COMMISSION STAFF WORKING DOCUMENT Analysis of an EU target for Resource Productivity Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a circular economy: a zero waste programme for Europe
Date: 2014-07-02
Institutions: European Commission
Subjects: EU growth strategy, clean technology, competitiveness, economic consequence, economic growth, economic reform, management of resources, natural resources, productivity, raw material, renewable energy, structural adjustment, sustainable development, waste disposal, waste recycling













EUR-Lex - 52014SC0211 - EN











|



52014SC0211

COMMISSION STAFF WORKING DOCUMENT Analysis of an EU target for Resource Productivity Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Towards a circular economy: a zero waste programme for Europe /* SWD/2014/0211 final */









Contents
1............ Introduction. 3
2............ The policy context 3
3............ A target for resource
efficiency. 5
3.1......... The benefits of a
target 5
3.2......... Criteria for choosing a
target 5
3.3......... The choice of an
indicator for a target 5
4............ Trends for Resource
Productivity. 6
4.1......... Past trends. 6
4.2......... Future trends. 8
4.3......... Scenarios for Resource
Productivity. 9
5............ Implementing a
target 9
6............ Improving resource
efficiency: policies and impacts. 10
6.1......... The economic context 10
6.2......... Sector and issue
specific analysis of resource efficiency potential 11
6.3......... Macroeconomic analysis
of resource efficiency potential 13
7............ Conclusions. 15
Annex 1 – Three layer approach of indicators. 17
Annex 2 – Comparisons of Past Trends in RMC and DMC.. 19
Annex 3 – Projections of future resource productivity. 20
Annex 4 – The statistical context 26
Annex 5 – Overview of the modelling. 27
1            Introduction
We depend on
natural resources — metals, minerals, fuels, water, land, timber, fertile soil,
clean air and biodiversity — for our survival. They all constitute vital inputs
that keep our economy functioning. Resource efficiency means optimising the use
of these resources with a view to ensuring that we remain within planetary
boundaries in the long term.  
Becoming more
resource efficient will contribute to delivering the Europe 2020 objective of
sustainable growth by boosting Europe's productivity and so creating growth and
jobs. 
Resource
savings will come from wasting less, and using what is available better. They
will be based on new ways to reduce inputs, minimise waste, improve management
of resource stocks, change consumption patterns, optimise production processes,
management and business methods, and improve logistics. This can lead to the development
of innovative products and services and so provide a competitive edge to our
economy. 
Resource
efficiency covers such a wide range of resources, with the materials that are
normally measured (minerals, fossil fuels, metals) being a proxy for the wider
set. Smarter use of these resources will nearly always translate into fewer
greenhouse gas emissions, less pollution and a better environment.   
As announced in
the Roadmap to a Resource Efficient Europe, the Commission has engaged with
stakeholders to develop indicators and potential resource efficiency targets.
Results of this work are outlined here, without pre-judging the outcome of the
mid-term review of the Europe 2020 strategy. This document discusses the
potential for a target on Resource Productivity to
measure progress in making Europe more resource efficient. Setting such
a target in the context of the European Semester would help guide action at the
European and national levels, allow progress to be monitored, and encourage the
sharing of best practice. 
As the 7th
Environment Action Programme[1]
says "A long-term and predictable policy framework … will help to
stimulate the level of investments and action needed to fully develop markets
for greener technologies and promote sustainable business solutions. Resource
efficiency indicators and targets underpinned by robust data collection would
provide the necessary guidance for public and private decision-makers in
transforming the economy. Once agreed at Union level, such indicators and targets
will become an integral part of the 7th EAP." 
2            The policy context
Europe 2020 is the EU's growth strategy setting out how the EU can
become a smart, sustainable and inclusive economy. Concretely, the Union has set five ambitious objectives - on
employment, innovation, education, social inclusion and climate/energy - to be
reached by 2020. Each Member State has adopted its own national targets in each
of these areas, so there is a clear linkage between targets set at the level of
the European Union and then national targets. Concrete actions at EU and
national levels underpin the strategy, and deliver the targets.
The resource-efficient Europe flagship initiative is part of the Europe 2020 Strategy. It supports the shift towards
sustainable growth via a resource-efficient, low-carbon economy. The "Roadmap to a Resource Efficient
Europe" (hereafter "the Roadmap")[2] is one of the main building blocks of the flagship initiative, and
outlined the structural and technological changes needed by 2050, including milestones
to be reached by 2020.
The Roadmap also committed the European Commission
to discussing and assessing the appropriateness of resource efficiency
indicators and targets. To start the debate, the Commission conducted a public
consultation on the options for resource efficiency indicators[3].
A European Resource Efficiency Platform (hereafter
"the Platform" or "EREP")[4] also provided high-level guidance to the
European Commission, Members States and private actors on the transition to a
more resource-efficient economy. The Platform specifically recommended setting
up indicators and targets as guiding tools for economic policy-making in view
of the mid-term review of the Europe 2020
Strategy that will start in 2014. The members include European Vice-President Tajani,
Commissioners Potočnik, Hedegaard, Šemeta and Rehn, members of the
European Parliament (MEPs), national environment ministers, selected business
CEOs, academia and representatives of NGOs and civil society.
The Platform stated in June 2013 that:
"Targets are essential for
guiding action, for making sure that we are moving in the right direction,
while indicators are needed to measure progress. The EU should set ambitious,
credible targets as soon as possible to improve the overall resource productivity
of the EU economy, with a view to achieving the EU 2020 objective of overall
decoupling of resource use and its environmental impacts from economic growth.
Indicators to measure progress towards these targets should, in addition to
carbon, include three key resources: materials (material productivity, as
measured by GDP/Raw Material Consumption), water and land. This approach will
be further refined and accompanied by the Platform with a view to being
integrated into the Europe 2020 Strategy and monitored in the European Semester
process."
The Platform subsequently endorsed a target in its
final recommendations of March 2014:
"We call upon the EU
to set a target for a substantially increased decoupling of growth from the use
of natural resources, in order to improve competitiveness and growth as well as
quality of life. The target should aim to secure at least a doubling of
resource productivity as compared with the pre-crisis trend. This would be
equivalent to an increase of well over 30% by 2030.
We therefore
call upon the European Commission to make a proposal for a headline target as
soon as possible."
3            A
target for resource efficiency
3.1         The
benefits of a target
A target (even non-binding) is useful in generating
political attention and in developing policies.
Setting a target for Resource Productivity could
help promote an approach which will cut costs for industry and society as a
whole. It could spur business and our societies as a whole to make a better use
of natural resources. Resource Productivity is no different from any other type
of productivity (labour, infrastructure etc.) in that it would contribute to
growth and jobs although Resource Productivity would also contribute to a
better environment. 
A target will allow decision makers to assess
whether potential improvements in resource efficiency are being enjoyed,
allowing for costs to the economy to be cut, generating growth and jobs at the
same time as reducing pressure on the environment. 
At the same time, the inclusion of a target in the
European Semester process would ensure proper monitoring, and sharing of good
practice as to which resource efficiency policies are most beneficial. 
3.2         Criteria
for choosing a target
In order to be understandable for the
general public and politically relevant then the target needs to relate to
simple concepts, and should be: 
•           supported
by data (therefore measurable in a reliable way);
•           set
at an appropriate level (i.e. achievable); 
•           cover
a broad set of resources;
•           applicable
where possible to different levels of economic activities (EU, Member States, sectors, firms, products);
•           avoiding
negative side effects (such as showing a positive trend simply because
environmental impacts are shifted outside the EU).
3.3         The
choice of an indicator for a target
Resource Productivity, defined as the
unit of GDP produced with one unit of Raw Material Consumption (RMC) is the
indicator which satisfies best those requirements.[5]
Including GDP in the target ensures that the link is made between resource use
and economic growth. RMC is the most relevant indicator upon which to base a
Resource Productivity target, as it touches upon every sector of the economy
and covers a wide range of resources. 
There are some limitations to the
measure for Resource Productivity: for example, RMC does not include other
resources such as land and water. This is why Resource Productivity is
complemented by a second tier dashboard of complementary macro indicators on
land, water and carbon.
Moreover,
RMC is an aggregated indicator using the sum of the weights for the different
resources covered. This aggregation limits its suitability for deciding on the
appropriateness of specific policies as it does not differentiate between the
economic and environmental impacts of the resources it covers. However, there
is a broad link between the indicator and both environmental and economic
impacts. Moreover, the indicator can monitor the move to the circular economy as
increased recycling will lead to less primary demand, and so reduced RMC. 
In terms of the choice of the indicator,
the consultation process has shown a broad consensus that Raw Material
Consumption (RMC) is most appropriate because it best takes account of the
resource use outside Europe, whilst Direct Material Consumption (DMC) - although
more directly obtained from Material Flows accounts - ignores the international
dimension of European material consumption. Using RMC in the Resource
Productivity formula therefore fulfils two imperatives:
·        
It
allows setting the European economy in the wider context of planetary
boundaries;
·        
It
favours production in Europe where industry is more resource efficient than in
developing countries.
·        
Whilst
the indicator is weight-based, it reflects environmental impacts reasonably
well. 
4            Trends
for Resource Productivity
4.1         Past
trends
Figure 1 shows a steady increase of RMC
between 2001 and 2007 with a total increase of 8%. This upward trend ended with
the recession and total RMC dropped by 11% over the following few years. In
2010 there are signs of a recovery as total RMC begins to pick up. Broadly
speaking, RMC tends to increase during periods of economic growth but at a
slower pace than GDP growth. 

Figure 1: Evolution of GDP, RMC and Resource Productivity
(RP) in the EU between 2001 and 2011
Non-metallic minerals (construction
materials) showed a significant increase of 19% between 2002 and 2007, followed
by a decrease of 23% between 2008 and 2010 during the economic crisis. The RMC
of biomass, metal ores and fossil energy resources remained relatively stable
over the same period (Figure 2).
As well as showing RMC, Table 1
also shows the change in GDP and hence Resource Productivity (GDP/RMC) over
time. 
Figure 2: Evolution of EU RMC (billions of tonnes RME) between 2001
and 2011
Before the economic crisis the
trend rate for improvement in Resource Productivity was around 1.2% per annum.
During this period, the construction sector in particular expanded quickly
leading to increased use of construction materials: this means that the period
before the crisis was unusual, and during this period in the business cycle a
downwards pressure was exerted on Resource Productivity. During the crisis the
construction sector was hit hard, resulting in a significant reduction in use
of low value non-metallic minerals: again, the period during the crisis is
exceptional.  
The most appropriate time period
for identifying the trend rate of improvement for Resource Productivity is to
take as full a business cycle as possible. Using all of the available data from
2001-11, the longer term trend for improvement in Resource Productivity is 1.9%
per annum.[6]
Looking at the period before the
crisis, there was partial decoupling of material consumption from economic
growth: including the period of the crisis there was absolute decoupling
between 2001 and 2011. 
On a per person basis, the resource
consumption of Europe is increasing: from 16.2 tonnes per person in 2001 to
17.2 tonnes per person in 2008. Although per person consumption then fell back
as the economy shrank, it began to grow again with the economic recovery.
Table 1: Composition
changes for Resource Productivity, between 2001 and 2011
   || Average annual change during period 2001-2011 || Absolute change during period 2001-2011 
 RMC || -0.5% || -5% 
 GDP || 1.3% || 14% 
 Resource productivity (GDP/RMC) || 1.9% || 20% 
4.2         Future
trends
Projections of future trends (the baseline or
business as usual scenario) suggest that Resource Productivity will continue to
increase, but at a slower rate than in the past. 
Central to any estimate of how resource
consumption will evolve is the assumptions on GDP growth. GDP is forecast to
increase by around 30% between 2014 and 2030[7]. RMC is forecast to increase by around half that level, or by
around 14% by 2030. The underpinnings of this RMC projection are set out in
Annex 3, and take into account past trends, and projections for economic
growth, population changes and other drivers and a wide range of resource
specific forecasts from across the European Commission. 
The baseline projection is therefore that Resource
Productivity will have improved by around 15% by 2030 (and by 7% by 2020) at a
trend rate of 0.9% per annum. 
To sum up, under a business as usual
scenario, Resource Productivity would continue to improve because of a mixture
of technological improvements and business efficiencies driven by rising
resource prices. There would be relative decoupling in the future albeit with
Resource Productivity increasing more slowly than it did during the period
2001-2011[8] (0.9 per cent per annum compared to 1.9 per cent per annum since
2001). 
4.3         Scenarios
for Resource Productivity 
The baseline analysis shows that the rate of
improvement for Resource Productivity will decline in the future as compared to
the period 2001-2011. A target to drive policy could help increase Resource
Productivity and to keep it improving at its current rate (as measured over
2001-2011).
Figure 3 shows the projections up to 2030
based on future projections for GDP and RMC from 2014 onwards (in turn based on
projections for population growth and other factors). 
·        
The Business as Usual scenario:
improvement of Resource Productivity is forecast to be 15% between 2014 and
2030 (an improvement rate of just under 1% per annum), a slowdown from the
current improvement rate (as measured over 2001-2011).
·        
The transition scenario: If the same
annual rate of increase as over the period of 2001-2011 was to be maintained in
the future (around 2% per annum) then this would result in a 30% improvement in
Resource Productivity between 2014 and 2030. With this scenario, RMC declines
marginally over the period, so there is absolute decoupling of economic growth
from resource use. 
·        
A rapid acceleration scenario: if
the rate of improvement was to be faster than in the past then obviously a
larger gain in Resource Productivity would be managed by 2030. Figure 3 shows a
scenario based on an improvement rate of 2.5% per annum, which leads to a 40%
improvement in Resource Productivity between 2014 and 2030.
Figure 3: Historical
trend and possible scenarios for Resource Productivity (GDP/RMC) of EU between
2001 and 2030
5             Implementing a target
A limitation is that
RMC is not currently available for all European countries. Eurostat will work
closely with Member States to find a rigorous and consistent approach to
estimating RMC on the basis of the statistics collected as part of the Material
Flows accounts. In the meantime, Member States can be flexible over the
methodology they use for estimation, whilst trying to draw a clear picture on
the rate of Resource Productivity improvement and the way in which it is being
achieved. Until RMC is available at country level, DMC can be used as proxy.
For a target to be
associated with a boost to growth and jobs, then it should be achievable at no
net cost for the economy and indeed deliver cost savings. For this to happen, a
target needs to be delivered through smartly designed policies. To facilitate
this, Resource Productivity could be established within the European Semester
as a headline target for the EU. 
Member States could set
their own related targets at national level, identify the relevant policies and
report on their implementation, allowing for identification of best practice.
They might wish to set sectoral targets but there would not be any expectation
that they do so. As the EU target would be established in the European
Semester, each Member State would be monitored on its Resource Productivity
performance.
Given the numerous ways
to deliver any target, there should be complete flexibility for Member States over
what action they take. The optimal policy mix would though imply a contribution
from EU policies to complement national efforts. Clearly, meeting the target
will be easier if the right knowledge and skills are in place: for example, it
is estimated that more than 4 million workers in the construction sector need
up-skilling to meet the 2020 energy-efficiency targets.
Policies would
therefore recognise that resources vary considerably in terms of their economic
and environmental relevance. All actors should concentrate their efforts on
policies that will not just reduce the weight of resource use[9], but
also ensure that reductions are economically and environmentally as
advantageous as possible. 
The Resource
Productivity target has been explicitly designed to complement and be mutually
reinforcing with: the target to increase Europe's manufacturing base to 20% of
the economy; the legally binding waste targets, given its wider scope; and, existing
Europe 2020 targets on carbon and energy efficiency, which by themselves are
not sufficient to cover the whole domain of Resource Efficiency.[10]
Similarly, the delivery of a Resource Productivity target would be consistent
with efforts to strengthen Europe's bioeconomy. RMC includes both fossil fuels
and biomass, and so would provide a link between these different targets as
well as economic targets, and reflect efforts to meet them.
A non-binding Resource
Productivity target would be useful in generating political attention and in
stimulating specific policies. For example, the 3% research spending target has
existed for more than a decade with no suggestion that it should become binding
whilst still providing a clear objective.
6             Improving
resource efficiency: policies and impacts 
6.1         The economic context
The
EU is not self-sufficient in many resources and imports six times more
materials and resources than it exports. Access to raw materials - some of
which are considered as 'critical' - is indispensable for EU industry with at
least 30 million jobs depending on this.[11]
For some of the materials considered as critical by the EU, the dependency is
significant. 
On average, real prices
increased by more than 300% between 1998 and 2011 for resources. [12]  The
prices of commodities are expected to rise further due to the expected increase
of demand for resources, in turn driven by a growing world population and even
faster growth in the world economy.[13]

These rising prices for
resources mean that improved resource efficiency is needed to improve the
competitiveness of EU firms. Resources make up a significant part of the cost
base for business: for example, recent studies on the steel and aluminium
sectors show that raw materials make up around 30 to 40
per cent of the sectors' cost structures (not including energy costs)[14]. 
Despite the argument that increasing
commodity prices will deliver resource savings, both theoretical and empirical evidence
suggests that there are significant market failures due to externalities,
information deficits, adaptation and coordination deficits:
• Positive externalities
associated with eco-innovation that pose barriers to entrepreneurs and product
innovation,
• Wide-spread information
deficits as regards to potentials for saving material purchasing costs within
companies and across industries,
• information deficits
concerning uncertainties about future demand for new eco-innovations, including
in critical areas such as construction,
• Adaptation and
coordination deficits with regard to existing market power, path dependencies
and difficulties to finance mass market development of radical innovations.
6.2         Sector
and issue specific analysis of resource efficiency potential
Because of the
importance of resources to the economy, using resources more efficiently can
have direct impacts on growth. The analysis in this section shows the potential
for concrete actions to be taken that improve Resource Productivity and hence
the efficiency of the economy. These actions respond to the market failures that
mean that economically beneficial resource practices are not being adopted. 
The European Commission
published an overview of Member State policies in place during 2011-2012 in
areas of priority for Resource Efficiency and the Europe 2020 Strategy.[15] The
overview examined changes in resource efficiency policies for the following
policy areas: economic, fiscal and financial aspects (i.e. budgetary issues,
market-based instruments, environmentally harmful subsidies and state aids),
waste management, support to SMEs and air quality. A range of both performance
and policy approaches was found, suggesting scope for sharing of best policy
practice and for additional improvements in resource efficiency to take place. 
The "Roadmap to a Resource Efficient
Europe"[16] set out a framework for the design and implementation of future
actions. This framework recognised the scope for proven resource efficiency
policies, at the EU and national level, to be more widely adopted in a way that
would be economically and environmentally beneficial. A range of analysis and
studies show this potential:

 An
     analysis of the use of resources within businesses examined
     bottom-up industry data and case studies and found economic opportunities
     for businesses in three example sectors (Food and Drink manufacturing,
     Fabricated Metal Products, and Hospitality and Food Services). [17]
     Companies in these sectors could act in a number of ways ranging from
     better use of ecodesign, waste prevention and reuse: some measures would
     pay off almost straight away, others require up-front investment. Across
     industry, the study suggests that the net benefits for business from
     improved resource efficiency could be in the range of between 3% and 8% of
     annual turnover.
 Information
     provision programmes, such as knowledge transfer,
     industrial symbiosis, direct consulting and auditing services, training
     workshops and self-help tools and guides.
     [18] 
     These programmes by help businesses to reduce their use of resources and
     so cut their costs, and could be more systematically applied. 
 In
     the built environment, it is possible to reduce significantly
     (perhaps by up to 15%) the EU's Raw Material Consumption through a range
     of different technical measures.[19]
     This would only marginally affect GDP, and could perhaps increase it
     depending on policy design. 
 Standard
     practice in the UK shows that construction and demolition waste
     recycling could by itself replace 25% of current consumption of
     construction minerals. This figure is based on current technologies, and
     is likely to increase in future as good and best practices suggest considerably
     higher potential. Further improvements could come from reduced demand for
     construction materials (regardless of source).[20]
     Efforts to tackle this are discussed in the Communication on Sustainable
     Buildings COM(2014)445.
 Modelling
     of reducing
     food waste in the EU shows it would deliver very significant net
     economic benefits, to accompany the environmental benefits.
 In
     relation to waste management, existing EU policy has already
     reduced material consumption by between 5 and 14 per cent.[21]
     The proposals in the Circular Economy package, would save
     32 million tonnes of waste (and not necessarily of low value:
     16 million tonnes of paper/cardboard, 7.7 million tonnes of plastics, 1.9
     million tonnes of metals, and just under 7 million tonnes of glass), a saving
     of 0.4% of RMC. Full implementation of the Construction and demolition
     waste target would save an additional 1.6%, but focused on lower value
     resources. 
 In
     relation to the energy and climate package, this will lead to a
     decrease in consumption of fossil fuels. And contribution to a more than
     20% reduction in fossil fuel RMC by 2030, and a reduction of around 5% of
     total RMC from this category. The average annual
     additional investments needed over the period 2011 to 2030 to meet
     the targets are projected to amount to 38 billion Euros for the EU,
     largely compensated for by fuel savings.
 Environmental
     tax reform is both environmentally effective (it reduces
     resource consumption), and neutral or beneficial
     for the wider economy. Model-based simulations of the impact of an
     environmental tax reform in Europe that includes energy and material taxes
     of 5% of their price in 2010 and up to 15% of their price in 2020, lead to
     a 5% reduction of material consumption in 2020, in particular for
     construction minerals and ores[22].
     The analysis of potential for environmental tax reform in 12 MS[23]
     indicates that the additional tax revenue could rise to 1.62% of GDP
     (which could be used to lower labour taxes). In addition, in 2016, around
     0.41% of GDP could be saved by removing some environmentally harmful
     subsidies.

The findings above - indicating scope
for resource efficiency that can cut costs and reduce the pressure on the
environment - hold also for a number of global actions on global resources. [24] 
6.3         Macroeconomic
analysis of resource efficiency potential
Macroeconomic analysis
tells broadly the same story as the sector and issue specific analyses. Modelling suggests we could realistically reduce the total material
requirements of the EU economy by 17% and that this could boost GDP and create
additional jobs. [25]

Further
analysis was recently undertaken to specifically analyse the linkages between
RMC and the economy and the environment through looking into the evolution of
Resource Productivity.[26]
Figure 4 shows the impacts of different scenarios compared to the baseline (a
15% improvement in Resource Productivity by 2030, at an annual rate of
improvement of 0.9% per annum ie a slowdown in the annual rate of improvement
of Resource Productivity):
-       
The Business as Usual scenario:
improvement of Resource Productivity is forecast to be 15% between 2014 and
2030 (an improvement rate of just under 1% per annum), a slowdown from the
current improvement rate. In the model, this is taken as neutral and so at 0%
on the y-axis. In practice, this would deliver economic benefits but in this
context it is assumed to be the baseline against which the other scenarios are
compared.
-       
A transition scenario: a 30% improvement
in Resource Productivity by 2030, at an annual rate of improvement of 2% per
annum. This delivers an increase in GDP of 0.8% by 2030, and more than 2
million additional jobs. 
-       
More rapid acceleration scenarios:
a 40% improvement in Resource Productivity by 2030, at an annual rate of
improvement of 2.5% per annum.  In the medium term, this scenario delivers a
smaller increase in GDP than under the transition scenario. The reason why
rapid acceleration is less good for growth is that to make further
improvements, resource efficiency policies need to be put in place that have
costs for the economy. Whilst the first improvements are beneficial to the
economy, the additional steps come at a cost and in the end the net effect is
negative. 
These
model runs are based on existing evidence about the scope for resource
efficiency technical improvements at different costs, but it needs to be
recognised that there is still considerable uncertainty over the unit costs of
these improvements. Nevertheless, the sectoral and issue specific analysis
reported in Section 6.2 provides confidence in the main message of the
macroeconomic analysis in Figure 4: smart policies can deliver Resource
Productivity improvements at a faster rate than business as usual would allow,
and this would deliver additional growth and jobs.  
Figure 4:  EU GDP impacts, % difference from baseline
In
terms of the policy mix to deliver the technical improvements, an equal
contribution was assumed for the modelling between market based instruments
(such as taxes), support to business (such as a recycling or information
campaigns but also regulation) and improvements in the capital stock (such as
investment in machinery to cut down raw material consumption per unit of
production).[27]

The
benefits of the different scenarios are clearly dependent on the Business as
Usual scenario. There are very significant benefits in delivering the Business
as Usual scenario as compared to keeping the current level of Resource
Productivity. It is also the case though that the Business as Usual scenario
may be faster or slower than predicted, not least because economic growth may
be faster or slower than predicted. As for other targets, this will need to be
reviewed periodically.
Sensitivity
analysis[28]
of increasing manufacturing suggests that a shift from services to
manufacturing within the EU will have only a marginal impact on resource use as
measured by RMC, and it may be positive. This may appear surprising, as
manufacturing is considered to be resource intensive. However, one of the
explicit reasons for using RMC and not DMC was to account for resource use
outside the EU, and capture some of the hidden resource use associated with
services.   
More
generally and leaving aside the purely indicator issues, the increased demand
for resources in the future and the likely increase in their prices means that Europe's
manufacturing sector will need to become more resource efficient if it is to
maintain a competitive lead. Improvements in resource productivity will be
necessary to maintain the strength of manufacturing and facilitate the sector's
growth. It would be fully in line with the philosophy of, for example, the
European Innovation Partnership on Raw Materials as it would contribute to
reducing risks relating to the supply of raw materials. Therefore, improving resource
efficiency is coherent with meeting the goal set by the European Commission
that industry's share of GDP should be around 20% by 2020, and RMC is the best
indicator for measuring progress.  
7            Conclusions
Discussion
within the European Resource Efficiency Platform reflected a general consensus
that GDP divided by Raw Material Consumption (GDP/RMC) is currently the most
appropriate indicator on which to set a target. This is available for the EU
and already a number of Member States. Eurostat should continue working on this
indicator, also at the level of individual Member States, whilst in the
meantime Direct Material Consumption could be used as a good proxy.
Recent
trends suggest that further progress on resource efficiency is possible and can
bring economic benefits. Resource Productivity in the EU grew by 20% in the
period 2000-2011 (as measured by GDP/RMC). 
Looking
ahead, the forecasted baseline would result in an improvement of Resource
Productivity of 15% between 2014 and 2030 (an improvement rate of around 1% per
annum). If the same annual rate of increase as in the past was to be kept in
the future (around 2% per annum) as occurred over the last economic business
cycle, then this would result in a 30% improvement in Resource Productivity by
2030. The EREP endorsed this level of ambition as realistic.[29] 
Estimates
suggest that maintaining the current rate of improvement could boost GDP by
nearly 1%, and create over 2 million jobs, compared to the baseline.[30]
This would also help improve security of resource supply and bring environmental
benefits such as reductions in greenhouse gas emissions.
Certain
industries have raised concerns over the possibility of a complex web of
binding targets reaching down to the sectoral level, or that a single indicator
would be used to determine policy choices without proper consideration of the
full economic, social and environmental impacts of decisions. This aspirational
target is obviously not designed for that, but to provide the right policy
signal and to encourage Member States to establish the necessary policy
framework.  
The
Commission has launched a public consultation linked to the mid-term review of
the Europe 2020 Strategy. This review covers all targets and aspects of the
Strategy and the Semester and is seeking views on which targets should be
included in the revised strategy to be adopted by the next Commission.[31]
Resource Productivity could be considered in this context. 
A
non-binding Resource Productivity target could be set at EU level, leaving
Member States free to set their individual objectives and decide on an optimal
policy mix. A combination of national and EU policies, for example policies to
deliver a Circular Economy, would lead to meeting the target.
Policies
undertaken should not be designed to just reduce the weight of resources used,
but ensure that reductions are economically and environmentally advantageous ('no
regret' actions that make sense simply on a financial basis). This will ensure
consistency with existing targets in the Europe 2020 Strategy.
              Annex 1 – Three layer approach of indicators
Annex 6 of the "Roadmap
to a Resource Efficient Europe"[32] set
out a provisional indicator set organised in a 3 layer approach:

 One headline
  indicator,
 a dashboard of
     complementary macro indicators, and
 a set of theme
     specific indicators to measure progress towards the specific objectives
     and actions.

First layer / lead indicator: focus on resource
productivity
Measured by GDP divided by Domestic Material Consumption
(euro/tonne) the Commission proposed to continue to use 'resource
productivity', as the lead indicator.
However, even though this indicator is felt to be the most
appropriate indicator available, it still has some considerable shortcomings:

 GDP/DMC as an
     indicator takes a national production perspective, which implies that it
     is insensitive to changes in environmental pressures that occur outside
     the national borders.
 DMC measures
     resources by weight, which impedes telling the full story of resources'
     scarcity and economic value and the environmental impact of their use.

The Roadmap also indicated that a development underway
is the integration of indirect or embodied material consumption into material
flow accounts in order to reflect the life cycle or value chain perspective.
The indicator that will come out of this improvement is Raw Material
Consumption (RMC).
Second layer / dashboard: focus on resource and its
environmental impacts
The Commission chose to complement the lead indicator with
a concise dashboard of macro consumption and production indicators on
materials, water, land and carbon. This dashboard of indicators – in
conjunction with the lead indicator – has the advantage that it focuses on
clear stocks or flows of main resources. As such it can be easily understood,
measured and communicated.
Third layer: thematic indicators to monitor policy
effectiveness
To measure performance on the actions and milestones
proposed in the Roadmap the Commission proposed a wide range of thematic
indicators. Here the approach was to limit the number of indicators to one
relevant indicator per theme.
              Annex 2 – Comparisons of Past Trends in RMC and DMC 
The Figure below shows
the movements in RMC and DMC over time for the EU27. As can be seen, the trends
are broadly the same, but with some divergences. At the level of individual
Member States, it would of course be possible to have bigger divergences
between the two measures.
               
Annex 3 – Projections of
future resource productivity 
Overview
During the ten years after 2001,
Resource Productivity (RP) as measured by Gross Domestic Product / Raw Material
Consumption (GDP/RMC) increased by 19.6% from 1.27 to 1.52 €/kg (+1.8% increase
per year on average). The trend was not constant, with the fastest increase in
2008-2009 during the crisis, and a slower increase both beforehand and then
especially after between 2010 and 2011. Regarding the total RMC of the EU-28,
there was a first stable increase of 7% between 2001 and 2007 (+1.2% increase
per year on average). Then, this trend stopped because of the recession, and
the total RMC dropped by 11.1% over the next few years (which explains the
strong increase in RP between 2008 and 2010). In 2010, the effect of a recovery
can be seen in an increase of the total RMC. 
An important factor underlying
the trend is the construction sector, which represents between 33% and 37% of
EU-28 RMC over this period. The sector “Services” corresponds to the second
most important sector in terms of contribution to the EU-28 RMC (21% for the
whole period), whereas "Food, Drink and Tobacco", “Engineering”, and
“Energy” represents about 11-13%, 8-10% and 7% respectively. The other sectors
have an even lower contribution (< 5%) to the EU-28 RMC.
Thus, the general RMC trend can
be to a large extent explained by the evolution of RMC of non-metallic minerals
(primarily construction materials). Indeed, this element increased by 19.1%
between 2002 and 2007, and then decreased by 22.7% between 2008 and 2010 during
the economic crisis. Meanwhile, the RMC of biomass, metal ores, and fossil
energy resources remained relatively stable between 2002 and 2010.
The improvements in RP
manifested in a partial decoupling from economic growth will relate, at the
underlying level, to a mixture of technological improvements, efficiency driven
by rising resource prices and the effects of resource efficiency policies over
the period. 
Forward projections
Looking forward, the baseline
assumption is that these underlying trends will continue, and the analysis
below of the different categories of resources is consistent with this
hypothesis. With GDP forecast to grow at a rate of 1.6-1.9% per annum, the
baseline assumption is that RMC will increase by 14% between 2014 and 2030 (5%
between 2014 and 2020) and that RP will increase by an average of 0.85% per
annum between 2014 and 2030 (1.07% between 2014 and 2020).
   || 2014-2020 || 2020-2030 || 2014-2030 
 GDP || absolute || 11.7% || 16.9% || 30.6% 
 annual || 1.87% || 1.57% || 1.68% 
 RMC || absolute || 4.8% || 8.8% || 14% 
 annual || 0.79% || 0.85% || 0.83% 
 RP || absolute || 6.59% || 7.4% || 14.5% 
 annual || 1.11% || 0.73% || 0.86% 
Trends per category of resources:
1.     
Biomass
a.      
Past trends
 Category || RMC past trends 
 Cereals || Stable over the period 2001-2011 (+0.3%), with significant annual variations (from -16% to +34%) 
 Other food || Gradual decrease (-7%) between 2001 and 2011 
 Feed || Stable over the period 2001-2011 (+0.6%) with moderate annual variations (from -8% to +10%) 
 Bioenergy || Small category; gradual growth over the period 
 Wood || Slight change between the level in 2001 and 2011 (+2.4%); a gradual increase until 2007, followed by a drop and recovery 
 Other biomass || Stable between 2001 and 2011with moderate annual variations (from -9% to +24%) 
Biomass consumption is mainly
linked to agricultural (food, animal feed, biofuel, natural fibre production)
and forestry activities (wood products, paper and pulp products and bioenergy).

Thus, the main drivers of
biomass consumption are related to food, feed, renewable energy demand and
construction materials needs, which are themselves linked to population growth
(increase of food, energy needs, housing needs for example), consumption
behaviour (rising incomes or food trends that lead to more meat consumption,
less vegetables, an increase in the demand of individual houses) and EU policy to
increase the share of renewable energies for energy security and climate
protection reasons..
The EU-28 population increased
by 4% between 2000 and 2011. Thus, the stable trends of cereals and feed RMC
can be explained by a compensation between growing exports and changes in
diets, while the negative trend of the ‘other food’ product category can be
explained by a decrease in fruits and vegetables in diets. The increase in wood
consumption is the result of an increasing demand for paper products. The
significant increase of bioenergy is the result of EU energy policies, which
aim to increase the share of renewables in the energy mix.
b.      Future
trends
 Category || RMC future trends 
 Cereals || Modelled on the basis of the 2009-2022 projection (source: DG AGRI), assumption: between 2022 and 2030, the annual trend will be the same as between 2020 and 2022 (about 0.1% per year); overall trend for 2010-2030: +9% growth è +0.77% per year between 2010 and 2022 and 0.12% per year between 2022 and 2030. 
 Other food || Food consumption: 33% increase between 1983 and 2050 in Europe (source: Kearney, 2010). Trend of food consumption between 2010 and 2030 modelled as 10% ( about +0.5% per year), assumption: linear growth. 
 Feed || Feed consumption (driven by meat and dairy consumption): +6% in Europe between 2010 and 2030 (source: PBL, 2011). Average consumption of meat in Europe: 52 kg, and 300 kg of milk and milk products. Per-capita consumption of animal products in Europe: increased by around 50% over the 1961-2007 period (due to increased welfare and relatively lower prices), expected to continue to grow until 2030. 
 Bioenergy || Bioenergy consumption (driven by energy policies that promote the increase of renewable energy): +90% g between 2013 and 2020, i.e. 10% per year (JRC’s, 2013). Assumption: same annual trend between 2020 and 2030 è overall increase of 233% between 2010 and 2030. 
 Wood || Wood consumption (mainly driven by the construction and paper industry): +15% in Europe between 2010 and 2030, i.e. 0.7% per year (FAO, 2011). 
 Other biomass || Modelled on the straw consumption evolution: +26% between 2000 and 2020, i.e. 1.2% per year (IEEP’s, 2012). Assumption: same trend will apply annually between 2020 and 2030 è23% global increase 2010-2030. 
2.     
Metal
ores
a.       Past
trends
 Category || RMC trends 
 Ferrous ores || Gradual increase until the crisis, then strong drop (-48%), and finally solid recovery. At the end of the period in 2011, overall ferrous ores RMC decreased by 9.9% compared to 2001 due to the recession. 
 Copper || Global decrease (-7.4%) between 2001 and 2011. 
 Other non-ferrous ores || Gradual increase until 2007, then strong drop (-20%), and finally solid recovery. At the end of the period in 2011, non-ferrous ores RMC increased by 6.4% compared to 2001. 
 Bauxite and other aluminium || RMC stable between 2001 and 2011 (+0.6%) with moderate annual variations (from -7% to +7%). 
 Gold-gross ores || No reliable data. 
Metal ores consumption is strongly related to industrial and
construction activities, which are in turn strongly correlated with economic
growth as measured by GDP. The trends of copper, aluminum, ferrous and
non-ferrous ores globally increased until the crisis, then dropped and finally
recovered.
b.      Future
trends
 Category || RMC trends 
 Copper || Related to the activities of the construction sector; overall 2010-2030 trend : +29.3% (about 1.3% per year), in line with European GDP 
 Ferrous ores and Other non-ferrous ores || based on the evolution of the economic activities of the engineering sector; overall  trend : +30.4% between 2010 and 2030, i.e. about 1.34% per year 
 Bauxite and other aluminium || Driven by construction and industry: 2% per annum increase in Europe until 2030, i.e. 49% growth from 2010 to 2030 (source: JRC, 2008) 
 Gold-gross ores || Based on the evolution of GDP: 1.2% per year between 2010 and 2015, 1.5% per year between 2015 and 2020 and then +1.7% per year between 2020 and 2030 (source: EU 2012 Ageing Report), overall increase: 31% from 2010 to 2030 
3.     
Non-metallic
minerals
a.       Past
trends
 Category || RMC trends 
 Sand and gravel || Increase in the pre-recession period, decrease during the recession, recovery post-recession, now 6.3% below its 2001 value. 
 Construction minerals || Increase in the pre-recession period, decrease during the recession, now 6.7% higher than in 2001. 
 Industrial minerals || Steady growth followed by a fall during the recession period (-24%, high percentage because of the small total quantity of this category); in general: quite stable compared to the larger categories (above), but general fall over the period (-19.2%). 
 Other non-metallic minerals || Steady growth followed by a fall during the recession period (-42%, high percentage because of the small total quantity of this category); in general: quite stable compared to the larger categories (above), but general fall over the period (-24.5%). 
The main activities that use non-metallic minerals are construction
and industry. In the construction sector, sand and gravel but also marble,
granite, or sandstone, are used as raw materials to produce construction
materials such as concrete. In the industry sector, these non-metallic minerals
are used in the production of paper, fertilizers or are integrated within the
chemical industry. Population growth is also an important driver for this category
(demand for housing and infrastructure). 
The impact of the economic crisis (which hit the construction sector
particularly hard) is observable and demonstrates the strong link between
non-metallic minerals and economic growth. Indeed, all non-metallic mineral
sub-categories of RMC decreased during the economic crisis: between -14% and
-24% between 2008 and 2009.
Finally, the increasing importance of recycling can also explain the
decrease of the non-metallic minerals RMC of almost all sub-categories between
2001 and 2011. For example, sand and gravel have been more and more recycled in
aggregates for the production of concrete or for road applications. This is
also the case for the chemical industry, which led to a reduction in raw
materials consumption.
b.      Future
trends
All sub-categories within the non-metallic minerals are related to
the construction sector. 
Thus, the 2010 – 2030 RMC trend for these sub-categories is coupled
with the trend in the construction sector, which is forecast to be +29.3% over
the 2010 – 2030 period. There would also be some increased demand for nickel,
uranium, silver, molybdenum and to a lesser extent for copper and aluminium as
part of the switch to a non-fossil electricity mix. 
4.     
Fossil
energy resources
a.       Past
trends
 Category || RMC trends 
 Hard coal, and crude oil, condensate and natural gas liquids || Overall decrease of RMC (between -22.8% and -16.2%) between 2001 and 2011 
 Lignite || Declined slightly over this period (-3.1%), recovery in 2010 
 Natural gas || Declined slightly over this period (-0.8%) 
 Oil shale and tar sands || RMC grew between 2001 and 2011 (+76.3%). 
 Peat || RMC was stable between 2001 and 2011 (+1.5%) but is subject to very strong annual variations (from -50% to +35%) 
Fossil energy resources consumption is related to the energy demand
(related to economic and population growth), the energy production systems, and
the EU climate change policy. Fossil energy resources combustion is an
important source of anthropogenic greenhouse gases (GHG), hence the creation of
several programs and targets: the energy and climate "20-20-20"
targets (-20% of GHG emissions in 2020 in comparison to 1990 levels; 20% of the
EU energy consumption should come from renewable resources; + 20% improvement
of the EU’s energy efficiency), and the EU Emissions Trading Scheme (EU ETS) to
reduce the GHG emissions from energy (power and heat) production systems and
other energy-intensive sectors.
Both polices influenced the consumption of fossil energy resources.
Indeed, the RMC of crude oil and hard coal, two high-carbon energy resources,
decreased between 2001 and 2011 by 16.2% and 22.8% respectively. In the
meantime, the consumption of other ‘low-carbon’ fossil energy resources (e.g.
natural gas) was constant. This reflects the shift made to replace high-carbon
energy resources with low-carbon fossil energy technologies.
Finally, the increase in oil shale and tar sands consumption over
the 2001 – 2011 period is due to the investments made in these materials after
the 2003 oil crisis, which led to the development of new extraction techniques
and thus higher consumption of these two fossil energy resources.
b.      Future
trends
Over the period 2010-2030, these are the forecast
developments:
·        
Hard
coal: -2.5%
·        
Crude
oil, condensate and natural gas liquids: -10.5%
·        
Lignite
(brown coal): -2.5%
·        
Natural
gas: -17.8%
·        
Oil
shale and tar sands: -10.5%
·        
Peat: -2.5%
              Annex 4 – The statistical context 
In order to
have a holistic view of the various aspects of sustainable development, the
existing framework for measuring the economy – in other words, the system of
national accounts – is supplemented by satellite systems representing
environmental or social indicators. The material flow accounts of Eurostat are
the data framework systematically recording the inputs of materials to European
economies.  The data in the accounts is provided to Eurostat by the Member
States and conforms to agreed standards in terms of concepts, definitions,
classifications and accounting rules. As such it brings environmental data
together with economic data in a coherent and comparable framework. 
The indicator derived from MFA
accounting that is most referred to in policy making is domestic material
consumption (DMC). In accounting terms:
·        
Direct Material Input (DMI) = Domestic Extraction Used (DEU) + Imports (IMP) 
DEU is the aggregated amount of
all materials (excluding water and air) extracted inside the national economy.
IMP is the import of products measured as their mass weight when crossing the
border. Adding IMP to DEU gives DMI, which is the amount of materials
(excluding water and air) actually available as a physical basis for domestic
production activities. 
·        
Direct Material Consumption (DMC) =Direct
Material Input (DMI) - Exports (EXP) 
When the mass weight of exported
products (EXP) is subtracted from DMI, then this gives DMC. DMC is the actual
direct consumption of material (excluding water and air) in Europe.
The DMC of the aggregated EU-27
economy is dominated by bulk minerals  – about half is sand and gravel and
other non-metallic minerals such as natural stones, clay etc. Fossil energy
materials make up around one fourth. Crop residues & grazed biomass and
other biomass together contribute another fourth. Metal ores constitute the
smallest category.
A criticism of DMC is that imports and
exports are measured in terms of the mass weight of goods crossing the
boundary. However, this does not take account of how far the traded products
have been processed: the traded good may have involved considerable additional
material use outside Europe, but this will not be captured in DMC meaning that
the material footprint outside Europe is partially missed. 
A more comprehensive picture is be obtained
by converting the traded goods into their raw material equivalents (RME), i.e.
amounts of domestic extraction used (DEU) required to provide the respective
traded goods. Doing this for imports and exports allows RMC to be calculated.
Of course, the question
is what coefficient to apply to imports to account for these hidden material
uses outside Europe. Eurostat has developed a model to
estimate the RME of imports and exports for the aggregated EU-27 economy
(essentially, the coefficient to apply to imports and exports). However, this
is outside the MFA and so Member States can choose to apply their own RME
coefficients, leading to data for RMC that whilst being more complete than the
data for DMC, is statistically less rigorous and less comparable.
              Annex 5 – Overview of the
modelling 
The model 
The model used
is the macroeconomic E3ME model which has a material sub-model.[33]  This
is a computer-based model of Europe’s economies, linked to their energy systems
and the environment. The model was originally developed through the European
Commission’s research framework programmes in the 1990s. 
The economic
structure of E3ME is based on the system of national accounts, with further
linkages to materials, energy and environmental emissions.  The labour market
is covered in detail, with estimated sets of equations for labour demand,
supply, wages and working hours. International trade is modelled at sectoral
level.   
Relationships in
the E3ME model are estimated empirically, and the model covers the components
of GDP (consumption, investment, and international trade), prices, energy and
material demands. Each equation set is disaggregated by country and by sector.
The main dimensions of the model are:
-       
33 countries (the EU Member States, Norway and Switzerland and three candidate countries)
-       
69 economic sectors, defined at the NACE (rev2)
2-digit level, linked by input-output relationships
-       
43 categories of household expenditure
-       
13 types of household, including income
quintiles and socio-economic groups such as the unemployed, inactive and
retired, plus an urban/rural split
-       
14 users of 7 different material types 
-       
22 different users of 12 different fuel types
E3ME models
material consumption at Member State level with the following material types
are included:
-       
Food
-       
Animal feed
-       
Forestry
-       
Construction minerals
-       
Industrial minerals
-       
Ferrous ores
-       
Non-ferrous ores
E3ME principally uses
Domestic Material Input (DMI) as its measure of material consumption. In order
to produce RMC in the model, a set of Raw Material Equivalent (RME)
coefficients from Eurostat[34]
is applied.  The Eurostat RME coefficient estimates are disaggregated by
material and product for the EU27. The EU27 RME coefficients are apply to Croatia as well to give EU28 results.  
The method of
feedbacks in the materials model is similar in nature to that of the energy
module. It is assumed that all material consumption meets intermediate demands
(i.e. materials are used as part of the production process and not bought by
households directly). A relatively small number of sectors produce the
materials: agriculture and fishing produce food and feed; the forestry sector
produces forestry; and other mining produces all mineral categories. The
feedback is through adjustments to economic input-output coefficients at the Member State level.
Energy-Environment-Material-Economy
linkages 
Scenario assumptions
The policy
assumptions in the scenarios are designed to be transparent and simple. For
each scenario, improvement in resource productivity comes from:
·        
1/3 investments in capital stock to improve
resource efficiency  
·        
1/3 behavioural change delivered through policies
such as recycling or information campaigns
·        
1/3 market-based
instruments (MBI) (such as tax)
The policy
assumptions apply to all the materials groups (and the three fossil fuels
groups) and start from 2014.  
Fossil fuels are
assumed to contribute to the RMC RP targets in the scenarios in line with the
improvement in other materials.  However, since fossil fuels in the baseline
already see RP improvement of around 2.5% pa (DG Energy 2010), there is only
further improvement where the overall RMC RP target is 3% pa.
For the MBI
share, a tax on the consumption of raw materials is introduced.  Tax revenues
are collected by national governments and recycled back at Member State level through lower income taxes and employers’ social security contributions (i.e.
labour taxes) in order to achieve revenue neutrality.  It is assumed that material taxes collected by
government are used to pay for investment in resource efficiency, the remaining
revenues are available for recycling.
One third of the
reductions in material consumption are met by improvements in the capital
stock, e.g. investment in machinery to cut down raw material consumption per
unit of production. This requires estimates for the amount of investment
required per tonne of material saved; although figures are available for energy
consumption[35],
little is available for materials. For example, the UNEP (2010) report
estimates that around 10% of global annual global capital investment is needed
for making the world economy more resource efficient.  However, there is no
clear description of what this means in terms of actual reductions in resource
consumption. Therefore, an estimate is used in line with the figure quoted for
reduction in energy consumption: €31.4bn annual investment is required in the EU
for each 1% reduction in energy consumption (IEA, 2010). This investment figure
is assumed to be the same for other non-fossil fuel materials.
In order to determine the most
cost-effective ways of reducing RMC in the scenarios, a pre-analysis was set up
to calculate the abatement cost for each user of each material, using each of
the three policy types: MBIs, regulation, and investment.  In this analysis,
the model worked out a level of cost or investment in order to achieve a one
percent reduction of RMC for each material/user/policy from the baseline in
2030.  The GDP outcomes are calculated as difference from baseline and the euro
per tonne costs of RMC reduction are obtained.  The euro/tonne results are
ranked, per policy, to indicate the least-cost (or most beneficial) options to
be included in each scenarios.
Scenario results
The main scenarios run are as follows:
 Scenario || Description || Approximate  Improvement (2014-30) 
 Scenario 1 || Baseline || 14 % 
 Scenario 2 || Modest and flexible improvement || 20% 
 Scenario 3 || Enhanced and flexible improvement || 30% 
 Scenario 3.5 || Further enhanced and flexible improvement || 40% 
 Scenario 4 || Ambitious and flexible improvement || 50% 
The EU macroeconomic impacts are as
follows. These are shown as percentage changes from the baseline (S1). This
means that the benefits are additional to the baseline, and the benefits of S1
are not indicated.
Table 1: EU28
macroeconomic impacts, % difference from baseline (S1)
   || S2 || S3 || S3.5 || S4 
 2020 ||   ||   ||   ||   
 GDP || 0.2 || 0.3 || 0.2 || 0.2 
 Employment || 0.2 || 0.3 || 0.4 || 0.5 
 Consumer spending || 0.3 || 0.5 || 0.2 || -0.2 
 Investment || 0.2 || 0.4 || 0.8 || 1.2 
 Imports (extra-EU) || 0.1 || 0.0 || -0.2 || -0.9 
 Exports (extra-EU) || -0.1 || -0.4 || -0.9 || -1.4 
 Consumer price || 0.2 || 0.4 || 1.1 || 2.5 
   ||   ||   ||   ||   
 2030 ||   ||   ||   ||   
 GDP || 0.6 || 0.8 || 0.3 || -0.1 
 Employment || 0.7 || 1.0 || 0.8 || 0.9 
 Consumer spending || 0.9 || 1.3 || 0.3 || -0.8 
 Investment || 0.4 || 0.6 || 0.6 || 0.8 
 Imports (extra-EU) || 0.2 || 0.0 || -0.7 || -1.9 
 Exports (extra-EU) || -0.2 || -0.7 || -2.0 || -3.0 
 Consumer price || 0.6 || 0.8 || 2.4 || 5.3 
   ||   ||   ||   ||   
To put this another way, the benefits of S3
(consistent with the 30% improvement in Resource productivity) is by 2030 GDP
would increase by around 130 billion Euros (0.8% of around 17 trillion Euros in
2030) or by around 40 billion Euros (0.3% of around 14 trillion Euros in 2020).
In terms of employment, it would generate over 2 million additional jobs by
2030 and around 600,000 additional jobs by 2020. 
[1] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2013:354:0171:0200:EN:PDF

[2] COM(2011) 571
[3] Details of the stakeholder consultation including responses are
available at http://ec.europa.eu/environment/resource_efficiency/targets_indicators/stakeholder_consultation/index_en.htm
 
[4] http://ec.europa.eu/environment/resource_efficiency/re_platform/index_en.htm

[5] Explanations of how the Material Flows Accounts are developed and
material consumption is measured are available at: http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Material_flow_accounts

[6] Clearly, the choice of timeframe is an imprecise science. More
historical data would be welcomed, but is not easily available and there is no
indication (based on the available information on material flows) that it would
change the figures in a way that it would suggest a different policy response. 
[7] Source: "The 2012 Ageing Report,
Economic and budgetary projections for the 27 EU Member State (2010 –
2060)", European Commission – DG for Economic and Financial Affairs of the
European Commission
[8] Please note that during this period there was a period of
unsustainable growth followed by an economic crisis with a severe drop in
manufacturing output and related resource use. This period is abnormal, and so
the future should not be seen as a simple projection of this abnormal past.  
[9] As RMC is a weight-based indicator, it is not by itself a suitable
basis for policy decisions. As always, decisions need to be based on an
integrated assessment of the economic, social and environmental impacts of
alternative policy options. 
[10] Section 6.2 examines the relation to other targets and their
complementarity. 
[11] Source : Note of the Interservice group set-up by BEPA on Raw
materials – November 2013
[12] Mapping resource
prices: the past and the future (2012) 
[13] Eurobarometer surveys of business show that despite the
current slowdown in price increases (during the economic crisis) they expect
resource prices to increase as growth picks up again to a more normal level. 
[14] "Assessment
of cumulative cost impact for the steel and aluminium sectors" (2013),
CEPS for DG Enterprise and Industry. This is a fairly consistent
finding across industrial sectors, that resources (and their associated
processing) is a dominant element of costs and often outweighs labour etc.
[15] " Steps towards
greening in the EU: Member States’ resource efficiency policies" (2013).
Previous studies have also identified successful policies at Member State level that could be more widely replicated: see, for example, "Economic
Analysis of Resource Efficiency Policies" (2012), IVM et al
[16] COM(2011) 571
[17] The opportunities to business of improving
resource efficiency (2013), AMEC et al
[18] The opportunities to business of improving
resource efficiency (2013), AMEC et al
[19] Assessment of Scenarios and Options towards a
Resource Efficient Europe (2014), TNO et al
[20] This can be seen as an
indication of how, in general, secondary material will not entirely replace
primary material.
[21] "Analysis of the key contributions to resource
efficiency", (2011), BioIS et al
[22] Ekins P., Speck S. (eds.), 2011 Environmental tax reform, Oxford
University Press
[23] Belgium, Czech Republic, Estonia, France, Hungary, Italy, Lithuania, Romania. Austria, Slovakia, Croatia and Poland: ongoing study
[24] EU Resource efficiency perspectives in a
global context (2011) 
[25] Macroeconomic modelling of sustainable
development and the links between the economy and the environment (2011), GWS
et al
[26] The study uses data for RMC using Eurostat's methodology
for estimation. The model used was the econometric model E3ME and results are
in "Modelling the Economic and Environmental
Impacts of Change in Raw Material Consumption (RMC)", Cambridge
Econometrics et al, (2014). Please note that other models corroborate these
general results (ie that resource efficiency is economically and
environmentally advantageous). Most noticeably, the GINFORS model was used for
modelling of resource efficiency scenarios, and produced results that were
economically more beneficial than those from E3ME. 
[27] In terms of the modelling undertaken, the key underlying point is -
based on a range of evidence including that identified in Section 6.2 - that
our economy currently uses resources inefficiently. A more efficient use of
resources, like productivity improvements related to labour or capital, will be
positive for growth and jobs. The policies chosen to deliver this in terms of
the modelling are secondary, and the modelling results should not be
particularly sensitive to their choice. For example, taxes are part of the
modelled policy mix but it will be up to Member States to identify if they are the
right policy tools in their situation from the wide range of policy tools
available.
[28] "Modelling the Economic and Environmental Impacts of Change in
Raw Material Consumption (RMC)", Cambridge Econometrics et al, (2014).
Modelling was based on increasing the share of manufactring in the economy to
17.5%. An increase to 20% would show the same direction of impacts (ie neutral
or positive), but obviously to a higher magnitude.  
[29] See http://ec.europa.eu/environment/resource_efficiency/documents/erep_manifesto_and_policy_recommendations_31-03-2014.pdf

[30] " Modelling the Economic and Environmental
Impacts of Change in Raw Material Consumption (RMC)", Cambridge
Econometrics et al,  (2014)
[31] http://ec.europa.eu/europe2020/public-consultation/index_en.htm

[32] COM(2011) 571
[33] See www.e3me.com for details
[34]http://epp.eurostat.ec.europa.eu/portal/page/portal/environmental_accounts/documents/Project_Estimates_for_Raw_Material_Consumption_(RMC)_and.pdf

[35] World Energy Outlook, IEA (2010).