The Expert Group on Circular Economy Financing has developed a guidance document titled Incentives to boost the Circular Economy - A guide for Public Authorities to support public authorities in identifying the most suited incentives to speed up the transition towards a circular economy at national, regional or local level.
Incentives aim at addressing market failures that prevent or delay the transition towards circular products, services and solutions. They play an instrumental role in pricing negative externalities, steering markets towards sustainability and driving behavioral changes.
Incentives have the ability to create value, de-risk investments and improve the competitiveness of value chains that bring net environmental benefits compared with linear economies. They also yield benefits to the economy and society.
As incentives target different market failures or barriers, their type, combination, associated costs and infrastructure of implementation, temporality or scope, as well as their relevant level of enforcement will inherently vary.