Policy Guidanceon Resource Efficiency

Policy Guidanceon Resource Efficiency

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﻿Preface – 3

Preface
Growth is one of the major driving forces of our world’s development.
But to improve the well-being of our citizens in an environmentally friendly
manner, we need a greener and more inclusive model of growth. Prosperity
and well-being need not be achieved by increasing the “weight of nations”
in terms of the resources they consume. The problem is not growth per se,
but the composition of that growth. By improving resource efficiency we candecrease the amount of virgin materials that are extracted and used, as wellas the associated environmental impacts. The challenge before us is to movetowards a society where we create more value with less natural resource
input, and where we do not compromise the needs of future generations.
Against this background, G7 Leaders launched an Alliance on Resource
Efficiency at their Summit in Schloss Elmau on 7-8 June 2015. This initiativebuilds on the commitments laid out within the 2008 Kobe 3R Action Plan
and broadens them in several ways, including through a stronger involvementof the private sector. In their declaration at Schloss Elmau, G7 Leaders also
called upon the UNEP International Resource Panel (IRP) and the OECD
to develop a synthesis report and policy guidance on resource efficiency,
respectively.
This policy guidance responds to the request by G7 Leaders andcomplements the report produced by the IRP. It presents the key trends andoutlooks related to resource efficiency in the G7 and beyond, and distils
policy guidance by focusing around four main areas: the choice and design ofpolicy instruments; how to combine instruments into an effective policy mix;
integration of resource efficiency into cross-cutting and sectoral policies;
and strengthening of data and analysis to support policy development andevaluation.
Although resource efficiency is first and foremost a matter of national
policy decisions, only collective action and coordinated efforts will ensure
widespread benefits amongst countries. This report highlights the importantrole for international co-operation and co-ordination. Moreover, this is anarea where G7 can play an important role.

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4 – ﻿Preface
The G7 can underscore the need for resource efficiency policies toaddress the entire life-cycle of products, as well as the need to align sectoral
policies in diverse areas like innovation, investment and trade with resource
efficiency objectives. The G7 can also work with other international
partners to facilitate integration of resource efficiency considerations in
Global Value Chains; address trade and investment obstacles to resource
efficiency in supply chains; call for some degree of harmonisation in thefield of environmental labelling and information schemes; and help address
key information gaps in data for material flows and on economic benefits ofresource efficiency policies.
The OECD stands ready to work with the G7 and other international
partners to address these important issues and facilitate the transition to amore resource efficient and more circular economy.

Angel Gurría
Secretary General
OECD

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TABLE OF CONTENTS – 5

Table of contents
Key recommendations ��������������������������������������������������������������������������������������������� 9
Summary and policy guidance ������������������������������������������������������������������������������11
Chapter 1. Introduction ����������������������������������������������������������������������������������������� 19
1.1. Resource efficiency initiatives at the international level������������������������������� 20
1.2. Definitions����������������������������������������������������������������������������������������������������� 23
Chapter 2. Trends and outlook������������������������������������������������������������������������������� 27
2.1. Trends������������������������������������������������������������������������������������������������������������� 28
2.2. Outlook����������������������������������������������������������������������������������������������������������� 33
Notes��������������������������������������������������������������������������������������������������������������������� 38
Chapter 3. Policy guidance for resource efficiency ��������������������������������������������� 39
3.1 Apply mixes of policy instruments so as to provide a coherent set of
incentives for resource efficiency throughout the product lifecycle��������������������� 40
3.2. Implement policies that promote resource efficiency across the lifecycle ofproducts����������������������������������������������������������������������������������������������������������������� 55
3.3. Treat resource efficiency as an economic policy challenge and integrate it
into cross-cutting and sectoral policies����������������������������������������������������������������� 67
3.4. Strengthen policy development and evaluation through better data andanalysis ����������������������������������������������������������������������������������������������������������������� 83
3.5. Strengthen co-operation at the international level, including among the G7 88
Notes��������������������������������������������������������������������������������������������������������������������� 90
References������������������������������������������������������������������������������������������������������������� 91
Annex A. Sustainable development goals and resource efficiency��������������������� 99
Annex B. A snap-shot of G7 countries and EU initiatives on resource
efficiency������������������������������������������������������������������������������������������������103
Canada����������������������������������������������������������������������������������������������������������������� 104
France ������������������������������������������������������������������������������������������������������������������105

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Germany������������������������������������������������������������������������������������������������������������� 107
Italy��������������������������������������������������������������������������������������������������������������������� 109
Japan��������������������������������������������������������������������������������������������������������������������111
United Kingdom��������������������������������������������������������������������������������������������������113
United States��������������������������������������������������������������������������������������������������������114
European Union ��������������������������������������������������������������������������������������������������116
Annex C. OECD policy guidance on extended producer responsibility ����������119
FiguresFigure 2.1 Global material extraction 1900-2009 ������������������������������������������������� 28
Figure 2.2 Progress in decoupling materials consumption from
economic activity��������������������������������������������������������������������������������� 29
Figure 2.3 Material productivity in selected countries ����������������������������������������� 30
Figure 2.4 Trends in municipal solid waste in the OECD��������������������������������������31
Figure 2.5 Trends in municipal solid waste management by country��������������������31
Figure 2.6 Material consumption per capita:
Production- and consumption-based estimates (2010)������������������������� 32
Figure 2.7 Projections for real gross domestic product to 2050����������������������������� 34
Figure 2.8 UNEP IRP scenarios on global resource consumption to 2050����������� 35
Figure 2.9 Water stress by river basin������������������������������������������������������������������� 37
Figure 3.1 Evolution of the number of ELIS by modes of governance andownership (1970-2012) ������������������������������������������������������������������������� 50
Figure 3.2 Disruptive technologies used by pioneers to launch and operate
circular business models with speed and scale������������������������������������� 75
TablesTable 3.1
Table 3.2
Table 3.3
Table 3.4
Table 3.5

Some examples of policy instruments applied at different stages ofthe product lifecycle����������������������������������������������������������������������������� 44
Taxes: strengths and weaknesses��������������������������������������������������������� 46
Standards: Strengths and weaknesses ������������������������������������������������� 48
Examples of policy misalignments that undermine low-carbon
investment��������������������������������������������������������������������������������������������� 78
Summary of target types and key advantages and disadvantages������� 86

Boxes
Box 1.1
Box 1.2
Box 2.1
Box 2.2
Box 3.1
Box 3.2

Kobe 3R Action Plan����������������������������������������������������������������������������� 21
G7 country initiatives on resource efficiency��������������������������������������� 22
Trends in the use of renewable resources��������������������������������������������� 33
UNEP IRP scenarios for resource consumption to 2050��������������������� 35
Waste prevention in OECD countries����������������������������������������������������41
Policy mixes for critical metals in mobile phones ������������������������������� 43

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TABLE OF CONTENTS – 7

Box 3.3
Box 3.4
Box 3.5
Box 3.6
Box 3.7
Box 3.8
Box 3.9
Box 3.10
Box 3.11

Collection of mercury switches in the US ������������������������������������������� 51
Financing the circular economy in Europe: Co-operation between
the European Commission and the European Investment Bank ��������� 53
Japanese EPR for home appliances������������������������������������������������������� 57
Integrating lifecycle analysis in green public procurement: The caseof the Netherlands��������������������������������������������������������������������������������� 61
Phosphate value chain agreement in the Netherlands�������������������������� 65
Policy misalignments in the context of sustainable mobility��������������� 69
Green Action Plan for SMEs in Europe:
Main objectives and actions����������������������������������������������������������������� 72
Promoting resource efficiency innovation in Canada ������������������������� 74
Resource governance in resource-rich countries��������������������������������� 82

Policy Guidance boxes
Designing mixes of policy instruments ������������������������������������������������������������������� 45
Individual policy instruments����������������������������������������������������������������������������������� 54
Strengthening extended producer responsibility ����������������������������������������������������� 58
Strengthening green public procurement����������������������������������������������������������������� 62
Partnerships with the private sector and other stakeholders ����������������������������������� 67
Mainstreaming resource efficiency in public policy ����������������������������������������������� 70
Resource-efficient innovation����������������������������������������������������������������������������������� 76
Promoting investment in low-carbon, resource‑efficient infrastructure����������������� 79
Job skills for the transition to a resource efficient economy ����������������������������������� 80
Effective governance for resource efficiency����������������������������������������������������������� 82
Strengthening policy development and evaluation through better data andanalysis.��������������������������������������������������������������������������������������������������������������������� 87

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POLICY GUIDANCE ON RESOURCE EFFICIENCY © OECD 2016

﻿K ey recommendations – 9

Key recommendations
Going for green growth and establishing a resource efficient economy
is a major environmental, development and economic challenge today. In
this context, improving resource productivity and putting in place policies
that implement the principles of reduce, reuse, recycle (the 3Rs) is crucial, as
recognised by G7 Leaders in the Schloss Elmau’s declaration in June 2015.
This report responds to the request by G7 Leaders at the Schloss Elmau
Summit asking the OECD to develop policy guidance for resource efficiency.
Key findings and recommendations from this report include the following
considerations.
Although resource efficiency is first and foremost a matter of national
policy decisions, only collective action and co-ordinated efforts will ensure
widespread benefits amongst countries. The G7 has an important role to playin this regard.
The G7 can highlight best practices and provide a platform for sharing ofexperiences both within and beyond its membership. Two key messages fromthis Guidance are that:•

Resource efficiency policies should target the entire life-cycle ofproducts.

•

National policies should put more emphasis on aligning sectoral
policies in diverse areas like innovation, investment, trade, educationand skills development with resource efficiency objectives.

These broader messages on the life-cycle approach and policy coherence
could be explicitly supported by the G7.
The G7 can also strengthen co-ordination and co-operation at theinternational level by:•

Facilitating integration of resource efficiency considerations in
Global Value Chains by supporting businesses in their supply chain
management efforts.

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10 – ﻿K ey recommendations•

Addressing trade and investment related obstacles to resource
efficiency in supply chains, including export restrictions on secondary
raw materials, restrictions on trade in used products, and barriers totrade in environmental goods and services.

•

Calling for some degree of harmonisation in the growing field ofenvironmental labelling and information schemes, with the aim ofmaintaining high standards, allowing for increased mutual recognitionof schemes, and countering increased costs associated with scheme
multiplication across international markets.

Finally, the G7 can help address key information gaps related to material
flows and resource efficiency. These gaps include harmonised data on indirectmaterial flows associated with international trade, information on flows
of secondary raw materials, disaggregated information on resource use byindustry, and information on the quality and deterioration of natural resource
stocks. Similarly, the G7 can support internationally co-ordinated efforts toimprove economic analysis of resource efficiency, an area that has currently
received very little attention in research.

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﻿Summary and policy guidance – 11

Summary and policy guidance
Going for green growth and establishing a resource efficient economy isa major environmental, development and macroeconomic challenge today. In
this context, improving resource productivity and putting in place policies
that implement the principles of reduce, reuse, recycle (the 3Rs) is crucial.
Increased resource productivity can help both to improve the environment,by reducing the amount of resources that human economic activity requires
as well as diminishing the associated environmental impacts, and to improve
resource security and competitiveness.
At their summit in Schloss Elmau, Germany, in June 2015, G7 Leadersagreed that “[b]uilding on the Kobe 3R Action Plan, and on other existing
initiatives, we will continue to take ambitious action to improve resource
efficiency as part of broader strategies to promote sustainable materials
management and material-cycle societies.” (G7 Leaders. 2015: 13) In order
to allow G7 countries to interact on resource efficiency policy on a common
knowledge-sharing platform, the G7 Alliance on Resource Efficiency was
founded at the summit, and launched in Berlin in October 2015.
This report responds to the subsequent request by the G7 Leaders at
the Schloss Elmau Summit asking the OECD to develop policy guidance
for resource efficiency. The report includes a discussion of key trends andoutlooks and identifies the main principles that should be used to develop
resource efficiency policies.

1. Key trends and outlook
While G7 and other OECD countries have gradually decoupled theiruse of material resources from economic growth, their per capita material
consumption remains significantly above the world average. Decoupling indeveloped countries has also been insufficient to compensate for increased
demand for material resources in the rest of the world
Recent decades have witnessed an unprecedented growth in demand forresources. This has been driven by the rapid industrialisation of emerging
economies and continued high levels of material consumption in developed

POLICY GUIDANCE ON RESOURCE EFFICIENCY © OECD 2016

12 – ﻿Summary and policy guidancecountries. Since 1990, the global use of material resources has grown slightly
slower than – but broadly in line with – global GDP: a trend known as relative
decoupling. In the same period, most OECD countries have decreased the useof material resources while their economies grew: this is absolute decoupling.
However, the annual per capita material consumption in OECD countries
remains high, about 60% above the world average.
There is evidence that policy has contributed to decoupling in developed
countries, even though performance among countries varies widely. However,
several other factors have also played an important role, though it is difficult
to disentangle their contributions from those of policy. Examples of factorsthat have contributed to decoupling in recent years include: volatile andrelatively high resource prices; technological change; the increased shareof the less material-intensive service sector in national economies; thesubstitution of material-intensive domestic production by imported products;
and reduced demand for resources due to the global financial crisis.
On current trends of population and economic growth, global material
resource consumption is expected to double by 2050, with potentiallysignificant negative impacts on the environment
By 2050, the world population is expected to increase from about 7 tomore than 9 billion, and the per capita income of the world’s population
to roughly triple. This will substantially increase demand for energy, foodand natural resources, especially if global production and consumption
patterns converge with those in OECD countries. Global material resource
consumption is projected to double by 2050. The associated environmental
impacts of harvesting resources, using them, and disposing of waste will also
increase. Unless environmental management and resource efficiency are
significantly improved, natural assets will continue to degrade and become
scarcer, with potentially serious adverse economic, social and environmental
consequences.
Resource efficiency policies can help to counteract these trends andgenerate significant positive impacts for the economy and the environment
G7 countries are increasingly committed to developing a circular economy
where the value of products, materials and resources is maintained in theeconomy for as long as possible, and the generation of waste minimised. Thereis evidence that policies that aim to enhance resource efficiency can deliver
multiple benefits, including lower production costs, increased competitiveness,jobs, reduced dependency on commodity imports and fewer adverse effects
on the environment. Resource efficiency improvements also support climate
mitigation objectives, as well as contributing to the implementation of anumber of the recently agreed Sustainable Development Goals.

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﻿Summary and policy guidance – 13

2. To realise these benefits, resource efficiency policies need to befurther developed and mainstreamed
Realising the benefits of resource efficiency requires concerted andcoherent policy action by governments in order to respond to the systemic
challenge that is posed. This report provides policy guidance that canhelp governments achieve this goal, organised around four main areas(i) the choice and design of policy instruments; (ii) how to combine theminto an effective policy mix that covers the whole of the product lifecycle;(iii) integrating resource efficiency into cross-cutting and sectoral policies;and (iv) strengthening of data and analysis to support policy development andevaluation. While the focus is mostly on the measures that governments cantake at the domestic level, the report concludes by identifying a number of areas
where international co-operation, including in the G7 framework, could makean important contribution in moving this agenda forward.

2.1. Apply mixes of policy instruments so as to provide a coherent
set of incentives for resource efficiency along the product value
chain
Policy instruments are needed to internalise environmental costs andto provide incentives for efficient resource use. To do this without simply
displacing environmental burdens across the lifecycle of products or fromone environmental medium to another requires the application of policy
mixes that create a coherent set of incentives. The main types of instruments
available to policy makers are economic instruments, regulations,information-based approaches, including environmental labelling, voluntary
approaches, and public financial support.
Policy instruments have generally been applied further downstream
in the product lifecycle rather than upstream. For instance, the number ofcountries reporting the use of economic instruments such as landfill taxes
increased significantly in the past 15 years and this has led to the diversionof waste, away from landfills into material and energy recovery. Efforts
upstream of end-of-life management have been more modest: an example
is waste prevention, which includes policies that encourage greener productdesigns and measures to change consumer behaviour.
Policy mixes would benefit from strengthening instruments that target
product design and that increase demand for resource-efficient products.
Effective policy mixes should be based on a coherent and complementary
set of policy instruments, and avoid overlapping or conflicting interventions.
Designing policy mixes and selecting individual instruments should be guided
by well-established criteria: increasing environmental effectiveness; enhancing
economic efficiency; strengthening incentives for innovation; minimising

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14 – ﻿Summary and policy guidance
administrative costs of compliance for business and government; addressing
potential impacts on low-income households and vulnerable sectors.

2.2 Implement policies that promote resource efficiency across the
lifecycle of products
One of the established principles of resource efficiency is thatenvironmental risks should be managed in an integrated way in order toensure that the overall use of resources is optimised. OECD countries havebeen using a number of different approaches to address this challenge,
including:•

Extended Producer Responsibility (EPR) involves producers taking
responsibility for collecting, sorting and treating end-of-life products,
following the polluter-pays principle. This approach is now used bya majority of OECD countries for electric and electronic equipment,
packaging and tyres. In France, EPR schemes exist for 14 different
product groups and Japan has EPR in place for home appliances,
packaging and end-of-life vehicles. While these policies have helped
to reduce landfilling of waste and increase material recovery,
incentives for eco-design can be further strengthened. Further efforts
are also needed to ensure that EPR systems operate according to good
governance principles, strengthening their transparency with a viewto enhancing accountability, improving performance assessment andidentifying good practices. The ambition of EPR systems should be
increased, better internalising environmental costs, broadening theirscope to encompass a larger number of products where possible, andstrengthening their enforcement.

•

Green Public Procurement (GPP) aims to establish resource
efficiency criteria for public purchases and can stimulate innovationand increase demand for green products. General government
procurement accounts for 12% of gross domestic product and nearly
one third of government expenditures in OECD countries. Today, 84%
of OECD countries have policies encouraging green procurement at
the central government level, such as Japan with its Green Purchasing
Act that has been in place since 2000. However, much remains to
be done to integrate resource efficiency considerations – including
the use of lifecycle analysis – into public procurement programmes.
This will require a review of GPP criteria to ensure that they reflect
resource efficiency objectives and that they build upon lifecycle
analysis. Furthermore, it is crucial that appropriate capacity is built
in relevant agencies at national and sub-national level. The OECD
Council Recommendation on Public Procurement can serve as animportant reference point.

POLICY GUIDANCE ON RESOURCE EFFICIENCY © OECD 2016

﻿Summary and policy guidance – 15•Partnerships involving businesses working along value chains.
Several G7 countries have co-operated with businesses working along
specific value chains to help develop more innovative approaches toresource efficiency. For instance, the United Kingdom, France andGermany have been actively supporting industrial symbiosis, which
engages economic actors in a network to foster eco-innovation andknowledge sharing in order to make one operator’s waste anotherone’s material input. Japan is supporting the integration of industrial
and urban symbiosis and through its eco-town programme. OECD
countries and other adherents to the Guidelines for Multinational
Enterprises are also working as a group to promote responsible supply
chains and are developing guidance for specific sectors. Given themultiple and diverse challenges along value chains, these partnerships
are potentially useful approaches that could be broadened andscaled-up. However, they are a complement to public policy, not analternative, and their progress should be regularly monitored.

2.3. Treat resource efficiency as an economic policy challenge andintegrate it into cross-cutting and sectoral policies
The transition to a circular economy also requires a comprehensive setof policy measures at the macroeconomic and sectoral level. Opportunities
should be sought to exploit synergies with other policies, including climatechange: there are many win-win opportunities in pursuing low-carbon andresource efficiency objectives, such as in the area of sustainable mobility. At
the same time, some of the main barriers to achieving resource efficiency
goals are linked to the incentives embedded in policies in other sectors.
Analysing the major resource-consuming sectors – agriculture and food,transport, energy – can help to identify policy misalignments with resource
efficiency objectives and how they might be overcome. Unless this analysis
is performed, resource efficiency policies may be ineffective.
Governments can also support resource-efficient structural change bymainstreaming the pursuit of resource efficiency into cross-cutting policies:•

Innovation is an essential means for decoupling resource consumption
and growth. Some governments are targeting innovation support
on SMEs, often the source of radical innovation. An example is
the green action plan for SMEs in Europe, which supports SMEs
with information and advice, and facilitates access to finance. A
sector-specific example of a pro-innovation initiative comes from
Canada: the Canada Mining Innovation Council launched a zerowaste initiative which prioritises innovation that is expected to lead tosignificant reductions in mining waste. Another area where innovation
could improve resource efficiency is through the development of new

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16 – ﻿Summary and policy guidancebusiness models, such as sharing platforms (e.g. cars, accommodation,
power tools) or circular supplies. These approaches can be up-scaled
and broadened if improving resource efficiency is integrated into
national innovation policies, research partnerships are promoted andbarriers to the entry of new firms and to the development of new
business models are removed.
•

Investment. The global economy requires around USD 90 trillionof investment in infrastructure between 2015 and 2030. This willtranslate into significant amounts of resource consumption, creating
an important opportunity to ensure that new investment helps to
support low carbon and resource efficient development, provided
that obstacles to investment in these directions are removed. Public
investors should set the example by integrating resource efficiency
objectives into standards for buildings and other infrastructure.
Private investors should be incentivised to integrate resource
efficiency objectives into their investment strategies.

•

Education and vocational training. The transition to a resource
efficient economy will stimulate the emergence of some sectors andthe decline of others. While this may or may not lead to a net increasein employment, it will change the skill profile of the workforce.
Governments should therefore assess new job skill requirements andadjust education and training programmes accordingly.

These efforts need to be supported by effective governance arrangements
at a sufficiently high level of government. This could help to co-ordinate
efforts by engaging key stakeholders, to monitor progress, and generally toprovide the political impetus needed to achieve ambitious policy objectives.
France is attempting to do this through its circular economy roadmap andFinland and the Netherlands have established an overarching mechanism tosupport coordination and coherence of resource productivity policies.

2.4. Strengthen policy development and evaluation through betterdata and analysis
Many OECD countries have now established material flow accounts andare developing indicators for resource efficiency. These efforts have been
supported by initiatives at the international level, such as the guidance andreference materials for measuring material flows and resource productivity
developed by the OECD and the database on international material flows
developed by the UNEP International Resource Panel. However, progresshas been insufficient when measured against objectives established over thelast decade. Adoption of the Sustainable Development Goals (SDGs), whichcontain a number of objectives and targets related to resource efficiency,

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﻿Summary and policy guidance – 17

has reinforced the need for strengthened efforts on data collection andthe development of indicators, including through enhanced international
co-operation in this area.
Better economic data and analysis is also needed to support policy
development, and to help make the case for more ambitious resource efficiency
policies. Such analysis should focus on the environmental externalities
associated with current resource consumption patterns and the economic
benefits of addressing them. Appropriate indicators should be developed sothat economic policy makers can track the contribution that resources make toeconomic development.
Many studies have claimed that improving resource efficiency generates
macroeconomic benefits such as higher output and more jobs, cost savings forcompanies, and reduced damage to the environment. Moreover, it is argued
that some of these benefits can be achieved at no or low cost to the companies
that implement them. There is some evidence to support these claims but
this line of research should be deepened. Thus, to ensure that these benefits
are realised, the design of resource efficiency policies should be guided byan assessment of their costs and benefits, particularly when establishingobjectives and targets.
Finally, policy evaluation should be significantly strengthened: identifying
good (and bad) practices and sharing experience can play a key role indesigning better policies for resource efficiency and promoting the transition
to a circular economy.

3. Strengthen co-operation at the international level, including among
the G7
Many of the measures that are required to support the transition towards
greater resource efficiency need to be implemented by governments at thedomestic level, but as the globalisation of our economies continues andvalue chains stretch across multiple jurisdictions, there is an increasingneed for co-ordinated approaches at the international level. The G7 canplay an important role in this respect, including by supporting businesses
in their supply chain management efforts, addressing trade and investment
related obstacles, using official development assistance to support resource
efficiency efforts, and improving environmental labelling and information
schemes, as well as resource efficiency data and indicators more broadly.
While it is difficult for national governments to influence the way supply
chains are managed due to their limited jurisdictional reach, this can be done
more effectively at the international level. For instance, within the frameworkof the OECD Guidelines for Multinational Enterprises, the OECD promotes

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18 – ﻿Summary and policy guidance
responsible supply chains in a number of industrial sectors including theminerals, garment and footwear, as well as agricultural sectors.
Trade and investment is another area of potential focus as international
value chains are typically connected through trade and investment in goods
and services and restrictions to trade may affect the efficiency with which
resources can be used. The OECD and other organisations have identified
export restrictions on raw materials as a source of friction and trade disputes
among governments and trading partners affected by them. Similarly,
restrictions on trade in used products can hamper reuse and remanufacturing
activities. Barriers to trade in environmental goods and services such as
local-content requirements and trade remedies are limiting the diffusion of
the best available environmental technologies and reducing the scope andscale of resource efficiency improvements globally.
Official development assistance provided by the members of the OECD
Development Assistance Committee accounted for more than USD 131 billion
in 2015, and it is assumed that only a very small share of this currently
provides support for resource efficiency improvements. For instance, only
about 0.3% is currently related to solid waste management. Significant effects
could be achieved if resource efficiency was mainstreamed into development
assistance more systematically, leading to more capacity development andtechnology transfer than is currently the case.
As environmental labels and information schemes are increasingly used
to encourage consumers to opt for less environmentally harmful products, thisis another area where international co-operation could be helpful. There are
a number of concerns linked to the proliferation of information schemes,
including that this could lead to consumers and procurers finding it harder
to distinguish good from bad labels and that firms may bear excess costs incertifying to multiple labels. A range of government and non-government
stakeholders have recognised that information schemes multiplication ishappening and that there could be benefits to acting at the international levelto seek some degree of harmonisation of labels and mutual recognition,
reducing their duplication and associated costs across international markets.
Improved resource efficiency data, and more robust economic analysisof resource efficiency challenges and policies could also be supported byinternational co-operation. The OECD has identified a number of data-related
gaps and many of these require international co-operation to ensure thecompatibility of datasets and common definitions and methods. Similarly, there
is a need for co-ordinated efforts to improve economic analysis of resource
efficiency, an area that has received very little attention in research for the
moment and where internationally co-ordinated research efforts could be
helpful.

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1. Introduction – 19

Chapter 1
Introduction

This chapter provides the rationale for developing this report, as wellas background on the key initiatives at the international level that areof relevance to the topic of resource efficiency, including the Kobe 3R
Action Plan and the internationally agreed Sustainable Development
Goals. It also provides some of the key definitions and discusses thescope of this report, which focuses on material resources.

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20 – 1. Introduction
At their summit in Schloss Elmau, Germany, in June 2015, G7 Leadersagreed that “[b]uilding on the Kobe 3R Action Plan, and on other existing
initiatives, we will continue to take ambitious action to improve resource
efficiency as part of broader strategies to promote sustainable materials
management and material-cycle societies” (G7 Leaders, 2015: 13). In order
to allow G7 countries to interact on resource efficiency policy on a common
knowledge-sharing platform, the G7 Alliance on Resource Efficiency was
founded at the summit, and launched in Berlin in October 2015.
To further these engagements, G7 Leaders asked for two reports tobe prepared: a synthesis report highlighting the most promising solutions
for resource efficiency, and a complementary report that develops policy
guidance. The UNEP International Resource Panel (UNEP IRP) was asked
to prepare the first, and the OECD the second.
This report is the OECD response to the G7 Leaders’ request. It refers
to previous initiatives on resource efficiency undertaken by the G7/G8 andrelated OECD policy work; summarises current trends in resource efficiency
and the outlook in G7 countries and beyond; and presents guidance on some of
the main policy approaches and instruments that can be employed to achieve
greater resource efficiency. The report also refers to resource efficiency
initiatives undertaken by G7 countries and the European Commission(e.g. Circular Economy package, A Resource Efficient Europe initiative).

1.1. Resource efficiency initiatives at the international level
In the past, there have been a number of initiatives aimed at promoting
resource efficiency, both in the G7/G8 framework and in the OECD.
The recently agreed Sustainable Development Goals define a number ofobjectives that commit the international community to progress in this area.
At the level of the G7/G8, the 2008 Kobe 3R Action Plan synthesised theresults of previous G8 work and recommended a set of measures to promote
greater resource efficiency through the 3R paradigm: Reduce, Reuse, Recycle(see Box 1.1). These measures covered national actions to achieve resource
efficiency, trade in materials and products, and co-operation with developing
countries and stakeholders. The Action Plan committed G8 countries to reporton measures taken, and requested the OECD to follow up on the progressof work related to resource productivity. Accordingly, the OECD prepareda report in 2011 that reviewed trends and policy developments regarding
resource efficiency in the G7 and the OECD more widely (OECD, 2011a).
In the OECD, two successive Council Recommendations on resource
productivity were adopted in 2004 and 2008 (OECD, 2004, 2008a), calling on
Member countries to “improve information on material flows and to establish

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1. Introduction – 21

Box 1.1. Kobe 3R Action Plan
Goal 1: Prioritise 3Rs Policies and Improve Resource Productivity
Action 1-1: Prioritise Implementation of 3Rs Policy
Action 1-2: Improve Resource Productivity and Set Targets
Action 1-3: Pursue Co-benefits between the 3Rs and Greenhouse Gas Emission
Reductions
Action 1-4: Promote Science and Technology and Create a Market for 3Rs-related
Products
Goal 2: Establishment of an International Sound Material-Cycle Society
Action 2-1: Collaborate to Promote Sound International Resource Circulation
Action 2-2: Promote International Trade of 3Rs-related Materials, Goods andProducts
Goal 3: Collaborate for 3Rs Capacity Development in Developing Countries
Action 3-1: Promote Collaboration with Developing Countries
Action 3-2: Promote Technology Transfer, Information Sharing and Environmental
Education
Action 3-3: Promote Partnership between Stakeholders

common measurement systems and indicators”, including through improved
data collection and methodologies, as well as to “take appropriate actions toimprove resource productivity and reduce negative environmental impactsof materials and product use, by encouraging environmentally effective andeconomically efficient uses of natural resources and materials at the macro,
sectoral and micro levels” (OECD, 2008a: 3-5). In 2014, the OECD reviewed
the actions taken and the progress achieved in implementing the 2008
Recommendation (OECD, 2014a).
Finally, in September 2015, Heads of State and Government adopted
the 2030 Agenda for Sustainable Development. This agenda includes 17
Sustainable Development Goals (SDGs) and 169 targets to be achieved by
2030. Resource efficiency features prominently in the SDGs. As shown inAnnex A, 9 of the SDGs and 17 targets refer directly to resource efficiency
or sustainable use of resources. In total, 12 of the 17 SDGs depend on thesustainable management of natural resources and the environment (UNEP,POLICY GUIDANCE ON RESOURCE EFFICIENCY © OECD 2016

22 – 1. Introduction
forthcoming). While most of the SDGs and related targets are qualitative, twoare quantitative:•

Target 7.3: By 2030, double the global rate of improvement in energy
efficiency.

•

Target 12.3: By 2030, halve per capita global food waste at the retailand consumer levels and reduce food losses along production andsupply chains, including post-harvest losses.

The SDGs are to be implemented by all countries and all stakeholders
through collaborative partnerships. A monitoring framework will beestablished, and progress in achieving the goals will be assessed using a setof global indicators. It is essential to ensure that the G7’s resource efficiency
initiative and related work within the SDG framework are complementaryand supportive (see Box 1.2).

Box 1.2. G7 country initiatives on resource efficiency
In parallel with international initiatives, G7 countries have adopted a range ofincreasingly ambitious resource efficiency policies. Initially this was spurred by
the recognition that traditional waste management policies were not adequate
to manage the full range of environmental impacts associated with resource
usage. Policies were adopted that went beyond an end-of-product-life focus
and applied a mix of policy instruments along the entire product lifecycle.
The development of such policies called for the engagement of many different
sectors and required closer co-operation with industry and other stakeholders.
Snapshots of G7 country initiatives (including the European Union) areprovided in Annex B. They show that some countries such as Canada have built
on and broadened waste management policies. Japan has spearheaded the 3R –Reduce, Reuse, Recycle – approach. The US has developed a policy that focuseson materials used in the economy with the greatest potential environmental
impact. European countries have increasingly linked resource efficiency tostructural economic change and the transition to a green or circular economy.
Implementation of resource efficiency policies has resulted in the applicationof new policy instruments, most notably extended producer responsibility
schemes that aim to provide incentives for resource efficiency throughout the
product lifecycle. Green public procurement programmes have been establishedto increase demand for more resource efficient products. Governments haverecognised the vital role of innovation and provided various forms of support.
Collaborative partnerships between government, industry and other stakeholders
have also been central elements of G7 resource efficiency programmes. Different
mixes of policy instruments have targeted different stages of the product lifecycle.

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1. Introduction – 23

Box 1.2. G7 country initiatives on resource efficiency (continued)
The focus of country programmes varies according to national circumstance.
Nevertheless, there are a number of materials and products that feature in several
G7 country programmes, including: food waste, plastics, electrical and electronicequipment, metals, critical raw materials, textiles, construction and demolitionmaterials, packaging and end-of-life vehicles. A number of countries prioritise
sectors such as the built environment, mobility, energy, mining and forestry.
Despite the different terms used and programmes implemented, G7 countries’
resource efficiency policies generally aim to decouple the consumption of
resources from economic growth: to do more with less. More specifically,
resource efficiency policies, to a greater or lesser extent, aim to achieve thefollowing objectives while meeting people’s needs:•

To promote the conservation and sustainable use of natural assets;•

To reduce adverse impacts on the environment;•

To enhance the productivity and competitiveness of the economy;•

To create new economic and employment opportunities;•

To increase the resilience of economies in the face of materials pricevolatility;•

To address the social concerns arising from an unsustainable use ofresources.

See Annex B for a more detailed overview of resource efficiency policies among
G7 countries.

1.2. Definitions
OECD work on sustainable materials management (OECD, 2012a)
describes how resource efficiency policies employ a variety of closelyrelated, often overlapping terms; for example, resources, materials, efficiency,
productivity, intensity, sustainable materials management, sound materialcycle societies, 3Rs, circular economy, eco-efficiency. These terms, as wellas the relative indicators, are sometimes defined differently which risks
causing confusion and difficulties when comparing analyses. In addition,
there are a wide variety of factors that are not necessarily part of resource
efficiency policies but that nevertheless contribute to achieving the related
goals (e.g. commodity prices). This makes it difficult to analyse the impactsof specific resource efficiency policies and to capture the full range of actions
that influence resource efficiency.

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24 – 1. Introduction
The report prepared by the UNEP IRP (UNEP, forthcoming) presents
an extensive analysis of some of these terms. In particular, it distinguishes
different ways in which the term “resource efficiency” is used, and provides
the following definitions:•

Resource productivity: the amount of economic output per unitof resource input. Resource productivity may also be expressed
as material or energy productivity. The calculation of resource
productivity combines an output expressed in monetary terms andresource input measured in physical terms. It is analogous to theconcept of labour productivity.

•

Resource intensity: the inverse of resource productivity. It measures
the amount of resources required to produce a unit of output.

The report also defines two related terms:•

Technical efficiency: the ratio of a material output and material input.
This is a ratio of two physical parameters.

•

Economic efficiency: the ratio of the economic values of outputs andinputs. It combines two monetary values and may be applied at botha micro- and macro-economic level. A resource efficient allocationof resources may or may not be economically efficient.

The definitions proposed by the UNEP IRP are consistent with thedefinitions used by the OECD. The OECD Guide on measuring material
flows and resource productivity (OECD, 2008b) specifies:“The terms productivity and efficiency refer to different but related
concepts. Productivity relates the quantity of output produced to one or more
inputs used in the production of the output, irrespective of the efficiency of
their use. In this guide, the term efficiency indicators is used in a generic way
covering both productivity and intensity ratios. One distinguishes:•

Productivity indicators that reflect resource or material productivity
at national, industry or plant level and that parallel those describing
labour or capital productivity.

•

Intensity indicators that reflect the intensity of use of natural resources
or materials at national, industry or plant level. Intensity indicators are
the inverse of productivity indicators.” (OECD, 2008b: 88)

Given that the mandate from the G7 was expressed in terms of “resource
efficiency”, this term will be used in this report. However, it should be bornein mind that it may refer to “productivity” or “intensity”, though this will
generally be clear from the context. In addition, it should be pointed outthat the main focus of this report will be on the material aspect of resource

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1. Introduction – 25

efficiency. Consistent with the definition used in the 2008 OECD Council
Recommendation on Resource Productivity (OECD, 2008a) and following
OECD work in this area (OECD, 2015a), in this report “the term resource isunderstood to include natural resources (and the materials and products derived
therefrom) whose extraction, processing, use and disposal are internationallysignificant, in both economic and environmental terms.” The scope is therefore“limited to minerals (metallic and non-metallic industrial minerals), andbiomass. Energy resources (e.g. coal, oil, gas), water resources and fisheryresources are excluded and are only covered to the extent that they are part ofan integrated approach to the entire resource cycle.” (OECD, 2008a: 5)
It is recognised that the nexus between materials and other natural
resources such as land, water and biodiversity is becoming increasingly close.
One consequence is that pressures on one resource may quickly intensify
pressures on others. Thus there is wide recognition of the need to address
resources in a comprehensive manner. Indeed, UNEP (forthcoming) adopts
such a comprehensive approach.
At the national level, legislation and policies define how terms like“resources” and “materials” are operationalised. As a result, the way G7
countries define “resources” may vary, and may not always be consistent withhow such terms are used internationally. For example, Germany’s resource
efficiency policy uses a narrow definition of resources, essentially abiotic
resources; biotic resources are covered by other laws and policies (BMUB,
2012). However, Germany’s statistical reporting uses internationally-agreed
definitions (Federal Statistical Office of Germany, 2014).

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2. Trends and outlook – 27

Chapter 2
Trends and outlook

This chapter presents information on current trends, as well as
providing an outlook for resource efficiency. It shows that G7 andother OECD countries have made some progress in decoupling theconsumption of materials from economic growth. But the global
trend is one of continued growth of resource consumption due to anincreasing world population and rising living standards. As a result,substantially improved resource efficiency will be needed to meethuman, social and economic demands for resources.

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28 – 2. Trends and outlook
This section presents information on current trends using the mostrecent OECD environmental and green growth indicators. It also examines
the outlook for resource efficiency. It shows that G7 and other OECD
countries have made progress in decoupling the consumption of materials
from economic growth, although per capita materials consumption is still
substantially above the world average. An increasing world population andrising living standards will exert significant pressures on the natural resourcebase. As a result, substantially improved resource efficiency will be needed
to meet human, social and economic demands for resources.

2.1. Trends
The last decades have witnessed unprecedented growth in demand for
raw materials, driven by the rapid industrialisation of emerging economies
and continued high levels of material consumption in developed countries.
As a result, the amount of materials consumed worldwide has doubled since1980, and increased ten-fold since 1900. By 2009, construction minerals
accounted for more than 55% of global material extraction; biomass for justover 20%; fossil fuel carriers for a bit less than 20%; and ores and industrial
minerals for 5% (Figure 2.1).
Figure 2.1. Global material extraction 1900-2009
Biomass

Fossil energy carriers

Ores and industrial minerals

Construction minerals

80

Gigatons

70
60
50
40
30
20
10
1900
1903
1906
1909
1912
1915
1918
1921
1924
1927
1930
1933
1936
1939
1942
1945
1948
1951
1954
1957
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008

-

Source: Krausmann et al. (2009).

Since 1990, the global use of material resources has grown slightly slower
but broadly in line with global GDP (Figure 2.2). This relative decouplingof material consumption from economic growth has been more pronounced
in OECD countries than in the rest of the world. Resource efficiency has

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2. Trends and outlook – 29

improved such that OECD economies today generate almost 30% more
economic value per tonne of raw materials than they did in 2000.
Figure 2.2. Progress in decoupling materials consumption from
economic activity
Index 1980=100
300

Index 1980=100
300

World

250

G7

250
GDP

200

200

150

material
extraction

150

100

100

50

50

0
1980

1985

1990

1995

2000

2005

2010

GDP

0
1980

material
consumption

1985

1990

1995

2000

2005

2010

Note: Material extraction = Domestic Extraction Used (DEU). Material consumption =Domestic Material Consumption (DMC). DMC equals DEU plus imports minus exports.
At the global level DEU and DMC are equivalent.
Source: OECD (2016a), “Material resources”, OECD Environment Statistics (database).

Prior to the global financial crisis in 2007-08, there were only a few examples
of absolute decoupling, with decreasing material consumption and continued
growth in GDP per capita, notably in Germany and Japan. Since the crisis, amajority of OECD countries have achieved absolute decoupling, as material
consumption across the OECD membership decreased by 11%. Nevertheless,the annual per capita material consumption in OECD countries remains high: atroughly 16.9 tonnes per person per year, it is about 60% above the world average.1
Within these overall trends, the performance of individual countries
varies widely. For example, in 2011, the economic value per material unit
generated by the United Kingdom is almost three times that of Canada, while
in China and India it is about half that of Canada (Figure 2.3).
Several factors have stimulated the improvement in resource efficiency
in OECD countries compared with the rest of the world, though it is difficult
to disentangle their relative influence.
First, policy action has driven improvements in material efficiency. An
increasing number of OECD countries have included resource efficiency as acentral objective in their green growth or sustainable development strategies,

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30 – 2. Trends and outlook
often in combination with energy efficiency. Many countries have establishedplans on sustainable production and consumption, integrated waste andmaterials management, including the 3Rs or circular economy approaches,
stewardship programmes for materials and natural resources, and green
public procurement policies.
Figure 2.3. Material productivity in selected countries
2010

4 000

2000

3 500

USD/tonne

3 000
2 500
2 000
1 500
1 000
500
In
di
a
Fe
de
ra
tio
n

a
in

Ru
ss
ian

Ch

G7

CD
OE

Ja
Un
pa
ite
n
d
Ki
ng
do
m

ly

ce
Fr
an

Ita

an
y
rm

Ge

a
ad

d

Un

ite

Ca
n

St
at
es

0

Note: Domestic material productivity is measured as the ratio of GDP/DMC, where DMC= domestic material consumption.
Source: OECD (2016a), “Material resources”, OECD Environment Statistics (database).

A generally positive trend can be observed for municipal waste: levelsof municipal waste disposal have decreased and recycling has increased
in OECD countries (Figure 2.4). Since 1990, the amount of waste going tolandfill decreased in absolute terms, while the amount of municipal waste
generated grew less than GDP. The amount of material recovery in OECD
countries increased from 19% in 1995 to 33% in 2010. Energy recovery
increased from 17% to 18% in the same period. Recycling rates (i.e. the shareof materials recovered from waste) have been increasing for a large rangeof important materials, such as glass, steel, aluminium, paper and plastics
reaching levels as high as 80% for some materials (OECD, 2014a).
Within these overall trends, the amount of recovered waste varied widely
among OECD countries (Figure 2.5). A few countries are, or soon will be,recovering virtually all the municipal waste generated either as materials orenergy. This suggests that significant further progress in resource efficiency could
be achieved if all G7 and OECD countries converged with the front-runners.

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2. Trends and outlook – 31

Second, the wider use of more resource-efficient technologies has helped
to reduce the amount of materials used per unit of output. Technologicalchange may have been driven both by policies and by commodity prices.
Figure 2.4. Trends in municipal solid waste in the OECD
Decoupling trend, municipal waste generation
versus GDP, 1990-2014
Municipal waste
Index 1990=100
180

Landfill

Municipal waste management, recovery anddisposal rates, 1990-2014
Material recovery

GDP

700
600
Amounts in kg per capita

160
140
120
100
80
60
40

586

593

Energy recovery
634

632

2000

2005

Disposal
604

588

2010

2014

500
400
300
200
100

20
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

0

1990

1995

Source: OECD (2016a), “Municipal waste generation and treatment”, OECD Environment Statistics (database).

Figure 2.5. Trends in municipal solid waste management by country%
100

Material recovery

Energy recovery

Disposal

90
80
70
60
50
40
30
20
10
0

1995 2012 2014 1995 2012 2011 1995 2014 1995 2014 1995 2014 1995 2013 1995 2014 1995 2013 1995 2014
Korea
GermanyJapan
Switzerland
Mexico Israel United States Australia
Italy
United Kingdom France

Note: The sum of the categories presented here might not add up to 100% because Other recovery andOther disposal treatments are not presented. Germany and Italy: break in time series.
Source: OECD (2016a), “Municipal waste generation and treatment”, OECD Environment Statistics (database).

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32 – 2. Trends and outlook
During most of the 20th century, commodity prices followed a downward
trend (UNEP, 2011). However, at the end of the century, demand for resources
increased, particularly in emerging economies, and prices became morevolatile. High commodity prices created incentives to reduce the consumptionof materials, particularly imports that might be subject to supply constraints,
and to develop more resource-efficient technologies. It also stimulated
exploration and exploitation of resources that had been difficult to access.
More recently, prices of commodities have fallen significantly following the
global financial crisis and these trends have been reversed.
Third, in most OECD countries structural change has led to a shrinking
manufacturing sector and a larger service sector which is less materialintensive. This trend is linked to the outsourcing of resource-intensive
domestic production to emerging and developing countries and to thesubstitution of goods previously produced in OECD countries by imports.
When the material consumption associated with these imports is taken into
account, OECD countries’ progress in resource efficiency and decouplingmaterial consumption from economic growth is less impressive. As Figure 2.6.
shows, the consumption-based measure of total weight of materials consumedby G7 countries (TMC), which includes materials embodied in trade as wellas unused material such as mining overburden, is about double the productionbased measure of material consumption (DMC).2
Figure 2.6. Material consumption per capita:
Production- and consumption-based estimates (2010)
DMC per capita

50

43

39

40

tonne/cap

TMC per capita

34

34

30

26
21

20

16

15

14

17

10

0

G7

OECD America

OECD Asia-Oceania

OECD Europe

OECD

Notes: Tonnes per person per year. TMC = total material consumption. DMC = domestic
material consumption. Figures for TMC are partial estimates and do not include
excavated soil from construction, dredged sediment or erosion from agricultural land, nor
do they include all indirect flows. Actual TMC figures would be higher.
Source: OECD (2016a), “Material resources”, OECD Environment Statistics (database).

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2. Trends and outlook – 33

Fourth, the global financial crisis that began in 2008 significantly reduced
demand for materials, particularly for infrastructure and construction.
However, data from 2010 shows that material extraction is back to pre-crisis
levels (OECD, 2015a).
The trends described above concern materials used in the economy; they
do not take account of the pressures that economic activities have placed on
renewable resources and of the increasingly close nexus between renewable
and non-renewable resources. The pressures on some renewable resources are
already considerable (Box 2.1). In the absence of greater resource efficiency
they will intensify.

Box 2.1. Trends in the use of renewable resources
The most recent OECD data provides the following insights into the use ofrenewable resources in OECD countries:
Water: The degree of water stress can be assessed on the basis of gross abstractions
as a percentage of internal resources. On this measure, 4 OECD countries are highstressed (more than 40%); 4 are medium to high stressed (20-40%); 7 are medium
stressed (10-20%). These national level data conceal regional variations in water
stress within countries.
Biodiversity: In most OECD countries, the number of species identified as
endangered is increasing. Specialist birds have decreased by 30% in 40 years.
Amphibians are more threatened than birds or mammals. Threats to biodiversity
are particularly high in countries with a high population density and highconcentration of human activities.
Forests: Forest area has remained stable or even increased in OECD countries
while it has decreased at the global level.
Fish stocks: 30% of those assessed are being fished unsustainably; 60% arefully exploited; 10% are under-exploited.
Source: OECD (2015c).

2.2. Outlook
The trends described above show that, at the global level, material
consumption has grown slightly slower than, but broadly in line with, economic
growth. How will these trends continue in the future? What are the implications
for the economy and the environment?

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34 – 2. Trends and outlook
The OECD and the UNEP IRP have examined this issue (OECD, 2012b;
UNEP, 2011). Two key drivers of resource consumption will be economic andpopulation growth. The global economy is projected to nearly quadruple by
2050 (Figure 2.7). Within the same timeframe, the world population is expected
to increase from about 7 to more than 9 billion and the per capita income of theworld’s population will roughly triple. As the living standards of a much larger
population converge with those of OECD countries, the demand for energy,
food and natural resources will increase, as will the associated environmental
impacts. Unless environmental management and resource efficiency aresubstantially improved, the natural capital base for economic activity willcontinue to degrade, with increasing resource scarcity leading to potentiallyserious adverse consequences for human health, ecosystems and the economy.
Figure 2.7. Projections for real gross domestic product to 2050OECD

350 000

BRIICS

RoW

US

China

India

Billions of constant 2010 USD

300 000
250 000
200 000
150 000
100 000
50 000
0

2010

2015

2020

2025

2030

2035

2040

2045

2050

Note: This scenario projection to 2050 is based on the OECD Environmental Outlook
Baseline (output from ENV-Linkages). It is valued using constant 2010 purchasing power
parity (PPP) exchange rates.
Source: OECD (2012b).

Figure 2.8 presents the three scenarios for resource consumption to 2050
developed by the UNEP IRP (UNEP, 2011). Box 2.2 summarises the mainfeatures for each of the 3 scenarios, which could be considered as relatively
optimistic. The overall conclusion of UNEP (2011) was that without significant
improvements in resource productivity, it will not be possible to meet theneeds of a global population of 9 billion people (including the eradication ofpoverty) by 2050, while protecting the environment and providing for future
generations.

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2. Trends and outlook – 35

Figure 2.8. UNEP IRP scenarios on global resource consumption to 2050
Development 1900-2005
Freeze and catching up

Factor 2 and catching up
Freeze global material consumption

150

Gigatons

100

10

0

1900

1920

1940

1960

1980

2000

2020

2040

Source: UNEP (2011).

Box 2.2. UNEP IRP scenarios for resource consumption to 2050
Three scenarios were developed to 2050 with 2000 as the baseline. Key
assumptions were that all countries would have a similar resource use per capita
by 2050, and that there would be no negative feedback on the economy fromresource constraints.
Scenario 1: Business as usual• Resource consumption per capita in developed countries was assumed tobe the same in 2050 as in 2000.
•

Global resource use would increase to 140 billion tons per year by 2050.

•

Global per capita resource consumption per year would be 16 tons.

•

Annual global resource extraction would increase three-fold.

Scenario 2: Moderate contraction and convergence• Developed countries reduce their resource consumption by half.
•

Global resource use would rise to 70 billion tons per year.

•

Global per capita resource consumption per year would remain constantat 8 tons.

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36 – 2. Trends and outlook

Box 2.2. UNEP IRP scenarios for resource consumption to 2050
(continued)
Scenario 3: Tough contraction and convergence• Global resource consumption would be the same in 2050 as in 2000.
•

Global resource consumption would be 50 billion tons per year.

•

Global per capita resource consumption per year would be 6 tons.

•

Absolute resource use in industrialised countries would be reduced by afactor of 3 to 5.

Achieving these targets would require unprecedented levels of innovation andconstraints on development that are probably politically unrealistic.
Source: UNEP (2011).

The OECD Environmental Outlook to 2050 (OECD, 2012b) examined
the implications of increased populations and living standards for water
resources and biodiversity.3 Under its Baseline scenario, it projected that if
current policies continued and no new policies were introduced, between
2000 and 2050 global water demand would increase by 55%, due to growing
demand “from manufacturing (+400%), electricity (+140%) and domestic use(+130%)” (OECD, 2012b: 208). Demands from these uses would put at risk the
supply of water to agriculture and ecosystems. Groundwater depletion could
become the biggest threat to agriculture and urban water supplies in several
regions. As a result, more than 40% of the global population – 2.3 billion
more people than today – would be living in river basins under severe water
stress. Water stress would be most severe in northern and southern Africa,
and central and south Asia (Figure 2.9). Increased water pollution would
result in increased eutrophication, biodiversity loss and disease.
In the absence of more ambitious policies, global biodiversity, measured
as terrestrial mean species abundance, is projected to “decline by about 10%
between 2010 and 2050” (OECD 2012b: 156). Amongst other things, thiswould have important impacts on rural and indigenous communities whose
livelihoods often depend directly on biodiversity and ecosystem services.
Last but not least, the UNEP (2015, forthcoming) and others have shownhow the challenges of resource efficiency and climate change are closely
related. The extraction, processing and use of resources require much energy,
and currently result in large volumes of CO2 emissions. Land use entails
emissions of non-CO2 greenhouse gas emissions. The increased material use

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2. Trends and outlook – 37

linked to the development of many low-carbon technologies will offset someof the decrease in CO2 emissions resulting from the declining use of fossil
fuels. Thus global climate policy objectives will not be achieved unless thechallenge of resource efficiency is adequately addressed.
Figure 2.9. Water stress by river basin
Severity level (water exploitation rate)
No (< 0.1)

Medium (0.2 – 0.4)

Low (0.1 – 0.2)

Severe (> 0.4)

No data

Water stress in major river basins, 2000

Baseline, 2050

Note: This scenario projection to 2050 is based on the OECD Environmental Outlook
Baseline (output from IMAGE).
Source: OECD (2012b).

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38 – 2. Trends and outlook

Notes
1.

“The average person living in an OECD country consumed roughly 46 kg ofmaterials per day in 2011, including 10 kg of biomass, 18 kg of construction andindustrial minerals, 13 kg of fossil energy carriers, and 5 kg of metals.” (OECD2015a: 78).

2.

The OECD and the UNEP International Resource Panel are currently working
together to develop an agreed method for estimating total material consumption.
See OECD (2015b).

3.

The Outlook also examined climate change and human health impacts of air
pollution.

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3. Policy guidance for resource efficiency – 39

Chapter 3
Policy guidance for resource efficiency

The chapter distils policy guidance on resource efficiency in fourmain areas: choosing and designing policy instruments; combining
instruments into an effective policy mix; integrating resource
efficiency into cross-cutting and sectoral policies; and strengtheningof data and analysis to support policy development and evaluation.
The chapter also highlights the important role for international
co-operation and co-ordination, and identifies areas where the G7
can play an important role.

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40 – 3. Policy guidance for resource efficiency
The previous chapter has shown how demographic and economic
growth are expected to lead to significantly increased demands for material
resources and the associated impacts on the environment, as well as point tosome of the benefits that improved resource efficiency could help to deliver.
This chapter provides guidance on how these trends could be reversed
and the benefits realised through concerted and coherent policy action by
governments.

3.1 Apply mixes of policy instruments so as to provide a coherent set of
incentives for resource efficiency throughout the product lifecycle
A strategic approach to resource efficiency relies on the integration of its
principles into economic policy and into product lifecycle management. At
the same time, a strategic approach must be underpinned by the applicationof specific policy instruments at different points in the product lifecycle, fromthe extraction of materials through to final disposal.
The objective of resource efficiency policy is to internalise environmental
costs and to provide incentives for efficient resource use. This requires theapplication of combinations of policy instruments that create a coherent
set of incentives to the various stakeholders involved throughout the entire
product lifecycle. There is no “silver bullet” for doing this. Policy mixes
must be designed for specific resource, product or waste streams. However,there is an inherent risk in designing such policy mixes: if it is not done ina co-ordinated way, economic distortions may result and environmental
burdens shifted from one environmental medium to another, or from one
phase of the material lifecycle to the next.
Policy mixes should address each of the main stages of the productlifecycle: material extraction, transport, production, consumption, recycling
and final disposal. However, available evidence suggests that current policy
mixes are relatively stronger at the downstream end of the product cycle (i.e. atthe disposal stage) and could be strengthened upstream (i.e. at the production
and consumption stage). A recent OECD report (2015d) suggests that while
waste prevention is a potentially effective approach, both in terms of its
environmental impacts and in terms of implementation costs, this approachis not being fully exploited (see Box 3.1). The European Environment Agency(2011) considered that its members’ measures targeting consumption wererelatively weak. The OECD (forthcoming a) concluded that extended producer
responsibility systems have had only a limited impact at the design phase. The
European Commission’s recent Communication (2015) on the circular economy
argued that market signals and existing policy initiatives have not provided
sufficient incentives for improved eco-design, and that existing requirements
have mainly targeted energy efficiency. The Commission indicated that, in the

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3. Policy guidance for resource efficiency – 41

future, it would systematically examine issues such as reparability, durability,
upgradability, recyclability, and the identification of certain materials or
substances.

Box 3.1. Waste prevention in OECD countries
Waste prevention is regarded as the highest priority and potentially most costeffective approach in the waste management hierarchy. However, a recent
OECD study suggests that while many countries have assigned it a higher
priority in recent years, much remains to be done to realise its potential.
Twenty-two countries and 2 regions responded to an OECD questionnaire on
waste prevention policies and programmes. Eleven respondents (4 non-EU and7 EU) indicated that they have specific legislation intended to prevent waste
generation. Twenty-one countries reported that they had established specificwaste prevention programmes. These programmes vary widely in terms ofspecificity and institutional responsibilities. Interestingly, only five countries
indicated a direct link to circular economy or sustainable materials management
strategies.
The study examined the measures employed to prevent waste: 179 initiatives
were reported covering waste prevention in both production and consumption.
Of these, 70% involved information-based instruments, 17% regulated
hazardous substances in products and 6% targeted consumption. Economic
instruments were mostly used to improve collection and sorting. While this mayhelp to improve material recovery, it has a limited impact on waste prevention.
Fourteen of the respondents indicated that they had established quantitative targets.
This provides a basis for monitoring and evaluating progress. However, the use ofdifferent targets and indicators limits international comparison. More generally,
programme assessment is hampered by difficulties in estimating how muchwaste has not been generated. Similarly, methodological difficulties have limitedassessments of environmental effectiveness and economic impacts. Progress inthese areas could help to improve the design of waste prevention programmes.
Source: OECD (2015d).

The interactions among instruments in a policy mix require carefulconsideration (OECD, 2007a). Combining two or more instruments cansometimes enhance the effectiveness and efficiency of both. For example,
a well-designed system for separate collection of recyclables together witha variable waste collection charge provides households with an incentive tosort recyclables that can be disposed of for free and thereby also reduce therisk of illegal dumping. Selecting instruments that provide as much flexibility

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42 – 3. Policy guidance for resource efficiency
as possible to the targeted groups increases the possibilities for mutual
reinforcement.
At the same time, combinations of instruments that reduce efficiency oreffectiveness should be avoided. This is the case with overlapping instruments.
When the same actors (i.e. individuals, firms and public administrations) are
affected by two instruments that address the same environmental issue, one of
the instruments will be redundant. Policy instruments may also work against
each other. For example, care should be taken when combining regulations andeconomic instruments as the former may limit the effect of the latter.
The selection of individual policy instruments should take account of thefollowing criteria:•

Their effectiveness in addressing the identified environmental problem;•

Their ability to achieve the specified objective at least cost;•

The need to minimise the administrative costs of compliance for bothgovernment and the regulatees;•

Their impacts on low-income households or vulnerable economic
sectors, if any.

Given the importance of innovation in promoting resource efficiency,
some consideration should be given to how the policy instruments and mixes
might contribute in this regard. The characteristics of policy instruments thatone should consider are (OECD, 2011c):•

Stringency – how ambitious is the policy target?

•

Predictability – what effect does the policy have on investor uncertainty?

•

Flexibility – whether potential innovators are free to identify the best
way to meet the objective?

•

Incidence – does the policy target the environmental objective as
closely as possible?

•

Depth – do incentives exist to innovate through a range of potentiallyascending objectives?

A striking feature of the literature on resource efficiency is the lack ofstudies evaluating the impact of policy instruments and approaches on the
behaviour of targeted individuals, households and firms, and ultimately
on material consumption and extraction. In the case of extended producer
responsibility schemes this was found to be largely due to a lack of transparency
on the part of producer responsibility organisations (OECD, forthcoming a).
There are often also methodological difficulties in distinguishing the roleof various policy and non-policy factors in determining resource efficiency

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3. Policy guidance for resource efficiency – 43

outcomes. Nevertheless, given the diversity of actors involved at various stagesof the product lifecycle and the complexity of aligning the incentives of different
actors to achieving resource efficiency objectives, it is essential that the impactsof policy instruments and approaches are analysed and lessons learned with aview to improving future policies (Box 3.2).

Box 3.2. Policy mixes for critical metals in mobile phones
One of the case studies prepared in the context of OECD work on sustainable
materials management considered the range of different policy instrumentsthat could be used at different stages of the lifecycle of critical metals in mobile
phones, i.e. beryllium, antimony, platinum and palladium:•

Energy efficiency requirements can reduce energy use and GHG
emissions in the processing and recycling of the four metals. Raisingawareness and setting standards can help to improve recycling yields andreduce exposure of workers to the health risks associated with the metals.

•

Phasing out materials with toxic properties (e.g. beryllium and antimony)from the production of mobile phones reduces human exposure andreleases to the environment. Product, materials or eco-design policies
could help to improve design for easier recycling and reduced toxicity.
These issues could also be addressed in extended producer responsibility
schemes or in voluntary agreements between governments and industry.

•

The collection of end-of-life mobile devices is a key challenge as collection
rates are currently very low. In some countries extended producer
responsibility programmes have contributed to rising product capture
rates. Given their diminishing life span, a deposit system for these devices
or innovative leasing arrangements may also help to raise collection rates.

•

Since the technical lifespan of a mobile phone is about ten years,
promoting extended mobile phone use through policy ultimately supports
sustainable use of materials.

Government procurement contracts could play a role by specifying productdurability requirements; alternatively, standard government policy could extend
electrical and electronic equipment usage periods.
Source: OECD (2011d).

Table 3.1 illustrates how different types of policy instruments can beapplied at different points in the product lifecycle. OECD (2008f, 2011b)
provide generic guidance on the selection of policy instruments. The rest of

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44 – 3. Policy guidance for resource efficiency
this section draws on this guidance and examines how it could be applied in
the context of resource efficiency.
Table 3.1. Some examples of policy instruments applied at different stages ofthe product lifecycle
Economic
instruments

Regulatory
instruments

Environmental
labelling andinformation schemes

Voluntary
approaches

Public financial
support

Extraction

Taxes on virginmaterials.

DesignAdvance disposal LCA-based
Research
Environment
fees.
standards,
technology verification partnerships.
take-backschemes.
requirements,
standards
e.g. for durability.

Production

Product taxes or
charges.

Emission or
performancestandards.

Advisory services for
SMEs.

Agreements
to develop
more efficient,less polluting
production
methods.

Consumption Deposit refund
schemes; payas-you-throw
pricing for
waste collection
systems.

Product
restrictions orbans.

Labelling
andcertification
schemes.

Behaviourallyinformedinterventions(“nudges”).

Platforms to match
supply of and demand
for secondary raw
materials.

Agreements
to create hubs
promotingindustrial
symbiosis.

Tax breaks, grants
for researchon recycling,industrial
symbiosis.

Bans, restrictions Information on
on landfill.
dismantling products.

Voluntary takeback schemes.

Grants, soft loans
to construct waste
disposal facilities.

Tax breaks on
Bans, restrictions Good mining practices. Agreements
exploration,
on managing
on mining ofmining.
environmental
materials.
impacts of mining.

RecyclingTax differentiation Standards
for recycled
between virginmaterials.
and recycledmaterials.

Waste
disposal

Landfill andincineration
taxes; tradable
landfill permits.

Tax breaks, grants
for R&D.

Soft loans to
SMEs.

Grants for thepurchase of ecolabelled products
or services.

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3. Policy guidance for resource efficiency – 45

Policy guidance on designing mixes of policy instruments
Apply combinations of policy instruments that: create a coherent set of
incentives across the product lifecycle for producers, consumers and otherstakeholders; reinforce each other’s incentives for efficiency and effectiveness;
and avoid unnecessary overlaps or conflicting instruments.
Strengthen instruments that target the design parts of the product lifecycle, that
reduce the generation of waste and that increase demand for resource efficient
products.
When selecting policy instruments, take account of their: environmental
effectiveness; economic efficiency; incentive for innovation; administrative costsof compliance for business and government; impacts on low-income households
or competitiveness.

3.1.1. Economic instruments
The use of economic instruments in sustainable materials management
policies has been growing steadily since OECD began collecting data in
2000, though this may be partially due to improved reporting (OECD, 2014a).
The number of countries reporting the use of landfill taxes increased almost
five-fold between 2000 and 2013. Similarly, the level of landfill tax rates
increased significantly in many countries over that same period. Similar
trends can be observed for the use of incineration taxes, even if such taxes
are a more recent phenomenon and far fewer countries apply them. Many
communities charge for household waste collection and disposal in a waythat provides an incentive to households to reduce the amount of waste for
disposal. Taxes on certain products – batteries and packaging for example –are used to reflect the costs of end-of-life disposal, and in some cases depositrefund systems are used to underpin waste separation and separate collection.
From an economic perspective, economic instruments have several
advantages over other policy instruments. The flexibility that they provide
allows the regulatee to identify the cheapest compliance option (“static
efficiency”). Thus, economic instruments are generally cost-effective. Overtime, the flexibility creates incentives to innovate (“dynamic efficiency”).
On the other hand, economic instruments are not well suited to dealing
with environmental issues such as toxic substances where emissions need to
be severely restricted or banned. In some cases, there is political opposition
to “another tax”. For charges or taxes, it may be difficult to determine how
they will influence behaviour and hence the eventual environmental outcome.

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46 – 3. Policy guidance for resource efficiency
Furthermore, taxes or charges may be particularly ineffective in influencing
the consumption of goods and services whose demand is price inelastic.
Establishing a tax or charge will generally not entail large costs, particularly
if it is integrated with other taxes or charges, e.g. taxes on motor vehicles orenergy fuels. However, monitoring costs may be high. In contrast, setting up a
cap-and-trade scheme (e.g. for tradable landfill permits) can entail substantial
costs. If the cost associated with the economic instrument is significant,consideration should be given to its impact on low-income households orfirms in trade-sensitive sectors. The adoption of measures to mitigate adverse
impacts on these groups may be needed (e.g. revenue recycling). Table 3.2
summarises some of the main advantages and disadvantages of taxes.
Table 3.2. Taxes: strengths and weaknesses
Strengths• Tend to equalise pollution
Taxes orabatement costs, cancharges onraise revenues, continuous
pollution or
incentives to innovate to
exploitation
reduce abatement costsof natural
resource• Implementation can be done
through existing national
institutions

Weaknesses

Conditions for favourable use• Potentially high monitoring
costs, uncertainty about levelof pollution emissions• Public-good market failure is
not dominated by monitoringand information costs.

• Adoption incentives loweredby costs to producers /consumers which are more
visible than with permits• Cross border spill-over effects
are important.

• Concerns of competitivenessand income distribution• Insufficient capacity or scopefor a cap and trade system.
Baselines can be set andverified at reasonable cost.

• Lower predictability of future
policy adjustments

Source: OECD (2011b).

No country has established a comprehensive, systematic portfolio of
economic instruments (Smith, 2014). Recycling illustrates some of thechallenges involved in trying to do so. Recycling can be stimulated by adirect subsidy to recycling activities, or by taxing other disposal options suchas direct landfill and incineration. Since the case for promoting recycling
is primarily that landfill and incineration have undesirable environmental
consequences (external costs such as air pollution and water contamination),taxes on these disposal options can be calibrated more precisely to the scale
and pattern of these costs, and will in general lead to superior outcomes tothose reached using a recycling subsidy. However, a recycling subsidy might
be preferable if high taxes on landfill and incineration would risk stimulatinghigh levels of illegal dumping or unregulated waste burning. The assessment
is further complicated when account is taken of the benefits and revenues
generated when energy is produced from waste incineration.

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3. Policy guidance for resource efficiency – 47

In a recent review of economic instruments used in sustainable materials
management, Smith (2014) concluded that individual economic instruments
have been developed and implemented on a piecemeal basis, without
systematic regard to the impact on the overall structure of incentives for
producers, consumers and the waste management and recycling industries.
The report suggested that there is a need for more clarity and consistency
in the definition of the underlying objectives of policy. Relatively few
instruments have been set with explicit regard to the external costs ofdifferent waste management routes, with the result that incentives areincomplete and do not always encourage the most efficient outcomesfrom the point of view of the system as a whole. Likewise, policies that
promote recycling and materials recovery need to have regard to the valueof recovered materials in relation to the costs incurred and to identify moreclearly specific reasons that inhibit materials recovery on a commercial basis.

3.1.2. Regulatory instruments
Regulatory instruments include laws or regulations stipulating
environmental quality standards (performance standards), limits onemissions from various pollutants (emission caps), bans on certain products
or practices, requirements for the application of certain “best available”
technologies (technology standards), and obligations for all polluters to obtainenvironmental permits from pollution control authorities (OECD, 2008f).
While these instruments can be applied to a wide range of environmental
problems, the main challenge related to their implementation is to avoid
undue inflexibilities that may limit their environmental effectiveness andeconomic efficiency.
In the context of resource efficiency policy, bans and restrictions havebeen applied to a variety of products and practices ranging from plasticbags to landfilling and mining. Bans allow regulators to reach targeted
environmental outcomes with relatively high certainty compared witheconomic instruments. For this reason, this type of regulatory approachshould be preferred in order to restrict highly toxic and damaging emissions.
Another situation where emission caps or outright bans outperform economic
instruments is where the level of environmental damage rises sharply withthe level of emissions from individual sources: strictly capping emissions
from individual sources can avoid pollution hot-spots. However, the main
downside of bans is that, when a given product or practice is banned from themarket, it is not necessarily clear what will replace them.
Environmental standards have been used extensively in sustainable
materials management throughout the product lifecycle: standards forrecycled materials are a good example of this practice. However, there
appears to be opportunities to expand their use in the upstream stages of

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48 – 3. Policy guidance for resource efficiency
the lifecycle, e.g. by establishing stricter requirements at the design phaseof products. Their principal advantage is the high degree of certainty
they provide about the environmental outcome. In addition, standards are
sometimes more politically acceptable than economic instruments, even if in
reality there are no significant differences in cost between the options.
There are a number of disadvantages associated with standards. The
more prescriptive they are, the more they reduce flexibility and increase
compliance costs compared with economic instruments. In addition, they do
not provide the same continuous pressure that can stimulate innovation; they
do not provide an incentive to go beyond compliance. This disincentive forinnovation may be reinforced if incumbent firms are given longer to comply
with new regulations than new entrants (“grandfathering”). However, to someextent the disincentives for innovation can be off-set by using performance
rather than technology-based standards. Establishing standards can be aresource-intensive task, especially in technically complex areas. Establishingan adequate evidence-base will be difficult when regulatees who hold mostof the relevant information, are unwilling to co-operate. As the number ofstandards increase, so does the enforcement challenge.
Some of the advantages and disadvantages of performance- and technologybased standards are set out in Table 3.3.
Table 3.3. Standards: Strengths and weaknesses
Strengths
Performance • Leave flexibility to searchstandards
for cheapest option to meetstandard

Weaknesses

Conditions for favourable use• Do not naturally tend towards • Pollution control at the source
equalisation of marginalof emissions is infeasible orabatement costs
very costly• High adoption and compliance • Potentially high administrative • No adequate proxy forincentives (relative to pricing
costs
pollutant that could be object
instruments)of taxation• Weak adoption incentives• Certainty over pollution
emission levels• Preserve incentives toinnovate to reduce costs ofmeeting standard• Weak response of agents toin an international context
price signals
given difficulty in reaching
agreement on burden sharing • Pollution emissions can be• More information required
measured from application ofthan for permits and taxes
technology
in order to be effective andefficient

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3. Policy guidance for resource efficiency – 49

Table 3.3. Standards: Strengths and weaknesses (continued)
Technology
standards• Low monitoring costs• Provides no flexibility to• Pollution control at the source
searchforcheaper
abatementof emissions is infeasible or• High adoption and complianceoptionsvery costly No adequate proxyincentives (relative to pricing
for pollutant that could be the• Cannot be easily adapted in
instruments)
object of taxation
response
tonew
information• Certainty over pollution
emission levels (at individual
units level)

about costs and benefits• No incentives to innovate• Administrative costs ofperformance standards are
too high• Abatement costs are relatively
homogeneous across agents

Source: OECD (2011b).

3.1.3. Information-based approaches including environmental
labelling
Environmental labelling and information schemes (ELIS) are useful
instruments for improving resource efficiency. They can assist consumers,
suppliers and public purchasers to make informed choices, and create demand
for sustainable goods and services. Their effects increase in proportion to
the private benefits involved, and to the extent that the information enables achoice to be made among a range of alternatives (e.g. a selection of goods withdiffering energy efficiencies). From a resource efficiency perspective, ELIS
are most relevant when they are based on a lifecycle assessment of the product.
Information-based approaches may also play a useful role in policy
mixes. For instance, combining labelling schemes with taxes on energy use
can reinforce incentives to choose more energy efficient appliances.
In recent years, insights from behavioural economics and behaviouralsciences have helped to strengthen information-based approaches. For
example, there is evidence that providing consumers with information on
how their consumption of energy or water compares with their neighbours’
can “nudge” some consumers to reduce their consumption (see Allcott, 2011).
This shows that leveraging on behavioural insights can make information
provision more effective by taking into consideration cognitive biases
Gruère (2013) identified 544 environmental labelling and information
schemes that were in operation in 2012 covering 197 countries. These
schemes were fairly evenly distributed over several environmentally relevant
policy areas: energy and climate change (24%), chemicals control (21%),natural resources (20%), waste (14%), biodiversity (11%), other (10%).

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50 – 3. Policy guidance for resource efficiency
Gruère (2013) shows how these schemes have expanded significantly
in recent years (Figure 3.1): non-profit voluntary schemes largely dominate
over time, but the number of private schemes has also increased rapidly,
faster than the number of public voluntary schemes. Other categories aresubstantially smaller. Gruère (2013) found that a high proportion of ELIS did
not use lifecycle approaches, though many do use standards focusing on theimpacts of the production phase of goods (non-product-related processes andproduction methods). A majority of the schemes operate at the national level.
A growing share use third-party auditing or verification. However, most ofthese schemes remain non-transparent in their standard-setting process, eventhough there is a limited but relatively faster increase in transparent schemes.
Recent years have seen growth in quantitative “footprint” type labels,
though companies have used different and inconsistent methods to assess theenvironmental footprint of their products.
Figure 3.1. Evolution of the number of ELIS by modes of governance andownership (1970-2012)
Private voluntary
Public voluntary

Hybrid voluntary
Public mandatory

Non-profit voluntary

600
500
400
300
200
100

10
12
20

08

20

06

20

04

20

02

20

00

20

98

20

96

19

94

19

92

19

90

19

88

19

86

19

84

19

82

19

80

19

78

19

76

19

74

19

72

19

19

19

70

0

Source: Gruère (2013).

While some of the long-established government-backed schemes haveretained their authority and serve as useful guides, the multiplication ofenvironmental labelling and information schemes has generated confusionand concern about misleading labels and claims (Prag et al., 2016).
Governments could help address concerns, for example, by endorsing highquality schemes (including through public procurement), enforcing existing
rules more vigorously, including on unfair commercial practices related tomisleading claims, and facilitating agreement on methodologies for assessing

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the environment footprint of products (European Commission, 2015).
Governments should also ensure that information schemes do not create
unneccessary obstacles to international trade.

3.1.4. Voluntary approaches
Governments have co-operated with different business sectors to
overcome some of the difficult obstacles to resource efficiency that are
not readily amenable to traditional policy instruments or market forces.
Some of the factors that can make such approaches successful will befurther discussed in section 3.2.3. Voluntary approaches can also be readily
integrated into a mix of policies addressing a particular part of a productlifecycle (Box 3.3).

Box 3.3. Collection of mercury switches in the US
The US Environmental Protection Agency (US EPA) promoted a voluntary
initiative to remove mercury-containing switches from scrap automobiles prior
to recycling. Nearly all obsolete automobiles in the US are dismantled, shredded
and burnt in furnaces to recycle the metal, thereby releasing mercury emissions
to the air. The US Clean Air Act gives the US EPA authority to regulate steel
mills, but not car dismantlers. There was little that steel producers could do otherthan install expensive end-of-pipe equipment to remove mercury from emissions.
The car dismantlers had little incentive to remove mercury-containing switches
due to the low value of the mercury involved and the additional costs of theprocedure. The 2006 US National Vehicle Mercury Switch Removal Program
was a voluntary initiative involving automobile and steel manufacturers, scrap
recyclers, vehicle dismantlers, environmental groups and the States. It aimed tofacilitate the removal of mercury-containing switches before recycling, including
through a fund established to compensate car dismantlers. The programme isstill operating although the resources of the fund were depleted in 2009.
Source: OECD (2008f), US Environmental Protection Agency (2016).

In some cases, voluntary approaches are an alternative to regulation,
providing one or more sectors with the flexibility to find an innovative,
less costly means to achieve an objective. There will also be lower costs
for government who retain the option of regulating if the initiative does not
succeed. The outcome of such approaches depends largely on the benefits
to participants of collaborating, including by avoiding regulation, and theabsence of obstacles to co-operation (such as not having to share confidential
information).

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3.1.5. Public financial support
Public expenditures can help to achieve resource efficiency policy
objectives in a variety of ways, including by providing support to R&D,
and for investments in waste management infrastructure and other resource
efficiency projects. However, governments are rightly cautious about using
public financial support. The polluter-pays principle is basically a no-subsidy
principle that asserts that governments should not provide public financial
support to enable industry to comply with environmental requirements.
However, targeted and time-bound public financial support may be justifiedin specific situations characterised by market failures or a need to securepublic goods that justify public expenditures.
In all instances, the use of public financial support instruments should
be restricted to cases where they provide the most efficient, or only, meansof achieving a policy objective. They should be used in a targeted manner,in association with clear objectives and within a defined timeframe: once theobjectives have been achieved, the support programme should be terminated,in order to avoid perpetuating public expenditures beyond what is needed(OECD, 2008f).
However, public financial support also involves complications aroundtargeting and raising and allocating limited public funds. These instruments
place complex information requirements on governments in the design phase,and need substantial administrative capacity in the management phase.
In the limited and aforementioned situations when targeted, time-boundpublic finance is justified, OECD (2006) presents general principles anda series of checklists to assist governments in designing programmes thatare environmentally effective and consistent with good practices of publicfinance. The key steps recommended are:•

“Define priority environmental objectives using evaluation methods,
such as risk assessment, cost-benefit analysis and cost-effectivenessanalysis, as well as participatory political processes.

•

Demonstrate that public expenditures are necessary to achieve theseobjectives.

•

Define the sources of funds, the size of the budget, and the terms andconditions of the expenditure programme.

•

Authorise an appropriate institution to manage the expenditure
programme.

•

Continue, modify or terminate the expenditure programme in light of
periodic reviews of the programme’s performance to assess whether
its objectives have been achieved and its continuation is necessary.”(OECD, 2006: 5)

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A variety of public financial support instruments are available togovernments (OECD, 2006). Grants are the most administratively simple andtransparent. When used, they should maximise incentives for timely and costeffective project implementation, maximise the leverage of other financial
resources and minimise chances of misuse of public money by beneficiaries.
Other public financial support tools may be considered in proportion
to the institutional capacity to manage the associated risks. In order ofincreasing risk, these tools include: interest subsidies, loans throughintermediaries, direct loans, leasing, equity investments and loan guarantees.
Governments may also use the fiscal system to provide incentives
for investments by the private sector. For example, tax breaks have beenused to support R&D, and accelerated depreciation to encourage specified
investments. However, unless these instruments are well-targeted – theadministrative resources required will generally increase in proportion to theextent of targeting – there is a risk that the foregone tax revenues will benefit
investments that would have been made anyway, and that they will favour
incumbent firms that may be less likely to innovate than new market entrants.
Private companies should generally finance investments in resource
efficiency from their own funds or by accessing capital and financial
markets. However, some firms, especially SMEs, may have difficulties
accessing finance. As a result, governments have established financing
mechanisms and advisory services to address these market failures (Box 3.4).
The provision of finance through such mechanisms should generally be oncommercial terms. The provision of any concessional finance should bejustified in relation to specific market failures.

Box 3.4. Financing the circular economy in Europe:
Co-operation between the European Commission andthe European Investment BankThe European Investment Bank (EIB) traditionally finances large, commercially
viable projects directly with medium and long-term loans with fixed or variableinterest rates. For smaller projects in SMEs, the EIB provides finance indirectly
through credit lines that it establishes in local banks and other financial
intermediaries. The EIB and the European Commission also co-operate in somecases by blending EU grants with EIB loans. This approach enables loans forsome types of projects to be offered on concessional terms (e.g. lower interest
rate and/or pay-back period).

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Box 3.4. Financing the circular economy in Europe: Co-operation
between the European Commission and the European Investment
Bank (continued)
The transition to a circular economy has involved a broadening of EIB’s
investment focus from traditional municipal waste infrastructure to includecommercial and industrial waste streams, in particular for recycling andwaste recovery. Often, such projects involve more risk than projects normallysupported by the EIB. To address this challenge, the European Commission andthe EIB have established a new mechanism. The European Fund for Strategic
Investments (EFSI) consists of a EUR 16 bn guarantee from the EU budget andEUR 5 bn of the EIB’s own capital. It can provide guarantees and other formsof support for projects in strategic sectors, including the circular economy, thathave a higher risk profile.
The European Investment Advisory Hub (EIAB) has been established to provide
a single point of entry for advisory services for investment projects in the EU.
Advice is provided by specialists, including in-house EIB staff, in strategic areas,
including those related to the circular economy. Services available include project
development support throughout all stages of the project cycle, as well as upstream
or policy advice on market studies, sector strategies, and project screening.
Source: European Investment Bank (2015).

Policy guidance on individual policy instruments
Ensure that existing and new economic instruments provide a coherent set of
incentives in line with the policy objectives they are intended to achieve.
Consider how standards could reinforce incentives for resource efficiency at
different parts of the product cycle, e.g. design, while providing flexibility toidentify cost-effective means of compliance.
Give recognition to environmental labelling and information schemes (ELIS)
that are based on robust, independent analysis, including lifecycle analysis; holdproponents of these schemes accountable for their environmental claims; workwith business to develop credible, consistent methodologies for assessing theenvironmental footprint of products across their lifecycle; ensure that domestic
schemes do not discriminate against foreign products.
In keeping with the polluter-pays principle, only use financial instruments when
they are the most efficient, or only, way to redress market failures or to provide
public goods related to resource efficiency; ensure that adequate institutional
capacity exists to manage any risks associated with financial instrument used.

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3.2. Implement policies that promote resource efficiency across the
lifecycle of products
One of the established principles of resource efficiency is thatenvironmental risks should be managed in an integrated way to avoid
problems being displaced along product lifecycles or to other environmental
media. This section examines three approaches that, building upon different
policy mixes, have sought to address resource efficiency along productlifecycles: extended producer responsibility; green public procurement; andpartnerships involving businesses working along value chains.

3.2.1. Extended producer responsibility
Extended producer responsibility (EPR) was one of the first attempts tomanage the environmental impacts of products throughout their lifecycle.
In 2001, the OECD prepared a guidance manual in which it defined EPR
as an environmental policy approach in which a producer’s responsibility
for a product is extended to the post-consumer stage of a product’s lifecycle(OECD, 2001).
In practice, EPR involves producers taking responsibility for collecting
end-of-life products, and for sorting them before their final treatment, ideally,
recycling. EPR schemes can allow producers to exercise their responsibility
either by providing the financial resources required and/or by taking over theoperational and organisational aspects of the process from municipalities.
They can do so individually or collectively through producer responsibility
organisations.
A recent OECD study (OECD, forthcoming a) took stock of progress with
EPR and provided updated guidance. About 400 EPR systems are currently inoperation, nearly three-quarters established since 2001. Legislation has beena major driver, and most EPRs appear to be mandatory rather than voluntary.
Small consumer electronic equipment accounts for more than one-thirdof EPR systems, followed by packaging and tyres (each 17%), end-of-life
vehicles, lead-acid batteries and a range of other products. Various forms of
take-back requirements are the most commonly used instrument, accounting
for nearly three-quarters of those surveyed. Advance disposal fees (ADF) anddeposit-refund systems account for most of the rest.
Assessing the impacts of EPR systems is difficult for several reasons:a serious lack of data; analytical difficulties in distinguishing the impact
of EPR systems from other factors; and the wide variety of EPR systems
which limits comparison among them. Nevertheless, there is evidence
that in some countries (e.g. France), EPRs have helped to shift some of thefinancial burden for waste management from municipalities and taxpayers to

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producers, and to reduce the public costs of waste management. It also seems
likely that EPR systems have contributed to the decreased share of waste
destined for final disposal and to the increased rates of recycling recorded inmany OECD countries. However, progress in these areas varies very widely
among countries, suggesting that there is scope in many countries to improvetheir performance by emulating the best performers.
A key message in the 2001 guidance manual was that there is no single“right approach” when designing EPR systems. Solutions need to be tailoredto achieve defined objectives in specific economic, political and culturalcontexts. Accordingly, it was recommended that EPRs be established inaccordance with general good governance principles such as setting clear
objectives, operating transparently, monitoring performance and so on.
OECD (forthcoming a) found that the quality of governance in many EPR
systems could be significantly improved. In particular, there was a lack oftransparency that made it difficult to assess performance, identify goodpractices and adjust EPR systems to make them more efficient and effective.
OECD (forthcoming a) also found that many of the recommendations
from the 2001 OECD guidance manual were still relevant and should beapplied more systematically. In addition, there are opportunities to make EPRs
more effective including by increasing their level of ambition; broadening
the scope of products covered; better internalising environmental costs; andstrengthening enforcement, particularly to reduce free-riding and leakage.
A key objective motivating the establishment of EPR was that it would
promote more resource-efficient eco-design: it was thought that making
producers responsible for their products in the post-consumer phase would
create incentives to design their products in a way that reduced environmental
impacts throughout the product lifecycle, including at the end of the productlife. However, the consensus appears to be that while EPR systems havecontributed to eco-design in some countries and some sectors, they haveseldom been sufficient to serve as the triggering factor. The impacts of EPR
systems seem to have been mainly downstream rather than upstream. The
EPR for household appliances in Japan appears to be a notable exception inthis respect (Box 3.5). Several approaches were identified that could stimulate
better eco-design including: ensuring that producers bear the full end-of-life
costs of their products (which may vary among producers), linking EPRs withbroader innovation initiatives and, in the case of globally traded products, byharmonising environmentally sensitive design features.
Many EPR systems are managed by producer responsibility organisations(PROs). In most cases, they were originally established as monopolies,
raising concerns that PROs would exploit their monopoly power by charging
higher prices. These concerns have increased with the growth of the waste
and recycling industries, the potential financial gains for producers, and the

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welfare losses for society that result from anti-competitive behaviour. Lack oftransparency has reinforced these concerns. This has prompted intervention
by competition authorities and to the emergence of EPR schemes with multiple
rather than single PROs. Competition authorities have also addressed someforms of anti-competitive behaviour in PROs that are vertically integrated with
waste management providers. Continued vigilance is needed to ensure that the
product markets that EPR systems serve remain competitive, and are efficientand effective in managing post-consumer products.

Box 3.5. Japanese EPR for home appliances
The Japanese Act for Recycling of Specified Kinds of Home Appliances cameinto force in April 2001. It aims to achieve a reduction in the volume of waste
and to improve material recovery from four categories of home appliances: air
conditioners; TV sets; electric refrigerators and freezers; and electric washingmachines and clothes dryers. Under the act, each home appliance manufacturer
must take back and recycle their products when they become waste.
To implement their obligations, manufacturers have set-up two competinggroups, each bringing together three or four of the most important producers
and representing a similar share of the market. One of the groups has set-up
its own recycling facilities, while the other contracts with existing operators.
Consumers and businesses disposing of home appliances have to pay both acollection or transportation fee and a recycling fee. Traceability is ensured by
the use of recycling tickets (manifests) that are issued to consumers who pay
the recycling fee. This manifest system ensures that waste home appliances aredelivered to the original manufacturers of the products.
While there is no differentiation in the costs of managing individual brands
within each of the producer groups, producers have an incentive to achieve
cost savings through efficient processing or product design. Hence, there iscompetition between the two manufacturer groups to minimise recycling costs.
Vertical integration creates a strong link between downstream management of
end-of-life products and the producer. There is some empirical evidence that thesystem provides tangible incentives for eco-design.
Source: OECD (forthcoming a).

EPR systems in emerging economies are a relatively new phenomenon
that was not covered in the 2001 OECD guidance manual (OECD, 2001). In
these countries, a large number of informal waste workers – estimated at a
total of 20 million – are involved in recycling end-of-life products with apositive economic value. The informal sector is usually relatively small in

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OECD countries and often interferes negatively with well-functioning formal
waste management systems e.g. by illegally removing high-value products
and materials from the waste stream. However, in emerging economies
informal workers often perform functions that are not provided by the formal
waste management systems; for example, collecting end-of-life products andrecovering the material from them. Thus, the introduction of an EPR systemin emerging economies may threaten the livelihoods of informal waste
pickers. The challenge is to find ways to integrate these workers in the formal
waste management systems characterised by well-defined standards, while
mitigating the adverse economic, environmental, health and social risks towhich they are exposed. The 2015 OECD updated guidance manual (OECD,
forthcoming a) provided guidelines on how this could be done (see Annex C).

Policy guidance on strengthening extended producer responsibility*
Ensure that EPR systems operate according to good governance principles (asdescribed in OECD 2001 and forthcoming a).
Ensure that EPRs improve their transparency and disseminate better information
with a view to making them more accountable, improving their performance andidentifying good practices.
Enhance the effectiveness of EPR systems, including by increasing their levelof ambition, broadening the scope of products covered, better internalising
environmental costs, and strengthening enforcement.
Strengthen incentives for eco-design, including by ensuring that producers bear
the full end-of-life costs of their products, linking EPRs with broader innovation
initiatives and, in the case of globally traded products, by harmonising
environmentally-sensitive design features.
Continue to involve competition authorities in overseeing the operation of EPR
systems.
In emerging economies, identify opportunities for integrating informal workers
in formal waste management systems when they can play a positive role, while
mitigating adverse economic, environmental and social risks associated with
waste picking.
* Comprehensive OECD policy guidance on EPR is provided in Annex C.

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3.2.2. Green public procurement
In 2002, the OECD adopted a Recommendation of the Council on
Improving the Environmental Performance of Public Procurement (OECD,
2002); in 2007, the Secretariat published a report (OECD, 2007b) toassess the progress on the implementation of measures contained in the
Recommendation.
In this report, Green Public Procurement (GPP) is defined as a setof “procurement policies for which environmental criteria are explicitly
applied in the procurement decision-making process.” (OECD, 2007b: 2) The
objective of introducing such criteria in the procurement process is to shift
public purchasing towards goods and services which are less environmentally
damaging throughout their whole lifecycle.
More recently, the OECD adopted the Recommendation of the Council on
Public Procurement (OECD, 2015e) to encourage the use of procurement as a
strategic tool for good governance. It includes guidelines on how to integrate
secondary policy objectives, including green growth, into public procurement
programmes. According to OECD (2015f), today 84% of OECD countries
have policies encouraging green procurement at the central government level.
Green public procurement provides a potentially important instrument
for shaping consumption and production to support resource efficiency
objectives. In OECD countries, general government procurement accounts
for 12% of GDP – 20% in the EU – and nearly one-third of government
expenditures (OECD, 2015g; OECD, 2015f; European Commission, 2015).
If the criteria for public purchases reflect policy objectives for increased
resource efficiency, they can serve as important drivers for innovation,
providing industry with incentives for developing greener products andservices. This practice can be particularly impactful in sectors where publicpurchasers represent a large share of the market, such as construction, healthservices and public transport.
However, reported obstacles to successful GPP implementation are:•“the perception that green products and services may be more
expensive than conventional ones;•

public officials’ lack of technical knowledge on integrating
environmental standards in the procurement process and•the absence of monitoring mechanisms to evaluate if GPP achieves
its goals.” (OECD, 2015g: 4)

To address these issues, the Public Governance and Territorial
Development Directorate of the OECD recently developed good practices

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60 – 3. Policy guidance for resource efficiency
for GPP based on country case studies (OECD, 2015g). Some of the main
findings and recommendations are summarised below:
1. A solid GPP framework. Such frameworks – which may include
regulation and policy guidance for public purchasers – can be
powerful tools for directing public purchases in line with green goals.
Regulatory frameworks rely on a variety of tools, from guidelines toschemes to increase “market-pull” that incentivise the developmentof green solutions. Well-aligned policies can help to reaching
GPP objectives; for example, policies for green growth, green
procurement, eco-labelling and eco-innovation should be consistentand, where appropriate, co-ordinated. The GPP framework should
provide for decisions to be taken on the basis of a comparison of thelifecycle costs of alternative products; if not, goods and services thathave lower initial costs but higher life-time costs will be selected. At
the same time, the GPP framework needs to be non-discriminatory
between domestic and foreign sources.
2. Understanding the factors that can help and hinder the uptake ofgreen goods and services. Opposition to GPP can be overcome bycommunicating the results of lifecycle analysis in a way that shows
the overall benefits of using greener products, particularly when the
up-front costs are higher than those of competing products. At thesame time, canvassing the views of suppliers can help to understandpossible options, define realistic performance standards, andstimulate research and innovation.
3. Introducing environmental standards in the technical specifications,procurement selection and award criteria, as well as in contract
performance clauses. It is difficult to implement GPP without
credible standards to identify products or services that are “green”.
EU studies show that the uptake of GPP has been strongly influenced
by eco-labels for different product categories. Using functional
performance-based criteria rather than specifying design featuresencourages the development of lower-cost, innovative approaches.
It is important to include environmental requirements at all stages
in the procurement process, from design to implementation. An
example is illustrated in Box 3.6, explaining how the Netherlands
have integrated lifecycle analysis in green public procurement.
4. Professionalising GPP and increasing know-how and skills. GPP
requires specialised knowledge and skilled multidisciplinary teams.
The capacity of the public sector to use procurement strategically
can be built up using tools like manuals, training and guidance.
Procurement teams should involve experts with the range ofskills required to manage the process, such as lawyers, scientists,

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engineers, and economists. Some countries have established channels
for dialogue between the government, front-runner companies andpurchasing units with the goal of constantly improving GPP policy.
In decentralised administrations, it is particularly important toengage sub-national levels of government and to support them tobuild their capacity to carry out their tasks.
5. Raising awareness on GPP solutions and their benefits with buyers,businesses and the civil society. A focused effort on getting the rightmessages across to government procurement officials, potential
suppliers and the general public can have a significant impact on the
success of GPP. Amongst other things, it can encourage businesses todevelop green solutions and increase citizens’ trust in the achievementsof green policies. Dedicated webpages, stakeholder dialogue, public
events and conferences are tools used to communicate about GPP.
However, there is scant information on the impact of these efforts.
6. Monitoring the results of GPP. Monitoring provides a basis forevaluating and adjusting GPP policies. Countries appear to have adopted
a variety of approaches to monitoring: some are simply descriptive;
others are calibrated against targets or forecasts; and some aim to assess
impacts. Some countries have developed reporting requirements.

Box 3.6. Integrating lifecycle analysis in green public procurement:
The case of the Netherlands
Despite the 2002 OECD Council Recommendation recognising the importanceof lifecycle analysis (LCA) in GPP, only 16% of OECD countries apply thisapproach systematically. The Netherlands has tried to address this challenge inpart by developing a software tool, DuboCalc, that calculates the environmental
impact of construction materials. It calculates the embedded environmental
impacts of material use, from raw material extraction and production up to andincluding demolition and recycling. It also calculates the energy consumed byinfrastructure works during the use phase.
DuboCalc incorporates information on the amounts of materials used for various
designs. Using LCA data from a built-in database, it calculates 11 environmental
impact parameters. It then uses shadow prices (of avoided emissions) to calculate
the Environmental Cost Indicator (ECI). The ECI is converted into a monetary
value which is a measure of the avoided environmental impact that can becompared with the total cost of the project. The contracting authority may thenuse the most economically attractive option (MEAT) criterion to identify thepreferred tender in a way that takes into account resource efficiency.

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Box 3.6. Integrating lifecycle analysis in green public procurement:
The case of the Netherlands (continued)
On completion of the work, the contractor must demonstrate that the proposed ECI
value has been achieved. If not, the contracting authority may impose a penalty
of 1.5 times the underachievement. So if an ECI value of EUR 5 million was notachieved, the contracting authority would pay the contractor EUR 7.5 million lessthan the submitted quote price.
An important advantage of this approach is that it allows the contractor freedom
to develop an innovative design. At the same time, monetising the reduced
environmental impact allows environmental factors to be considered in theframework of MEAT which is a commonly used criterion in public procurement.
The main challenge is to develop a methodology that costs and weighs theenvironmental parameters in an appropriate way.
Source: OECD (2015g).

Policy guidance on strengthening green public procurement
Review the environmental criteria in GPP programmes to ensure that resource
efficiency objectives are appropriately reflected and aligned with other government
policies; more systematically base environmental criteria on lifecycle analysis.
Increase the impact of GPP on resource efficiency by effectively integrating
resource efficiency criteria into all stages of the procurement process; tenderspecification, selection and implementation.
Build appropriate capacity in relevant agencies at national and sub-national levelas appropriate, and establish effective inter-disciplinary teams to manage GPP.
Raise awareness of the benefits of GPP with purchasers, suppliers and civil society.

GPP clearly has important potential to increase the demand for green
products. However, it is not clear to what extent this potential is being
realised. Work by the OECD and UNEP (2012) have pointed to the weakevaluation of the impacts of GPP. Results of support for green public
procurement are only measured in 69% of OECD countries (OECD, 2015f).
Reasons for this are lack of data, of appropriate methodology, insufficientincentives, lack of financial resources, absence of legal requirements.
Moreover, it is not clear how far the environmental criteria used in GPP

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systems are aligned with resource efficiency objectives. Although GPP
policies often acknowledge the importance of using lifecycle analysis (LCA)
when evaluating environmental impacts, few OECD countries are actually
implementing this approach in practice. In many countries, capacities toimplement GPP should be strengthened and stakeholders more engaged.

3.2.3. Partnerships with business and other stakeholders
An OECD report (2008g) defined partnerships as voluntary arrangements
involving the sharing of risks and benefits among partners, and combining
and leveraging the financial and non-financial resources of partners
towards the achievement of specific goals. Partnerships are a complement
to traditional policy instruments that have frequently been advocated asa useful approach for dealing with the complexities involved in achieving
resource efficiency along the product lifecycle. For example, the Netherlands
has adopted a full lifecycle approach to manage seven priority waste streams
that relies heavily on a partnership approach. A recent study has examinedthe various actions that could promote greater resource efficiency along theplastics value chain (World Economic Forum et al., 2016).
Within the OECD, a recent initiative has been taken within the frameworkof the Guidelines for Multinational Enterprises to promote responsible supply
chains through co-operation among business partners. The Guidelines
represent a commitment by adhering governments to provide an open andtransparent environment for international investors and to encourage the positive
contribution that multinational enterprises can make to economic and social
progress (OECD, 2011e). Governments have used this framework to provide
recommendations to enterprises in various areas. The recommendations arevoluntary and intended to complement relevant laws and international standards.
In order to help companies implement the recommendation of the Guidelines,
sector-specific guidance has been developed for responsible supply chains in theminerals (OECD, 2013) and agricultural (OECD and FAO, 2015) sectors. A draft
guidance document is currently under discussion on responsible supply chainsin the garment and footwear sector, one of the largest consumer sectors globallywith a significant environmental footprint (OECD, 2016b). The draft guidance
recommends how a range of potentially adverse impacts should be assessed,
managed and communicated. While it covers some environmental issues – theuse of chemicals, water and energy – there is no linkage with resource efficiency
policies more broadly. There may be an opportunity to bring these strands ofwork together.
Industrial symbiosis (IS) is another example of a type of partnership thatcan promote resource efficiency. Within the G7, the United Kingdom andGermany hosted a workshop on this issue in October 2015 (International
Synergies, 2015). Lombardi and Laybourne (2012) reviewed experience in

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this area and formulated the following definition of industrial symbiosis:“IS engages diverse organisations in a network to foster eco-innovationand long-term culture change. Creating and sharing knowledge through the
network yields mutually profitable transactions for novel sourcing of required
inputs, value-added destinations for non-product outputs, and improved
business and technical processes” (Lombardi and Laybourne, 2012: 31-32).
The classic example of IS is when one company’s waste becomes another’s
production input. National and local governments often play an importantrole in facilitating the process. Universities can provide technical support. An
assessment of the British experience suggested that the benefit/cost ratio of an
initial five-year programme was between 32-53:1. The United Kingdom andGermany have supported the establishment of successful industrial symbiosis
programmes in a wide range of countries. France has recently launched an
initiative in this area. There appears to be opportunities to further extend andscale-up this approach.
While the objectives of a partnership may be more or less precisely
defined, there are often a range of more-or-less unintended benefits attributed
to partnerships, such as:• “Attitude change: greater understanding and valuing of other sectors/
communities;• Networking: the development of new, trusted connections;• Technology and knowledge transfer: cross-partner transfer oftechnical and other skills and knowledge;• Human capital: improved working practice and human capitaldevelopment from exposure to different working methods andviewpoints;• Social capital: an improvement in reputation (and hence a greater
willingness for others to work with and/or trust an organisation);• Spin-off partnerships: an increased interest, capacity and opportunity
to build future successful partnerships.” (OECD, 2008g: 10)
The costs of partnerships include both the direct human and financial costs
associated with the project, including the communication and co-ordination
costs. Costs and complexity will increase with the level of ambition. There may
be unintended costs as well as unintended benefits. Ideally, to demonstrate thevalue added of a particular partnership, it would be desirable to compare thebenefits and costs with an alternative approach. The outcomes of partnerships,
the costs and benefits involved, should be evaluated to learn lessons for the
future. Many partnerships are not subject to such evaluation.
Governments will view partnerships as complements, not alternatives,to public policy instruments whereas private companies will only engage in

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partnerships when they cannot achieve their objectives by themselves, andwhen there is a clear business case for such an engagement. Partnerships are
not a panacea: they are not appropriate in all circumstances and even where
they are used, some will fail, as any project can fail. As Box 3.7 illustrates,
there are often substantial challenges to overcome when engaging in ambitious
partnerships.
Box 3.7. Phosphate value chain agreement in the Netherlands
To supply its large agriculture sector with phosphates, the Netherlands isdependent on imports from China and Morocco. Steep price increases in thelate 2000s led to concerns about a supply shortage. To address this, a numberof Dutch stakeholders promoted the idea of “mining” secondary phosphate, forexample from wastewater and manure. An additional benefit was that such an
approach could help the Netherlands reduce pollution in rivers and lakes fromexcess phosphate. In 2011, the government brought together 20 water, chemical,
food industry and agricultural stakeholders in a Nutrient Platform with thegoal of making the Netherlands a net exporter of secondary phosphate. The“Phosphate Value Chain Agreement” was signed in the same year.
There were a number of challenges to be overcome to promote co-operation,
including: bringing together stakeholders along the value chain that do notnormally work together; promoting trust among parties who might not benefit
equally from co-operation efforts; absence of any government incentives (suchas subsidies); legislation on the use of recovered material containing heavy
metals (which was amended).
Another challenge was to promote investment in the secondary phosphatemarket in the context of highly volatile commodity prices. The price ofphosphate rock rose from USD 50 to USD 450 in 2007-08 as a result of supply
issues in China. The price then fell to USD 100 in late 2009. The price volatility
created an uncertain and risky environment for investment. To address this,the Nutrient Platform sought to facilitate co-operation between companies andfinancial institutions with the objective of fostering innovation in the sector.
An additional complicating factor was the significant drop in the use ofphosphorus per hectare (ha) in the Netherlands; from almost 40 kg/ha in 199092 to just over 10 kg/ha on average between 2007-10. The impact of this decline
on the development of the Phosphate Value Chain Agreement is unclear.
While the outcome of this agreement is not yet final, it provides an example
of innovative approach to promoting resource efficiency along a value chain
through stakeholder co-operation and without state subsidies. It also illustrates
some of the challenges that may arise.
Source: OECD (2015h).

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OECD (2008g) identified a number of factors that can help partnerships
succeed:•“A positive enabling environment; such as appropriate government
policies/legal frameworks or the existence of appropriate institutions
to bring partners together;•

A focus on important needs that can be best fulfilled throughpartnerships and that are recognised and accepted by all partners;•

A clear understanding of the objectives of the partnership, and thetasks to be carried out, involving all parties, ideally the objectives
should be specific, measurable, agreed, realistic and time-bound(SMART);•

A result-oriented and appropriately detailed plan for achieving
the goals and targets set up jointly for the partnership, with clear
allocation of responsibilities;•

Clear understanding of mutual benefits (win-win) for all involved
parties, as well as the incentives that motivate each to achieve theagreed objectives;•

Effective relationships and communication built on mutual respect
and understanding and a shared commitment and ownership by all
partners; this requires patience and time;•

Sufficient and appropriate human and financial resources committed
from all partners;•

Good leadership which could include competencies in facilitationand change management; the leadership roles need to be clearly
defined and there should be recognition that they may change with
time;

•

Clear and enforceable lines of accountability; this can involve adhering
to agreed standards or procedures, sharing information on decisions,actions and performance, and justifying publicly why decisions were
made;

•

Flexibility is vital; there is no one-size-fits-all approach;•Accurate and appropriate indicators to be used to evaluate, inter alia,
progress in achieving the goals of partnerships and costs involved;•

Constant and effective monitoring, measuring and learning.” (OECD,
2008g: 17)

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Policy guidance on partnerships with the private sector andother stakeholders
Consider partnerships when government, private companies and other stakeholders
recognise that they cannot achieve important resource efficiency objectives bythemselves, and when there is a clear business case for such an engagement; ensurethat an effective, flexible governance arrangement is established, including asystem for monitoring progress.
Further develop, broaden and scale-up successful partnerships, for example in
the area of industrial symbiosis.
Explore how resource efficiency considerations could be better integrated into
OECD work on responsible supply chains.

3.3. Treat resource efficiency as an economic policy challenge andintegrate it into cross-cutting and sectoral policies
G7 countries are increasingly approaching resource efficiency as an
economy-wide issue, sometimes in the context of green growth or sustainable
development strategies. Some countries are committed to developing acircular economy where the value of products, materials and resources ismaintained in the economy for as long as possible, and the generation ofwaste minimised. There is some evidence (Dubois, 2015) that pursuing thisgoal could help to boost competitiveness, guard against scarcity of resourcesand volatile prices, and help to create new business opportunities andinnovative, more efficient ways of producing and consuming.
Even though there are important differences between the policy areas,
approaching resource efficiency as an economic challenge provides
opportunities to draw on some of the analytical and policy approaches thathave been applied to climate change. Indeed, there are important synergies
between climate and resource efficiency policies which should be exploited.
The potential GHG reductions from efficiency improvements are particularly
pronounced when resource flows are associated with the production of basic
materials such as cement, steel, chemicals and paper (OECD/IEA/NEA/ITF,
2015). The products, by-products and wastes (and the resource streams they
compete with) of these industries all contain large amounts of embedded
energy and GHG emissions, so resource efficiency gains in these activities
can result in proportionally large GHG emission reductions.

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At the overall governmental level, resource efficiency can be mainstreamed
into public policy by:•

Aligning policies so as to reduce pressures from the major resourceconsuming sectors such as agriculture and food, transport andenergy.

•Integrating resource efficiency into cross-cutting policy domains thatprovide opportunities for structural economic change.

3.3.1. Align sectoral policies with resource efficiency objectives
Sectoral policies may stimulate inefficient use of resources. A
recent OECD study on climate change identified five areas where policy
misalignments can occur (OECD/IEA/NEA/ITF, 2015), which are also
relevant from the point of view of resource efficiency:•

Policy areas and policy objectives. Is there consistency between
goals, objectives or impacts of existing policy areas and resource
efficiency policies? For instance, do financial market regulations haveunintended negative consequences for resource efficient investments?
Are tax systems encouraging resource inefficient development?

•

Development, economic and industrial policy goals. Are policies
that support development goals undermining long-term resource
efficiency goals?

•

Levels of government. Are the respective mandates of different levelsof government and different ministries conducive to or hinderingresource efficiency objectives?

•

Stakeholders. Do public and private actors have the same incentives
for transitioning to the circular economy – e.g. are potential risks
related to resource scarcity transparently reflected in corporate
disclosures and investor portfolios?

•

Borders. Can one country’s resource efficiency policy be underminedby another’s domestic policy choices? Do international trade rules or
unilateral trade remedies hinder the adoption of stronger resource
efficiency policies? If so, how?

In order to further develop this type of analysis, governments should
conduct sector-by-sector analyses of policy misalignments in order to identify
the most important drivers of resource inefficiencies and ways of addressing
them. Some G7 countries are already examining sectors such as food,plastics, construction, textiles and electrical and electronic equipment. In
addition, international organisations such as the OECD have also developed

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sector-specific analyses, for example to identify policy misalignments in the
broader investment environment for renewable energy, or to assess the impactof local-content requirements and other trade measures on renewable energy
investment and trade (OECD, 2015i, 2015j, forthcoming b). The opportunities
and challenges will vary according to the sector, the situation in the country
concerned and the value chains involved. Checklists could be developed toassist countries carry out their diagnoses of specific sectors.

Box 3.8. Policy misalignments in the context of sustainable mobility
Sustainable mobility has been identified as a priority by several G7 countries.
The reasons are clear: the transport sector generates 23% of global CO2 andis the fastest growing source. It also generates adverse health impacts (due tolocal air pollution), and economic costs (due to congestion). The productionof cars consumes significant amounts of metals and other materials. Road
infrastructure requires large volumes of concrete and other materials, andresults in land coverage and loss of biodiversity.
The transition to sustainable mobility is based on 3 main pillars:•

Reduce demand for vehicle usage;•

Promote the transition to low-emission, resource-efficient transport modes;•

Improve the carbon, energy and material intensity of fuels and vehicles.

While the way forward is well-understood, there are formidable barriers thatprevent progress, and which lock transport systems into their current carbon-,energy- and material-intensive structures. Some of these barriers stem frompolicies and arrangements in non-environmental sectors. These may include:•

Lack of co-ordination between authorities responsible for land-use andtransport resulting in urban sprawl and increased road infrastructure andvehicle usage;•

Mismatches between administrative boundaries and the functional extent
of metropolitan areas leading to unco-ordinated development of transportsystems;•

Perverse incentives from national governments for urban authorities toinvest in road and other infrastructure;•Tax incentives for company cars encourage the purchase, and greater use
of, larger more polluting vehicles;•

Existing regulations prevent the development of car sharing arrangements.

Source: OECD/IEA/NEA/ITF (2015), Ellen Macarthur Foundation et al. (2015).

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Identifying policy misalignments is a necessary but not sufficient condition
for promoting resource efficiency: a variety of other policy instruments should
also be applied. For example, in the sustainable mobility context, incentive
schemes could be set up to encourage walking (e.g. in pedestrian areas), cycling
and public transport (see Box 3.8). However, the effectiveness of these policy
instruments may be undermined unless policy misalignments are addressed.

Policy guidance on mainstreaming resource efficiency inpublic policy
Integrate resource efficiency into national economic development strategies,
including sustainable development and green growth strategies.
Develop synergies with climate change and other policies; integrate resource
efficiency into Intended Nationally Determined Contributions; where appropriate,draw upon experience gained from climate change policies to identify ways ofmainstreaming resource efficiency in economic policies and strategies.
Analyse key resource-consuming sectors with a view to identifying and rectifying
any policy misalignments with resource efficiency.

3.3.2. Integrate resource efficiency into cross-cutting policy domains
The transition to a resource-efficient economy is closely linked withbroader policy objectives of making national economies more productive andcompetitive. Governments have a number of policies at their disposal to steer
economic development, and they should consider how they could be designed
to support resource efficiency. This section examines three sets of policies:
innovation, investment and managing the employment and skills dimensionsof the transition. Governance arrangements are also considered. International
trade, including export credits, and official development assistance are otherimportant cross-cutting policy domains relevant to resource efficiency thatmerit further analysis: they are briefly discussed in section 3.5.

Promote resource efficiency through innovation
Innovation is a vital means to decouple economic growth from resource
consumption and to promote green growth (OECD, 2011c; OECD/IEA/
NEA/ITF, 2015). All G7 countries have programmes to support innovationin resource efficiency. In some cases, this applies both to technologies andto business models. 65% of the respondents to a 2011 survey of sustainable
management policies in OECD countries indicated that the innovation
dimension of their programmes was focused primarily on waste and products

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(OECD, 2014a). More upstream parts of the value chain did not receive thesame attention, at least not from public policies.
Business is the main driver of innovation but governments also have an
important role to play. This stems from two basic market failures.
First, markets fail to internalise the costs associated with pollution or the
drawdown of resources. These externalities are addressed by environmental
policies that aim to internalise these externalities. The policy instruments thatgovernments use for this purpose have been reviewed in section 3.1. Whenwell-designed, they can provide incentives to comply with environmental
requirements through innovation.
Second, firms face difficulties in fully capturing the benefits of theirinvestment in R&D. This results in a socially sub-optimal level of researchand innovation and policy measures to spur innovation are justified tobridge this gap. These policies include public investment in basic research,various support measures to encourage private investment in applied R&D,
protection of intellectual property, support for public-private co-operationand various other measures.
Public support for R&D is one of the main ways that governments canhelp to generate the knowledge that underpins innovation. This raises thequestions of how much should be invested and in what areas.
While public support related to innovation and climate change has been
analysed (OECD/IEA/NEA/ITF, 2015), no equivalent studies appear to havebeen carried out for resource efficiency. More broadly, analysis of innovation
policy shows that the financial crisis has resulted in cuts in research budgets:since 2008, OECD countries’ gross public expenditures on R&D grewat half the annual rate observed in 2001-08. In the same period, business
expenditures on R&D grew at about a quarter of the rate since in 2002-08.
The share of R&D allocated to the energy sector fell from about 10% to 5%
over the last 40 years. Given this context, it seems unlikely that the overalllevel of R&D related to resource efficiency has increased or even stayed thesame in recent years. While R&D is an imperfect indicator of innovation– it only accounts for one of the inputs to the process, not the output – itnevertheless is a statement of intent. It would be helpful to have better
insights into how resource efficiency is integrated into national researchpolicies and how effective such initiatives have been.
Innovation for resource efficiency can come from a wide variety ofsources. Given the uncertainty that this entails, it makes most sense forgovernments to support basic, long-term, riskier research that has a public
goods character and that is unlikely to be undertaken by the private sector. This
could include support for new interdisciplinary and trans-disciplinary research
fields. Generally, governments should avoid supporting specific technologies.

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72 – 3. Policy guidance for resource efficiency
Governments can use various tools to leverage business R&D. On the
supply side, they can offer direct support via grants or procurement or use
fiscal incentives such as R&D tax incentives. Market-based tools havethe advantages of helping to reduce the marginal cost of R&D activities,
and providing firms with the flexibility to decide which projects to fund.
However, they also have shortcomings. The benefits depend not only on R&D
expenditures, but also on the firm’s profitability. This may mean that small,
new companies not yet showing a profit may not benefit. Yet these firms areoften the source of radical innovations. Some countries have recognised thispitfall and included provisions for such companies to “carry over” their benefits
until they are profitable. Some resource efficiency programmes, such as theEuropean Commission’s Green Action Plan for SMEs (Box 3.9), have alsosought to overcome some of these challenges by focusing support on SMEs.

Box 3.9. Green Action Plan for SMEs in Europe:
Main objectives and actions
The European Commission has adopted a plan to assist SMEs to turn environmental
challenges into business opportunities. It comprises the following objectives andactions:
Greening SMEs for more competitiveness and sustainability• Provide practical information, advice and support;•

Support efficient technology transfer mechanisms;•

Facilitate access to finance.

Green entrepreneurship for the companies of the future• Promote all forms of eco-innovation, including non-technological
eco-innovation;•

Facilitate business partnering, skills and knowledge for green entrepreneurship;•

Exploit better the role of clusters in support of eco-innovative SMEs.

Opportunities for SMEs in a greener value chain• Address systemic barriers to cross-sectoral and cross-national value
chain collaboration and business creation and co-operation;•

Facilitate cross-sectoral collaboration.

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3. Policy guidance for resource efficiency – 73

Box 3.9. Green Action Plan for SMEs in Europe:
Main objectives and actions (continued)
Access to markets for green SMEs
• Facilitate access to international markets;•

Facilitate the uptake of resource efficiency technology in partner countries.

Governance• Monitor and update actions;•

Co-ordinate and exchange of best practices at European, national andregional level.

Source: European Commission (2014).

Governments can play a valuable role in bridging the gap between basic
and applied research by fostering co-operation between firms (both small
and large) with universities. They may also promote international research
co-operation and contacts with financial institutions. However, the closer,
governments get to applied research and market commercialisation, thegreater the risk they will have to make policy bets on specific technologies.
One strategy to reduce the risk is to prioritise support for innovation
with broad potential applications. For example, targeting R&D public
support at storage technologies rather than at specific renewable energy
technologies could be preferable for two reasons: it is less burdensome interms of information requirements for governments, and it targets earlystage technologies with important network externalities, which are likely to
Provision of targeted support for specific technologies requires continuous
evaluation in order to ensure that any government expenditure continues toprovide value added in achieving the established policy objective.
As Box 3.10 illustrates, some governments support companies to makethe transition from R&D to the market through financial support andadvisory services. Governments can also support the diffusion and take-up
of resource efficient technologies by using demand-side innovation policy
measures. These include public procurement (discussed in section 3.2.2),
information dissemination (e.g. through environmental technology
verification schemes), advanced market commitments, technology prizes andinstruments to change consumer preferences.

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Box 3.10. Promoting resource efficiency innovation in Canada
Sustainable Development Technology Canada (SDTC) funds Canadian clean techprojects and coaches the companies’ managers as they move new technologies tomarket. It also develops and supports networks of partners from industry, academia
and government, from home and abroad. The Canadian government has allocated
CND 915 million to SDTC and this has leveraged CND 1.8 billion from partners. It
has supported 269 projects in the energy, transport, agriculture, forestry and waste
sectors. The Canadian cleantech sector consists of over 800 companies, mostly
SME. It employs 50 000 people and has revenues of CND 12 billion.
The Canada Mining Innovation Council (CMIC) is a national non-profit organisationthat co-ordinates innovation projects and programmes in response to “life ofmine” challenges defined by its more than 80 industry-wide members. The
CMIC Zero Waste Initiative will develop innovation priorities that will leadto significant reductions in mining waste in the next 5 years. The aim is to
move towards net zero waste in mining and mineral processing in 10-20 years.
These end points would be staged through more efficient definition of new ore
discoveries, more effective in situ mining methods to minimise waste rockproduction, closed system processing to reduce water and energy waste, andrefinement of mine tailings towards a benign, saleable product.
Source: Pearson (2015), Sustainable Development Technology Canada (2016).

An important dimension of innovation for resource efficiency is thedevelopment of new business models (OECD, 2013). A study by Accenture
Strategy (2014) analysed 120 companies that are generating resource
productivity improvements in innovative ways. It suggests that while initiallydisruptive business models were driven by start-ups, larger multinational
companies are now also involved. On the basis of its analysis, Accenture
identified five underlying business models for the circular economy:•“Circular Supplies: Provide renewable energy, bio-based or fully
recyclable input material to replace single-lifecycle inputs;•

Resource Recovery: Recover useful resources/energy out of disposed
products or by-products;•

Product Life Extension: Extend working lifecycle of products andcomponents by repairing, upgrading and reselling;•

Sharing Platforms: Enable increased utilisation rate of products bymaking possible shared use/access/ownership;•

Product as a Service: Offer product access and retain ownership tointernalise benefits of circular resource productivity.” (Accenture
Strategy, 2014: 12)

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3. Policy guidance for resource efficiency – 75

Accenture Strategy also suggested that many or most of the new
business models would not be possible without the support of innovative
new technologies. Their research identified ten disruptive technologies inthree categories: digital (information technology), engineering (physicaltechnology) and hybrids (combinations of the two). Figure 3.2 outlines thepotential of these disruptive technologies for circular business models.
Figure 3.2. Disruptive technologies used by pioneers to launch and operate circularbusiness models with speed and scale
Circular
Supplies

Resource
Recovery

Product Life
Extension

Sharing
Platforms

Product asa Service

MobileM2M

CloudDigitalSocialBig Data
Analytics
Trace and returnsystems

Hybrid3D Printing

Modular design
technology
Advancedrecycling techEngineering
Life and Materialsciences

Note: Based on 120+ case studies and 50+ interviews. Number of icons in respective boxes indicate
relative importance.
Source: Accenture Strategy (2014).

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76 – 3. Policy guidance for resource efficiency
While these innovations are primarily driven by the private sector,
government may also have an important role to play in ensuring that regulatory
requirements do not unnecessarily impede the development of new, resourceefficient business models. However, as the conflicts over new taxi services,
accommodation, and music streaming illustrate, the incumbents in establishedmarkets may oppose new business models that threaten their revenue sources
or market share. Thus, the regulation of new business models may involve somedifficult trade-offs.

Policy guidance on resource-efficient innovation
Integrate resource efficiency into national innovation policies and regularly
assess the results achieved.
Prioritise basic, longer-term, riskier research in public R&D programmes, andprovide support for interdisciplinary initiatives.
Avoid policy measures that create barriers to the entry of new firms to markets;
establish an enabling environment to facilitate innovation and the take-up of
resource-efficient products and processes in SMEs.
Promote research partnerships involving the private sector, universities and thegovernment; any support for specific technologies should favour those with apotentially broad range of applications.
Remove any unnecessary regulatory barriers to the development of new resourceefficient business models.

Align investment policies with resource efficiency objectives
Irrespective of concerns about climate change or resource efficiency,
the global economy requires around USD 90 trillion of investment ininfrastructure (e.g. buildings, transport, energy) between 2015 and 2030
to support economic growth and the broader development agenda (OECD,
2015l). In advanced economies, many ageing infrastructure networks forwater, energy and transport need to be replaced or upgraded. In emerging
and developing economies, most of the infrastructure required to meetdevelopment goals is still to be built, particularly in urban settings.
In confronting this challenge, climate and resource efficiency policies
are closely aligned. There is an important window of opportunity to ensurethat new investment in infrastructure helps to support both low-carbon
and resource-efficient development. Failure to seize this opportunity willreinforce the carbon and resource intensity of economies. Analysis conducted

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on climate change suggests that the incremental short-term costs of lowcarbon infrastructure investment would amount to just a fraction of thefinance needed for infrastructure overall. Moreover, these additional costs
are small compared with the cost of the potential impacts of climate change
if this action is not taken.
According to the World Economic Forum (2014), global spending on
basic infrastructure – transport, power, water and communications – amounts
to USD 2.7 trillion a year, a shortfall of about USD 1 trillion comparedwith assessed development needs. An important factor in this shortfall isthe cut-backs in public budgets following the global financial crisis. Public
investment per capita in 2012 fell in 15 out of 33 OECD countries, comparedwith 2007. Public financing alone will not be enough to bridge the investment
gap. Rather, this transition will require the large-scale mobilisation of all
sources of private sector investment and finance. Governments should target
the scarce resources available for infrastructure investment at activities
unlikely to attract sufficient private funding and at leveraging large-scale
private sector investment. They should also set an example by ensuring thatpublic investments are resource-efficient (see discussion on green public
procurement in section 3.2.2).
Traditional sources of private capital, such as commercial banks, arefacing increasing constraints to supporting long-term investment due
to tightened financial regulations and the need to reduce debt. This has
stimulated interest in other sources of private capital, notably institutional
investors. With USD 92 trillion of assets under management in OECD
countries in 2013, institutional investors such as pension funds, insurers andsovereign wealth funds could play a significant role in driving long-term
investments in a low-carbon, resource-efficient economy.
Although institutional investors have increased their equity and debt
investment in low-carbon projects in recent years, these investments represent
a small fraction of their assets. Looking at large OECD pension funds only,
direct investment in infrastructure projects of all types accounted for 1%of their asset allocation in 2013. “Green” infrastructure is estimated toaccount for an even smaller share. Too many barriers still stand in the way ofscaling-up the participation of institutional investors. However, if and when
they did increase allocations towards infrastructure investment, it would be
important that the benefits of resource-efficient investment were recognisedin their investment strategies.
Current levels of low-carbon and resource-efficient investment fall shortof a development pathway compatible with the transition to a green economy.
Of the USD 1 600 billion of global energy investments in 2013, 70% was in
the extraction and transport of fossil fuels, oil refining and construction offossil fuel power plants

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78 – 3. Policy guidance for resource efficiency
National economies encompass a range of market and policy failures thatcollectively favour investment in carbon- and resource-intensive activities,
often unintentionally (OECD, 2015i). These are either linked to the enabling
environment in specific sectors of the economy, or to the functioning andBusiness environment

Table 3.4. Examples of policy misalignments that undermine low-carbon investment
Fiscalpolicies• Insufficient carbon pricing and incentives for low-carbon technologies• Environmentally harmful subsidies and incentives (e.g. fossil fuels)• Tax policies that unintendedly favour carbon-intensive behaviour (e.g. company cars)

Climatepolicies• Lack of ambitious international and national reduction targets or binding objectives• Lack of climate policy stability: retroactive changes in climate legislation

Investment
policies• Regulatory barriers to international investment in low-carbon projects (e.g. limits on foreign
ownership, restricted access to land, local content requirements)• Lack of transparency, insufficient investor protection and intellectual property rights protection
in low-carbon technologies, weak contract enforcement

Competition
policies• Lack of open and competitive infrastructure markets (e.g. in the electricity sector)• Market designs and regulatory rigidities that favour carbon-intensive infrastructure investmentin the energy sector• Lack of a level playing field in the power sector for existing fossil-fuel producing state-owned
enterprises and independent producers of clean energy

Financial system

Trade policies • Trade barriers for low-carbon goods and services
Publicgovernance• Lack of long-term goals for low-carbon infrastructure planning and procurement• Contradictory signals between national and sub-national climate objectives• Lack of stakeholder consultation in policy design

Innovation• Enforceable global intellectual property right regimes (potentially hindering the transfer ofgreen technologies to developing countries).

Financialmarketpolicies• Potential unintended consequences of financial regulations on long-term financing• Financial incentives across the financial system favouring short-termism (remuneration
practices, fiscal measures, performance appraisal)• Barriers to the deployment of innovative financial instruments for new types of investors(e.g. institutional investors)

Business
conduct• Corporate reporting that does not reflect the climate risk (e.g. stranded assets)• Lack of a responsible investment code
• Lack of clarity on fiduciary duty and stewardship with respect to environmental, social andgovernance issues

Publicfinance andinvestment• Ongoing support to carbon-intensive investments, nationally and internationally• Continued support of carbon-intensive investments in development finance• Lack of capacity

Source: OECD/IEA/NEA/ITF (2015).

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3. Policy guidance for resource efficiency – 79

provisioning of financial markets (Table 3.4). Together they mean that therisk-return profile of low-carbon, resource-efficient investments do not offer asufficiently attractive risk-adjusted return compared with available alternatives.
The updated OECD Policy Framework for Investment includes a section on
investment for green growth, recognising that “green” investments require
both strong conditions for private investment in general, coupled with specificpolicies aimed at improving the risk-return profile of green and resourceefficient investments (OECD, 2015k). Looking specifically at unlocking clean
energy investments, the OECD has developed a Policy Guidance for Investment
in Clean Energy Infrastructure, a non-prescriptive tool to help policy makers
address misalignments and strengthen the enabling environment for investment
in renewable energy and energy efficiency in the power sector (OECD, 2015i).
Ongoing OECD research is also assessing empirically the impact of climate
policies and of the broader investment environment – and especially ofcompetition policy – on investment in renewable electricity generation in OECDand G20 countries (OECD, forthcoming b, c).

Policy guidance for promoting investment in low-carbon,
resource‑efficient infrastructure
Target the scarce public resources available for infrastructure investment at
activities unlikely to attract sufficient private funding and at leveraging large-scale
private sector investment.
Review investment policy frameworks with a view to identifying and removing
obstacles to investment in low-carbon, resource-efficient infrastructure.
Set an example by ensuring that public investments in infrastructure are resource
efficient; integrate resource efficiency objectives into standards for buildings andother infrastructure.
Incentivise private investors to integrate resource efficiency objectives into theirinvestment policies.

Ensure that labour policies and education and training programmes
support the transition to a resource-efficient economy
The transition to a resource-efficient economy will stimulate theemergence of some sectors and the decline of others. While this may or may
not lead to a net increase in employment, it will change the skill profile of
the workforce (OECD, 2012c). For example, there may be new jobs linked
to the use of different materials in the building and transport sectors, while

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80 – 3. Policy guidance for resource efficiency
there may be a decrease in employment in the extractive and heavy materials
sectors such as cement and steel.
One factor that can smooth the transition is labour market institutions
and policies that support the reallocation of labour from shrinking to
growing firms and activities. Countries that have reconciled labour mobility
with income security (achieving so-called flexicurity) are likely to have an
advantage managing an efficient transition. Such policies also help to limit
political opposition to green growth policies grounded in concerns about theeconomic dislocation they could imply.
Another measure that can help to smooth the transition is to adapt
vocational education and training programmes in a timely way to changing
skill demands. The need for training support is generally greater in SMEs
than in larger firms with the capacity to organise their own training, as someelectricity utilities have done for renewable energy. There may be a sectoral
dimension. For example, the European Commission launched an initiative forthe construction sector, starting with country-level evaluations of skills needs
and gaps. It revealed that more than 3 million workers in Europe will require
training by 2020, most in the form of continuous vocational education forexisting workers. In a second phase, funding will be provided for large-scalequalification and training schemes. There may also be a regional dimension
to the transition that requires dedicated measures.
Given the uncertainties, it would be prudent for governments to try
to anticipate the evolving skill needs for a resource efficient economy. To
date several G7 countries have made such assessments, though in different
forms, e.g. by developing episodic studies of “green skills”, systematicallyforecasting the emerging demand for such skills, or co-ordinating vocational
education and training planning with the implementation of environmental
policies and systematically green skills (OECD/IEA/NEA/ITF, 2015).
Assessing how effective these initiatives have been in addressing skills gaps
would provide valuable insights to further develop policy in this area.

Policy guidance on job skills for the transition toa resource efficient economy
Assess new job skill requirements for the transition to a low-carbon, resourceefficient economy and adjust education and training programmes accordingly.

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3. Policy guidance for resource efficiency – 81

Establish effective governance arrangements to promote a coherent
approach to resource efficiency
Even when governments have established a national strategy for resource
efficiency, they face a major challenge to co-ordinate policies given thevariety of issues involved, the mixed track record of most governments
in working horizontally, and the need to include an unprecedented rangeof public and private actors. The scales and time frames involved in thetransition to a resource-efficient economy also make policy implementationand co-ordination particularly challenging.
Many OECD Members report that implementation of resource efficiency
policies is hampered by the broad scope of resource productivity issues andthe involvement of many economic actors in different sectors and in different
locations in the supply, use and disposal chain (OECD, 2014a). As discussed
above, achieving coherence, avoiding misalignments, and achieving reductions,
not displacements, of resource consumption are all major challenges. It seems
unlikely that efforts to co-ordinate policies will be successful if they do not
operate at a sufficiently high level of government, and have the power toconvene and guide the activities of all the major ministries involved.
Finland and the Netherlands are among the few countries that appear tohave established an overarching mechanism to support co-ordination andcoherence of resource productivity policies (European Environment Agency,2011). France’s Circular Economy Roadmap is also intended to support betterco-ordination across policy areas (OECD, 2014a).
Governments have developed a variety of other solutions to promote
more strategic co-ordination of cross-cutting policy objectives. These include
establishing super ministries, policy “tsars”, inter-ministerial committees,
and independent policy units. The United Kingdom adopted one of the mostfar-reaching approaches to government co-ordination for climate change,
involving legally-prescribed climate change targets that cut across electoral
cycles, with implementation monitored by an independent review mechanism.
Governments have also sought to co-ordinate policies by providing guidance
to ministries on how to take account of environmental or climate change in theirdecision-making. This has been done for instance for the appraisal of proposed
public projects (OECD, 2015g), for conducting impact assessments (OECD, 2010),
and for public procurement (as discussed in section 3.2.2).
Resource efficiency not only calls for new approaches to policy making
within governments, but new forms of partnership with non-governmental
actors. Indeed, most commentators consider that in view of its scale andcomplexity, the resource efficiency challenge can only be addressed byinnovative new forms of collaboration. As discussed in section 3.2.3, businessclearly has a key role to play, and governments are exploring new forms of

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82 – 3. Policy guidance for resource efficiency
partnership that go beyond legal requirements and business-as-usual scenarios.
Equally, cities are the locus of many innovative initiatives on climate change
and related issues (OECD and Bloomberg Philanthropies, 2014). Governments
are also engaging universities and consumers in resource efficiency initiatives.
Establishing effective systems for the governance of resources is much
more challenging in countries that are rich in resources than in those thatare primarily importers. Resource-rich countries must establish governancesystems that cover a range of complex, sensitive issues, including: definitionsof property rights, establishing an appropriate fiscal framework, determining
how the benefits of resource exploitation will be distributed, including tolocal communities, and managing the environmental and social impacts
associated with the exploitation of resources. The Revenue Watch Institutehas developed an index to monitor resource governance in 58 resourcerich countries.1 Its most recent findings indicate that mismanagement andcorruption are widespread in many resource-rich countries (Box 3.11).
Box 3.11. Resource governance in resource-rich countries
The Resource Governance Index evaluates four key components of resource
governance in each country: Institutional and Legal Setting; Reporting
Practices; Safeguards and Quality Controls; and Enabling Environment. Basedon its evaluation, the Index assigns a numerical score to each country anddivides them into four performance ranges, ranging from satisfactory to failing.
Out of 58 countries, only 11 were considered to have satisfactory governancearrangements. These included the three G7 countries included in the analysis:
Canada (Alberta), United Kingdom and United States (Gulf of Mexico). The
vast majority of countries examined exhibit serious shortcomings in resource
governance. The governance deficit is largest in the most resource-dependent
countries and directly affects nearly 450 million poor people. Nevertheless,there is evidence that good governance is possible even in countries where
natural resources are economically and politically important.
Source: Revenue Watch Institute (2013).

Policy guidance on effective governance for resource efficiency
Establish effective mechanisms at a sufficiently high government level to promote a
coherent approach to resource efficiency and review progress against policy objectives.
The centres of government should provide guidance to sectoral and otherministries on how to take account of resource efficiency in their decision making,e.g. project appraisal, public procurement, impact assessments.

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3. Policy guidance for resource efficiency – 83

3.4. Strengthen policy development and evaluation through better data
and analysis
3.4.1. Strengthen data collection and analysis of resource efficiency
The previous sections have drawn on existing information andanalysis to describe some of the main trends, possible future scenarios andpolicy measures for resource efficiency. However, many gaps exist. The
development of more efficient and effective policies for resource efficiency,
and the evaluation of their impact, should be supported by strengthening datacollection, more in-depth analysis, and refining future scenarios on resource
consumption. The recently adopted SDGs have reinforced the need for betterdata and indicators, as well as the importance of better co-ordination of these
efforts internationally.
At the international level, several developments have supported
internationally comparable material flow analysis, including:•

The OECD has developed a set of guidance and reference materials
for measuring material flows and resource productivity (OECD,
2008b, c, d, e);•

The System of Environmental and Economic Accounting was jointly
adopted as an international standard by the UN, the EU, FAO, theIMF, the OECD and the World Bank (United Nations et al., 2014);•

Material flow cost accounting was included in the International
Organization for Standardization’s set of environmental management
standards (International Organization for Standardization, 2011);•

A mandatory requirement was established within the EU to report onmaterial flows (European Union, 2011);•

The UNEP IRP has developed a comprehensive international material
flow database, which includes upstream resource requirements oftraded goods.2

At the national level, many OECD countries have now establishedmaterial flow accounts and are developing indicators for resource efficiency.
However, a recent review of OECD countries’ progress in strengthening theinformation base for resource efficiency concluded that many of the positive
developments stem from initiatives begun in the early 2000s (OECD, 2014a).
Progress in complying with the information-related provisions of the 2008
OECD Council Recommendation on resource productivity (OECD, 2008a,
2014a) was considered to be insufficient. Some of the most important gaps
identified were:

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84 – 3. Policy guidance for resource efficiency•

Methods for assessing the environmental impacts of resource use
throughout the entire lifecycle of materials and the products that
embody them.

•International flows of materials, in particular flows of raw materials
embodied in traded goods.

•

Flows of materials that are important to a circular economy and the
3Rs, including flows of secondary raw materials (recycled materials)
and of waste.

•

Material resource use and productivity disaggregated by industry andby type of material, and information on the processing levels of thematerials (raw materials, semi-finished products, finished products).

•

Compatible international data for key materials and substances,including critical raw materials, environmentally harmful substancesand substances that play a role in global biogeochemical cycles orraise global concerns.

•

Estimates of the size and value of future urban mines.3

Finally, at the macroeconomic level, a number of studies have developedmodels to estimate the potential benefits of a transition to the circular
economy. They generally show that substantial benefits would result.
However, a review of some of these studies considered that the results weredifficult to interpret as they had used innovative assessment methodologies
that had not been documented or reviewed before (Dubois, 2015). Most of themacroeconomic forecasts rely on assumptions regarding the costs associatedwith the transition to a more resource-efficient economy.4 At the same time,these studies generally do not take into account the benefits of avoided
resource disruption and environmental damage that resource efficiency
policies are intended to achieve. For both of these reasons, as also underlined
in UNEP (forthcoming), the results of such forecasts should be interpretedwith caution and as a lower bound estimate of resource efficiency benefits.
Improving the understanding of the economic aspects of resource
efficiency should, therefore, form part of the effort to strengthen the data andanalytical base for policy development and evaluation. Major policy proposals
should be subject to a careful assessment to ensure that the additional costs
entailed are justified by the benefits they deliver. When objectives have beenset, alternative instruments for achieving them should be assessed with aview to selecting those with the least cost (OECD, 2008f).

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3. Policy guidance for resource efficiency – 85

3.4.2. Establish objectives and targets based on good data androbust analysis
There has been much discussion about the role of targets in resource
efficiency policies. Four of the G7 countries have established economy-widetargets that, in one way or another, aim to decouple the use of resources from
economic growth: France, Germany, Italy and Japan (Annex B). However,other G7 countries, and the EU as a group, decided against such an approach.
This may have been due to doubts about the value of an aggregate, economywide approach covering all the materials in an economy, the difficulties ofdoing so, particularly for a diverse group of countries, or it may have been
due to political culture and the way that decision-making is organised indifferent governance systems.
While there are different approaches to aggregate national targets, all G7
countries have set quantitative targets at the level of waste streams (e.g. foodwaste, construction and demolition waste), or related to the amount ofrecycling or reuse to be achieved. Targets have also been set for parameterssuch as the amount of materials or toxic substances used in products.
A recent OECD report on sustainable materials management (OECD,
2012a) identified several possible reasons for setting targets for resource
efficiency:•“Providing a future vision/inspiration for action;•

Co-ordinating actions among various actors;•

Providing a mid-term constraint as a bridge or means to encourage
society to be prepared for a future expected reality;•

Providing a metric of success against which progress can bemeasured;•

As a signal of action on an issue.” (OECD, 2012a: 86)

There is broad agreement that targets should be SMART:•Specific – target a specific area for improvement;•

Measurable – quantify or at least suggest an indicator of progress;•

Assignable – specify who will do it; in some cases, “a” may also
stand for “agreement” or “achievable”;•

Realistic – identify the results that can realistically be achieved,
given available resources; “r” may also suggest “relevant”;•

Time-bound – specify when the result(s) should be achieved.

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86 – 3. Policy guidance for resource efficiency
Establishing SMART targets requires a strong data and analytical base.
If not, there is a risk that the information asymmetry that exists between
government and business, whereby the latter has more information about its
products than the former, will result in targets that simply reflect business as
usual. At the same time, inadequate analysis can result in overly ambitious
targets that are not achieved, undermining the credibility of the policy.
The economic implications of targets should be carefully assessed toensure that benefits outweigh costs. This increases with importance as thelevel of the target increases. Economic analysis can also guide prioritysetting. Targets that can be achieved at no cost, or at low cost, are the obvious
priorities for short-term action.
Establishing and achieving objectives is not solely an information issue;
it also requires a strong government commitment, active engagement of
stakeholders, and a credible review process to monitor progress and adjust
the target if needed. In Germany, for example, the economy-wide resource
productivity target has been included in a set of sustainable development
goals that are reviewed every 4 years by the Federal Statistics Office.
OECD (2012a) reviewed the various types of targets used in this policy
context and assessed their advantages and disadvantages (Table 3.5).

Table 3.5. Summary of target types and key advantages and disadvantages
Type of target Timeline Focus

Accountability

Key advantages

Key disadvantages

Hard

Short
(1-5 yrs)

ProductorMaterial

Clear and enforced Set a baseline
Measurable
Enforceable

Soft

Short toMediumProduct
SystemSomewhat clear
but flexible

Easier to achieve agreement Harder to enforce
Adaptable to new information Less accountabilityLess stringent information
Information requirements
requirements

Voluntary

Short toMediumProduct, Various, generally
Material clear but flexible
or
Product
SystemEasier to achieve agreement Harder to enforce
Adaptable to new information Less accountabilityLess stringent information
Typically based on known
requirements
opportunities
Inspires action
Flexible

Difficult to achieve agreement
Information requirements
Typically based on known
opportunities

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3. Policy guidance for resource efficiency – 87

Table 3.5. Summary of target types and key advantages and disadvantages (continued)
Type of target Timeline Focus
Strategic
Objective

Long
(10+
years)

Accountability

Country Limited
or Market

Key advantages

Key disadvantages

Easier to achieve agreement Limited accountability
Co-ordinate multiple
Difficult to measure successprogrammes
Inspires action
FlexibleCan be ambitious

Source: OECD (2012a).

Policy guidance on strengthening policy development andevaluation through better data and analysis.
Strengthen the collection of data on material flows along the lines recommended
by OECD (2014a).
Strengthen international co-operation on resource efficiency data with a view
to supporting the establishment of an effective monitoring system for achieving
the SDGs.
Strengthen the economic analysis of resource efficiency to provide further
support for the development and evaluation of policies in this area; particularattention should be given to strengthening policy evaluation, and identifying
and sharing lessons learned.
Develop more robust outlooks to assess the economic and environmental
implications of the transition to a more resource-efficient, circular economy.
Strengthen analysis of how the rebound effect can affect future scenarios.
Continue efforts to develop indicators that can help to assess the contribution ofnatural resources to economic growth and productivity, and the sustainabilityof resource use.
Deepen the analysis of the economic costs and benefits of implementing
resource efficiency policies, including the obstacles that need to be overcome.
Improve analysis of the environmental costs, and the economic benefits ofmanaging them, along value chains.
When establishing resource efficiency targets, ensure that they are SMART(specific, measurable, assignable, realistic and time-bound), that benefits outweighcosts, and that they are embedded in an effective governance system.

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3.5. Strengthen co-operation at the international level, including
among the G7
Many of the measures that are required to support the transition towards
greater resource efficiency need to be implemented by governments at thedomestic level, but action at the international level is also important. As theglobalisation of our economies continues and value chains increasingly span
across numerous jurisdictions, there is an increasing need for co-ordinatedapproaches at the international level. The G7 can play an important role in thisrespect, including by supporting businesses in their supply chain management
efforts, in addressing trade related obstacles, in using official development
assistance to support resource efficiency efforts, improving environmental
labelling and information schemes, as well as resource efficiency data andindicators more broadly.
While it is difficult for national governments to influence the way supply
chains are managed due to their limited jurisdictional competence, this canbe done more effectively at the international level. For instance, the OECD
Guidelines for Multinational Enterprises (OECD, 2011e) are recommendations
for responsible business conduct that 46 adhering governments – representing
all regions of the world and accounting for 85% of foreign direct investment– encourage their enterprises to observe wherever they operate. Within
this framework, OECD promotes responsible supply chains in a number ofindustrial sectors including the garment and footwear sector, agricultural
supply chains and the extractive sector. The work includes developing due
diligence guidance in order to promote the observance of standards of
responsible business conduct to ensure that operations do not lead to adverse
impacts and contribute to sustainable development (OECD, 2013, 2016b).
Trade and investment is another area of potential focus as international
value chains are typically connected through trade and investments in goods
and services and restrictions to trade and investments may affect the efficiency
with which resources can be used. The OECD has identified export restrictions
on raw materials as a source of friction and trade disputes among governments
and trading partners affected by them. The OECD inventory of export
restrictions on raw materials shows that more than half of the identified export
restrictions are related to metal waste and scrap (OECD, 2014b), potentiallyleading to mis-allocations of these secondary materials, a weakening of metal
scrap markets and reduced opportunities for material recovery. Similarly,
restrictions to the trade of used products have been identified to potentiallyhamper reuse and remanufacturing activities, which could play an importantrole in establishing a circular, more resource-efficient economy. Trade inenvironmental goods and services also remains subject to numerous barriers,
thereby hampering the diffusion of best available environmental technologies
and reducing the scope and scale of resource efficiency improvements globally.

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3. Policy guidance for resource efficiency – 89

Official development assistance provided by the members of theOECD Development Assistance Committee accounted for more than
USD 131 billion in 2015, and it is assumed that only a very small share of thiscurrently provides support for resource efficiency improvements (OECD,
2015l). For instance, only about 0.3% is currently related to solid waste
management (Lerpiniere et al., 2014). Significant effects could be achieved
if resource efficiency was mainstreamed into development assistance more
systematically, leading to more capacity development and technology transfer
as is currently the case.
Another area of possible attention at the international level is thatof environmental labels and information schemes (ELIS) that are
increasingly used to encourage consumers to opt for less environmentally
harmful products. Similarly, manufacturers aiming to green their supply
chains often struggle to identify the exact material composition of partsand components that they procure, linked to a lack of information along the
supply chain. The OECD dataset of environmental labels and information
schemes shows a rapid increase in their implementation, with their number
more than doubling between 2000 and 2012 (Prag et al., 2016). There areconcerns that the multiplication of these schemes could lead to consumers
and procurers finding it harder to distinguish good from bad labels; thatfirms may bear excess costs in certifying with many different labels; andthat competition may drive down the stringency of standards as different
information schemes bid for market share. They could also adversely affecttrade by modifying market access or by shifting the balance of international
competitiveness. A range of government and non-government stakeholders
have recognised that the multiplication of labelling and information schemesis happening and there could be benefits of acting at the international
level to seek harmonisation of labels and mutual recognition, leading to
the elimination of duplication and reductions of costs across international
markets.
Finally, international efforts could also benefit the development ofbetter resource efficiency data, as well as more robust economic analysisof resource efficiency. As outlined in section 3.4.1, the OECD identified anumber of data-related gaps and there are a number of issues that requireinternational co-operation to ensure the compatibility of datasets andcommon definitions and methodologies. Similarly, there is a need forco-ordinated efforts to improve economic analysis of resource efficiency,
an area that has received very little attention in research for the moment
and where internationally co-ordinated research efforts could allow to move
forward more quickly.

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90 – 3. Policy guidance for resource efficiency

Notes
1.

The Revenue Watch Institute merged with the Natural Resource Charter to form
the Natural Resource Governance Institute in 2013.

2.

This database is publicly available in UNEP Live and currently presents data
until 2010, with plans to update it. The database was used in UNEP (2015) reportand is will be at the core of a forthcoming UNEP IRP report on material flow
analysis.

3.

The idea of “urban mines” refers to anthropogenic (rather than geological) stocks
of materials (OECD, 2015a). Such stocks may be either used in the economy ornot, but in theory they are accessible. Analysis of this issue has mostly focusedon metals which in principle can be recycled continuously.

4.

One such common assumption is costless technical change.

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REFERENCES – 91

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OECD (2007b), “Improving the Environmental Performance of Public
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Environmental Expenditure Management, OECD, Paris, C(2006)84.
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Productivity, OECD, Paris, C(2004)79.
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Pearson, M. (2015), Presentation at G7 meeting, Berlin, 12-13 March 2015.
Prag, A. et al. (2016), “Multiplication of Environmental Labelling andInformation Schemes (ELIS): Implications for Environment and Trade”,
OECD Environment Working Papers, No. 106, OECD Publishing, Paris.
Revenue Watch Institute (now Natural Resource Governance Institute) (2013),
The 2013 Resource Governance Index, www.resourcegovernance.org/
resource-governance-index/report.
Schreyer, P. and C. Obst (2015), “Towards complete balance sheets in thenational accounts: the case of mineral and energy resources”, OECD
Green Growth Papers, No. 2015/02, OECD Publishing, Paris, http://dx.doi.org/10.1787/5js319256pvf-en.
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org/10.1787/5jrs8st3ngvh-en.
Smith, S. (2014), Innovative economic instruments for sustainable materials
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Sustainable Development Technology Canada (2016), website, www.sdtc.ca/en (accessed on March 20, 2016).
United Nations et al. (2014), System of Environmental and Economic
Accounting 2012 – Central Framework, UN, New York.
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Development, A/RES/70/1 https://sustainabledevelopment.un.org/post2015/transformingourworld.
UNEP (forthcoming), Report of the UNEP International Resource Panel to
the G7 on Resource Efficiency, UNEP, Paris.
UNEP (2015), 10 Key messages on climate change, UNEP, Paris, www.unep.
org/resourcepanel/Portals/50244/publications/COP21_Messages.pdf.
UNEP (2015), International Trade in Resources: A Biophysical Assessment,
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UNEP (2012), The impacts of sustainable public procurement, UNEP DTIE,
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US Environmental Protection Agency (2015), Sustainable materials
management program strategic plan 2017-22, EPA, Washington, DC.
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Environment, www.epa.gov/mercury (accessed on March 20, 2016).
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management: the road ahead, EPA, Washington, DC.
World Economic Forum (2014), Infrastructure Investment Policy Blueprint,
World Economic Forum, Geneva, http://www3.weforum.org/docs/WEF_
II_InfrastructureInvestmentPolicyBlueprint_Report_2014.pdf.
World Economic Forum, Ellen MacArthur Foundation and McKinsey &Company (2016), The New Plastics Economy – Rethinking the future ofplastics, http://www.ellenmacarthurfoundation.org/publications.
WRAP (2015), Strategies to achieve economic and environmental gains by
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Annex A. Sustainable development goals and resource efficiency – 99

Annex A
Sustainable development goals and resource efficiency
The Sustainable Development Goals (SDGs) comprise 17 goals and 169
targets. Nine goals and 17 targets are presented below that refer directly toresource efficiency or sustainable use of resources. Many others refer moreindirectly to resource efficiency.

Goal 2: End hunger, achieve food security and improved nutrition, andpromote sustainable agriculture
Target 2.4: By 2030, ensure sustainable food production systems andimplement resilient agricultural practices that increase productivity andproduction, that help maintain ecosystems, that strengthen capacity foradaptation to climate change, extreme weather, drought, flooding and otherdisasters and that progressively improve land and soil quality.

Goal 6: Ensure availability and sustainable management of water andsanitation for all
Target 6.4: By 2030, substantially increase water-use efficiency acrossall sectors and ensure sustainable withdrawals and supply of freshwaterto address water scarcity and substantially reduce the number of people
suffering from water scarcity.

Goal 7: Ensure access to affordable, sustainable and modern energy
for allTarget 7.3: By 2030, double the global rate of improvement in energy
efficiency.

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Goal 8: Promote sustained, inclusive and sustainable economic growth,
full and productive employment and decent work for all
Target 8.4: Improve progressively, through 2030, global resource efficiency
in consumption and production and endeavour to decouple economic growthfrom environmental degradation, in accordance with the 10-year frameworkof programmes on sustainable consumption and production, with developed
countries taking the lead.

Goal 9: Build resilient infrastructure, promote inclusive andsustainable industrialization and foster innovation
Target 9.4: By 2030, upgrade infrastructure and retrofit industries tomake them sustainable, with increased resource-use efficiency and greater
adoption of clean and environmentally sound technologies and industrial
processes, with all countries taking action in accordance with their respective
capabilities.

Goal 11: Make cities and human settlements inclusive, safe, resilientand sustainable
Target 11b: By 2020, substantially increase the number of cities andhuman settlements adopting and implementing integrated policies and plans
towards inclusion, resource efficiency, mitigation and adaptation to climatechange, resilience to disasters, and develop and implement, in line with the
Sendai Framework for Disaster Risk Reduction 2015-30, holistic disaster risk
management at all levels.

Goal 12: Ensure sustainable production and consumption
Target 12.1: Implement the 10-year framework of programmes onsustainable consumption and production, all countries taking action, with
developed countries taking the lead, taking into account the development andcapabilities of developing countries
Target 12.2: By 2030, achieve the sustainable management and efficientuse of natural resources
Target 12.3: By 2030, halve per capita global food waste at the retail andconsumer levels and reduce food losses along production and supply chains,
including post-harvest losses
Target 12.5: By 2030, substantially reduce waste generation throughprevention, reduction, recycling and reuse

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Target 12.6: Encourage companies, especially large and transnational
companies, to adopt sustainable practices and to integrate sustainability
information into their reporting cycle
Target 12.7: Promote public procurement practices that are sustainable,in accordance with national policies and priorities
Target 12.8: By 2030, ensure that people everywhere have the relevant
information and awareness for sustainable development and lifestyles inharmony with nature
Target 12a: Support developing countries to strengthen their scientificand technological capacity to move towards more sustainable patterns ofconsumption and production.

Goal 14: Conserve and sustainably use the oceans, seas and marine
resources for sustainable development
Target 14.4 By 2020, effectively regulate harvesting and end overfishing,illegal, unreported and unregulated fishing and destructive fishing practices
and implement science-based management plans, in order to restore fishstocks in the shortest time feasible, at least to levels that can produce
maximum sustainable yield as determined by their biological characteristics
Target 14.6: By 2020, prohibit certain forms of fisheries subsidies which
contribute to overcapacity and overfishing, eliminate subsidies that contributeto illegal, unreported and unregulated fishing and refrain from introducing
new such subsidies, recognising that appropriate and effective special anddifferential treatment for developing and least developed countries should
be an integral part of the World Trade Organization fisheries subsidies
negotiation.

Goal 15: Protect, restore and promote sustainable use of terrestrial
ecosystems, sustainably manage forests, combat desertification, andhalt and reverse land degradation and halt biodiversity loss
Target 15.1: By 2020, ensure the conservation, restoration and sustainable
use of terrestrial and inland freshwater ecosystems and their services, inparticular forests, wetlands, mountains and drylands, in line with obligations
under international agreements.

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Annex B
A snap-shot of G7 countries and EU initiatives on
resource efficiency

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CanadaNational policy framework
2009 Canada-wide EPR plan.
2015 Minerals and metals policy.

Resources covered
Materials and natural resources, and their linkages.

Range of activities covered
A range of activities across the lifecycle of products: extraction,
production, consumption, disposal.

Targets
No national level target.

Priorities
90 product groups are covered by EPR schemes. The EPR plan commits
jurisdictions to implement programmes in the following areas:•by 2015: packaging; printed materials; mercury-containing lamps;
electronics; household hazardous and special waste; automotive
products;•

by 2017: construction and demolition waste; furniture; textiles andcarpets; appliances; ozone depleting substances.

Main programmes
In addition to the EPR programmes, governments enter into partnerships
with business and other stakeholders to promote resource efficiency indifferent sectors, including through support for R&D and investment.
Initiatives have been implemented on green mining, sustainable development
technology, pulp and paper, forestry, and oil sands.

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FranceNational policy framework
2015 Energy Transition for Green Growth Act recognised the circular
economy as one of five pillars of sustainable development. The transition toa circular economy is one of the core objectives of the Act.

Resources covered
Raw materials including biomass.

Range of activities covered
Various measures adopted to improve resource efficiency along the value
chain targeting:•the design of products, including through extended producer
responsibility (EPR) schemes;•sustainable production;•

sustainable consumption;•

waste management;•

territorial development;•international (trans-frontier waste).

Targets
By 2030, increase by 30% the ratio of GDP to domestic consumption of
raw materials (compared with 2010); and reduce per capita consumption of
raw materials nationwide.
By 2020, reduce the volume of non-recyclable manufactured products on
the market by 50%.
A range of quantitative targets for waste management were established.

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Priorities
Specific measures target waste streams such as food waste and plastics.
In addition to those identified in EU directives, EPR schemes apply to otherwaste streams such as textiles, furniture, graphic paper and medical waste.
A national stakeholder working group recommended the adoptionof a resource efficiency strategy focused on a limited number of priority
resources.
Several sectors are also prioritised including sustainable building, cleantransport, renewable energy and nuclear safety.

Some of the main programmes
A national circular economy strategy is to be prepared every 5 years.
National Council of Industry supports the development of industry sectorplans, including innovation and financial support.
Information to consumers.
Green public procurement.
EPR schemes.
71 innovation clusters established to promote public-private co-operation
in R&D and training.

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Germany
National policy framework
2012 Resource Efficiency Programme (ProgRESS).
2002 National Sustainability Strategy.
2010 Raw Materials Strategy.

Resources covered
ProgRESS covers biotic resources not used for energy production (ores,
industrial minerals, construction minerals) and the use of biotic resources
as materials. It does not include natural resources such as water, air, land,soil, biodiversity and ecosystems which are covered by other government
programmes.

Range of activities covered
ProgRESS aims to cover the entire value chain, from the extraction of
resources through to final disposal. International co-operation with emerging
and developing countries is an important part of the programme.

Targets
A target was established in the 2002 National Sustainability Strategy to
double resource productivity by 2020 using 1994 as a base year. Progress ismonitored every 4 years by the National Statistical Office.

Priorities
In addition to those identified in EU directives, EPR schemes apply toother waste streams such as biowaste.
ProgRESS identifies 7 examples of sectors where actions have beentaken: bulk metals; rare earths and critical metals; planning, construction andbuildings; photovoltaic systems; electromobility; IT; and chemicals.
Four examples of material flows are provided: phosphorous, indium, goldand plastics.

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Some of the main programmes
Raw materials strategy.
Support to the manufacturing sector, particularly small- and mediumsized enterprises.
Information to consumers.
Green public procurement.
EPR schemes.
Support for R&D and innovation.
International: trans-frontier waste; transfer of know-how and technology
through development co-operation programmes.

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Italy
National policy framework
The sustainable development strategy and the national plan for sustainableproduction and consumption provide the overall policy framework forresource efficiency. The development of a Green Act is under consideration
which could provide additional support for resource efficiency.

Resources covered
Energy, water.

Range of activities covered
The main programmes focus on renewable energy and energy efficiency;
water management; and waste management, including EPR.

Targets
Several quantitative targets have been set:
• Reduction of Total Material Requirement by 25% by 2010, 75% by2030 and by 90% by 2050;• At least 30% of the public purchases to match ecological requirements;• 30-40% of durable goods with reduced energy consumption.

Priorities
Plastics, construction materials, aggregates.
In addition to those identified in EU directives, EPR schemes apply toother waste streams including agricultural film.

Main programmes
Energy efficiency.
Renewable energy.

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EPR schemes.
Green public procurement.
Trans-frontier waste.

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Japan
National policy framework
2001 Fundamental law for a sound material-cycle society: this is
supported by laws on waste management and efficient use of resources, aswell as regulations applying to specific waste streams and resources.
2000 Green purchasing act.

Resources covered
Materials used in the economy.

Range of activities covered
Comprehensive range of activities throughout the product lifecycle. Priority
also given to international co-operation, particularly in the Asian region.

Targets (to be achieved by 2015 using 2000 as the base year)•

Resource productivity: 60% improvement; equivalent to JPY 420 000
per ton.

•Cyclical rate (the proportion of the total material input to the economy
that remains in productive use): 40-50% increase; equivalent to about
14-15% of the total material input.

•

Final disposal volume: 60% reduction; equivalent to 23 million tons.

Priorities
As specified by the Cabinet in the 3rd Fundamental law for a soundmaterial-cycle society: promoting 2Rs (reduce and reuse); recovery andrecycling of useful metals; recycled waste and biomass to energy; integrationof initiatives for low carbon society, harmony with nature and upgrading
local recycling networks; co-operation and technology transfer, particularlyin the Asian region; treatment and reuse of waste from the Great East Japan
earthquake; safe treatment of radioactive-contaminated waste from theearthquake.

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Main programmes
As defined by the main bodies of legislation: containers and packaging;home appliances; construction materials; food waste; end-of-life vehicles;
small home appliances; and green purchasing.

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United Kingdom
National policy framework
2005 Sustainable Development Strategy identified four priorities
including sustainable production and consumption, and natural resources.
2011 government vision on mainstreaming sustainable development.
2012 document, “Enabling the transition to a green economy” and a
Resource Security Action Plan.

Resources covered
Renewable and non-renewable resources.

Range of activities covered
All stages along the value chain have been addressed, from resource
extraction through production, consumption and final disposal. Provision has
been made for international co-operation.

Objectives/targets
No overall national target has been set, but targets have been set for specificwaste streams.

Priorities
Food waste, textiles, electrical and electronic equipment.

Main programmes
Resource security action plan.
Programme to promote resource efficiency partnerships (WRAP).
Green procurement.
EPR.
Research and innovation.
Industrial symbiosis (proposal for a G7 initiative).

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United States
National policy framework
2002 Beyond RCRA: waste and materials management in 2020.
2009 Sustainable materials management: the road ahead.
2017-22 SMM Strategic Plan.

Resources covered
Main focus on materials used in the economy.

Range of activities covered
Full lifecycle approach.

Objectives/targets
National objective focuses on tracking and reducing the overall amountof materials disposed, which would encompass activities targeting source
reduction, reuse, recycling and prevention. National target: by 2030, reduceby 50% food loss and waste in retail and consumer sectors, as well as theamount of food ultimately disposed of in landfill.

Priorities
Sustainable materials management (SMM) seeks most productive use ofmaterials across their lifecycle, minimising amount of materials used and all
associated impacts. SMM approaches can potentially fill the gap in the current
Intended Nationally Determined Contributions. Using lifecycle analysis, 38
materials, goods and services with significant environmental impacts wereidentified. These included materials, goods and services from the following
sectors: food, textiles, non-renewable organics, metals and construction.

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Main programmes
In the 2017-22 period, the main priorities will be: built environment,sustainable food management, and sustainable packaging. Work will also be
carried out sustainable electronics management, international co-operation on
lifecycle analysis and SMM, and overall measurement efforts.

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European Union
National policy framework
Europe 2020 strategy for smart, sustainable and inclusive growth.
7th Environmental Action Plan (2013-20), with the thematic objective toturn the EU into a resource-efficient, low-carbon competitive economy.
2015 EU Action Plan for a Circular Economy presents an ambitious andcomprehensive range of initiatives, including legislative changes.

Resources covered
Comprehensive coverage of renewable and non-renewable resources.

Range of activities covered
Comprehensive range of activities throughout the product lifecycle:
sourcing, design, production, consumption, “closing the loop,” disposal,
supporting markets for secondary materials. International activities will beoriented to achieving the resource efficiency components of the SDGs.

Objectives/targets
An overall resource efficiency target has not been established. Several
waste targets have been identified:•

a common EU target for recycling 65% of municipal waste by 2030;•

a common EU target for recycling 75% of packaging waste by 2030;•

material-specific targets for different packaging materials;•

a binding target to reduce landfill to 10% by 2030.

Priorities
Plastics (including marine litter); food waste; critical raw materials;
construction and demolition materials; biomass and bio-based products.

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Main programmes
An ambitious range of programmes covering all stages of the lifecycle
and priority resources identified. They will be supported by cross-cutting
programmes on innovation, finance and monitoring through indicators.

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Annex C. OECD policy guidance on extended producer responsibility – 119

Annex COECD policy guidance on extended producer responsibility

2001 guidance (OECD, 2001)
The 2001 OECD Guidance Manual (OECD, 2001) is more than 150
pages, divided into 8 chapters and with 15 annexes. It includes 6 checklists
for policy makers as well as the following set of guiding principles forthe design and development of EPR policies and programmes. The main
recommendations include:•

EPR policies and programmes should be designed to provide
producers with incentives to incorporate changes upstream at thedesign phase in order to be more environmentally sound.

•

Policies should stimulate innovation by focusing more on results
than on the means of achieving them, thus allowing producers
flexibility with regard to implementation.

•

Policies should take into consideration a lifecycle approach so thatenvironmental impacts are not increased or transferred somewhere
else in the product chain.

•

Responsibilities should be well defined and not be diluted by theexistence of multiple actors across the product chain.

•

The unique characteristics and properties of a product, productcategory or waste stream should be factored into policy design. Given
the diversity of products and their different characteristics, one typeof programme or measure is not applicable to all products, productcategories or waste streams.

•

The policy instrument(s) selected should be flexible and chosen ona case-by-case basis, rather than setting one policy for all products
and waste streams.

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Extension of producer responsibilities for the product’s lifecycle
should be done in a way to increase communication between actors
across the product chain.

•

A communication strategy should be devised to inform all the actors
in the product chain, including consumers, about the programme andto enlist their support and co-operation.

•

To enhance a programme’s acceptability and effectiveness, aconsultation of stakeholders should be conducted to discuss goals,
objectives, costs and benefits.

•

Local governments should be consulted in order to clarify their roleand to obtain their advice concerning the programme’s operation.

•

Both voluntary and mandatory approaches should be consideredwith a view on how to best meet national environmental priorities,
goals and objectives.

•

A comprehensive analysis of the EPR programme should be made(e.g. which products, product categories and waste streams areappropriate for EPR, whether historical products should be included,
and the roles of the actors in the product chain).

•

EPR programmes should undergo periodic evaluations to ensure thatthey are functioning appropriately and are flexible enough to respondto these evaluations.

•

Programmes should be designed and implemented in a way thatenvironmental benefits are obtained while domestic economic
dislocations are avoided.

•

The process of developing and implementing EPR policy andprogrammes should be based on transparency.

2015 guidance (OECD, forthcoming a)
On the design and governance of EPRs•

Fully implement the recommendations on the good governance of
EPR systems in the 2001 OECD Guidance Document, particularly
concerning the need to establish clear objectives, to specify the roles
and responsibilities of stakeholders, and to establish platforms for
dialogue among stakeholders.

•

Periodically review the targets of EPR policies and adjust theirambition in line with waste management and resource productivity

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policy objectives; take account of the costs and benefits of proposed
targets and establish them in consultation with stakeholders.
•Consider extending the scope of EPRs, particularly to cover moreenvironmentally sensitive end-of-life products which are inappropriate
for landfill disposal or incineration.

•

In mandatory systems, governments should establish consistent andcredible means for enforcing EPR obligations, including registers of
producers, accreditation of PROs and appropriate sanctions.

•

Governments and industry should co-operate to establish effective,
adequately-resourced monitoring systems; in some circumstances,
they may consider establishing an independent monitoring bodyfinanced by a tax on PROs.

•

Mandatory EPR systems should be required to report regularly on thetechnical and financial aspects of their operations; their performance
should be regularly audited, preferably independently; to the extent
possible, definitions and reporting modalities for EPR systems
operating in the same jurisdiction should be harmonised, and ameans for checking the quality and comparability of data established;voluntary EPR systems should be encouraged to be as transparent as
possible and periodically to undergo independent evaluations of theiroperations.

•

The sharing of experience among EPRs, nationally and internationally,should be encouraged with a view to improving collection and recycling
rates, disseminating information on eco-design, and enhancing the costeffectiveness of EPR systems.

On financing, free-riding and orphan products•

In mandatory systems, governments should establish consistent andcredible means for enforcing EPR obligations, including registers of
producers, accreditation of PROs and appropriate sanctions.

•

Governments and industry should co-operate to establish effective,
adequately-resourced monitoring systems; in some circumstances,
they may consider establishing an independent monitoring bodyfinanced by a tax on PROs.

•

The cost of end-of-life treatment ideally should be internalised into
the price of the product and paid for by consumers; Producers should
be responsible for financing the end-of-life costs of their products;

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Free-riding should be addressed through peer pressure and strict
enforcement with suitable sanctions.

•Orphan products should be addressed by opting for an approach thatis adapted to the specific nature of the challenge involved, including:current producers covering their own costs as well as those of former
producers; ADF; fees paid at purchase; last owner pays; and insurance;•

Governments should exchange experience on, and identify ways inwhich EPR systems can be financed in a sustainable manner; thisshould include analysis of how risks such as price volatility, leakage,etc.
could be managed.

To further promote the integration of competition policy and EPRs•

Competition impact assessments should be integrated into thedesign of EPR policies, taking account of the 2009 OECD Council
Recommendation on Competition Assessment (2009), and the 2005
Council Recommendation on Regulatory Policy and Governance.

•

Competition authorities periodically should issue easily-accessible
guidance or information regarding their consideration of EPRs.

•

Agreements to establish a PRO should be assessed by competition
authorities within the jurisdiction’s general framework for assessing
horizontal agreements. Contracts between service providers
and PROs should be assessed on a case-by-case basis within thejurisdictions general framework for assessing vertical agreements.

•

Competition authorities should not distinguish between voluntaryand government-sponsored agreements.

•

EPR schemes should allow single PROs only when it can bedemonstrated that the benefits (for example the capacity to manage
the waste would not otherwise be built) outweigh the costs of lesscompetition; the operations of monopoly PROs should be kept underreview and competition encouraged when the benefits of single PROsno longer outweigh their costs.

•

Any restrictions on competition intended to support the introductionof the EPR (such as allowing a PRO exclusive rights to a market)
should be phased out as soon as possible.

•

Services such as waste collection, sorting, and treatment, should be
procured by transparent, non-discriminatory and competitive tenders.
Factors that should be taken into account in this regard include
providing for sufficient but not excessive contract duration, sufficient

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scale to provide incentives for investment, and sufficient scale andlevel of aggregation to facilitate bidding by all qualified firms.
•

Tenders should not oblige collectors and recyclers to contract exclusively
with one PRO. Other possible distortions, such as those that may result
from bundling collection together with sorting and processing, should
also be assessed.

•

Post-consumer materials should not be allocated in a way that raises
barriers to entry or expansion in the product market; for example
when material is allocated at below market prices according tohistorical product market share.

•PROs, national registers or other clearinghouses should be designed
so as to prevent the sharing of confidential market information that
could result in anti-competitive behaviour.

On incentives for design for environment•

Ensure the full costs of end-of-life management are covered byproducer fees in order to maximise design-for-environment incentives.

•

Variable rather than fixed producer fees should be applied in collective
schemes where this is feasible.

•

Consider the use of innovative approaches such as modulated fees(e.g. according to content of hazardous substances) or the use of
new technology that may allow to link fees with end-of-life costs for
specific products and improve cost allocation among producers;•

Enhance information flows from downstream sectors and users to
manufacturers with a view to enhancing design for environment.

•

PROs should support R&D efforts intended to improve the ecodesign of their products by sharing their experience and, when costeffective, by providing financial support.

•

International harmonisation of the design of globally-traded products
should be encouraged with a view to improving their eco-design.

For integrating informal workers in EPRs in emerging anddeveloping economies•

The role that informal recyclers play should be recognised: in many
emerging economies, they are responsible for most of the materials
that are captured, processed and sold in the recycling value chain.

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124 – Annex C. OECD policy guidance on extended producer responsibility•

Cities in emerging economies should consider how they could bestdraw on the knowledge of waste pickers and junk shops; they areoften the only stakeholders with practical experience, knowledge tomaximise recycling under local market conditions, and incentive toadapt quickly to new value chains and market opportunities.

•

Informal recyclers should be invited to contribute their experience andexpertise in all relevant public decision making processes. They should
be engaged in the design, monitoring and evaluation of recycling andvalorisation systems, as well as the definition of quality standards.

•

Producers, city authorities and informal recyclers should work
together (experiment) to strengthen, or introduce, upstream separationof recyclables, organics and residuals at the level of businesses andhouseholds. Upstream separation provides important support for EPR
systems. Downstream activities such as dismantling and recycling
are potentially more problematic and authorities need to enforce
environmental standards in such operations.

•Public authorities should work with informal recyclers to collect dataon waste generation and recycling rates. It should not be assumed thatno recycling is taking place.

•

The insights and ambitions of informal recyclers should be combinedwith international good practice approaches for integrating informal
workers into formal waste management systems, and take fullaccount of relevant health and safety, social protection and financial
considerations.

•

EPR systems in emerging economies should avoid becoming involvedin the recycling of materials where private value chains are likely towork well. EPR systems provide more opportunities for stakeholders,
including informal recyclers, when they address market failures,
including: environmentally sensitive waste streams, low-valuematerials, recyclables difficult to dismantle, or recycling in areas where
there are few value chain buyers within reasonable transport distance.

•

Priority should be given to developing business partnerships withinformal, and micro and small, recycling enterprises over Public Private
Partnership approaches government more than the host community.

•

In developing EPRs, engage local authorities, municipal associations,
national governments, regional economic communities, and bilateraland multi-lateral institutions; evaluate, disseminate, and use goodpractices of partnerships involving informal recyclers to informpublic policy and legislation; and use these partnerships and activities
to promote recognition of the informal recycling sector.

POLICY GUIDANCE ON RESOURCE EFFICIENCY © OECD 2016

ORGANISATION FOR ECONOMIC CO-OPERATION
AND DEVELOPMENTThe OECD is a unique forum where governments work together to address the economic,
social and environmental challenges of globalisation. The OECD is also at the forefront ofefforts to understand and to help governments respond to new developments and concerns,
such as corporate governance, the information economy and the challenges of an ageing
population. The Organisation provides a setting where governments can compare policy
experiences, seek answers to common problems, identify good practice and work to coordinate domestic and international policies.
The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland,Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway,
Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, theUnited Kingdom and the United States. The European Union takes part in the work of theOECD.
OECD Publishing disseminates widely the results of the Organisation’s statistics
gathering and research on economic, social and environmental issues, as well as theconventions, guidelines and standards agreed by its members.

OECD PUBLISHING, 2, rue André-Pascal, 75775 PARIS CEDEX 16(97 2016 08 1 P) ISBN 978-92-64-25733-7 – 2016

Policy Guidance on Resource Efficiency
This report responds to the request by G7 Leaders at the Schloss Elmau Summit
in June 2015, for the OECD to develop policy guidance on resource efficiency.
Establishing a resource efficient economy is a major environmental, development andmacroeconomic challenge today. Improving resource efficiency by putting
in place policies that implement the principles of reduce, reuse, recycle (the 3Rs)
is crucial to improving resource use, security and competitiveness while diminishing theassociated environmental impacts.
Contents
Introduction
Trends and outlook
Policy guidance for resource efficiency
References
Annex A. Sustainable development goals and resource efficiency
Annex B. A snap-shot of G7 countries and EU initiatives on resource efficiency
Annex C. OECD policy guidance on extended producer responsibility

Consult this publication on line at http://dx.doi.org/10.1787/9789264257344-en.
This work is published on the OECD iLibrary, which gathers all OECD books, periodicals andstatistical databases.
Visit www.oecd-ilibrary.org for more information.

isbn 978-92-64-25733-7
97 2016 08 1 P