Challenging pollution and the balance problem from rare earth extraction: how recycling and environmental taxation matter

Bocar Samba Ba, Pascale Combes Motel () and Sonia Schwartz
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Pascale Combes Motel: CERDI - Centre d'Études et de Recherches sur le Développement International - UCA [2017-2020] - Université Clermont Auvergne [2017-2020] - CNRS - Centre National de la Recherche Scientifique
Authors registered in the RePEc Author Service: Pascale Motel Combes ()

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Abstract: Rare earth element extraction induces environmental damages and the balance problem. In this article, we show that recycling can challenge both problems in a two-period framework. We also find other results depending on the amount of scrap that can be recycled. If the recycling activity is not limited by available scrap, it does not change extraction in the first period. Environmental taxes on extracted quantities reduce extraction and favor recycling. But if the recycling is limited, the extractor reduces extraction in period one, adopting a foreclosure strategy, and environmental taxes can decrease recycling. In all cases, environmental taxes are never equal to the marginal damage from pollution, in order to take into account the recycling effect.

Keywords: Rare Earth Elements; Pollution; Balance Problem; Recycling; Pigouvian Taxation; Cournot Competition (search for similar items in EconPapers)
Date: 2020-12
New Economics Papers: this item is included in nep-ene, nep-env and nep-res
Note: View the original document on HAL open archive server: https://hal.science/hal-03093684
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Citations: View citations in EconPapers (4)

Published in Environment and Development Economics, 2020, 25 (6), pp.634-656. ⟨10.1017/S1355770X20000054⟩

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Related works:
Journal Article: Challenging pollution and the balance problem from rare earth extraction: how recycling and environmental taxation matter (2020)
Working Paper: Challenging pollution and the balance problem from rare earth extraction: How recycling and environmental taxation matter (2019)
Working Paper: Challenging pollution and the balance problem from rare earth extraction: How recycling and environmental taxation matter (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03093684

DOI: 10.1017/S1355770X20000054

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