As of: 19.07.2010Financing of the German circular economy
A modern waste management system committed to the goals of environmental and resource protection requires high technical
standards and an adaequate legislative environment. High waste management standards for their part need modern equip-ment for
waste collection, transport, sorting, recycling and disposal. The corresponding investments and running costs need a solid
financing. Which way has been chosen for waste management in Germany?
Generally, four different sources of finance can be distinguished:
- Germany disposes of a system financed by fees, which uses the
“polluter-pays” principle as a rule for the distribution of fees: The producer has to pay for waste treatment or
disposal. In turn, he receives a bill stating the services he gets for his payment. Waste production and recycling/disposal
costs can be con-trolled to some degree, by increased sorting or product reuse.
-
Product responsibility obliges producers and distributors to take their products back and take on recycling of
the recyclable fraction. In this case, producers/distributors usually finance joint systems that operate collection and
recycling of products at the end of their life cycle.
-
Secondary raw materials partly fetch good revenues. For example, markets for metals are global markets with
trading prices geared to prices for primary raw materials. Metals, glass, paper, plastics and many recycled production residues
realize positive prices at the world market. High qualities in separate collection of secondary raw materials make it possible
to finance a range of waste manage-ment activities by this means.
- In many countries, waste management system are finance through tax money.
However, it has been observed that having a state financing implemented, mod-ern waste management technologies are able to gain
ground but comparably slow. One reason for this lies in the fact that taxes are often spent for policy areas „more
important“ than waste management. Nevertheless, in Germany, too, there are certain fields that initially need public
financial support. This is particu-larly the case where global prices for raw materials cannot yet guarantee an in-dependent
financing of recycling activities.
Taking a conclusive look, it can be stated that the solid financing basis contributed to the development of a highly effective
waste management system in Germany.
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