By Organisation for Economic Co-Operation and Development
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Additional info for Addressing the Economics of Waste
This perception may have emerged in 1987, when the barge “Mobro”, loaded with Long Island garbage, was unable to unload its cargo after repeated attempts (see Bailey, 1995, for a discussion of the incident). A wave of state and local legislation encouraging or mandating recycling was passed soon after this incident. In addition, voters read newspaper stories that landfills were closing faster than they were opening. S. fell by nearly 75%, during 1988-2000, from about 8,000 to only 2,100 (Glenn, 1998 and Biocycle, 2001).
In the model above, however, the simplest way to make all of the private market conditions match all of the social optimality conditions is to set all tax rates to zero except: (1) tg = – nuG/O , where O is the marginal utility of income at the optimum. Since uG is negative, this tax rate is positive. It is merely an example of the general principle of Pigou (1932): for an activity that causes a negative externality, the optimal corrective tax is “marginal external damages” (MED). The expression in (1) reflects the negative effect on utility (uG) for all n individuals, converted into dollars when divided by the marginal utility of income.
OECD (2002b), OECD Environmental Data – Compendium 2002, OECD, Paris. OECD (2002c), “Drivers for Waste Generation”- ENV/EPOC/WGWPR/SE(2002)2. Statistics Finland (2002), Household Budget Survey, Income Distribution Survey. US EPA (2002), “Municipal Solid Waste in the United States: 2000 Facts and Figures”, June 2002. 38 Chapter 3 ECONOMIC ANALYSIS OF SOLID WASTE MANAGEMENT POLICIES By Don Fullerton and Amy Raub 1 Worldwide quantities of household solid waste have been rising. 4 pounds per person per day.
Addressing the Economics of Waste by Organisation for Economic Co-Operation and Development