The Swedish Circular Economy

Nov 14, 2016 | written by:

After the announcement of the first electric highway, Sweden continues its journey in living up to its role of being a global leader of sustainable development. How? With tax breaks for those who repair and recycle instead of buying new items. After all, even the choices relating to purchases made by its citizens have an environmental impact and the new proposal aims to reduce the throwaway consumer culture preferring population’s awareness for a more sustainable life.

The fiscal plan has been presented by the Finance Minister Per Bolund and will come into operation from January 2017. The discounts are for all - municipalities, businesses and individuals deserving citizens - and not just for major expenses, as the repair of furniture or appliances, but also on common objects such as bicycles or clothing. Precisely on the latter VAT has been reduced from 25% to 12% and on white goods consumers can claim back income tax due on the person doing the work. In addition to tax breaks, the Swedish politic will provide information campaigns on sustainable consumption and the rationalization of natural resources, tools to give greater visibility to companies that adopt policies of environmental sustainability.

However, Minister Per Bolund had to answer tricky questions that questioned the actual benefits of the legislation, especially in the economic sphere: won’t the country's economy suffer if people buy less? According to Bolund no, in fact, the measure will not prevent citizens to buy, but will allow them to buy higher quality products, because they will know that, in the event, will be able to repair them. Repairs will also have the positive effect of creating new jobs for craftsmen because it will involve less work than the productions nowadays largely automated. Spread the practice of repair could therefore expand the labor market and reduce unemployment.

The Swedish tax plan is part of the European circular economy package: in circular systems products retain their value as long as possible without creating waste. When a product reaches the end of the life cycle, the resources remain within the economic system, so that it can be reused several times for production purposes and thus create new value. The circular economy in Europe offers an opportunity for significant reduction of annual costs of materials between 340 and 380 billion dollars.

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