MF accounts and waste statistics • Urban mines: anthropogenic stocks of materials • Analysis of links with specific environmental problems and impacts • Analysis of links with economic aspects and supply security 41 Current work and developments • Further development of information basis • Filling information gaps – – – – – Trade in raw materials (primary, secondary) Recycling, recovery, circular economy, Link to recycling markets, commodity prices Link to natural resource stocks/ reserves Link to environmental impacts and resource scarcity (CIRCLE project, modelling) • Further development of indicators and accounts: demandbased measures of material flows (footprints) – accounting for raw materials embodied in trade – link to work on embodied carbon, input-output tables – link to work on trade in value added (TiVA) Current work on demand-based material flow indicators For which purpose are they used? • To gain a better understanding of – The implications of the international fragmentation of production and global supply and value chains for environmental performance, resource efficiency, supply security, economic performance – The extent to which improvements in resource productivity are the result of domestic policies – The extent to which domestic final demand and consumption patterns affect global environmental issues and natural resources abroad • Used as a complement to production-based measures – to balance the message conveyed – to inform, raise awareness 43 Current work on demand-based material flow indicators Interpretation and communication issues • Understanding by non-experts – Less easy to communicate than carbon footprint indicators, even for production-based indicators – Not linked to a clearly identified global issue, nor impacts, but linked to several issues: supply security; natural resource stocks (unevenly distributed in the world) • Link to policies • Do not always relate to well defined policy areas • Can lead to complex and multi-faceted policy conclusions • Credibility and interpretability – Need for guidance on the way to use and present the indicators – Need for indicator harmonisation: terminology, indicator names, definitions, calculation methods • Series of OECD-UNEP expert workshops to reach a consensus on the measurement approach to use 44 Current work and developments • International cooperation to set up a global capacity for monitoring material flows – Close cooperation and joint work with UNEP IRP and Eurostat to ensure global coherence • • • • Eurostat work on economy-wide MF (mandatory) UNEP database (2015) available on UNEP life OECD database EU countries, other OECD countries, the BRIICS, other countries in the world – Cooperation with UNSD to ensure coherence with the System of environmental-economic accounting (SEEA) – Link to the monitoring of the SDGs: global and regional reporting 45 Lessons so far: success criteria for work at international level and in countries • Selected success criteria • • • • Demand-supply relationship Institutional capacity and continuity Trust and shared ownership, credibility influence Flexibility, pragmatism, cost-effectiveness • Conceptual and measurability issues: important but not an obstacle • “Learning by doing”: start using what you have • “Step by step” approach: to improve and refine • Much to learn from exchange of experience • No rigid transfer of experience • Adaptation to specific circumstances • Commonalities and coherence with international work • OECD role in supporting countries’ efforts & promoting exchange of experience and convergence in key areas GRAZIE! THANK YOU! More on: www.oecd.org/env/indicators www.oecd.org/greengrowth/ www.oecd.org/env/waste www.oecd.org/environment/resourceefficiency www.oecd.org/env/countryreviews 47