IDEAS home Printed from https://ideas.repec.org/h/spr/circec/v1y2021i2d10.1007_s43615-020-00002-z.html
   My bibliography  Save this book chapter

Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation

Author

Listed:
  • Leonidas Milios

    (Lund University)

Abstract

The transition to a circular economy is a complex process requiring wide multi-level and multi-stakeholder engagement and can be facilitated by appropriate policy interventions. Taking stock of the importance of a well-balanced policy mix that includes a variety of complementing policy instruments, the circular economy action plan of the European Union (COM(2020) 98 final) includes a section about “getting the economics right” in which it encourages the application of economic instruments. This contribution presents a comprehensive taxation framework, applied across the life cycle of products. The framework includes (1) a raw material resource tax, (2) reuse/repair tax relief, and (3) a waste hierarchy tax at the end of life of products. The research is based on a mixed method approach, using different sources to analyse the different measures in the framework. More mature concepts, such as material resource taxes, are analysed by reviewing the existing literature. The analysis of tax relief on repairs is based on interviews with stakeholders in Sweden, where this economic policy instrument has been implemented since 2017. Finally, for the waste hierarchy tax, which is a novel proposition in this contribution, macroeconomic modelling is used to analyse potential impacts of future implementation. In all cases, several implementation challenges are identified, and potential solutions are discussed according to literature and empirical sources. Further research is required both at the individual instrument and at the framework level. Each of the tax proposals needs a more detailed examination for its specificities of implementation, following the results of this study.

Suggested Citation

  • Leonidas Milios, 2021. "Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation," Circular Economy and Sustainability,, Springer.
    • Handle: RePEc:spr:circec:v:1:y:2021:i:2:d:10.1007_s43615-020-00002-z
    DOI: 10.1007/s43615-020-00002-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s43615-020-00002-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s43615-020-00002-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Vasileios Rizos & Arno Behrens & Wytze Van der Gaast & Erwin Hofman & Anastasia Ioannou & Terri Kafyeke & Alexandros Flamos & Roberto Rinaldi & Sotiris Papadelis & Martin Hirschnitz-Garbers & Corrado , 2016. "Implementation of Circular Economy Business Models by Small and Medium-Sized Enterprises (SMEs): Barriers and Enablers," Sustainability, MDPI, vol. 8(11), pages 1-18, November.
    2. Wilts, Henning & O'Brien, Meghan, 2019. "A Policy Mix for Resource Efficiency in the EU: Key Instruments, Challenges and Research Needs," Ecological Economics, Elsevier, vol. 155(C), pages 59-69.
    3. Palmer, Karen L. & Walls, Margaret, 1999. "Extended Product Responsibility: An Economic Assessment of Alternative Policies," Discussion Papers 10830, Resources for the Future.
    4. I. Gåvertsson & L. Milios & C. Dalhammar, 2020. "Quality Labelling for Re-used ICT Equipment to Support Consumer Choice in the Circular Economy," Journal of Consumer Policy, Springer, vol. 43(2), pages 353-377, June.
    5. Ekins, Paul & Pollitt, Hector & Summerton, Philip & Chewpreecha, Unnada, 2012. "Increasing carbon and material productivity through environmental tax reform," Energy Policy, Elsevier, vol. 42(C), pages 365-376.
    6. Gregor Schwerhoff & Max Franks, 2018. "Optimal Environmental Taxation with Capital Mobility," Fiscal Studies, John Wiley & Sons, vol. 39(1), pages 39-63, March.
    7. Tomas Ekvall & Martin Hirschnitz-Garbers & Fabio Eboli & Aleksander Śniegocki, 2016. "A Systemic and Systematic Approach to the Development of a Policy Mix for Material Resource Efficiency," Sustainability, MDPI, vol. 8(4), pages 1-26, April.
    8. Daniel R. Cooper & Timothy G. Gutowski, 2017. "The Environmental Impacts of Reuse: A Review," Journal of Industrial Ecology, Yale University, vol. 21(1), pages 38-56, February.
    9. Aurélien Bruel & Jakub Kronenberg & Nadège Troussier & Bertrand Guillaume, 2019. "Linking Industrial Ecology and Ecological Economics: A Theoretical and Empirical Foundation for the Circular Economy," Journal of Industrial Ecology, Yale University, vol. 23(1), pages 12-21, February.
    10. Thomas Eichner, 2005. "Imperfect Competition In The Recycling Industry," Metroeconomica, Wiley Blackwell, vol. 56(1), pages 1-24, February.
    11. Radetzki,Marian, 2008. "A Handbook of Primary Commodities in the Global Economy," Cambridge Books, Cambridge University Press, number 9780521880206, Junio.
    12. Ekvall, Tomas & Hirschnitz-Garbers, Martin & Eboli, Fabio & Sniegocki, Aleksander, 2016. "A Systemic Approach to the Development of a Policy Mix for Material Resource Efficiency," EIA: Climate Change: Economic Impacts and Adaptation 234309, Fondazione Eni Enrico Mattei (FEEM).
    13. Trevor Zink & Roland Geyer, 2017. "Circular Economy Rebound," Journal of Industrial Ecology, Yale University, vol. 21(3), pages 593-602, June.
    14. Tomas Ekvall & Martin Hirschnitz-Garbers & Fabio Eboli & Aleksander Sniegocki, 2016. "A Systemic Approach to the Development of a Policy Mix for Material Resource Efficiency," Working Papers 2016.28, Fondazione Eni Enrico Mattei.
    15. Kirchherr, Julian & Reike, Denise & Hekkert, Marko, 2017. "Conceptualizing the circular economy: An analysis of 114 definitions," Resources, Conservation & Recycling, Elsevier, vol. 127(C), pages 221-232.
    16. Sjöström, Magnus & Östblom, Göran, 2010. "Decoupling waste generation from economic growth -- A CGE analysis of the Swedish case," Ecological Economics, Elsevier, vol. 69(7), pages 1545-1552, May.
    17. Domenech, Teresa & Bahn-Walkowiak, Bettina, 2019. "Transition Towards a Resource Efficient Circular Economy in Europe: Policy Lessons From the EU and the Member States," Ecological Economics, Elsevier, vol. 155(C), pages 7-19.
    18. Lint Barrage, 2020. "Optimal Dynamic Carbon Taxes in a Climate–Economy Model with Distortionary Fiscal Policy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 87(1), pages 1-39.
    19. Thomas H. Tietenberg, 1973. "Specific Taxes and the Control of Pollution: A General Equilibrium Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(4), pages 503-522.
    20. Xie, Jian & Saltzman, Sidney, 2000. "Environmental Policy Analysis: An Environmental Computable General-Equilibrium Approach for Developing Countries," Journal of Policy Modeling, Elsevier, vol. 22(4), pages 453-489, July.
    21. Allwood, Julian M. & Ashby, Michael F. & Gutowski, Timothy G. & Worrell, Ernst, 2011. "Material efficiency: A white paper," Resources, Conservation & Recycling, Elsevier, vol. 55(3), pages 362-381.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arfaoui, Nabila & Le Bas, Christian & Vernier, Marie-France & Vo, Linh-Chi, 2022. "How do governance arrangements matter in the circular economy? Lessons from five methanation projects based on the social-ecological system framework," Ecological Economics, Elsevier, vol. 197(C).
    2. Ren, Qiuzhen & Albrecht, Johan, 2023. "Toward circular economy: The impact of policy instruments on circular economy innovation for European small medium enterprises," Ecological Economics, Elsevier, vol. 207(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Saskia Manshoven & Wim Van Opstal, 2022. "The Carrot or the Stick? Stakeholder Support for Mandatory Regulations towards a Circular Fashion System," Sustainability, MDPI, vol. 14(22), pages 1-31, November.
    2. Chembessi Chedrak & Gohoungodji Paulin & Juste Rajaonson, 2023. "“A fine wine, better with age”: Circular economy historical roots and influential publications: A bibliometric analysis using Reference Publication Year Spectroscopy (RPYS)," Journal of Industrial Ecology, Yale University, vol. 27(6), pages 1593-1612, December.
    3. Paul Dewick & Magnus Bengtsson & Maurie J. Cohen & Joseph Sarkis & Patrick Schröder, 2020. "Circular economy finance: Clear winner or risky proposition?," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1192-1200, December.
    4. Mohamad Kaddoura & Marianna Lena Kambanou & Anne-Marie Tillman & Tomohiko Sakao, 2019. "Is Prolonging the Lifetime of Passive Durable Products a Low-Hanging Fruit of a Circular Economy? A Multiple Case Study," Sustainability, MDPI, vol. 11(18), pages 1-22, September.
    5. Luis Gabriel Carmona & Kai Whiting & Angeles Carrasco & Tânia Sousa & Tiago Domingos, 2017. "Material Services with Both Eyes Wide Open," Sustainability, MDPI, vol. 9(9), pages 1-23, August.
    6. Söderholm, Patrik, 2011. "Taxing virgin natural resources: Lessons from aggregates taxation in Europe," Resources, Conservation & Recycling, Elsevier, vol. 55(11), pages 911-922.
    7. Ewa Mazur-Wierzbicka, 2021. "Towards Circular Economy—A Comparative Analysis of the Countries of the European Union," Resources, MDPI, vol. 10(5), pages 1-25, May.
    8. Federico Cuomo, 2022. "Urban Living Lab: An Experimental Co-Production Tool to Foster the Circular Economy," Social Sciences, MDPI, vol. 11(6), pages 1-22, June.
    9. Mark Meyer & Martin Hirschnitz-Garbers & Martin Distelkamp, 2018. "Contemporary Resource Policy and Decoupling Trends—Lessons Learnt from Integrated Model-Based Assessments," Sustainability, MDPI, vol. 10(6), pages 1-28, June.
    10. Erik G. Hansen & Ferdinand Revellio, 2020. "Circular value creation architectures: Make, ally, buy, or laissez‐faire," Journal of Industrial Ecology, Yale University, vol. 24(6), pages 1250-1273, December.
    11. Yevgeniya Arushanyan & Anna Björklund & Ola Eriksson & Göran Finnveden & Maria Ljunggren Söderman & Jan-Olov Sundqvist & Åsa Stenmarck, 2017. "Environmental Assessment of Possible Future Waste Management Scenarios," Energies, MDPI, vol. 10(2), pages 1-27, February.
    12. Kai Whiting & Luis Gabriel Carmona & Angeles Carrasco & Tânia Sousa, 2017. "Exergy Replacement Cost of Fossil Fuels: Closing the Carbon Cycle," Energies, MDPI, vol. 10(7), pages 1-21, July.
    13. Dwivedi, Ashish & Moktadir, Md. Abdul & Chiappetta Jabbour, Charbel José & de Carvalho, Daniel Estima, 2022. "Integrating the circular economy and industry 4.0 for sustainable development: Implications for responsible footwear production in a big data-driven world," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    14. Alexandra Barón Dorado & Gerusa Giménez Leal & Rodolfo de Castro Vila, 2022. "Environmental policy and corporate sustainability: The mediating role of environmental management systems in circular economy adoption," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(4), pages 830-842, July.
    15. Beata Zofia Filipiak & Dorota Wyszkowska, 2022. "Determinants of Reducing Greenhouse Gas Emissions in European Union Countries," Energies, MDPI, vol. 15(24), pages 1-24, December.
    16. Alfonso González González & Justo García-Sanz-Calcedo & David Rodríguez Salgado, 2018. "Evaluation of Energy Consumption in German Hospitals: Benchmarking in the Public Sector," Energies, MDPI, vol. 11(9), pages 1-14, August.
    17. Ionela-Corina Chersan & Mirela Paunescu & Elena-Mirela Nichita & Valentin Florentin Dumitru & Cristina Lidia Manea, 2023. "Circular Economy Practices in the Electrical and Electronic Equipment Sector in the European Union," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 25(62), pages 1-80, February.
    18. Ren, Qiuzhen & Albrecht, Johan, 2023. "Toward circular economy: The impact of policy instruments on circular economy innovation for European small medium enterprises," Ecological Economics, Elsevier, vol. 207(C).
    19. Zhu, Bing & Nguyen, Mai & Sarm Siri, Nang & Malik, Ashish, 2022. "Towards a transformative model of circular economy for SMEs," Journal of Business Research, Elsevier, vol. 144(C), pages 545-555.
    20. Ahmed A. Khalifa & Abdul-Jalil Ibrahim & Abdulkarem I. Amhamed & Muftah H. El-Naas, 2022. "Accelerating the Transition to a Circular Economy for Net-Zero Emissions by 2050: A Systematic Review," Sustainability, MDPI, vol. 14(18), pages 1-20, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:circec:v:1:y:2021:i:2:d:10.1007_s43615-020-00002-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.