Circular economy: economic impacts of higher material recycling targets

Circular economy: economic impacts of higher material recycling targets

The circular economy requires well-functioning waste management systems. In this regards, packaging waste management (PWM) plays a key role. The Italian PWM system bases on a consortium with operate in compliance with the extended producer responsibility. The key financial mechanism ruling the functioning of the system is the so-called environment contribution. This paper draws up potential socio-economic implications arising from higher recycling targets in the medium-term. Two scenarios are discussed: the baseline, which simulates the environmental contribution according to the current recycling rate along with the reference that reflects higher goals. Results suggest that higher recycling targets are associated with positive effects on job creation, production and value added by virtue of both direct and indirect effects. The application of the model has demonstrated significant positive socio-economic impacts achievable when defining new policies and regulations for the sector. Although limited to Italy, this paper serves as a reference for policy makers since environmental legislation and especially waste management policy deserve careful consideration in the light of the polluter pays principle and shared responsibility.