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Efficient Policies for Green Design in a Vintage Durable Good Model

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  • Thomas Eichner

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  • Marco Runkel

Abstract

Using a dynamic durable good model, we investigate efficiency-restoring policy schemes in case of free garbage disposal. In the long-run, efficiency is attained by a subsidy on recyclability of the durable and a tax on the purchase of the durable. On the short-run adjustment path, in contrast, both policy instruments may change their signs such that the government harms recyclability by taxing it and promotes the demand for the durable good by subsidizing it. A deposit--refund system is shown to yield the efficient allocation both in the short-run as well as in the long-run. Copyright Springer 2005

Suggested Citation

  • Thomas Eichner & Marco Runkel, 2005. "Efficient Policies for Green Design in a Vintage Durable Good Model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 30(3), pages 259-278, March.
  • Handle: RePEc:kap:enreec:v:30:y:2005:i:3:p:259-278
    DOI: 10.1007/s10640-004-2302-9
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    References listed on IDEAS

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    1. 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.
    2. Fullerton, Don & Wu, Wenbo, 1998. "Policies for Green Design," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 131-148, September.
    3. 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.
    4. Eichner, Thomas & Pethig, Rudiger, 2001. "Product Design and Efficient Management of Recycling and Waste Treatment," Journal of Environmental Economics and Management, Elsevier, vol. 41(1), pages 109-134, January.
    5. 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.
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    Cited by:

    1. Bernard, Sophie, 2011. "Remanufacturing," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 337-351.
    2. Pangburn, Michael S. & Stavrulaki, Euthemia, 2014. "Take back costs and product durability," European Journal of Operational Research, Elsevier, vol. 238(1), pages 175-184.
    3. R. Yamaguchi & K. Ueta, 2011. "Capital depreciation and waste accumulation in capital-resource economies," Applied Economics Letters, Taylor & Francis Journals, vol. 18(6), pages 519-522.
    4. Chen, Chialin & Liu, Lucy Qian, 2014. "Pricing and quality decisions and financial incentives for sustainable product design with recycled material content under price leadership," International Journal of Production Economics, Elsevier, vol. 147(PC), pages 666-677.
    5. Bernard, Sophie, 2015. "North–south trade in reusable goods: Green design meets illegal shipments of waste," Journal of Environmental Economics and Management, Elsevier, vol. 69(C), pages 22-35.

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