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Global Reuse and Optimal Waste Policy

  • Hide-Fumi Yokoo
  • Thomas C. Kinnaman

Exporting used durable goods for additional consumption in a developing economy, a concept we call \global reuse", has unfortunate negative consequences if those goods contain toxic substances. The cathode ray tubes (CRTs) of televisions and personal computers contain large amounts of lead oxide and cadmium - substances harmful to the natural environment and to human health. But unfortunately the importers of used durable goods rarely possess the technologies, policies, and en- forcement infrastructures necessary to appropriately dispose hazardous waste. A simple general equilibrium model of two-country trade is constructed to discover solutions to the problems associated with global reuse, focusing on policies in de- veloped country. This paper shows that the dual policy of waste tax and exporting tax can achieve social optimum under global reuse economy with negative exter- nality of waste. When developed country is unable to assess exporting tax perhaps due to some pressure from a domestic industry, the waste tax or subsidy can be the alternative policy.

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Paper provided by Graduate School of Economics Project Center, Kyoto University in its series Discussion papers with number e-09-002.

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Length: 21 pages
Date of creation: Mar 2010
Date of revision:
Handle: RePEc:kue:dpaper:e-09-002
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  1. Copeland, Brian R., 1991. "International trade in waste products in the presence of illegal disposal," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 143-162, March.
  2. Don Fullerton & Thomas C. Kinnaman, 1993. "Garbage, Recycling, and Illicit Burning or Dumping," NBER Working Papers 4374, National Bureau of Economic Research, Inc.
  3. Fullerton, Don & Wu, Wenbo, 1998. "Policies for Green Design," Journal of Environmental Economics and Management, Elsevier, vol. 36(2), pages 131-148, September.
  4. Rob Aalbers & Herman Vollebergh, 2008. "An economic analysis of mixing wastes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(3), pages 311-330, March.
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