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A Framework to improve monitoring of the physical economy

The size and the complexity of the global material flows have increased drastically over the past decades as a consequence of population growth, urbanization, globalization, technological development (e.g., employment of more complex material combinations in manufacturing), and sophistication in supply chain management. The increased use of materials has been accompanied by and an increased energy use and a growing waste and emission generation along the supply chain. This transformation of the physical economy has resulted in growing concerns for the security of supply with critical raw materials and the sustainability of the economic system more generally. Various strategies have been developed in order to address the consequences of this transformation, with an aim to control the physical flows of matter and energy. However, the effectiveness of these strategies is severely hampered by a lack of a robust understanding of the physical economy.

Current monitoring programmes often have a monetary focus, which is insufficient due to the lack of addressing flows from and to the environment and the lack of mass-balance consistency. Many efforts have been taken over the last years to improve our understanding of the physical economy. Different government agencies, non-governmental organizations, research institutions, and industry associations have started to map individual aspects of the global physical economy, addressing individual countries or regions, and individual materials. While these efforts have increased our understanding, we are still far away from a sufficiently consistent and robust understanding of the global physical economy needed to inform effective policies and business strategies. These efforts are severely impeded among others by fragmented, inconsistent, non-transparent, and incomplete measurement programmes.

Against this background, the MinFuture project developed a framework for monitoring the physical economy, aimed at delivering clarity on the different components of MFA needed for monitoring the physical economy and hence yielding a more robust map of the global physical economy. This framework facilitates a systematic reflection about the interactions between different aspects of monitoring. The framework proposed is based on Material Flow Analysis (MFA), a tool widely used for tracking materials and energy in the economy.

The framework distinguishes

  • four dimensions (Stages, Trade, Linkages, Time) and
  • seven components (Systems, Data, Uncertainty, Models & Scenarios, Indicators, Visualisation, Decision & Strategy Support - please click on the different components in the above figure to get more information on each component)

that need to be addressed for a consistent monitoring of the physical economy.

Please find here a concise description of the framework components and related key messages.

The MFA components are organised and linked in a hierarchical order. The robustness of components at the upper level depends on the robustness of the component(s) found in the lower levels. The hierarchical structure of the pyramid is of fundamental importance. Material flow analysis cannot be developed without a system in place and without data that can map to that system. Forecast models and scenarios are developed upon the availability of systems and data. MFA uncertainty analysis normally takes place during the stage of model development and once a mass balance model is constructed. However, uncertainty is also found in each individual component in the pyramid and may be analysed separately and not part of the MFA during data collection, indicator development and so on. Visualisations are produced to communicate the outcomes of models and their uncertainty and are therefore located in the pyramid in the level above. Indicators should be developed once an MFA is produced, namely once the complex system of a material cycle is understood and intervention areas have been identified to enable quantitative measures to be produced. At the top of the pyramid stands the strategy and decision support component. This represents the ultimate goal of MFA, namely to support the decision making process and to facilitate the development of strategies from governments,  authorities and industries. Strategies can have diverse purposes, but often around the subjects of resource management and security of supply.

For each component, clicking on the component in the above figure will show further information and suggests approaches that could allow practitioners to design each component in a more robust and transparent way - and thus to ensure MFAs are done according to high standards.

 

Furthermore, the development of a glossary is a crucial part of the common MFA methodology being developed in MinFuture. Developing terminology that is agreed by the multidisciplinary stakeholders of MinFuture is the first step towards harmonisation and it is therefore seen as an important function of the common MFA methodology.

Case studies demonstrate the foundational roles of systems and data in MFA. They illustrate how gaps and barriers identified in the four dimensions of MFA (i.e., stages of material cycles, trade, linkages, and time) for specific materials can be addressed in a generally agreed common methodology.