TY  - JOUR
AU  - Fullerton,Don
AU  - Wu,Wenbo
TI  - Policies for Green Design
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5594
PY  - 1996
Y2  - May 1996
UR  - http://www.nber.org/papers/w5594
L1  - http://www.nber.org/papers/w5594.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu
AB  - We analyze alternative policies such as a disposal content fee, a subsidy for recyclable designs, unit pricing of household disposal, a deposit-refund system, and a manufacturer `take-back' requirement.  In order to identify the problem being addressed, we build a simple general equilibrium model in which household utility depends on a negative externality from total waste generation, and in which firms use primary and recycled inputs to produce output that has two `attributes': packaging per unit output, and recyclability.  If households pay the social cost of disposal, then they send the right signals to producers to reduce packaging and to design products that can more easily be recycled.  But if local governments are constrained to collect household garbage for free, then households do not send the right signals to producers.  The socially optimal attributes can still be achieved by a tax on producers' use of packaging and subsidy to producers' use of recyclable designs.
ER  -