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Environmental R&D, imperfectly competitive recycling market, and recycled content standards

Author

Listed:
  • Yasuyuki Sugiyama

    (Faculty of Economics, Fukui Prefectural University)

  • Patcharin Koonsed

    (Department of International Trade Promotion, Ministry of Commerce)

Abstract

In this paper, we construct a model consisting of an upstream monopoly recycler and downstream oligopolistic firms to examine the economic and environmental impacts of a recycled content standard (RCS). In our model, final goods firms undertake environmental research and development (ER&D) for the purpose of improving green design of the goods. Using this framework with a linear demand curve, we show that a stricter RCS reduces both the output of final goods and the degree of green design, even though it decreases the price of recycled materials. The profits of the recycler and the final goods firms also decrease. Besides, the economy improves its recycling ratio and can curtail the total amount of waste if the degree of the green design is less than a half.

Suggested Citation

  • Yasuyuki Sugiyama & Patcharin Koonsed, 2017. "Environmental R&D, imperfectly competitive recycling market, and recycled content standards," Economics Bulletin, AccessEcon, vol. 37(4), pages 2970-2979.
    • Handle: RePEc:ebl:ecbull:eb-16-00167
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Recycled content standard; environmental R&D; green design; recycling; imperfect competition;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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