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Extended Producer Responsibility and Green Marketing: an Application to Packaging

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  • Brice ARNAUD

Abstract

This paper analyses the efficiency of Extended Producer Responsibility (EPR) to manage household packaging wastes. We use a Mussa-Rosen type model of vertical product differentiation: two firms produce a homogeneous good and use packaging to create a subjective vertical differentiation. We verify that an ERP characterised by a Pigouvian tax – producers bear the social cost of waste management – is not an optimal policy. We show then that an optimal policy is an adjusted Pigouvian tax, accounting for waste management costs.

Suggested Citation

  • Brice ARNAUD, 2014. "Extended Producer Responsibility and Green Marketing: an Application to Packaging," Cahiers du GREThA 2014-04, Groupe de Recherche en Economie Théorique et Appliquée.
  • Handle: RePEc:grt:wpegrt:2014-04
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    File URL: http://cahiersdugretha.u-bordeaux4.fr/2014/2014-04.pdf
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    References listed on IDEAS

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    1. Fullerton, Don & Wu, Wenbo, 1998. "Policies for Green Design," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 131-148, September.
    2. 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.
    3. Yue, Chengyan & Hall, Charles R. & Behe, Bridget K. & Campbell, Benjamin L. & Dennis, Jennifer H. & Lopez, Roberto G., 2010. "Are Consumers Willing to Pay More for Biodegradable Containers Than for Plastic Ones? Evidence from Hypothetical Conjoint Analysis and Nonhypothetical Experimental Auctions," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(04), pages 757-772, November.
    4. Bansal, Sangeeta, 2008. "Choice and design of regulatory instruments in the presence of green consumers," Resource and Energy Economics, Elsevier, vol. 30(3), pages 345-368, August.
    5. Hiroaki Ino, 2007. "Extended producer responsibility in oligopoly," Economics Bulletin, AccessEcon, vol. 17(6), pages 1-9.
    6. Mussa, Michael & Rosen, Sherwin, 1978. "Monopoly and product quality," Journal of Economic Theory, Elsevier, vol. 18(2), pages 301-317, August.
    7. C. Lombardini-Riipinen, 2005. "Optimal Tax Policy under Environmental Quality Competition," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(3), pages 317-336, November.
    8. Marco Runkel, 2003. "Product Durability and Extended Producer Responsibility in Solid Waste Management," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(2), pages 161-182, February.
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    Keywords

    duopoly; extended producer responsibility; packaging; pigouvian tax; vertical differentiation.;

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