Recycling and Environmental Externalities: Should Recycling Be Subsidized?

Recyclage et externalités environnementales: Faut-il subventionner les activités de récupération recyclage ?

Jean de Beir (), Mouez Fodha and Guillaume Girmens ()
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Jean de Beir: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne
Guillaume Girmens: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne

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Abstract: This paper considers recycling in a general equilibrium model. It is shown that recycling should be subsidized if recycling costs are high, as an incentive to recycle all of the available waste. This tax incentive should vanish if recycling is profitable enough. In this case, recycling should even be taxed, in order to make the competitive equilibrium be an optimal allocation. We conclude also that, if recycling is efficient enough, it allows to internalize environmental externalities. In this case, recycling replaces a tax instrument.

Keywords: Overlapping generations model; recycling sector; environmental externalities; tax policy; Modèle à générations imbriquées; secteur du recyclage; externalités environnementales; politique fiscale (search for similar items in EconPapers)
Date: 2007-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00144632
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Citations: View citations in EconPapers (3)

Published in 2007

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Working Paper: Recycling and Environmental Externalities: Should Recycling Be Subsidized? (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00144632

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