An Introduction to Circular Economy

Economic Instruments and Financial Mechanisms for the Adoption of a Circular Economy

Abstract

The transition to a circular economy requires the mobilization of resources and investments that support the adoption and upscale of ecological design and new technologies and business models. Policy instruments, including economic instruments, play a key role in ensuring that the prices of goods and services reflect the economic damages or benefits associated with their production and use, thereby creating incentives for circularity. Such incentives can help create a more playing level field for innovative technologies and business models and play a key role in freeing and reallocating resources that are currently used in the linear model. Finance instruments will be instrumental to scale up funding in new business models to support the transition toward a circular economy.

Author

Santiago ENRIQUEZ
Climate Change Specialist
Abt Associates

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