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An Economic Analysis of Mixing Wastes

Author

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  • Rob F.T. Aalbers

    (SEO Economic Research, Amsterdam)

  • Herman R.J. Vollebergh

    (Faculty of Economics, Erasmus Universiteit)

Abstract

Using a general equilibrium model with heterogeneous waste, this paper studies optimal waste policy when households have to exert separation effort to produce near-homogeneous waste streams suitable for recycling. Our model explicitly allows for changes in the composition (quality) of waste streams depending on how much effort households are willing to spend on separating different types of waste. Accordingly, we are able to generalize some earlier contributions to the waste management literature and demonstrate that with both mixing and effort included, a first-best optimum is feasible under reasonable conditions. In particular, we find that a (modified) deposit-refund system still provides the optimal incentives to guide recycling as well as legal disposal (landfilling) and illegal dumping. Both the number and level of taxes and subsidies needed to reach the first-best depend crucially on the socially optimal level of dumping as well as the socially optimal composition of the mix.

Suggested Citation

  • Rob F.T. Aalbers & Herman R.J. Vollebergh, 2005. "An Economic Analysis of Mixing Wastes," Tinbergen Institute Discussion Papers 05-094/3, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20050094
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    References listed on IDEAS

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    1. Don Fullerton & Wenbo Wu, 2002. "Policies for Green Design," Chapters, in: Don Fullerton & Thomas C. Kinnaman (ed.), The Economics of Household Garbage and Recycling Behavior, chapter 5, pages 102-119, Edward Elgar Publishing.
    2. Don Fullerton & Thomas C. Kinnaman, 2002. "Garbage, Recycling, and Illicit Burning or Dumping," Chapters, in: Don Fullerton & Thomas C. Kinnaman (ed.), The Economics of Household Garbage and Recycling Behavior, chapter 2, pages 49-62, Edward Elgar Publishing.
    3. Takayoshi Shinkuma, 2003. "On the Second-best Policy of Household's Waste Recycling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(1), pages 77-95, January.
    4. Thomas Eichner & Rüdiger Pethig, 2001. "Recycling, Producer Responsibility and Centralized Waste Management," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 57(3), pages 333-360, May.
    5. Dijkgraaf, E. & Gradus, R. H. J. M., 2004. "Cost savings in unit-based pricing of household waste: The case of The Netherlands," Resource and Energy Economics, Elsevier, vol. 26(4), pages 353-371, December.
    6. Thomas Eichner & Rüdiger Pethig, 2003. "Corrective Taxation for Curbing Pollution and Promoting Green Product Design and Recycling," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(4), pages 477-500, August.
    7. Chongwoo Choe & Iain Fraser, 2001. "On the Flexibility of Optimal Policies for Green Design," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 18(4), pages 367-371, April.
    8. Dijkgraaf, Elbert & Vollebergh, Herman R.J., 2004. "Burn or bury? A social cost comparison of final waste disposal methods," Ecological Economics, Elsevier, vol. 50(3-4), pages 233-247, October.
    9. Margaret Walls & Paul Calcott, 2000. "Can Downstream Waste Disposal Policies Encourage Upstream "Design for Environment"?," American Economic Review, American Economic Association, vol. 90(2), pages 233-237, May.
    10. Ann Wolverton & Don Fullerton, 2000. "Two Generalizations of a Deposit-Refund Systems," American Economic Review, American Economic Association, vol. 90(2), pages 238-242, May.
    11. Choe, Chongwoo & Fraser, Iain, 1999. "An Economic Analysis of Household Waste Management," Journal of Environmental Economics and Management, Elsevier, vol. 38(2), pages 234-246, September.
    12. Timothy K. M. Beatty & Peter Berck & Jay P. Shimshack, 2007. "Curbside Recycling In The Presence Of Alternatives," Economic Inquiry, Western Economic Association International, vol. 45(4), pages 739-755, October.
    13. Jenkins, Robin R. & Martinez, Salvador A. & Palmer, Karen & Podolsky, Michael J., 2003. "The determinants of household recycling: a material-specific analysis of recycling program features and unit pricing," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 294-318, March.
    14. David Aadland & Arthur J. Caplan, 2003. "Willingness to Pay for Curbside Recycling with Detection and Mitigation of Hypothetical Bias," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 492-502.
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    Cited by:

    1. Wolfram Berger & Yoko Nagase, 2018. "Waste management regulation: policy solutions and policy shortcomings," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(3), pages 205-223, July.
    2. Eiji B. Hosoda, 2014. "An Analysis of Sorting and Recycling of Household Waste: A neo-Ricardian Approach," Metroeconomica, Wiley Blackwell, vol. 65(1), pages 58-94, February.
    3. Fleckinger, Pierre & Glachant, Matthieu, 2010. "The organization of extended producer responsibility in waste policy with product differentiation," Journal of Environmental Economics and Management, Elsevier, vol. 59(1), pages 57-66, January.
    4. repec:hal:cesptp:hal-00641867 is not listed on IDEAS
    5. Kinokuni, Hiroshi & Ohori, Shuichi & Tomoda, Yasunobu, 2021. "Advance disposal fee vs. disposal fee: A monopolistic producer’s durability choice model," Resource and Energy Economics, Elsevier, vol. 65(C).
    6. M. Dubois & J. Eyckmans, 2015. "Efficient Waste Management Policies and Strategic Behavior with Open Borders," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(4), pages 907-923, December.
    7. Shi, Xiaoran & Thanos, Aristotelis E. & Celik, Nurcin, 2014. "Multi-objective agent-based modeling of single-stream recycling programs," Resources, Conservation & Recycling, Elsevier, vol. 92(C), pages 190-205.
    8. Yokoo, Hide-Fumi & Kinnaman, Thomas C., 2013. "Global Reuse and optimal waste policy," Environment and Development Economics, Cambridge University Press, vol. 18(5), pages 595-614, October.
    9. Matsumoto, Shigeru, 2011. "Waste separation at home: Are Japanese municipal curbside recycling policies efficient?," Resources, Conservation & Recycling, Elsevier, vol. 55(3), pages 325-334.

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    More about this item

    Keywords

    Economics of Waste; Recycling; Environmental Taxes and Subsidies; General Equilibrium Theory;
    All these keywords.

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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