Challenges

By enabling the internalisation of externalities

Once the full value chain has to be accounted for, circular business models will automatically become more feasible in comparison to linear models. One first step in this direction could be full transparency. Another one should be fiscal reforms and/or "eco-taxation". This dream has been spun already many times.. Nevertheless, several big European circular economy projects are on it's way, as is the European Commission circular economy financing expert group, that will hopefully suggest some further solutions at least for more sustainable financing models.

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How can this be improved?
Paul Schosseler
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  • Hi Johannes, you hit the point! True internalisation of environmental and social costs would soon lead to the failure of many linear economy models, which are profitable for the moment.
    We must, however, also look into taxation models that have been designed along the linear economy to create "financial value" from it and think about adapting the models to the circular economy. We have looked into some case studies with KMPG Luxembourg, e.g. for V.A.T. Please see also https://blog.kpmg.lu/towards-a-circular-economy-vat-and-the-resell-modeā€¦
    Best,
    Paul