Strategy and decision support
MFAs are developed to facilitate the reflection about material (and energy) systems. They are typically developed to address two fundamental questions: (i) How well do we understand the physical system, and how can we improve our understanding of the system most effectively? (ii) What are challenges related to the real world system analysed, and how can we control the system most effectively to reach certain goals?
While the first question addresses the understanding of the system (methodology), the second question aims at changing the system (interventions). MFA outcomes can support decision-making and strategy development. The following areas may be considered:
- Supporting industry and governments to make informed decisions and develop strategies and policy for raw materials. MFA results may find application in a variety of fields that aim at reaching different goals, such as those of the Strategic Implementation Plan (SIP) of the European Innovation Partnership on Raw Materials, the Circular Economy Action Plan, or the Sustainable Development Goals;
- Supporting strategies for more effectively monitoring and forecasting of material cycles, such as the Raw Material Information System (RMIS), through improved measurement strategies, data harmonization, and data integration.
Hence, material flow analysis comprise a powerful tool for assisting decision making at different levels (e.g. corporate, national, regional level) and for addressing different needs (e.g. criticality and supply disruption, environmental implications, resource efficiency, forecast scenarios, system optimisation). Its usefulness (able to address different needs) and flexibility (e.g. temporal, spatial variation is possible) suggests that it can greatly enhance the work of decision makers. However, several challenges exist that need to be addressed to enable the successful use of MFA in decision making:
- Data challenges (also discussed under data & systems)
- Lack of financial resources for the uptake of the common MFA methodology
- Skills, expertise and education support
- Poor understanding of the benefits of MFA
- Engagement at global level is complicated
- No long term push or pull actions to support the integration of MFA approaches in decision making.
Please note: The following text is taken from the existing MinFuture report "A systems approach for the monitoring of the physical economy". Please click on the afore-mentioned link to access and read the full publication.
Strategies for enhancing system understanding
Following the logic of the framework presented here, the interpretation of an MFA should include interpretations of the results that answer the following methodological questions:
- How robust is our understanding of the system? Do we consider all of the relevant stocks and flows at an adequate granularity?
- How well is our quantitative understanding of the system? Do we have relevant data gaps?
- Where do we have major uncertainties that need to be considered when drawing policy-relevant conclusions?
- How good and useful are the models and scenarios for addressing the specific questions at hand?
- Are the indicators developed sufficient to adequately reflect the performance of the system?
- Are the visualisations suitable to communicate the main findings?
- How well is our overall understanding in order to support policy-relevant conclusions? Where can we be confident, and where do we need to be cautious?
Carefully answering these methodological questions is considered best practice in MFA. Ensuring transparency and reproducibility in the MFA research community involves pointing out the strengths and limitations of the approach and data used. It is a prerequisite for developing research strategies of individual research groups, research institutions, as well as research foundations.
However, the relevance of these methodological findings is not restricted to the research community. Also governments, NGOs, and industry associations have started to monitor various aspects of the physical economy. Answers to the questions laid out above are therefore highly relevant for informing the development of monitoring strategies. For example, the findings of MFAs can be used to identify relevant data gaps and effective ways to address them, either by using the mass balance principle, by making informed estimates, or by proposing new measurements or proposing amendments to existing measurement programmes. Another important aspect of monitoring strategies is data harmonisation. But most importantly, MFAs can facilitate the reflection about the scope of monitoring programmes, including the identification of relevant aspects that should be monitored at different levels of granularity.
Strategies for system interventions (governance and business models)
MFAs are designed with many different purposes in mind, but most commonly to identify or describe problems related to the physical economy, to test alternative strategies for mitigating these problems, or to identify potential business opportunities. The relevance of MFA results is always limited by the system definition chosen. It is therefore critical that the purpose of the model is stated explicitly and upfront, and that it is aligned with the system definition. The MFA component at the top of the pyramid (“strategy and decision support”) hould therefore not be considered the last one, but rather the first and the last, with the first one (purpose, scope) informing the base of the pyramid (system definition).
MFA results cannot provide policy makers and industry representatives with meaningful strategies. The problems typically analysed in MFAs are too complex, and cannot be solved by one scientific discipline alone. Policy-prescriptive interpretations of the results are therefore not consistent with the scientific principles. Nevertheless, MFAs can inform decisions and strategies with relevant findings. The art of interpreting MFA findings is therefore to be policy- (and business-) relevant while avoiding to be policy-prescriptive.
MFAs are also poorly suited to distinguish between “good” and “bad” solutions or outcomes or to blame specific actors for certain phenomena. Changes in the physical economy may involve aspects that are desired by some actors and undesired by others. What we perceive
as problems is usually generated by the entire system involving many stakeholders that are all linked with each other through the physical economy. On the other side, MFAs are well suited to facilitate the reflection about complex multi-stakeholder problems (how different processes and stakeholders are linked with each other through the physical economy) and how they can be addressed most effectively through multi-stakeholder interventions.
MFAs can inform government and industry strategies in many ways:
- MFAs can demonstrate where materials are “lost” or ineffectively used along the supply chain, and thereby point out the largest potentials for resource recovery and recycling. This information is highly relevant for informing strategies related to resource management, circular economy, or (critical) raw materials supply. Whether or not governments or businesses should focus on the recovery of these resources, however, may be determined by many other factors that are out of scope.
- MFAs have been developed to forecast future scrap availability. This information can be relevant for informing investments in new recycling facilities or the development of new sorting technologies needed to separate different fractions of the scrap.
- Other MFAs have been developed to forecast demand for certain materials. This information is relevant for investments into mining and production of these materials.
- Some MFAs for individual materials have been linked to models of energy use and greenhouse gas emissions, which allowed the model developers to develop scenarios for greenhouse gas emission in these sectors, and to test the effectiveness of alternative intervention options for overall reduction of greenhouse gas emissions.
These examples illustrate that MFAs have a potential for informing strategies, among others for resource management and circular economy, critical raw material supply, climate change, and investments. Since many of the great problems of humanity today are linked with each other through the physical economy, MFA has also a great potential to inform strategies that aim at simultaneously addressing several sustainable development goals.
- MFAs are designed with many different purposes in mind, but most commonly to identify or describe problems related to the physical economy, to test alternative strategies for mitigating these problems, or to identify potential business opportunities.
- MFAs are typically developed to address two fundamental questions:
- How well do we understand the physical system, and how can we improve our understanding of the system most effectively?
- What are challenges related to the real world system analysed, and how can we control the system most effectively to reach certain goals?
- While the first question addresses the understanding of the system (methodology), the second question aims at changing the system (interventions).
- Since many of the great problems of humanity today are linked with each other through the physical economy, MFA has a great potential to inform strategies for amongst others resource management and circular economy, critical raw material supply, climate change, and investments.
The intention of this conference "Monitoring the physical economy requires putting raw material data in a system context" was to present, reflect on and refine key recommendations from the MinFuture project on a monitoring system for the physical economy.
The presentations held and recommendations made will soon be available via this website.
This report aims to address existing challenges by developing a methodological framework for the monitoring of the physical economy that facilitates the users in reflecting more systematically about the problems mentioned above and in developing more effective strategies for addressing them. The framework proposed is based on Material Flow Analysis (MFA), a tool widely used for tracking materials and energy in the economy.
In order to develop strategies as well as to define and reach goals concerning raw materials management, maps are needed to help navigate existing knowledge and data.
The purpose of this workshop was to further develop the roadmap for monitoring the physical economy. During the spring of 2018, the MinFuture project has held several commodity specific workshops to test the developed framework and to identify commodity specific trends, opportunities and challenges that can inform the MinFuture roadmap. Workshops has been held on aluminium, cobalt, neodymium, platinum, phosphorus and construction aggregates, and stakeholders from different parts of the supply chain has contributed to it.
The MinFuture workshop synthesis brief describes the main insights from discussions on:
- How can we add more relevance and credibility to data published on raw materials? What context is missing that might enhance their status? How could we present data using a systemic MFA? perspective
- How do raw material data reporting schemes (information flows) currently operate at national, regional and global level?
- What raw material indicators are often used to identify issues with raw material supply/ demand? What are their strengths and weaknesses and how do they relate to material flow analysis?
The purpose of this workshop was to initiate a dialogue with key stakeholders that report raw materials data, use data to develop MFA models, or use MFA models to inform decision making. The knowledge and needs of data providers, users and decision actors are different, but in order for a ‘common approach’ to be developed their input is required.