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Policies for Green Design

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Author Info
Don Fullerton
Wenbo Wu

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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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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5594.

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Date of creation: May 1996
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Handle: RePEc:nbr:nberwo:5594

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Find related papers by JEL classification:
D6 - Microeconomics - - Welfare Economics
H2 - Public Economics - - Taxation, Subsidies, and Revenue

References listed on IDEAS
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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. [Downloadable!] (restricted)
  2. Don Fullerton, 1996. "Second-Best Pollution Taxes," NBER Working Papers 5511, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
  4. 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. [Downloadable!] (restricted)
  5. 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. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
  7. Miedema, Allen K., 1983. "Fundamental economic comparisons of solid waste policy options," Resources and Energy, Elsevier, vol. 5(1), pages 21-43, March. [Downloadable!] (restricted)
  8. 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. [Downloadable!] (restricted)
  9. Fullerton, Don & Kinnaman, Thomas C, 1996. "Household Responses to Pricing Garbage by the Bag," American Economic Review, American Economic Association, vol. 86(4), pages 971-84, September. [Downloadable!] (restricted)
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  10. Stavins Robert N., 1995. "Transaction Costs and Tradeable Permits," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 133-148, September. [Downloadable!] (restricted)
  11. Weitzman, Martin L, 1974. "Prices vs. Quantities," Review of Economic Studies, Blackwell Publishing, vol. 41(4), pages 477-91, October. [Downloadable!] (restricted)
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  12. Palmer, Karen & Walls, Margaret & Sigman, Hilary, 1996. "The Cost of Reducing Municipal Solid Waste," Discussion Papers dp-96-35, Resources For the Future. [Downloadable!]
    Other versions:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Walls, Margaret, 2006. "Extended Producer Responsibility and Product Design: Economic Theory and Selected Case Studies," Discussion Papers dp-06-08, Resources For the Future. [Downloadable!]
  2. Francisco J. André & Emilio Cerdá, 2005. "Gestión de residuos sólidos urbanos: Análisis económico y políticas públicas," Economic Working Papers at Centro de Estudios Andaluces E2005/23, Centro de Estudios Andaluces. [Downloadable!]
  3. Hai-Lan Yang & Robert Innes, 2007. "Economic Incentives and Residential Waste Management in Taiwan: An Empirical Investigation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(3), pages 489-519, July. [Downloadable!] (restricted)
  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, vol. 21(3), pages 259-284, March. [Downloadable!] (restricted)
  5. Rob F.T. Aalbers & Herman R.J. Vollebergh, 2005. "An Economic Analysis of Mixing Wastes," Tinbergen Institute Discussion Papers 05-094/3, Tinbergen Institute. [Downloadable!]
    Other versions:
  6. Chongwoo Choe & Iain Fraser, 2001. "On the Flexibility of Optimal Policies for Green Design," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 367-371, April. [Downloadable!] (restricted)
  7. David Aadland & Arthur J. Caplan, 2003. "Curbside Recycling: Waste Resource or Waste of Resources?," Others 0310001, EconWPA. [Downloadable!]
    Other versions:
  8. Thomas Eichner & Rüdiger Pethig, 2000. "Das Gebuehrenkonzept der DSD auf dem oekonomischen Pruefstand," Volkswirtschaftliche Diskussionsbeitraege 84-00, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
  9. Paul Calcott & Margaret Walls, 2000. "Can Downstream Waste Disposal Policies Encourage Upstream "Design for Environment"?," American Economic Review, American Economic Association, vol. 90(2), pages 233-237, May. [Downloadable!] (restricted)
  10. Thomas Eichner & Rüdiger Pethig, 1999. "Product Design and efficient Management of Recycling and Waste Treatment," Volkswirtschaftliche Diskussionsbeitraege 76-99, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
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  11. Klaus Conrad, 1999. "Resource and Waste Taxation in the Theory of the Firm with Recycling Activities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 14(2), pages 217-242, September. [Downloadable!] (restricted)
  12. Takayoshi Shinkuma, 2003. "On the Second-best Policy of Household's Waste Recycling," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(1), pages 77-95, January. [Downloadable!] (restricted)
  13. Palmer, Karen & Walls, Margaret, 2000. "Upstream Pollution, Downstream Waste Disposal, and the Design of Comprehensive Environmental Policies," Discussion Papers dp-97-51-rev, Resources For the Future. [Downloadable!]
    Other versions:
  14. Palmer, Karen & Walls, Margaret, 1999. "Extended Product Responsibility: An Economic Assessment of Alternative Policies," Discussion Papers dp-99-12, Resources For the Future. [Downloadable!]
  15. Walls, Margaret & Calcott, Paul, 2000. "Policies to Encourage Recycling and "Design for Environment": What to Do When Markets are Missing," Discussion Papers dp-00-30, Resources For the Future. [Downloadable!]
  16. Thomas Eichner & Marco Runkel, 2000. "Efficient and Sustainable Management of Product Durability and Recyclability," Volkswirtschaftliche Diskussionsbeitraege 88-00, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
  17. Thomas Eichner & Ruediger Pethig, 2000. "Corrective Taxation for Curbing Pollution and Promoting Green Product Design and Recycling," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
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  18. Marco Runkel, 2003. "Product Durability and Extended Producer Responsibility in Solid Waste Management," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(2), pages 161-182, February. [Downloadable!] (restricted)
  19. Walls, Margaret & Calcott, Paul, 2002. "Waste, Recycling, and "Design for Environment": Roles for Markets and Policy Instruments," Discussion Papers dp-00-30-rev, Resources For the Future. [Downloadable!]
  20. Thomas Eichner & Rüdiger Pethig, 2000. "Gebuehrenstrategien in einem disaggregierten Modell der Abfallwirtschaft," Volkswirtschaftliche Diskussionsbeitraege 85-00, Universität Siegen, Fachbereich Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht. [Downloadable!]
  21. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  22. Jean De Beir & Mouez Fodha & Guillaume Girmens, 2007. "Recyclage et externalités environnementales : faut-il subventionner les activités de récupération recyclage ?," Documents de travail du Centre d'Economie de la Sorbonne v07010, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne. [Downloadable!]
    Other versions:
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