The economics of recycling rate: New insights from waste electrical and electronic equipment

Abstract

This paper addresses the determinants of metal recycling rates. The literature on recycling flows is scarce and does not directly address the issue of achieving a high recycling rate. In addition, extant literature has not quantified the recycling rate response to metal prices. Therefore, this paper explores factors that affect the recycling rate of different metals embodied in computers. We examine the effects of metal price, metal concentration in products, relative concentration ratio (i.e., primary vs. secondary supply), and embodied metal value on the recycling rate. Although the results reveal a significant effect of metal price on the recycling rate, the marginal response is low across different models (ordinary least squares, generalized linear model, fractional response model with endogenous regressor, and left-censored Tobit). This effect is not surprising and is in line with extant literature on recycling flows. Unfortunately, for most unrecycled metals, achieving a minimum embodied value is unlikely, as it would require a median price increase by one or two order of magnitude. In addition, it seems that the recycling rate is more elastic to other technical factors, such as the metal concentration in products or the relative concentration ratio. While the findings suggest important public policy implications, more data and interdisciplinary research are required to support these preliminary results.