Efficiency and sustainability in the food sectorcritical assessment of circular economy lead indicators for water policy development

Resumo

Climate crisis has become one of the greatest environmental concerns on several issues such as natural resources depletion, deforestation, waste disposal, loss of biodiversity and water scarcity in global agenda. Particularly, water scarcity stands as greatest concern since freshwater is an essential resource for human activities and business operations. While demand for this scarce resource increases, the “climate crisis” challenges the availability of water and increases competition toward the freshwater. To ensure the efficient water management, adequate policies, strategies and frameworks should be developed. At this point, indicators are the key for linking policy objectives with water use performances and providing feedback to the decision-makers to take the right actions. Under these circumstances, the indicators may assist stakeholders to remove any barriers for a transition toward a more circular economy (CE). Particularly, showing businesses that CE strategies improves the water efficiency, reduces water consumption and related costs, as well as improving their organizational performance could attract businesses to employ the CE strategies. Considering the role of businesses in the transition to a more CE, selecting right indicator set and developing a guideline for this transition are two important steps. This dissertation has conducted a critical analysis to water productivity, one of the leading indicators in the European Resource Efficiency Scoreboard, and it explores also the pathways for the implementation of CE practices at lean shop floors within a Spanish small-medium enterprise (SME) to increase water efficiency. To do so we focus on one of the most water intensive industry: the food and agriculture sector. First, carried out a decomposition analysis to the water productivity. This allowed us to understand the main driving factors behind the water productivity. Secondly, we run a comprehensive econometric analysis to the water productivity with its indicators. Last but not least, in order to provide a pathway to make a successful transition toward the CE, this dissertation provides a case study from the food manufacturer as an example. The results show that water efficiency did not explain any significant impact on the path followed by water productivity in our panel data of countries (EU countries plus some big Asian countries during 1995-2010 period). Instead, the sources of economic growth, capital investments and its impact on labor productivity, are the main drivers for the improvements in water productivity. Accordingly, the growth in economic productivity masks the increase absolute water consumption. Hence, it appears to be that the use of water productivity – or its reciprocal water intensity – should not be considered proxies of water efficiency and for any decoupling assessments. At the micro level, a case study in food industry shows that the joint implementation of Lean manufacturing and CE practices at the shop floor of Frinova has improved the water circularity and the water efficiency, as well as the organizational performance within the organization. The findings provide a guideline to firms to make a transition toward a more CE which is also transferable to other industries. Lastly, the findings also provide evidence that for a more consistent success in CE strategies the lean-CE initiatives should be considered as long-term practices. The results of this dissertation provides valuable insight to policy-makers and scholars to accelerate the transition toward a more circular economy and reach the UN targets. It seems clear that resource productivity indicators – or the reciprocal term resource intensity – should not be used for policy targets and monitoring the progress in resource efficiency since the indicator is blind to the actual resource consumption. Therefore, the use of this indicator should be avoided, or the main driving factor (economic productivity) should be taken into account during the assessment. This dissertation also shows that the synergies between lean-CE initiatives could pave the way for improving material efficiency through increasing the material circularity without damaging the organizational performance in a cost-efficient way.