The relationship between the waste recycling fee and subsidy of due recyclable waste

Wei-Lung Huang

doi:10.21511/ee.07(1).2016.09

Abstract

This study employs a life-cycle evaluation model of due recyclable waste (DRW) to analyze its optimal waste recycling fee (WRF) and subsidy. The results suggest that the government could set the optimal WRF and subsidy of DRW under the assumptions of the relationship that exist between the WRF and the subsidy for the budgetary constraints, but not set for the externality of DRW, and the environmental consciousness of individuals. And the different purposes of the WRF and subsidy are the reasons why a life-cycle evaluation model of due recyclable waste (DRW) is necessary to analyze its optimal waste recycling fee (WRF) and subsidy

Highlights

Many countries have used a waste recycling fee (WRF) and subsidy to promote the recycling systems of due recyclable waste (DRW)
A relationship between the WRF and the subsidy pertaining to DRW must be set by the government for the budgetary constraints, but few studies have analyzed the appropriateness of the specific relation
The purposes of the WRF and subsidy are not achieved due to limitations posed by the Specific Relationship

Summary

The model without the externality of DRW

Because the WRF and subsidy are at different stages of the life cycle of DRW, we constructed a model of the life cycle of DRW. Kleineidam et al (2000) used the control theory to discuss effective chain management for production chains such as recycling (life-cycle assessment), finding that chains are controllable not through incineration prices and taxes but rather through regulatory instruments and covenants between the government and industry. Craighill and Powell (1996) proved that lifecycle evaluation is a powerful tool in sustainable waste management and recycling policy and that recycling systems should perform better than waste disposal systems in reducing global warming, and acidification effects. From equation (13), we obtain Proposition 1 and Lemma 3, and if the government increases the subsidy for individuals whose environmental consciousness is c by one dollar, the social utility of DRW will increase by N[(1 − λ)v(c)] dollars. Lemma 3: If the government increases the subsidy of the individual whose use time for DRW is less than or equal to t(c) by one dollar, the social utility of DRW will increase by N [(1 − λ )V (c)] dollars. Lemma 5 states that the government will set the lowest (not highest) WRF and subsidy for the individual with the lowest environmental consciousness The explanation for this lemma is that the combination of the WRF and subsidy that satisfies budget constraints and the Specific Relation leads to the highest waste time for DRW.

The model with the externality of DRW

Conclusion