A strategic policy model for promoting secondary materials use

Abstract

This paper discusses problems associated with the development of a tax and subsidy policy to promote the use of secondary materials converted from industrial waste as a substitute for virgin materials. The main purpose of the study was to examine how a set of tax and subsidy levels modifies consumption and affects welfare. For this purpose, a static partial equilibrium model was developed, taking into account welfare effects in production and consumption under economic and ecological constraints. The results of the study indicate that a virgin materials tax combined with subsidies for waste converters could be an effective policy to promote the use of waste-based secondary materials.