Session 8 - Economic Policy Instruments for a Transition towards a Circular Economy

Convener - Artem Korzhenevych, Henning Wilts

Speaker Titel Abstract Kind of presentation
Valeria Knels, Thomas Guenther Perceived stakeholder pressure and the mediating effect of EMCS on eco-innovation  Eco-innovations play a major role for a firm’s success as they contribute to a reduction of a firm’s environmental impact. Current research shows that there is a variety of influencing factors and drivers for such innovations. This study examines the role of perceived stakeholder pressure (PSP) and of management controls on eco-innovations. In particular, the relationship of different groups of stakeholders, namely market stakeholders, capital providers, and regulatory and community stakeholders is examined. Based on a survey of 301 large German firms the authors explore the mediating effect of formal and informal environmental management control systems (EMCS) between PSP and eco-innovation. The main results of the partial least squares (PLS) analysis show that both formal and informal EMCS affect the firm’s eco-innovations in a positive way. Additionally, the results suggest that eco-innovations are being influenced stronger by either formal or informal EMCS depending on a firm’s particular characteristics, one of them being the age of the firm. The contribution of this paper is twofold. First, it shows that external factors such as stakeholder pressure is not sufficient to create eco-innovation as they are mediated by an internal management control system. Second, we find that there are different ways for inspiring eco-innovations and for controlling them. Oral (normal length)
John James Loomis Integrated quantification of forest total economic value  Climate change and biodiversity loss represent major challenges for both developing and developed countries. It is necessary to demonstrate that conservation efforts designed to address such challenges, such as national parks or nature protection areas, are not at odds with regional development goals. Forests’ carbon sequestration is well known, but they also provide a range of other ecosystem services. Additionally, they support local socio-economic dynamics such as cultural value and sustainable tourism. However, ecosystem assessments are time and resource consuming endeavors, and, in order to encourage consideration of forest conservation, a methodology applicable to any natural forest type in the world was created that allows quick total economic value (TEV) estimations. Existing methodologies and the scientific literature were reviewed. Given the prominence of carbon markets, this estimation is divided into carbon sequestration, other ecosystem services, and socio-economic impacts, which are combined into one monetary value. This tool is capable of offering policy makers, companies, and communities a quick assessment of a forest’s TEV, thus it is a step towards the complete valuation of various land uses and ecosystems often found in nature protection areas. Following the results, the tool’s contribution to the literature and future research needs are discussed. Oral (normal length)
Jan Janosch Förster TRANSFORMATIVE POLICY IN THAILAND’S BIOPLASTIC TRANSITION  Transitional processes of transforming current unsustainable societal patterns of production and consumption have become an important field for international academic sustainability research. The bioeconomy and the substitution of fossil resources with those based on biological resources is increasingly associated with providing a pathway to tackle the sustainability challenges of the Anthropocene, while holding socioeconomic potential for developing, emerging and more established economies alike. The development of a bioplastic industry in Thailand, which uses cassava-based inputs instead of fossil fuel resources as feedstock, next to a considerable conventional plastic industry in the country, can be seen as such a transitional process. Important practical questions involve: what were rationales, drivers, challenges and outcomes for which actors of this potential story of transition within the country's 'new wave' policies towards becoming a hub for bioeconomy and bioplastic in the ASEAN region? Theoretically, questions about how to effectively initiate and steer such aspired transitional change of socioeconomic structures remain largely unanswered in current international literature from the perspective of policy. How does policy and governance enable or constrain transitional processes and to which outcomes? Which resources and capacities in political administrations and other actors of society are required and which policy mix and governance modes are gaining societal traction? The according paper will be developed on the basis of empirical findings from field research in Thailand in 2019. It attempts to provide answers to the above questions looking through an integrative analytical lens combining theories of transition and transformation with scholarly insights from the field of policy sciences and development research. Exploring theory-informed and evidence-based lessons learned for future transitional processes elsewhere, this paper strives to contribute scientific knowledge to the highly topical discourse of how to achieve expedient governance for and of sustainability transitions. Oral (normal length)
Antonia Biggs Chile's transition to circular economy through sustainable consumption and production  Since 2015, Chile has been ranked as a high-income economy by the World Bank and member of OCDE countries. Despite Chile´s fast development, its economy is highly extractive and dependent of natural resources thus, extremely vulnerable to climate change. In this sense and in order to promote economic growth while protecting the environment, creating jobs, and encouraging social equity, stated in the Green Growth Strategy (2013), the National Program on Sustainable Consumption and Production (NPSCP) of Chile was created (2015). The NPSCP has been designed as a tool to modify current patterns of consumption and production, by decoupling the country's growth and development from environment degradation. Three of twelve lines of action of the NPSCP have had considering development in the latter years: the Extended Producer Responsibility Law (EPR); a National Committee on Food Loss and Waste and a Material Flow program. In this research, we analyze barriers and advances of these key areas. The EPR Law (framed today as Circular Economy) - relying on the assessment of the benefits and costs of the proposed regulatory scenario indicates that the implementation of the goals is highly profitably from a social perspective. However, uncertainties about incremental rules provide an issue to be resolved by public-private partnership. Regarding the National Committee on Food Loss and Waste, it has estimated 3,700 million kilos / year of food suitable for human consumption are lost; if good consumption practices were adopted at the country level, for each person, you could save $279 USD a year. Finally, a proposal of an environmental account pilot for material flow was designed to encourage the development of environmental indicators used by the Ministry of the Environment to achieve SGDs in different areas such as material footprint per capita and by GDP; and internal consumption of materials in absolute terms Oral (normal length)
Chiara Magrini Market-based instruments to boost waste prevention in European countries  Waste prevention is the highest level of waste hierarchy promoted by European Union and it has become a key element in the transition towards a circular economy. It is a long-term process which requires modifying behaviours of citizens, producers and other participants in the economy, where both consumers and producers need incentives to produce less waste. As stated in Directive 2008/98/CE and Directive 2018/851/EU, economic instruments can play a crucial role in the achievement of waste prevention and management objectives. The aim of this study is to assess the effectiveness of some market-based instruments (MBIs) to achieve quantitative prevention of municipal solid waste (MSW), hence improving resource efficiency usage. A strict definition of waste prevention has been used, including waste avoidance, waste reduction at source or in process, and product reuse. In order to provide a solid overview of the European situation, the study selected six Member States (Belgium, Bulgaria, Italy, Netherlands, Romania and Spain). Several selection criteria have been considered, such as geographic location or MSW per capita production trends from 1995 to 2017. The implementation amongst the selected countries of extended producer responsibility (EPR) schemes, pay-as-you-throw (PAYT) schemes, deposit-refund system (DRS) and environmental taxes on products or on resources has been studied in order to understand how these MBIs can be used for the sake of waste prevention. Based on the results of this study, the effectiveness of MBIs implementation is strictly related to the context they are enforced in. It is particularly important to tailor the MBIs based on the implementation area. Moreover, in order to obtain better results in terms of waste prevention, policymakers should focus on the possibility to measure the avoided impact linked to the waste prevented and develop a related system of incentives. Oral (normal length)
Hans Wiesmeth Some Common Fallacies in Environmental Policies  Current environmental policies contain regulations, which are not incentive-compatible regarding the goals of the policies. The presentation refers to holistic approaches to environmental policies, and considers, in particular, prisoners' dilemma or tragedy of the commons type regulations, insufficient integration of relevant stakeholders into the policies, and the issue of vested interests. The associated examples are taken from environmental policies in Germany and refer to the areas of packaging waste in general, and to drinks packaging and waste electric and electronic equipment in particular. In more concrete terms, the issue concern the common requirement of a design for environment, waste prevention or waste reduction, and the focus on producers in EPR policies. The presentation points, of course, to the problematic regulatory issues and proposes alternative regulations. Oral (normal length)
Kriselda Sulcaj Green Finance Modeling of Nature-Based Solution Projects towards Circular Economy in European Cities  Nature-based solutions are actions which are inspired by, supported by or copied from nature and the out most importance of them is that they can address different social challenges in a sustainable way. More over NbS is characterized by increased potential to be efficient and resilient to change, but to be successful they must be adapted to local conditions. Firstly the focus of this work is to advance the understanding of nature based solutions as an innovative solution on a circular economy with special emphasizes on the case of self-governing and self-operating models which priory has the potential to be implemented in different settings, because despite those co-benefits and inclusive nature of the framework serving as solutions one of the main challenges so far has been delivering them to different stakeholders especially to private sector mainly due to a financing gap on such projects. In this regard, many municipalities in Europe report that they lack know-how on how to finance green projects. For this reason the main research objective of the work is to model green finance for nature-based solution projects. This objective is motived also by the latest ambitious action plan for sustainable finance of the European Commission on March 2018 which announced reorienting capital flows towards sustainable projects. In this regards nature-based solution projects seems to be among the most sustainable projects which require changing the investment culture and behavior of all market participants. We propose that those solutions may be very effective especially to better manage the water related challenges and at this point there is a clear link to circular economy since the global water cycle is already a circular system. Key words: nature based solutions, circular economy, sustainability, green finance projects. Oral (normal length)
Maksud Bekchanov Economic instruments along waste-to-asset value chain for scaling up the resources recovery and reuse technologies  Resources recovery and reuse (RRR) technologies (compost, biogas, treated water) can effectively reduce waste related pollution, allow for additional revenues and improve resource use productivity. Especially, developing countries such as Sri Lanka where waste accumulation is a generic issue have large potential for implementing these technologies to enhance sustainable development. Yet, various governmental interventions such as subsidies to chemical fertilizers create barriers for wider adoption of RRR options. An economic optimization model of the integrated waste management, energy and agriculture systems was developed to examine the role of economic policy instruments along waste-to-asset value chain for scaling up RRR technologies. Model was calibrated using data from multiple research and statistical reports of both national and international development organizations. The results show that recycling organic waste into compost can considerably reduce fertiliser import costs (US$ 104–145 Million), sanitary landfilling costs (US$ 214–406 Million) and environmental pollution costs (US$ 127–142 Million). Biogas technology can largely contribute to reduced carbon gas emissions. Fines to open waste dumping and illegal logging, costs for landfilling, subsidies to electricity and chemical fertilizers are found to have large impact on financial feasibility and adoption levels of RRR options. Keywords: waste recycling, compost, biogas, waste-to-asset value chain, economic instruments, South Asia Oral (normal length)