How To Enhance Transition To Circular Economy
The Global Alliance for Circular Economy and Resource Efficiency (GACERE) made a call for collective action to accelerate the transition to circular economies during the sixth session of United Nations Environment Assembly (UNEA-6).
The financing of transition to circular economy was a focus of discussion during the UNEA-6 held in January this year by the governments of Morocco, Costa Rica, Peru and Rwanda together with GACERE, the Circular Economy Coalition for Latin America and the Caribbean, and the African Circular Economy Alliance.
As per the discussion, robust institutions and regulations are essential to enable the meaningful implementation of circular economy strategies by governments and other stakeholders. The moves need to be backed by solid financing and investment plans, and by directing financial flows to pro-circular economy measures.
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According to the case studies of mechanisms to collect financial backing to implement the circular economy, presented by the Governments of Peru, Rwanda and Slovenia, optimizing national budgets, establishing green funds, optimizing fiscal policy approaches and making public procurement circular might aid in the transition.
Officials also said that governments can provide tax incentives and subsidies, as well as investments in innovation, capacity-building and awareness-raising.
The speakers at the session highlighted that an international legally binding instrument on plastic pollution, now being negotiated, represents a significant step toward realizing circularity goals globally.
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Development finance institutions play a key role in helping to mobilize commercial banks to finance circular economy projects. Introducing stable policy and regulatory frameworks over time to encourage financial institutions to integrate circularity in their products and services will also enhance the transition to circular economy.
