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Environmental Policy with Collective Waste Disposal

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  • Hamilton, Stephen F.
  • Sproul, Thomas W.
  • Sunding, David
  • Zilberman, David

Abstract

Centralized collection and disposal is an integral component of waste management strategies for many solid and liquid wastes, and carbon capture and storage is currently being considered for gaseous waste. In this paper we show how collective waste disposal systems introduce essential changes in the design of optimal environmental policy. Absent collective disposal, an optimal environmental policy imposes relatively stringent regulations on polluters in regions where local environmental damage functions are “high”; however, under collective waste disposal, the optimal environmental policy level increases monotonically over distance from the disposal site, and this is true irrespective of the degree of spatial heterogeneity in local environmental damage functions. We characterize the optimal spatial pattern of environmental policy levels under collective waste disposal and identify optimal membership size for waste disposal networks comprised of homogeneous producers.

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Paper provided by Agricultural and Applied Economics Association in its series 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. with number 151142.

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Date of creation: 2013
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Handle: RePEc:ags:aaea13:151142

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Keywords: Environmental Economics and Policy;

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  1. Don Fullerton & Thomas C. Kinnaman, 1993. "Garbage, Recycling, and Illicit Burning or Dumping," NBER Working Papers 4374, National Bureau of Economic Research, Inc.
  2. 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.
  3. Isik, Murat & Khanna, Madhu, 2002. "Uncertainty and spatial variability: incentives for variable rate technology adoption in agriculture," Risk, Decision and Policy, Cambridge University Press, vol. 7(03), pages 249-265, December.
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  5. 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.
  6. 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.
  7. 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.
  8. Kurt A. Schwabe & Iddo Kan & Keith C. Knapp, 2006. "Drainwater Management for Salinity Mitigation in Irrigated Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(1), pages 133-149.
  9. Don Fullerton & Ann Wolverton, 2000. "Two Generalizations of a Deposit-Refund System," NBER Working Papers 7505, National Bureau of Economic Research, Inc.
  10. Dinar, Ariel & Letey, J., 1991. "Agricultural water marketing, allocative efficiency, and drainage reduction," Journal of Environmental Economics and Management, Elsevier, vol. 20(3), pages 210-223, May.
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