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Policies for Green Design

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  • Fullerton, Don
  • Wu, Wenbo

Abstract

We analyze alternative policies such as a disposal content fee, a subsidy for recyclable designs, unit pricing of household disposal, a deposit-refund system, and a manufacturer `take-back' requirement. In order to identify the problem being addressed, we build a simple general equilibrium model in which household utility depends on a negative externality from total waste generation, and in which firms use primary and recycled inputs to produce output that has two `attributes': packaging per unit output, and recyclability. If households pay the social cost of disposal, then they send the right signals to producers to reduce packaging and to design products that can more easily be recycled. But if local governments are constrained to collect household garbage for free, then households do not send the right signals to producers. The socially optimal attributes can still be achieved by a tax on producers' use of packaging and subsidy to producers' use of recyclable designs.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 36 (1998)
Issue (Month): 2 (September)
Pages: 131-148

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Handle: RePEc:eee:jeeman:v:36:y:1998:i:2:p:131-148

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Web page: http://www.elsevier.com/locate/inca/622870

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References

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  1. Don Fullerton, 1996. "Second-Best Pollution Taxes," NBER Working Papers 5511, National Bureau of Economic Research, Inc.
  2. Smith, Vernon L, 1972. "Dynamics of Waste Accumulation: Disposal Versus Recycling," The Quarterly Journal of Economics, MIT Press, vol. 86(4), pages 600-616, November.
  3. Sullivan, Arthur M., 1987. "Policy options for toxics disposal: Laissez-faire, subsidization, and enforcement," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 58-71, March.
  4. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September.
  5. Miedema, Allen K., 1983. "Fundamental economic comparisons of solid waste policy options," Resources and Energy, Elsevier, vol. 5(1), pages 21-43, March.
  6. Palmer, Karen & Walls, Margaret & Sigman, Hilary, 1996. "The Cost of Reducing Municipal Solid Waste," Discussion Papers dp-96-35, Resources For the Future.
  7. M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
  8. Don Fullerton & Thomas C. Kinnaman, 1994. "Household Responses to Pricing Garbage by the Bag," CARE Working Papers 9402, The University of Texas at Austin, Center for Applied Research in Economics.
  9. Morris Glenn E. & Holthausen Jr. Duncan M., 1994. "The Economics of Household Solid Waste Generation and Disposal," Journal of Environmental Economics and Management, Elsevier, vol. 26(3), pages 215-234, May.
  10. Fullerton Don & Kinnaman Thomas C., 1995. "Garbage, Recycling, and Illicit Burning or Dumping," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 78-91, July.
  11. Hilary A. Sigman, 1995. "A Comparison of Public Policies for Lead Recycling," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 452-478, Autumn.
  12. Rousso, Ada S. & Shah, Shvetank P., 1994. "Packaging Taxes and Recycling Incentives: The German Green Dot Program," National Tax Journal, National Tax Association, vol. 47(3), pages 689-701, September.
  13. Alan J. Auerbach, 1982. "The Theory of Excess Burden and Optimal Taxation," NBER Working Papers 1025, National Bureau of Economic Research, Inc.
  14. Hong Seonghoon & Adams Richard M. & Love H. Alan, 1993. "An Economic Analysis of Household Recycling of Solid Wastes: The Case of Portland, Oregon," Journal of Environmental Economics and Management, Elsevier, vol. 25(2), pages 136-146, September.
  15. Palmer, Karen & Walls, Margaret, 1997. "Optimal policies for solid waste disposal Taxes, subsidies, and standards," Journal of Public Economics, Elsevier, vol. 65(2), pages 193-205, August.
  16. James D. Reschovsky & Sarah E. Stone, 1994. "Market incentives to encourage household waste recycling: Paying for what you throw away," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(1), pages 120-139.
  17. Ian M. Dobbs, 1991. "Litter and Waste Management: Disposal Taxes versus User Charges," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 221-27, February.
  18. Marie Lynn Miranda & Jess W. Everett & Daniel Blume & Barbeau A. Roy, 1994. "Market-based incentives and residential municipal solid waste," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 13(4), pages 681-698.
  19. Copeland, Brian R., 1991. "International trade in waste products in the presence of illegal disposal," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 143-162, March.
  20. Dinan Terry M., 1993. "Economic Efficiency Effects of Alternative Policies for Reducing Waste Disposal," Journal of Environmental Economics and Management, Elsevier, vol. 25(3), pages 242-256, November.
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