Title: Instruments to improve waste prevention incentives of Extended Producer Responsibility in open markets
Authors: Dubois, Maarten
Issue Date: 28-Jun-2012
Conference: Conference of the European Association of Environmental and Resource Economists, EAERE edition:19 location:Prague, Czech Republic date:27-30 June 2012
Article number: x
Abstract: Extended Producer Responsibility (EPR) for consumer waste has been criticized for failing to
induce strong waste prevention incentives. Using a stylized economic model with oligopolistic
competition of recycling firms, this paper assesses efficiency of thr
ee policies that strengthen
EPR prevention incentives. In a closed economy, market power of recycling firms, excise duties
and disposal taxes on recycling residues are shown to strengthen prevention in an efficient way.
Raising collection targets above the
best level improves prevention but also creates
inefficiency. In an open European market for waste destined for recycling, strategic behavior of
governments makes the use of disposal taxes difficult. Indeed, tax competition between countries
may lea
d to a ‘race to the bottom’ for recycling residue taxes. Conversely, strategic behavior may
lead to a counter
intuitive ‘ race to the top’ for collection targets and excise duties because
domestic prevention restrains foreign recycling profits. Since welfa
re loss from the use of excise
duties is minimal, an excise duty seems the instrument best fit to induce stronger EPR prevention
incentives in an increasingly open European waste market.
Publication status: published
KU Leuven publication type: IC
Appears in Collections:Department of Materials Engineering - miscellaneous
Sustainable Metals Processing and Recycling

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