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Resource Dependence, Recycling, and Trade

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  • Egger, Peter
  • Keuschnigg, Christian

Abstract

Recycling waste from used goods can substitute for scarce raw materials and reduce resource dependence. We present a model of waste collection, recycling and final goods production using raw and recycled materials. Avoiding environmental damage from non-recycled waste causes costly landfill and creates externalities. An optimal allocation requires a trash tax on producers to pay for costly waste disposal, and an input subsidy to recycling firms to compensate for disposal cost avoidance. Trade between resource poor and resource rich countries involves non-trivial interactions between terms of trade effects and distortions in recycling and resource extraction.

Suggested Citation

  • Egger, Peter & Keuschnigg, Christian, 2023. "Resource Dependence, Recycling, and Trade," CEPR Discussion Papers 18486, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:18486
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    Cited by:

    1. Timo Kuosmanen & Xun Zhou, 2025. "Secondary materials, Pigouvian taxes, and a monopsony," Papers 2502.14636, arXiv.org.

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    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • F18 - International Economics - - Trade - - - Trade and Environment

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