Economic incentives are mechanisms that provide financial rewards for reducing environmental impacts or penalties for increasing them. Some economic incentives provided by the Department of Resources Recycling and Recovery (CalRecycle) includes grants, payment loan programs to address household hazardous waste, used oil, and tires. In addition, CalRecycle’s Recycling Market Development Zone Loan Program combines recycling with economic development to fuel new businesses, expand existing ones, create jobs, and divert waste from landfills.

Financial Economic Incentives

The following categories are financial economic incentives and disincentives that are either currently applied or could be applied to increase diversion of organics and other recyclable materials. These categories focus on incentives and programs that are not offered by the CalRecycle or the Department of Conservation.

Funding: Grants, Loans, and Bonds

California Business Incentives Gateway database of state and local business development financial programs and service incentives.

Grants are a sum of non-refunded money given by a government agency for specific purpose.

Loans are money borrowed from a government agency.

Bonds are certificates issued by a government or public company promising to repay money at a fixed rate and specified time.

Tax Credits

Tax Credits reduce business tax liability.


A rebate is an amount paid by way of reduction, return, or refund on what has already been paid or contributed.

Tradable Permits and Tariff Contracts

Tradable Permits are market-oriented environmental policy that sets a ceiling on the quantity of pollution allowed, and give marketable or tradable permits to emit pollutants up to a cap.

Tariff Contracts are guaranteed contracts that provide predictable revenue streams over a specified term, with specified operating conditions.

Grow Your Business: Financial and Market Development Assistance