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Strategic Use of Recycled Content Standards under International Duopoly

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  • Higashida, Keisaku
  • Jinji, Naoto

Abstract

We examine the strategic use of recycled content standards (RCSs) under international duopoly. RCSs require firms supplying the domestic market to use a certain proportion of recycled materials as inputs. We demonstrate that, when there is no trade in recycled materials, two identical countries both set strategically stricter or more lax RCSs. However, when there is trade in recycled materials, it may be the case that one country sets a stricter RCS while the other sets a more lax RCS. When a world supply constraint on recycled materials is not binding, the main source of the asymmetric distortion in RCSs is a demand effect for recycled materials.

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File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/16962/1/070econDP04-12.pdf
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Bibliographic Info

Paper provided by Graduate School of Economics, Hitotsubashi University in its series Discussion Papers with number 2004-12.

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Length: 38, [2], 12 p.
Date of creation: Feb 2005
Date of revision:
Handle: RePEc:hit:econdp:2004-12

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Keywords: recycling; recycled content standard; international trade; strategic trade policy;

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References

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  1. Gérard Gaudet & Ngo Van Long, 2003. "Recycling Redux: A Nash-Cournot Approach," The Japanese Economic Review, Japanese Economic Association, Japanese Economic Association, vol. 54(4), pages 409-419.
  2. Thomas Eichner & Rüdiger Pethig, 2000. "Corrective Taxation for Curbing Pollution and Promoting Green Product Design and Recycling," CESifo Working Paper Series 350, CESifo Group Munich.
  3. James Cassing & Thomas Kuhn, 2003. "Strategic Environmental Policies when Waste Products are Tradable," Review of International Economics, Wiley Blackwell, vol. 11(3), pages 495-511, 08.
  4. Anni Huhtala & Eva Samakovlis, 2002. "Does International Harmonization of Environmental Policy Instruments Make Economic Sense?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 21(3), pages 259-284, March.
  5. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
  6. Di Vita, Giuseppe, 1997. "Macroeconomic effects of the recycling of waste derived from imported non-renewable raw materials," Resources Policy, Elsevier, Elsevier, vol. 23(4), pages 179-186, December.
  7. Grossman, Gene M, 1981. "The Theory of Domestic Content Protection and Content Preference," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 96(4), pages 583-603, November.
  8. Yann Duval & Stephen Hamilton, 2002. "Strategic Environmental Policy and International Trade in Asymmetric Oligopoly Markets," International Tax and Public Finance, Springer, Springer, vol. 9(3), pages 259-271, May.
  9. Furusawa, Taiji & Higashida, Keisaku & Ishikawa, Jota, 2003. "What information is needed for welfare-enhancing policies under international oligopoly?," Japan and the World Economy, Elsevier, Elsevier, vol. 15(1), pages 31-46, January.
  10. Benoît Laplante & Martin K. Luckert, 1994. "Impact of Newsprint Recycling Policies on Canadian Waste Production and Forests," Canadian Public Policy, University of Toronto Press, vol. 20(4), pages 400-414, December.
  11. Kala Krishna & Motoshige Itoh, 1986. "Content Protection and Oligopolistic Interactions," NBER Working Papers 1843, National Bureau of Economic Research, Inc.
  12. Ishikawa, Jota & Spencer, Barbara J., 1999. "Rent-shifting export subsidies with an imported intermediate product," Journal of International Economics, Elsevier, Elsevier, vol. 48(2), pages 199-232, August.
  13. Seade, Jesus K, 1980. "On the Effects of Entry," Econometrica, Econometric Society, Econometric Society, vol. 48(2), pages 479-89, March.
  14. Richardson, Martin, 1993. "Content Protection with Foreign Capital," Oxford Economic Papers, Oxford University Press, vol. 45(1), pages 103-17, January.
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Cited by:
  1. Mariko Onoda, 2010. "On Second-best Policing Effort against the Illegal Disposal of Recyclable Waste," Discussion Paper Series, School of Economics, Kwansei Gakuin University 56, School of Economics, Kwansei Gakuin University, revised May 2010.
  2. Mizuno, Tomomichi & Takauchi, Kazuhiro, 2013. "Rules of origin and uncertain cost of compliance," MPRA Paper 44431, University Library of Munich, Germany.
  3. Hajime Sugeta & Takayoshi Shinkuma, 2012. "International trade in recycled materials in vertically related markets," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, Society for Environmental Economics and Policy Studies - SEEPS, vol. 14(4), pages 357-382, October.
  4. Honma, Satoshi, 2013. "Optimal policies for international recycling between developed and developing countries," MPRA Paper 43703, University Library of Munich, Germany.

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