An Economic Analysis of the Packaging Waste Recovery Note System in the UK

Norimichi Matsueda and Yoko Nagase
Additional contact information
Yoko Nagase: Oxford Brookes University

No 72, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: In order to cope with the increasing scarcity of final dump sites for household wastes, the UK recently introduced an environmental policy targeted at the firms that produce and sell products that generate packaging wastes. This policy requires such businesses to hold predetermined numbers of tradable credits called gPackaging waste Recovery Notes h (PRNs). This article provides insights into the economic implications of such a policy through a simple analytical model of a recyclable product and the PRN markets. Our analysis yield two particularly interesting results. First, an increase in the required recycling rate dampens the output and landfill waste levels, while the effect on the level of recycling activities is ambiguous. Second, an increase in the landfill tax always leads to an increase in the landfill waste. We also discuss how the socially optimal landfill tax in the presence of the PRN market should be chosen.

Keywords: PRNs; Recycling; Landfill Tax; Comparative Statics (search for similar items in EconPapers)
JEL-codes: Q28 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2011-06, Revised 2011-06
New Economics Papers: this item is included in nep-env and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://192.218.163.163/RePEc/pdf/kgdp72.pdf First version, 2011 (application/pdf)

Related works:
Journal Article: An economic analysis of the Packaging waste Recovery Note System in the UK (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:72

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