Leveraging consumers' recycling incentives in a Circular Economy

Valeria Forlin and Eva-Maria Scholz (scholz.evamaria@gmail.com)
Additional contact information
Valeria Forlin: Università di Roma Tor Vergata, and Toulouse School of Economics

No 2017010, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We study firms' incentives for supporting the transition to a Circular Economy via the choice of their business model, accounting for consumers' recycling preferences and policy makers' Extended Producer Responsibility (EPR) initiatives. Our analysis focuses on take-back programs (TBPs) that reward consumers for dropping off previous purchases at collection points. Results suggest that the uptake of TBPs is primarily driven by the revenue opportunities of firms' collecting and recycling activities and the EPR policy design. Recycling subsidies provide rms with greater incentives than disposal fees or take-back requirements; stricter policies may increase firms' incentives only under take-back requirements or recycling subsidies. From an environmental and consumer welfare perspective, the introduction of TBPs should be encouraged in most cases; regarding producer welfare and the costs of policy makers' initiatives, the result varies with the EPR policy design. In this context, we also identify the trade-offs policy makers face when designing their initiatives.

Keywords: Circular Economy; Extended Producer Responsibility; Optimal Policy Design; Recycling; Take-back Programs; Waste Reduction. (search for similar items in EconPapers)
Date: 2017-03-14
New Economics Papers: this item is included in nep-env
References: Add references at CitEc
Citations:

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2017.html (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2017010

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS (alain.gillis@uclouvain.be).