DOI:10.52340/ekonomisti.2025.04.04

Expanded Summary

This paper explores the various interpretations of the concept of "circular economy" and highlights the main approaches to its formation. The aim of the study is to analyze the different methodological approaches for evaluating the development of circular economy in the socio-economic space, which is essential for the further development and testing of a new evaluation tool, as well as reducing the insufficient and weak development of the methodological approach to the circular economy concept in Georgian language sources.

In 1987, the Brundtland Report, known as "Our Common Future," was published. The report was released by the World Commission on Environment and Development (WCED) and named after the commission\\\\'s then-chairman, Gro Harlem Brundtland, the Prime Minister of Norway. In this report, sustainable development was officially defined for the first time and laid the groundwork for the current understanding of sustainable development.

According to Geng Y., Fu J., and Sarkis J. (2012), the earliest references to indicators for evaluating circular economy can be found in Chinese scientific literature. The first indicator system was based on the 3R principles and was created to promote the use of circular economy practices, assess overall practice efficiency, and support processes.

Walter R. Stahel\\\\'s model is one of the first globally recognized models of circular economy studies, which, although initially theoretical, did not have a practical explanation at the time. Kenneth Boulding\\\\'s model (1966) discusses the fundamental differences between linear and circular economies, treating the Earth as a closed and circular system with limited resources. The author emphasizes the need to find an equilibrium point for economic development and environmental preservation, an idealistic version of Boulding\\\\'s equilibrium point.

B. Johnson’s "5R" model (Refuse, Reduce, Reuse, Recycle, Rot) suggests that circular economy can become the main model for sustainable development.

J. Guo-gang (2012) proposed an index system for evaluating the level of circular economy development, consisting of 16 indicators grouped into four categories: consumption, environmental disturbances, waste recycling, and social development.

In 2012, a research group led by Geng Y., Fu J., and Sarkis J. suggested using a system of indicators divided into two groups: macro-level (22 indicators) and industrial park level (12 indicators).

In 2013, the Ministry of Environmental Protection (MEP) of China introduced an evaluation system for circular economy based on 21 indicators, categorized into four groups: economic development, waste recycling, pollution control, and administration.

In 2015, C. Ruiter proposed the "Circular Economy Performance Index," which consists of 25 key performance indicators (KPIs) for evaluating the effectiveness of circular economy practices.

Almas Heshmati (2016), in his 2015 paper "Review of Circular Economy and its Implementation," compares over 40 empirical studies on circular economy, sustainable development, and entrepreneurship. In 2015, the "EU Resource Efficiency Scoreboard" also presented a system for evaluating the circularity of the economy using 32 indicators.

In 2015, the Ellen MacArthur Foundation, Granta Design, and LIFE developed the "Material Circularity Indicator" (MCI), a model for assessing material circularity, which is presented in their work "Circularity Indicators: An Approach to Measuring Circularity. Methodology."

The formula for MCI is as follows: MCI=1−LFI×F(X)MCI=1-LFI\timesF(X)MCI=1−LFI×F(X)
Where:

• LFI is the linear flow index, calculated as the total amount of new raw material used in the product composition and non-recoverable waste produced, divided by the total volume of the produced product.
• F(X) is the usage coefficient of the product, represented as a function of utility (X).

In 2016, L.H. Verbeek proposed the "Circular Economy Index for the Consumer Goods Sector," which assesses the closed-loop business model using KPI approaches related to product consumption.

In 2018, the World Business Council for Sustainable Development (WBCSD) released a report titled "Circular Metrics Landscape Analysis," highlighting three key tools for evaluating circular economy:

1. Life Cycle Assessment (LCA), a method for assessing environmental impact throughout a product’s life cycle, from raw material extraction to disposal.
2. Circular Economy Toolkit (CET), an evaluation method that identifies and assesses the potential improvements in product circularity and is closely linked with LCA.
3. Griffiths and Cayzer’s Circular Economy Indicator, which evaluates the productivity of circular production, developed using MS Office Excel-based calculation functions.

The European Academies\\\\' Science Advisory Council (EASAC) report (2016) analyzes various methodologies for evaluating circular economy indicators. These include:

• UNDP Sustainable Development Indicators,
• Global Reporting Initiative (GRI) indices,
• Environmental Performance Index (EPI),
• OECD Green Growth Indicators,
• Economy-wide Material Flow Accounts (EW-MFA), and others.

In 2018, the EU’s Raw Materials Initiative celebrated its tenth anniversary, focusing on sustainable raw material use and secondary raw material supply. The "Raw Materials Scoreboard 2018" presents monitoring data that provides reliable information to governments, industries, and stakeholders regarding circular economy, recycling, and ecological sustainability.

Various European countries’ experiences in evaluating circular economy development are reflected in different reports, such as the "Resource Efficiency Scoreboard" (2015) and the "Raw Materials Scoreboard" (2018).

In 2019, a research group led by Z.J.N. Steinmann, M.A.J. Huijbregts, and L. Reijnders introduced a material circularity (Qc) indicator, which measures energy savings from primary material recycling and represents the energy expended in processing one kilogram of raw material.

In 2019, Zajac P. proposed a circular economy indicator evaluation system that includes 25 indicators, divided into seven categories.

Razminenes and Tvaronavichenes (2018) presented an effective tool for evaluating the efficiency of clusters in circular economy, providing an assessment of clusters at the national level using 15 indicators grouped into four domains.

In 2019, a research group by Saidani Michael et al. studied over 55 different approaches to evaluating circular economy, contributing to the further understanding of circular economy metrics. 

      Keywords: Circular Economy, Sustainable Development, Environmen