Economic Incentives and Residential Waste Management in Taiwan: An Empirical Investigation

Environmental & Resource Economics (2007) 37:489519 Springer 2006 DOI 10.1007/s10640-006-9040-0

HAI-LAN YANG1 and ROBERT INNES2,*

1Department of Economics, 260 Heady Hall, Iowa State University, Ames, IA, 50011, USA;

2Department of Agricultural and Resource Economics, University of Arizona, Tucson, AZ, 85721, USA; *Author for correspondence (fax [phone]; phone [phone]; e-mail: [email protected]). Senior authorship not assigned.

Accepted 21 September 2006

Abstract. This paper presents an empirical study of how three waste management policies have aected residential waste generation and recycling behavior in Taiwan over the past decade. The three policies are unit-pricing of garbage in Taipei, a mandatory recycling program in Kaohsiung, and a nationwide policy of charging for plastic bags. We estimate policy eects on total waste, total recycling, and recycling of four specic materials, all measured by weight per capita. Unlike prior work, we nd that unit-pricing and mandatory recycling policies lead to signicant increases in recycling of most materials, as well as increased levels of total recycling and garbage reduction. The plastic bag policy is generally found to lower material-specic and total recycling rates, as well as total garbage volumes.

Key words: recycling, solid waste management, unit pricing

1. Introduction

As incomes and populations have grown over the past three decades, costs of waste disposal have grown in tandem. Suitable landll sites have become increasingly scarce. Even costs of incineration have grown as environmentally conscious communities seek to avoid the external disamenities that incinerators create. Policy-makers in the developed world have responded to increased disposal costs with measures designed to reduce waste volumes by prompting consumers to demand less waste-intensive products, to recycle more, and to engage in other source-reduction activities (such as composting). Policies include waste charges that rise with volume (called unit pricing), availability of curbside recycling, deposit-refund requirements for recyclables, and government recycling mandates.

The ecacy and eects of such policies have been fertile ground for economic research on both theoretical and empirical fronts. In the absence of illegal waste disposal opportunities, theory oers a simple prescription for

Economic Incentives and Residential Waste Management in Taiwan: An Empirical Investigation

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optimal policy: Charge consumers a price for their waste equal to the true marginal social cost of waste disposal (Fullerton and Kinnaman 1995). However, when illegal disposal is possible, this simple...