Strategic Environmental Policies when Waste Products are Tradable

Abstract

The paper deals with international trade in hazardous waste products when there is an international oligopoly market for waste, and both waste-importing and waste-exporting countries act strategically to utilize national environmental policies to attach rents arising from trade in waste. The authors model a multiple-stage game where waste is generated in an industrialized country as a byproduct of production, and potentially is exported to some less-developed countries, if not abated locally, or imposed on local residents at a cost of an environmental tax. In the market for waste, an oligopolistic supply is assumed. The demand for waste is perfectly competitive, with waste-processing firms guided by marginal disposal costs and environmental taxes levied by foreign countries. With each country playing Nash, the analysis finds domestic and foreign taxes to be distorted from the Pigouvian taxes in such a way that the domestic (waste-exporter) tax rate is set below, and the foreign tax rate is set above, the Pigouvian taxes. However, a global welfare optimum requires tax distortions in the opposite direction, in the sense that foreign environmental taxes must be set below the Pigouvian tax rate. Copyright Blackwell Publishing Ltd 2003.

Optimal Environmental Tax and Level of Privatization in an International Duopoly

“…6 Also, third country market model that incorporates the design of environmental policies is used by Conrad (1993Conrad ( , 2001, Barrett (1994), Walz and Wellisch (1997), and Nannerup (2001). 7 For example, see Krutilla (1991), Kennedy (1994), and Cassing and Kuhn (2003). considered along with the international oligopoly.…”

Success Stories for Recycling of MSW at Municipal Level: A Review

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Management of Hazardous Waste and Contaminated Land

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