Is the Deposit Refund System for Lead Batteries in Delhi and the National Capital Region Effective?

Yamini Gupt

No 68, Working papers from The South Asian Network for Development and Environmental Economics

Abstract: Lead acid batteries generate hazardous waste in the form of lead, with serious environmental and health implications. These batteries are recyclable and the present Deposit Refund System for recycling operating in Delhi provides a discount to consumers when they purchase a new battery and return used batteries to retailers. The retailers in turn determine whether the batteries will be recycled in an environment-friendly or unfriendly manner by selling them to manufacturers or informal sector scrap dealers, who then sell them to un-registered smelters. This study finds that that the economic instrument that brings used batteries into the recycling system works exceptionally well. However, organized lead recycling is undertaken only in a limited manner. Rather, retailers prefer to sell used batteries to the informal sector because they obtain higher prices, and incur lower storage costs and taxes. Current rules prevent scrap dealers from selling batteries to regulated smelters. Relaxing these rules would reduce raw material shortfalls currently experienced by the sector and bring more batteries into the formal recycling market. In addition, an alternate policy instrument to consider is a green tax on batteries coupled with a partial or complete refund when the manufacturer ensures environment-friendly recycling.

Keywords: Lead battery; recycling; deposit refund systems; extended producer responsibility; green tax (search for similar items in EconPapers)
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