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Environmental and Resource Economics

, Volume 62, Issue 4, pp 907–923 | Cite as

Efficient Waste Management Policies and Strategic Behavior with Open Borders

  • M. Dubois
  • J. Eyckmans
Article

Abstract

During the last decade waste management has been characterized by two main trends: the growth of international trade of waste materials and the introduction of extended producer responsibility (EPR) as a policy instrument. In this paper a two-country stylized model with imperfect competition in the recycling market is used to address two research questions. First, how do EPR recycling targets interact with other policy instruments such as taxes on recycling residues and excise duties? Second, how does strategic behavior of national policy makers influences the use of policy instruments? The model demonstrates that a combination of EPR with other instruments is needed to achieve the first-best outcome. When governments do not coordinate policies across borders, strategic behavior may lead to a ‘race to the bottom’ for taxes on recycling residues. Conversely, strategic behavior may lead to a counter-intuitive ‘race to the top’ for excise duties and EPR recycling targets. It is shown that these instruments are not only used to stimulate waste prevention but also to extract rents from foreign recyclers.

Keywords

Economic instruments Extended producer responsibility  Strategic behavior Trade Waste Recycling 

Notes

Acknowledgments

We thank Herman Vollebergh, Yoko Nagase, Sandra Rousseau and Stef Proost for their valuable suggestions.

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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  1. 1.Policy Research Centre for Sustainable MaterialsKU LeuvenLeuvenBelgium
  2. 2.Centre for Economics and Corporate SustainabilityKU Leuven Campus BrusselsBrusselBelgium

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