Income effect or policy result: a test of the environmental Kuznets Curve

Abstract

Taipei Municipal City (TMC) began implementing a policy of a plastic-bag-based disposal fee for household solid waste treatment in July 2000, while other counties kept their same charge of a disposal fee based on potable water consumption. Taiwan's EPA has highly valued the outcome of TMC's new policy and has thus required all counties to follow TMC in employing a policy of a plastic-bag-based disposal fee accompanied by a compulsory sorting system. We attempt to verify whether the new policy implemented by TMC is successful in the reduction of general waste collected and then we seek to identify what other factors contribute to such a successful result. This paper provides a general overview of household waste management practices employed in Taiwan and the changes of household waste collected over time through simple statistical analysis and management practices, including evaluating waste recovery and recycling initiatives. The authors employ statistical analysis to verify TMC's new policy and to examine the factors that affect its success in addition to the policy changes through a test on the Environmental Kuznets Curve (EKC). We separate the data into three groups: TMC, non-TMC regions, and the pooled data (combination of TMC and non-TMC). The results show that: (1) the policy of a plastic-bag-based disposal fee is significantly effective in the reduction of general waste collected; and (2) the per capita household solid waste collected in both regions (TMC and non-TMC) is significantly related with household incomes in an EKC relationship. However, the test of EKC relationships on the pooled data is not significant.