154
cases, “clunkers” were not destroyed but exported and sold abroad (Ashok et al.
2012; Antoniades 2013). In a circular economy perspective, the same payments
could have been offered to remanufacture/retrofit stock, e.g. to remanufacture the
car engines and convert them to compressed natural gas. As this job is best done
in local workshops, it would have created local jobs. It would have avoided the
GHG emissions from recycling the clunkers and manufacturing their replacements,
and substantially reduced emissions in use.
Most current policies promoting a circular economy focus on environmental performance or resource efficiency, exemplified by:
• OECD Guidance (2015b): due diligence guidance for responsible supply chains
of minerals from conflict-affected and high-risk areas (“Guidance”);
• Rules of the U.S. Securities and Exchange Commission on Disclosure of
Payments by Resource Extraction Issuers (US SEC 2012);
• UN (2013) Mercury agreement, designed to reduce emissions and ensure an efficient utilisation of stocks of resources;
• EU (2008) waste directive to foster waste prevention through reuse and servicelife extension of goods (see Chap. 14).
To promote sustainable development, a new approach should be more holistic,
defining policies which are simple, convincing and cross-cutting with the objective
of preserving stock. The full societal cost of not working has generally been
underestimated, but a recent OECD study has shown a strong link between mental
health and employment (OECD 2015a). Both health and acquired capital of unused
workers (e.g. sub-employed or unemployed people and non-active retirees) can
deteriorate rapidly and even lead to a high risk of developing mental problems
(Coulmas 2012). On the other hand, just as for poorly maintained manufactured
capital, overuse of human capital can also lead to a loss of the stock through, for
instance, burn- out. In general, to promote sustainable development, policies are
needed which promote economic sectors that intelligently use and also preserve all
forms of stocks or capitals. As these activities are more labour and considerably less
resource intensive than manufacturing, sustainable taxation emerges as a key lever
to promote change to a low-carbon resource-efficient society (Stahel 2013).
Examples of a different approach to taxation include:
• Do not tax renewable resources, noting that human labour is renewable, but
exclusively tax non-renewable resources, wastes and emissions;
• Do not levy value added tax (VAT) on the value preservation of stock (such as
reuse and service-life extension activities);
• Give carbon credits to carbon emission prevention (smart stock management) at
the same rate as to carbon emission reductions (cleaner flow).
It must be emphasised that the proposal here is for a shift in the tax base rather
than an increase in tax levels. A fiscal policy of sustainable taxation could make
many subsidy policies redundant; taxing non-renewable resources instead of labour
would give clear incentives to economic actors to shift from flow to stock business
models. In addition, it would make all stock management activities (looking after
W.R. Stahel and R. Clift
cases, “clunkers” were not destroyed but exported and sold abroad (Ashok et al.
2012; Antoniades 2013). In a circular economy perspective, the same payments
could have been offered to remanufacture/retrofit stock, e.g. to remanufacture the
car engines and convert them to compressed natural gas. As this job is best done
in local workshops, it would have created local jobs. It would have avoided the
GHG emissions from recycling the clunkers and manufacturing their replacements,
and substantially reduced emissions in use.
Most current policies promoting a circular economy focus on environmental performance or resource efficiency, exemplified by:
• OECD Guidance (2015b): due diligence guidance for responsible supply chains
of minerals from conflict-affected and high-risk areas (“Guidance”);
• Rules of the U.S. Securities and Exchange Commission on Disclosure of
Payments by Resource Extraction Issuers (US SEC 2012);
• UN (2013) Mercury agreement, designed to reduce emissions and ensure an efficient utilisation of stocks of resources;
• EU (2008) waste directive to foster waste prevention through reuse and servicelife extension of goods (see Chap. 14).
To promote sustainable development, a new approach should be more holistic,
defining policies which are simple, convincing and cross-cutting with the objective
of preserving stock. The full societal cost of not working has generally been
underestimated, but a recent OECD study has shown a strong link between mental
health and employment (OECD 2015a). Both health and acquired capital of unused
workers (e.g. sub-employed or unemployed people and non-active retirees) can
deteriorate rapidly and even lead to a high risk of developing mental problems
(Coulmas 2012). On the other hand, just as for poorly maintained manufactured
capital, overuse of human capital can also lead to a loss of the stock through, for
instance, burn- out. In general, to promote sustainable development, policies are
needed which promote economic sectors that intelligently use and also preserve all
forms of stocks or capitals. As these activities are more labour and considerably less
resource intensive than manufacturing, sustainable taxation emerges as a key lever
to promote change to a low-carbon resource-efficient society (Stahel 2013).
Examples of a different approach to taxation include:
• Do not tax renewable resources, noting that human labour is renewable, but
exclusively tax non-renewable resources, wastes and emissions;
• Do not levy value added tax (VAT) on the value preservation of stock (such as
reuse and service-life extension activities);
• Give carbon credits to carbon emission prevention (smart stock management) at
the same rate as to carbon emission reductions (cleaner flow).
It must be emphasised that the proposal here is for a shift in the tax base rather
than an increase in tax levels. A fiscal policy of sustainable taxation could make
many subsidy policies redundant; taxing non-renewable resources instead of labour
would give clear incentives to economic actors to shift from flow to stock business
models. In addition, it would make all stock management activities (looking after
W.R. Stahel and R. Clift