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Garbage, Recycling, and Illicit Burning or Dumping

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  • Don Fullerton
  • Thomas C. Kinnaman

Abstract

Additional solid waste disposal imposes resource and environmental costs, but most residents still pay no additional fee per marginal unit of garbage collection. In a simple model with garbage and recycling as the only two disposal options, we show that the optimizing fee for garbage collection equals the resource cost plus environmental cost. When illicit burning or dumping is a third disposal option, however, the optimizing fee for garbage collection can change sign. Burning or dumping is not a market activity and cannot be taxed directly, but it can be discouraged indirectly by a system with a tax on all output plus a rebate on proper disposal either through recycling or garbage collection. This optimizing fee structure is essentially a deposit-refund system. The output tax helps achieve the first-best allocation even though it may affect the choice between consumption and untaxed leisure, because consumption leads to disposal problems while leisure does not.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4374.

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Date of creation: May 1993
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Publication status: published as Journal of Environmental Economics and Management, vol. 29, no. 1, pp. 78-91, (July 1995).
Handle: RePEc:nbr:nberwo:4374

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  1. 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.
  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. Porter, Richard C., 1978. "A social benefit-cost analysis of mandatory deposits on beverage containers," Journal of Environmental Economics and Management, Elsevier, vol. 5(4), pages 351-375, December.
  4. 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.
  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. Lee, Dwight R., 1984. "The economics of enforcing pollution taxation," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 147-160, June.
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  1. > Environmental and Natural Resource Economics > Economics of waste and recycling
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