Comments by Siow Yue Chia, on Export of Recyclable Materials: Evidence from Japan

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Siow Yue Chia: International trade in wastes is categorized into hazardous waste (e.g., batteries coal ash), recyclable waste (e.g., plastic waste, paper waste, metal scraps) and second-hand goods (e.g., autos, electronics). This paper analyzes the export of recyclable waste materials from Japan to developing countries under the waste-haven hypothesis (WHH), which notes the exporting of physical waste materials from countries with stringent environmental regulation to countries with lax environmental regulation. The authors’ econometric analysis found that the environmental regulation gap did not significantly affect the waste trade, however and they conclude that environmental regulations did not work well. The paper highlighted several policy considerations: First, overall, international trade in waste materials should be largely reduced and regulated in the spirit of the Basel Convention. Particularly, waste trade in Asia is excessive and out of control. Second, waste trade in recyclable resources could positively affect economic growth and save natural resources and energy, but inappropriate recycling activities might do serious environmental and health damage to importing countries. Third, policy schemes to regulate waste trade include the following: (a) tariffs on wastes trade, which would be more effective if all Asian countries charge a substantial uniform tariff rate on all kinds of wastes; (b) pre-shipment inspections for shipment of all wastes in all Asian countries; (c) heavy penalties on environmental damage in recycling activities; and (d) international policy coordination in Asia.