Upstream Pollution, Downstream Waste Disposal, and the Design of Comprehensive Environmental Policies

By Margaret Walls, Karen L. Palmer. 2001

174 citations recorded by the source corpus.

Many environmentalists and policymakers are shifting their focus from media-specific pollution problems to product-specific, life-cycle environmental problems. In this paper, we develop a model of production and consumption that incorporates life-cycle environmental externalities—specifically, an upstream manufacturing byproduct, air or water pollution from manufacturing, and downstream solid waste disposal. We then use the model to derive optimal government policies to address all three externalities. We assume throughout that a Pigovian tax on waste disposal is precluded because of the potential for illegal dumping. We then examine four cases: one in which Pigovian taxes on the upstream externalities are feasible, one in which such taxes are infeasible, and two final cases in which the upstream pollutant is subject to one of two different types of regulatory standards. In general, we find that no single instrument can solve multiple problems, contrary to what some observers have suggested. However, we find that there are alternative ways of reaching the social optimum. We also discover that a so-called "integrated" approach to policy appears to be important, no matter what policy options are adopted. And finally, we find that there is only a limited role for product "life-cycle assessments"—enumerations of all of the resources used and pollutants emitted throughout an entire product life-cycle.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/d7e2e64c8bdaa2e052881634bcd8b1f49fc691a6

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Citations in the corpus

Bargaining framework for competitive green supply chains under governmental financial intervention (2011, methodology): “Drawing from the concept of social welfare (SW) maximization, which is extensively used in literature for green policy determination (Dobbs, 1991; Walls and Palmer, 2001), this work proposes an objective function for the government that has the following four key elements: (1) consumer surplus…”
Using a Policy Mix for Pollution Control { A Review of Economic Literature (2012, unknown): “Walls and Palmer (2001) extent the analysis of this type of deposit-refund systems to a setting with multiple lifecycle externalities.”
Impact of Take‐Back Regulation on the Remanufacturing Industry (2017, background): “Early papers (e.g., Calcott and Walls 2000, Calcott and Walls 2005, Palmer and Walls 1997, Walls 2001, Walls et al. 2005) compared policies such as taxes, deposit/refund schemes, disposal fees, and recycling subsidies in terms of their ability to achieve social optimality.”
Stakeholder Perspectives on E‐Waste Take‐Back Legislation (2013, background): “Similar discussions on take-back policy choice have already taken place in the environmental economics literature, part of which focuses on how the socially optimum amount of waste generation and disposal can be ensured (e.g., Palmer et al. 1996; Palmer and Walls 1997; Fullerton and Wu 1998; Palmer ”