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The diffusion dynamics of the informal sector and sustainable WEEE supply chain

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  • Chen, Yenming
  • Wu, Tien-Hua

Abstract

Literature indicates that the main obstacle to better manage existing WEEE recycling supply chain in the developing countries is lake of environmental laws and/or lax enforcement, particularly in control instruments to overcome the difficulty of informal e-waste processing firms and its supply chain. Policy makers may rely on new legislative framework to control environmental performance and the health impacts of pollution; however, this strategy is not clearly effective as the informal nature of this supply chain blocks the enforcement efforts and causes the high cost of monitoring. Hence, it is definitely crucial to understand the interaction between the environmental policy options and economic consideration when achieving the sustainability of operations across the WEEE supply chain. In this study, we propose the simplest form of epidemic spreading, namely a criss-cross epidemic model, and aim to examine the legislative stringency for observing the diffusion dynamics of informal and formal sectors in an e-waste recycling system. We find that a diffusion threshold does exist and it is related to the regulatory stringency. Effective population changes dramatically if it grows beyond this diffusion threshold. In particular, a government agency is able to layout a minimal regulatory stringency so that the participants of the informal sector diminish quickly and eventually cease while the economy remains unhurt. We use a simplified numerical study to test the proposed criss-cross epidemic model. Based on significant findings, this paper provides managerial implications for developing the new environmental legislative framework which is not only feasible but also beneficial to achieving the sustainable WEEE supply chain.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25650.

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Date of creation: 04 Oct 2010
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Handle: RePEc:pra:mprapa:25650

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Keywords: Environmental issue; regulatory stringency issue; epidemiological model; informal sector-diffusion; sustainable WEEE supply chain;

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  1. Moreno-S Nchez, Roc O Del Pilar & Maldonado, Jorge Higinio, 2006. "Surviving from garbage: the role of informal waste-pickers in a dynamic model of solid-waste management in developing countries," Environment and Development Economics, Cambridge University Press, vol. 11(03), pages 371-391, June.
  2. Chen, Yenming & Sheu, Jiuh-Biing, 2007. "Environmental-Regulation Pricing Strategies for Green Supply Chain Management," MPRA Paper 25255, University Library of Munich, Germany.
  3. Wu, Fang & Huberman, Bernardo A. & Adamic, Lada A. & Tyler, Joshua R., 2004. "Information flow in social groups," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 337(1), pages 327-335.
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