- Client: Environment and Forestry Directorate of the Scottish government
- Implementation period: January, 2014 - December, 2015 (Completed)
- Geographic coverage: Scotland
How can fiscal instruments stimulate the circular economy in Scotland?
The purpose of this project was to examine the role of fiscal instruments in maximising the duration for which materials remain or flow through the Scottish economy in their highest value form, and that way support a shift toward a circular economy. The study focused on the potential of existing and new fiscal instruments to stimulate a more circular economy in Scotland.
The review and assessment of existing fiscal instruments resulted in the following key findings:
- There is already coverage of the circular economy design conditions;
- Most of the instruments have a low degree of specificity;
- There are no current instruments relevant to sharing design information through the supply chain;
- There are no current fiscal instruments supporting a move towards business models aligned with the circular economy conditions;
- There is a range of existing fiscal instruments supportive of the development of reverse logistics conditions;
- There are very few instruments related to the enabling factors of a circular economy.
The study also developed a Roadmap categorising fiscal instruments that can support the circular economy in the short, medium and long term:
- In the short term, the type of fiscal instruments used to support circular economy conditions are generally feasibility studies, innovation subsidies and investment subsidies (e.g. deposit refund schemes).
- In the medium term, the use of tax credits, allowances and reliefs could be considered to support design, innovative business models and reverse logistics (e.g. Deposit Return Schemes, reduced VAT).
- In the longer term, further financial product development could be introduced to support innovative business models (e.g. Pay as You Throw schemes, Product levies and hypothecated levy funds).
Our work contributed to the Scottinsh Government’s circular economy strategy, which can be found here.