Alcoa re-Revisited: Recycling, Market Power and Environmental Policy

Jean De Beir and Guillaume Girmens

Economie Internationale, 2009, issue 120, 37-52

Abstract: This article incorporates an environmental dimension into the study of markets characterised by producers of a primary good in a position of market power over a sector of recycling. In the model used, production of the primary good by a monopolistic firm is polluting, whereas production of the recycled good is not. Taxing the monopolistic firm allows to reduce pollution, at the price of a reduction in the total quantity of good produced. The effect of a subsidy for recycling depends on the slopes of the demand curve and of the recycler's supply curve. It is ambiguous in terms of welfare, but it always encourages recycling.

Keywords: Recycling; market power; environmental externalities; environmental policy (search for similar items in EconPapers)
JEL-codes: D42 D62 H23 Q53 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepiei:2009-4tb

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