The Role of Tax Policies in Transition to Circular Economy

Year 2025, Volume: 20 Issue: 1, 300 - 326

İclal Dağlıoğlu Şanlı

Abstract

This study emphasizes the importance of redesigning tax policies to support the circular economy (CE), particularly in terms of enhancing resource efficiency and fostering sustainable consumption and production habits. Within the research scope, tax instruments suitable for the CE are analyzed, providing a comprehensive framework for understanding the role of tax policies in establishing a sustainable economic structure. The primary objective of this study is to evaluate the potential contributions of tax policies in the transition to a CE and, within this context, to offer comprehensive policy recommendations based on approaches in the current literature. Through these contributions, the study aims to support both academic and practical policy development processes in this field.

Keywords

Circular economy, tax, tax policies, tax incentive

Döngüsel Ekonomiye Geçişte Vergi Politikaların Rolü

Abstract

Bu çalışmada, vergi politikalarının döngüsel ekonomi (DE)’yi destekleyecek şekilde yeniden tasarlanmasının önemi vurgulanmış; özellikle kaynak verimliliğinin artırılması, sürdürülebilir tüketim ve üretim alışkanlıklarının oluşturulması açısından bu politikaların etkisi ele alınmıştır. Araştırma kapsamında, DE’ye uygun vergi araçları analiz edilerek sürdürülebilir bir ekonomik yapı oluşturulmasında vergi politikalarının rolüne dair kapsamlı bir çerçeve sunulmuştur. Çalışmanın temel amacı, DE’ye geçişte vergi politikalarının potansiyel katkılarını değerlendirmek ve bu bağlamda mevcut literatürdeki yaklaşımlar çerçevesinde kapsamlı politika önerileri sunarak bu alandaki akademik ve uygulamalı politika geliştirme süreçlerine katkıda bulunmaktır.

Keywords

Döngüsel ekonomi, vergi, vergi politikaları, vergi teşvikleri

Ethical Statement

Bu çalışma bilimsel araştırma ve yayın etiği kurallarına uygun olarak hazırlanmıştır

References

• Allwood, J. M., Ashby, M. F., Gutowski, T. G., & Worrell, E. (2011), “Material Efficiency: A White Paper”, Resources, Conservation and Recycling, 55(3): 362-381.
• Brears, R. C. (2018). Natural Resource Management and the Circular Economy, Palgrave Macmillan, Palgrave Studies İn Natural Resource Management, New Zealand, Springer.
• Castro de Hallgren S., Julca A., Palacin Lucio, J., Ferrufino R., & Pacini Costa, H. S. (2023), “New Economics for Sustainable Development, Circular Economy”, https://www.un.org/sites/un2.un.org/files/circular_economy_14_march.pdf (Erişim Tarihi: 21.12.2023).
• Dobson, A. (2007), “Environmental Citizenship: Towards Sustainable Development”, Sustainable Development, 15(5): 276-285.
• Domenech, T., & Bahn-Walkowiak, B. (2019), “Transition Towards A Resource Efficient Circular Economy In Europe: Policy Lessons From The EU And The Member States”, Ecological Economics, 155: 7-19.
• EASAC (2015), Circular Economy: A Commentary from the Perspectives of the Natural and Social Sciences, https://easac.eu/fileadmin/PDF_s/reports_statements/EASAC_Circular_Economy_Web.pdf (Erişim Tarihi: 13.12.2023).
• Eckermann, F., Golde, M., Herczeg, M., Mazzanti, M., Zoboli, R., & Speck, S. (2015), “Material Resource Taxation–an Analysis for Selected Material Resources” European Topic Centre on Sustainable Consumption and Production & European Topic Centre on Waste and Materials in a Green Economy, ETC/SCP & ETC/WMGE 2014-2015.
• EEB ( November, 2022), Circular Taxation, A Policy Approach to Reduce Resource Use and Accelerate the Transition to a Circular Economy. Final Report. https://eeb.org/wp-content/uploads/2022/11/Circular-Taxation-study-EEB-Final-Report.pdf (Erişim Tarihi: 31.10.2024).
• Ekins, P. (1999), “European Environmental Taxes and Charges: Recent Experience, Issues and Trends”, Ecological Economics, 31(1): 39-62.
• EMF (2015), Delivering the Circular Economy – A Toolkit for Policymakers, https://emf.thirdlight.com/file/24/neVTuDFno5ajUene-man5IbBE/Delivering%20the%20circular%20economy%3A%20a%20toolkit%20for%20policymakers.pdf (Erişim Tarihi: 21.12.2023).
• Enviliance ASIA (2024), Plastic Tax, How Tailand Can Learn from Other Countries, https://enviliance.com/regions/southeast-asia/th/th-plastic-tax
• Esen, Ö., Yıldırım, D. Ç., & Yıldırım, S. (2021). Pollute Less or Tax More? Asymmetries in the EU Environmental Taxes–Ecological Balance Nexus. Environmental Impact Assessment Review, 91, 106662.
• Esposito, M., Tse, T. & Soufani, K. (2017), “Is the Circular Economy a New Fast Expanding Market?”, Thunderbird International Business Review, 59 (1): 9-14.
• European Commission (2020), A New Circular Economy Action Plan – For a Cleaner and More Competitive Europe, Communication from the Commission to the European Parliament, the Council, The European Economic And Social Committee and the Committee of the Regions, COM(2020) 98 Final.
• European Commission (2019), Accelerating the Transition to The Circular Economy, https://op.europa.eu/en/publication-detail/-/publication/02590134-4548-11e9-a8ed-01aa75ed71a1 (Erişim Tarihi: 21.12.2023).
• European Consumer Centres Network (2023), Right To Repair In The EU. https://www.eccnet.eu/publication/right-repair-european-union
• European Environment Agency (2019), Paving the Way for a Circular Economy. https://www.eea.europa.eu/publications/circular-economy-in-europe-insights (Erişim Tarihi: 23.2.2024).
• European Union (2012), Consolidated Version of the Treaty on the Functioning of the European Union, Official Journal of the European Union. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT (Erişim Tarihi: 31.10.2024).
• Fan, Y., & Fang, C. (2020), “Circular Economy Development In China-Current Situation, Evaluation And Policy Implications”, Environmental Impact Assessment Review, 84, 106441.
• Fındık, D. (2023), AB Ülkelerindeki Döngüsel Ekonomi Uygulamalarının Firma Performansına Etkisi Üzerine Ampirik Bir Çalışma, Verimlilik Dergisi, Döngüsel Ekonomi ve Sürdürülebilirlik: 37-52.
• Freire-González, J., Martinez-Sanchez, V., & Puig-Ventosa, I. (2022), “Tools for a Circular Economy: Assessing Waste Taxation in a CGE Multi-Pollutant Framework”, Waste Management, 139: 50-59.
• Geng, Y., & Doberstein, B. (2008), “Developing the Circular Economy in China: Challenges and Opportunities for Achieving'leapfrog Development'”, The International Journal of Sustainable Development & World Ecology, 15(3): 231-239.
• Ghisellini, P., Cialani, C., & Ulgiati, S. (2016), “A Review on Circular Economy: The Expected Transition to a Balanced Interplay of Environmental and Economic Systems”, Journal of Cleaner Production, 114: 11-32.
• Gooijer, J. (2022), “Corporate Taxation in a Circular Economy”, A. Siegmann (ed.), Climate of the Middle: Understanding Climate Change as a Common Challenge içinde, Springer Nature: 53-62.
• Cornelia, P. G. (2020), “Government Interventıon in the Development of the Circular Economy”, Annals of' Constantin Brancusi'University of Targu-Jiu, Economy Series, 20(5).
• Govindan, K., & Hasanagic, M. (2018), “A Systematic Review on Drivers, Barriers, and Practices Towards Circular Economy: A Supply Chain Perspective”, International Journal of Production Research, 56(1-2): 278-311.
• Grafström, J., & Aasma, S. (2021), “Breaking Circular Economy Barriers”, Journal of Cleaner Production, 292, 126002.
• Groothuis F. (2022), “The Taxshift An EU Fiscal Strategy to Support the Inclusive Circular Economy”, https://ex-tax.com/wp-content/uploads/2022/06/The-Taxshift_EU-Fiscal-Strategy_Extax-Project-2June22def.pdf (Erişim Tarihi: 11.12.2023).
• Groothuis F. (2018), “Tax as a Force for Good Rebalancing Our Tax Systems to Support a Global Economy Fit for The Future”,, https://www.accaglobal.com/lk/en/professional-insights/global-profession/environmental-tax.html (Erişim Tarihi: 4.12.2023).
• Hannah H., & Hill, J. (2011),” Reinventing the Wheel: A Circular Economy for Resource Security”, https://green-alliance.org.uk/wp-content/uploads/2021/11/Reinventing-the-wheel.pdf (Erişim Tarihi: 1.11.2023).
• Hartley, K., van Santen, R., & Kirchherr, J. (2020), “Policies For Transitioning Towards A Circular Economy: Expectations From The European Union (EU)”, Resources, Conservation And Recycling, 155, 104634.
• Hondroyiannis, G., Sardianou, E., Nikou, V., Evangelinos, K., & Nikolaou, I. (2024), “Circular Economy And Macroeconomic Performance: Evidence Across 28 European Countries”, Ecological Economics, 215, 108002.
• Khajuria, A., Atienza Vella, A., Chavanich, S., Henning, W., Islam, I., Kral, U., Meng, L., Xiao, L., Murthy, I. K., Oyedotun, T. D. T., Verma, P., Xu, G., Zeng, X., & Li, J. (2022), “Accelerating Circular Economy Solutions to Achieve The 2030 Agenda For Sustainable Development Goals”, Circular Economy 2022;1:100001: 1-9.
• Kirchherr, J., Piscicelli, L., Bour, R., Kostense-Smit, E., Muller, J., Huibrechtse-Truijens, A., & Hekkert, M. (2018), “Barriers to the Circular Economy: Evidence from the European Union (EU)”, Ecological Economics, 150: 264-272.
• Kok, L., Wurpel, G., & Ten Wolde, A. (2013), “Unleashing The Power of The Circular Economy”, Report by IMSA Amsterdam for Circle Economy.
• KPMG (2021). Plastic Tax, Reduce, Reuse, Recycle. https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2021/09/plastic-tax.pdf
• Kumar, V., Sezersan, I., Garza-Reyes, J. A., Gonzalez, E. D., & Al-Shboul, M. D. A. (2019), “Circular Economy in the Manufacturing Sector: Benefits, Opportunities and Barriers”, Management Decision, 57(4): 1067-1086.
• Lin, B. C. A. (2020), “Sustainable Growth: A Circular Economy Perspective”, Journal of Economic Issues, 54(2): 465-471.
• Ma, W., Liu, T., Hao, J. L., Wu, W., & Gu, X. (2023), “Towards a Circular Economy for Construction and Demolition Waste Management in China: Critical Success Factors”, Sustainable Chemistry and Pharmacy, 35: 101226.
• Masi, D., Kumar, V., Garza-Reyes, J. A., & Godsell, J. (2018), “Towards a More Circular Economy: Exploring the Awareness, Practices, and Barriers from a Focal Firm Perspective”, Production Planning & Control, 29(6): 539-550.
• Milios, L. (2021), “Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation”, Circular Economy and Sustainability, 1:477–498.
• Murray, A., Skene, K., & Haynes, K. (2017), “The Circular Economy: An Interdisciplinary Exploration of The Concept and Its Application in A Global Context”, Journal of Business Ethics, 140(3): 369-380.
• Neves, S. A., & Marques, A. C. (2022), “Drivers And Barriers In The Transition From A Linear Economy To A Circular Economy”, Journal of Cleaner Production, 341, 130865.
• OECD (2018), International Trade and the Transition to a Circular Economy, https://www.oecd.org/environment/waste/policy-highlights-international-trade-and-the-transition-to-a-circular-economy.pdf.
• OECD (2023), Towards a National Circular Economy Strategy for Hungary, https://www.oecd.org/en/publications/towards-a-national-circular-economy-strategy-for-hungary_1178c379-en.html.
• Patwa, N., Sivarajah, U., Seetharaman, A., Sarkar, S., Maiti, K., & Hingorani, K. (2021), “Towards A Circular Economy: An Emerging Economies Context”, Journal of Business Research, 122, 725-735.
• Peszko, G. (15 February 2023). Plastic Taxes: A Guide To New Legislation In Europe. https://www.internationaltaxreview.com/article/2ba9a65l5p74ycisjwagw/plastic-taxes-a-guide-to-new-legislation-in-europe
• Potting, J., Hekkert, M. P., Worrell, E., & Hanemaaijer, A. (2017), “Circular Economy: Measuring Innovation in the Product Chain”, PBL Netherlands Environmental Assessment Agency, PBL Publication Number: 2544.
• Preston, F. (2012), “A Global Redesign? Shaping the Circular Economy Briefing Paper”, London.:Chatham House.
• SACEP (2019), A Roadmap for Sustainable Waste Management and Resource Circulation in South Asia, 2019-2030. South Asia Co-Operative Environment Programme.
• Safarzynska, K., Di Domenico, L., & Raberto, M. (2023), “The Circular Economy Mitigates The Material Rebound Due To İnvestments In Renewable Energy”, Journal Of Cleaner Production, 402, 136753.
• Schlosser, R., Chenavaz, R. Y., & Dimitrov, S. (2021), “Circular Economy: Joint Dynamic Pricing And Recycling Investments”, International Journal Of Production Economics, 236, 108117.
• Sohal, A., Nand, A. A., Goyal, P., & Bhattacharya, A. (2022), “Developing A Circular Economy: An Examination of SME’s Role in India”, Journal of Business Research, 142: 435-447.
• Söderholm, P. (2011), “Taxing Virgin Natural Resources: Lessons from Aggregates Taxation in Europe”, Resources, Conservation and Recycling, 55(11): 911-922.
• Stahel, W.R. (2013), “Policy for Material Efficiency—Sustainable Taxation as a Departure from the Throwaway Society”, Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences, 371(1986), 20110567.
• UNEP (2019), Global Resources Outlook 2019: Natural Resources For The Future We Want, https://www.resourcepanel.org/reports/global-resources-outlook (Erişim Tarihi: 27.11.2023).
• Uusitalo, T. Huttunen-Saarivirta, E., Hanski, J., Lima-Toivanen,M., Myllyoja, J., & Pasi Valkokari, P. (2020), “Policy Instruments and Incentives for Circular Economy - Final Report”, 16 January 2020. Eit. Raw Meterials Connecting Matters.
• Van Kruchten, S., & Van Eijk, F. (2022), “Circular Economy & SDGs: How Circular Economy Practices Help to Achieve the Sustainable Development Goals”, https://circulareconomy.europa.eu/platform/sites/default/files/3228_brochure_sdg_-_hch_cmyk_a4_portrait_-_0520-012.pdf (Erişim Tarihi: 3.10.2023).
• Vence, X., & López Pérez, S. D. J. (2021), “Taxation for a Circular Economy: New Instruments, Reforms, and Architectural Changes In The Fiscal System”, Sustainability, 13(8): 4581.
• Wijkman, A., & Skånberg, K. (2015), “The Circular Economy and Benefits for Society Swedish Case Study”, An Interim Report by the Club of Rome with Support from the MAVA Foundation and the Swedish Association of Recycling Industries. Club of Rome.
• Xue, B., Chen, X. P., Geng, Y., Guo, X. J., Lu, C. P., Zhang, Z. L., & Lu, C. Y. (2010), “Survey of Officials’ Awareness on Circular Economy Development in China: Based on Municipal and County Level”, Resources, Conservation and Recycling, 54(12): 1296-1302.
• Yu, Y., Xu, J., Zhang, J. Z., Wu, Y., & Liao, Z. (2022), “Do Circular Economy Practices Matter For Financial Growth? An Empirical Study in China”, Journal Of Cleaner Production, 370, 133255.