‘Economic instruments for the circular economy transition: the (neglected) role of virgin materials and landfill taxation in Italy’

The use of economic instruments in environmental and circular economy policies has
attracted a wide and increasing interest in the international and European debate in recent decades.
Environmental taxes and levies, subsidies and other marked-based instruments have been seen as
useful policy tools to enhance environmental protection, getting the price right and creating market-based
incentives – price and cost signals – for environmentally-friendly behaviors. In this perspective, taxes and
other economic instruments acquire, primarily or at least partially, a regulatory and preventive role: they
address the market failure of environmental externalities, aligning private and social costs and,
consequently, stimulating more socially desirable outcomes. The paper focuses on the two main price
instruments implemented in Italy at the beginning and at the end of the material stream - i.e the
aggregates levy and the landfill tax – aiming at enlightening the main characteristics of the two
instruments and suggesting some possible future development. The analysis will show how the regulatory
role of these subnational environmental levies is largely neglected, jeopardizing the opportunity to use
them in a more effective and consistent way.