Effectiveness of fiscal incentives on businesses and consumers to adopt circular economy practices (acronym: FISCAL-CE)

The aim of this contract is to address the following central research question: To what extent do fiscal incentives and disincentives (taxes and tax discounts for example) play a role in encouraging businesses and consumers to embrace circular economy practices? Within this framework, the contractor shall: 1) Develop a Comprehensive Database of fiscal incentives affecting circular economy outcomes that have been implemented across European countries over time. These instruments include taxes, charges, subsidies, deposit-refund schemes, Pay-As-You Throw and other economic incentives aimed at influencing production and consumption behaviour, meeting the aims of circular economy. The main focus shall be taxes, using (Milios, 2021) and the Policy INstruments for the Environment - OECD database (Policy INstruments for the Environment - OECD database by OECD - Issuu: https://issuu.com/oecd.publishing/docs/pine_database_brochure) circular economy category for cross-cutting domains and other suitable sources as a guide to define the fiscal instrument types and uses in the EU (MS, regions, and cities) 2) Further the JRC Concept for Measuring Effectiveness by suggesting suitable and proven methods of analysis such as dynamic modelling (Thombs, et al., 2025) and identifying dependent variables such as CMUR and GHG and other suitable independent variables based on literature review and assessment of existing databases including JRC’s databases. The goal would be to know the availability, quality, location, and accessibility of data on circularity indicators such as waste prevention, reuse, repair, recycling, secondary material use, avoidance of landfill and incineration and resource productivity. 3) Conduct Analysis using panel-data and econometric methods to assess the extent to which different instruments (taxes first) contribute to measurable improvements in circularity indicators such as waste prevention, reuse, repair, recycling, secondary material use, avoidance of landfill and incineration and resource productivity. Comparative case studies of MS selected instruments and jurisdictions (can be regions or cities) will complement the quantitative analysis, examining how policy design, implementation, enforcement, and institutional context shape their effectiveness. Other methods may be suggested. 4) Propose a method for evaluating combined effects of mixed policy approaches if data availability allows. 5) Provide feedback that allows JRC to evaluate current landscape and make solid recommendations for “EU-wide” approach (guidelines) to CE taxation and other fiscal incentives. Resources: • Milios, L. Towards a Circular Economy Taxation Framework: Expectations and Challenges of Implementation. Circ.Econ.Sust. 1, 477–498 (2021). https://doi.org/10.1007/s43615-020-00002-z . • Policy INstruments for the Environment - OECD database Thombs, R.P., Zhang, W., Sovacool, B.K. 2025 Do decarbonization policies work? Evidence from a global meta-analysis - ScienceDirect (https://www.sciencedirect.com/science/article/pii/S0140988326000241)

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