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Circular Economy

What policies are still necessary?

In order to be able to actually realize the ambitions for a circular economy, additional poliy measures are necessary. The following steps are suggested as improvements.

Sustainable Coalition Agreement

A coalition of nearly 450 businesses and social organisations have petitioned the House of Representatives to make the next coalition agreement a sustaianble agreement. They urged the House to include the following points in the coalition agreement:

1. Focus on Sustainable Development Goals

The cabinet should test all policy on the way in which this contributes to reaching the SDGs. This will prevent negative (indirect) effects of Dutch policy. Where possible the cabinet will aim for maximum contributions to (worldwide) sustainable development.

2. Tax reform from labour to resources

There is a need in changing taxation from labour to natural resource use and consumption. Taxes on resources increase recycling and reduce resource extraction. Lower taxes on labour would make it possible to tap into the abundance of talents and capacities of people. Although a tax shift is budget neutral for governments, it fundamentally changes the margins within which business, consumers and governments operate.

The Ex’Tax project is a foundation that researches this subject and is involved in the social debate. They advise the Dutch government, as an important prerequisite to a tax reform, to aim for a reorganisation of the Dutch Tax Authority. The tax authority should have larger capacity and better organisation, to ensure a high quality of service. The Ex’Tax project has reached these conclusions from their case study on the Netherlands, in cooperation with Deloitte, EY, KPMG Meijburg and PwC. Read here: New era. New plan. Fiscal reforms for an inclusive, circular economy. Case study the Netherlands (2014).

3. Acceptable budget for development aid

The cabinet should encourage international corporate social responsibility, and return to a fully acceptable budget for development aid. This way, developing nations can reach the SDGs as well.

Source (in Dutch): Duurzaamregeerakkoord.nl

Improve VANG program

The current VANG -program (“From waste to resource”) of the Dutch government has some positive impacts, but needs additional steering measures if it wants to succeed. Additional recommendations are:

  • Develop a vision of a circular society to arrive more easily at common ground;
  • Focus on economic opportunities and take resource scarcity into account in a stronger collaboration between the Ministries of Environment, Economic Affairs and Foreign Affairs to improve opportunities for business;
  • Focus on international co-operation, for example in the EU;
  • Focus also on sustainable production, consumption and other business models (i.e. leasing), instead of only on waste and resources;
  • The government should not only be stimulating, but also regulating in order to achieve the targets;
  • Support local governments and scale up successful practices;
  • Increase attention for vested interests that hinder the transition;
  • Review targets with regards to the quality of recycling;
  • Remain focus on measures that actively support the targets in the VANG-program.

Rood, & Hanemaaijer. 2014, p.2-3

Extended producer responsibility

A better implication of extended producer responsibility is needed, which is also called Product responsibility. To enable this, the following can be applied:

  1. Product responsibility can be extended to other materials, such as paper, furniture and pharmaceuticals;
  2. Product responsibility schemes could place financial responsibility for collection and treatment on the organisation(s) which represents the producers’ interest.
  3. Product responsibility could be used to make producers responsible for using the materials which are collected.
  4. For suitable products, product responsibility could include targets for reuse and preparation for reuse.
  5. Product responsibility schemes should encourage fee structures which reflect the ease with which products can be reused / remanufactured / recycled, thereby encouraging eco-design principles.
  6. The design of product responsibility mechanisms should encourage individual producers to adopt their own models.

RWM, 2014, p.14-15

At this time, the government is working on a ‘Producer responsibility 2.0’, where a new definition of the concept will pay attention to the start of the production chain.

Reducing environmentally harmful subsidies

Almost all nations apply direct and indirect subsidies (tax breaks and lower tariffs) for environmentally damaging activities. Reducing these subsidies leads to fair competition with clean technologies.

Groothuis. 2014, p.45

At this time, the government is doing research into harmful subsidies and creating better alternatives.

Creating a resource information system

To move circular economy developments from the margin to mainstream, three things are important. First of all, awareness of the seriousness of the issues related to resources scarcity, and the persistence of current environmental guidelines, should grow. In addition, information technology must be developed to keep track of materials. Finally, a shift in consumer behavior is of interest. (Ellen Macarthur Foundation, 2013a, Chapter 5)

To facilitate these shifts a material information system is relevant. It is recommended to the government to invest in the development of this system, by:

  • Supporting pilot projects and communicating successful pilots;
  • Organizing cross-sectoral meetings in order to learn from each other.
  • Promote (new) knowledge and informatie technologie on tracking materials and parts;
  • Implementing policies on commodities that benefits both frontrunners, and mainstream groups and laggards. These measures can include:
    • fiscal incentives to use recycled materials;
    • encouragement of circular procurement; and
    • removing or easing regulatory barriers;
  • Providing national or European (co-) funding.
  • Integrate, harmonize and standardize the wide variety of environmental labels, labeling, certification systems and standards;
  • Develop governance structures for the management of a commodity information system (who is owner / operator thereof).
Mentink & Houben, 2014