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Recycling and Environmental Externalities: Should Recycling Be Subsidized?
[Recyclage et externalités environnementales : Faut-il subventionner les activités de récupération recyclage ?]

Author

Listed:
  • Jean de Beir

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne)

  • Mouez Fodha

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Guillaume Girmens

    (EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne)

Abstract

This paper considers recycling in a general equilibrium model. It is shown that recycling should be subsidized if recycling costs are high, as an incentive to recycle all of the available waste. This tax incentive should vanish if recycling is profitable enough. In this case, recycling should even be taxed, in order to make the competitive equilibrium be an optimal allocation. We conclude also that, if recycling is efficient enough, it allows to internalize environmental externalities. In this case, recycling replaces a tax instrument.

Suggested Citation

  • Jean de Beir & Mouez Fodha & Guillaume Girmens, 2007. "Recycling and Environmental Externalities: Should Recycling Be Subsidized? [Recyclage et externalités environnementales : Faut-il subventionner les activités de récupération recyclage ?]," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00144632, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00144632
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00144632v1
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    Cited by:

    1. John Baffoe-Bonnie & Fidel Ezeala-Harrison, 2023. "Analysis of Optimal Solid Waste Recycling Policy: Evidence from U.S. Using Panel Data," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(3), pages 1-2.
    2. Karima AFIF & Bocar Samba BA & Eugénie JOLTREAU, 2024. "Tax-subsidy schemes for recycling when quantity and quality of waste matter," Working Papers 2024.02, FAERE - French Association of Environmental and Resource Economists.
    3. Loukil, Faten & Rouached, Lamia, 2012. "Modeling packaging waste policy instruments and recycling in the MENA region," Resources, Conservation & Recycling, Elsevier, vol. 69(C), pages 141-152.

    More about this item

    Keywords

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    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • 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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