At the core of the regenerative economy lies a set of values and beliefs that challenge the fundamental assumptions of the current "fast turnover" economic paradigm. Our existing economic model has been designed to maximize financial and built capital, often at the expense of human and natural capital. When environmental costs are accounted for, most industries would struggle to be considered profitable. In contrast, the regenerative economy prioritizes the health and resilience of ecosystems, understanding that human well-being is deeply intertwined with the health of the natural world. Ignoring climate change will lead to escalating risks, from physical disruptions to financial losses, while high levels of inequality pose a serious threat to social stability.

The core beliefs of the regenerative economy include:

• Interdependence and Common Good: Acknowledging the interconnectedness of all life forms and systems, and the necessity for economic activities to contribute positively to the health of the entire ecosystem.
• Sustainability and Stewardship: Focusing on long-term ecological balance rather than short-term profits, ensuring that economic activities do not deplete natural resources beyond their ability to regenerate.
• Human dignity and Equity: Committing to the fair distribution of resources and opportunities, addressing social inequalities, and fostering inclusive growth. This encompasses not only material resources but also opportunities for meaningful participation in economic, social, and political life. The regenerative economy emphasizes a long-term perspective, prioritizing intergenerational equity and the well-being of future generations.

On this basis, a regenerative economy is envisioned as a system that balances individual needs with collective well-being,integrating effective management of common natural resources with local and global cooperation. The economy focuses on empowering communities through strong local governance, supporting local businesses, and ensuring that essential needs like energy and food are met locally. Economic security is a core aim, ensuring that everyone has access to basic resources and opportunities, while fostering creativity and innovation. The economy values contributions to society in a fair and inclusive manner, whether through meaningful work, artistic endeavors, or environmental stewardship, and aims to recognize and reward these contributions.

On this basis, one of the central concepts of regenerative economies is the circular economy, which seeks to close the loop on production and consumption by designing products and processes that minimize waste and maximize the reuse of materials. In a circular economy, products are designed for longevity, repairability, and recyclability, reducing the demand for virgin resources and mitigating environmental degradation. Moreover, digital technologies such as artificial intelligence, blockchain, and the Internet of Things (IoT) can facilitate the transition to a regenerative economy by improving resource management, enabling transparency in supply chains, and supporting the development of new business models based on sharing, collaboration, and circularity.

4. Restoring Natural Capital: recognizing the need to invest in and restore the health of natural systems. Businesses and societies must actively work to regenerate and sustain the natural capital—such as forests, water sources, and biodiversity—that supports life and economic activity. This includes practices such as sustainable agriculture, reforestation, and conservation, ensuring that natural resources are preserved and enhanced for future generations.

5. Human and Social Capital: recognizing the value of human ingenuity, creativity, and social cohesion as essential elements for achieving a sustainable economy. Businesses should invest in human capital through education, training, and fair labor practices, and foster social capital by building strong, resilient communities.

To transition to a regenerative economy, a dual approach is required: short-term actions to buy time and long-term strategies for systemic change. In the short term, we focus on enhancing resource productivity and deploying existing technologies to address immediate challenges and prevent further crisis escalation. This involves improving efficiency, optimizing resource management, and preventing rebound effects. In the long term, we aim to establish a regenerative economy by adopting circular material flows and regenerative agriculture, substituting non-renewable materials with renewables, driving technological innovation, and implementing banking reform and economic incentives to support sustainable practices.

The transition to a regenerative economy requires a deep and systemic transformation, recognizing the complexity and interconnectedness of social, economic, and ecological systems. It emphasizes systems thinking, based on the importance of relationships and feedback loops within complex systems, seeking to identify leverage points where interventions can lead to significant positive change.

A) Political Institutions

Governments play a vital role in establishing regulatory and policy frameworks that encourage regenerative practices and discourage harmful, extractive activities. To manage a growing population and simultaneously boost per capita income in low-income countries, we must combine efficiency-enhancing technologies with circular material flows and use economic instruments to manage demand, promote behavioral changes, and leverage new technologies to enable economic prosperity in fundamentally different ways.

• Strengthening recycling and reuse targets can reduce waste and residues, with limits on waste incineration to capture value post-first-use.
  
• Policies should be introduced or enhanced to promote renewable energy through feed-in tariffs, tax credits, and green certificates and stop subsidies for non-renewable energy
• It is essential to incorporate external costs, such as pollution and natural capital loss, into market prices. This might include policies such as carbon pricing.
  
• New product design requirements should focus on ease of repair, maintenance, and dismantling to combat obsolescence.
• Establishing standards for product categories will facilitate better reuse and recycling, especially for challenging materials like plastics.
• Public procurement should incentivize business models that prioritize sustainable performance and energy efficiency over product sales and (lowest) price.
• Governments should support research and development and direct investments in green technologies, circular economy and renewable infrastructure
  
• Material efficiency must be integrated into climate mitigation strategies to maximize emission reductions from extended product lifecycles and improved recycling rates.
• Introduce or enhance taxes on undesirable activities, such as excessive resource use or pollution to incentivize sustainable practices and job creation. Reduce taxes on labor and income, and reduce taxes for activities that encourage sustainability.
• Creating a market for secondary materials, such as by removing VAT on recycled materials and mandating recycled content in production, can drive the circular economy.
• Additionally, extending minimum legal warranties for products (e.g. 6-8 years)
• Implement policies to eliminate the use of toxic materials
• Reform company statutes to prioritize environmental performance and broader stakeholder interests.
• Reform agriculture by prioritizing smallholder, sustainable farming to enhance local resilience and food security.
  
• Implement environmental protection laws and regulations that enforce sustainable land use and resource management.

Moreover, to address economic inequality, it is crucial to implement several key policies:

• Enhance access to essential services such as education, healthcare, and childcare
• Introduce or increase minimum wages to boost living standards and reduce poverty. Ensure good job quality and improve job security
• Adopt progressive taxation to fairly distribute economic power and curb tax avoidance
• Explore universal basic income (UBI) or a job guarantee program to provide financial stability and employment opportunities
• Improve childcare access
• Invest in local skills and training programs
• Support worker cooperatives to foster equitable economic growth and community empowerment.
  
• Consider global wealth redistribution mechanisms, like carbon markets, to support poorer nations and address climate change.
• Implement trade barriers to protect developing economies from exploitation and encourage domestic industries. Cancel or restructure national debts to free up resources for development.
  
• Overhaul corrupt legal systems to ensure justice and effective governance.
  
• Invest in clean energy, water, and sanitation to improve basic living conditions and reduce environmental impact.
  
• Lastly, ensure population stability through improved education, access to contraception, and better living conditions to manage demographic pressures.
  

B) Financial Institutions

The financial sector also plays a critical role in enabling the regenerative economy.

1) Financial System Structure

• Enhance Diversity and Resilience:Increase the variety of financial institutions to ensure different roles and strategies (e.g., stakeholder banks, public banks).
  
• Address Interconnectedness:Improve the management of how financial institutions' connections impact crisis spread and stability.
• Control System Size:Regulate the size of financial systems relative to their domestic economies to mitigate risks.
• Simplify Complexity and Improve Transparency:Reduce the complexity of financial products and enhance transparency to manage risks more effectively.Implement measures to prevent excessive risk-taking.
  
• Break Up Large Banks: Consider breaking up large banks into smaller, less connected entities. Convert large banks into public utilities with high capital requirements
• Promote cooperative finance to provide fairer access to capital and ensure equitable business practices.
  
• Reform capital markets:Promote long-term investments over short-term speculation. Implement differential voting rights and heavy taxation on short-term returns.

2)Regulation and Governance

• Regulate Asset and Liability Composition: Monitor and manage where banks invest to avoid speculative and volatile assets. Adjust funding methods, emphasizing stable deposits over short-term borrowing.
• Create simple, structural rules for the shadow banking sector.
• Restrict Bank Activities: Limit banks' ability to use insured deposits for high-risk trading. End practices that lead to too-big-to-fail scenarios and ensure accountability for financial crimes.
• Differential Reserve Requirements: Implement 100% reserve requirements for property investments (except new or socially necessary housing) and speculative investments.
  
• Adjust Leverage Ratios: Enforce stricter capital requirements to reduce systemic risk
  

3)Sustainable Investment

• Credit Guidance:Direct credit and investment towards sustainable enterprises and investments, such as renewable energy, sustainable agriculture, and green infrastructure.
• Encourage Specialist Banks:Establish Green Investment Banks or National Investment Banks focused on sustainability.
• Promote Regional or Local Banks: Support the creation of regional or local banks with public interest mandates to avoid speculative investments.
• Promote innovative financial instruments: Support green bonds, impact investing, and carbon markets to mobilize the necessary resources for regenerative initiatives.

4)Innovative Financial Models

• Evergreen Direct Investment (EDI): Explore EDI methods where investors receive a preferred return and share profits with the brand holder.
• Sovereign Money Creation: Use sovereign money to fund sustainable investments and public welfare programs, separating money creation from private banking.
• Strategic Quantitative Easing (QE): Use QE to invest in green infrastructure and sustainable projects, rather than bailing out traditional banks.

C) Business

Economically, businesses are crucial to advancing a regenerative economy. Future success will depend on their ability to embed sustainability into core strategies, foster disruptive innovation, and embrace new business models that emphasize circularity, resource efficiency, and social responsibility.

• This includes rethinking supply chains, production processes, product design, and waste management to minimize environmental impact and contribute to the regeneration of natural systems.
• Businesses should uphold human rights by supporting freedom of association, eliminating forced and child labor, and discrimination; they should also advocate for environmental responsibility, support eco-friendly technologies, and combat corruption, while ensuring they are not complicit in human rights abuses (e.g. UN Global Compact Principles)
• Businesses should support for SDGs and climate change goals, e.g. adopt science-based emission reduction targets, price carbon, use 100% renewable electricity, engage responsibly in climate policy, eliminate deforestation-driven products from supply chains by 2020, reduce short-lived climate pollutants, and enhance energy efficiency

D) Citizens

Finally, to improve political engagement and create a more inclusive, fair, and sustainable political system, it’s essential to involve citizens, especially the youth, through new technology and reduce the influence of money and lobbying in politics. Policies should focus on long-term goals, prioritize well-being and environmental sustainability, and adapt to technological changes. Addressing the negative impacts of globalization, controlling the financial sector, increasing transparency, and improving migration policies are also crucial. Moreover, supporting a free and responsible media is vital for a healthy democracy.

• The transition to a regenerative economy combines top-down (policy and institutional changes) and bottom-up (business and community-led initiatives) processes. The overarching goal is to redefine the economic narrative to emphasize well-being, dignity, and environmental health, ensuring that these values become integral to institutional and business practices.
  
• Policy and Institutional Change:a) Influence political leaders to develop and implement policies that align with the new narrative of regenerative economics. b)Create Enabling Environments that support the adoption of regenerative practices, including investments in training and capacity-building.
• Business and Finance: a) Establish Measures of Well-being. b) Encourage businesses to adopt practices that enhance well-being and focus on regenerative wealth creation. c)Redirect Capital Flows and channel investments towards companies and projects committed to regenerative practices.
• Implementation Strategy: a) Identify Key Players who influence the current economic narrative and convene them to ensure coherence in the transition. b) Involve various stakeholders to adapt and refine the economic narrative. c)Crowdsource locally appropriate strategies for scaling regenerative initiatives. d)Highlight and support leaders and businesses committed to regenerative practices.
  
• Cross-Sector Collaboration:Build Partnerships and encourage collaboration across sectors and scales to support collective action and shared responsibility. Facilitate the exchange of knowledge, technology and best practices among diverse stakeholders.
  
• Capacity-Building:Provide training and resources to equip individuals and organizations with the skills needed to thrive in a regenerative economy.
  

• Conceptual ambiguity: Despite the wide use and importance attributed to “restoration” and “regeneration,” the concepts are rarely defined or explained in theliterature. Piero Morseletto points out that the concept of "regeneration" isa ambiguous and mainly a symbolic/evocative term with little practical application in the context of circular systems exceptin the case of certain agricultural practices. "Until new conceptual developments intervene, regenerationdoes not seem to be applicable to the economy as a whole and because of this, might beabandoned as a guiding principle of the circular economy. Unlike regeneration, restoration can beconsidered a core principle because it has widespread application and can be a point of referencefor circular applications."
• Complexity: One of the most significant challenges is the complexity involved in implementing circular and regenerative economic models at scale. These models require a systemic change across entire supply chains, industries, and economies, which involves coordination among numerous stakeholders with varying interests.
  
• Economic Viability and Profitability: While circular and regenerative practices are theoretically beneficial for the environment, their economic viability and profitability are often questioned.
  
• Technological limitations: Current recycling technologies are often inefficient, leading to quality degradation of materials, and there are significant technological gaps in achieving true circularity in some industries, such as electronics and textiles. Moreover, regenerative practices like biomimicry and ecological restoration require advanced scientific understanding and technological solutions that are still under development.
  
• Scale and Scalability: Local successes in circular and regenerative practices do not easily translate to larger scales due to differences in economic structures, resource availability, and cultural contexts. Scaling up often requires substantial infrastructure investments, changes in policy, and global cooperation, which are difficult to achieve uniformly across regions.
  
• Social and Behavioral Barriers: Consumer resistance, lack of awareness, and entrenched consumption patterns are major obstacles to the widespread adoption of circular and regenerative practices. Additionally, businesses may be reluctant to shift away from traditional linear models that are well-understood and financially rewarding .