THE DETERMINANTS OF HAZARDOUS WASTE DISPOSAL CHOICE: AN EMPIRICAL ANALYSIS OF HALOGENATED SOLVENT WASTE SHIPMENTS

Disposal of hazardous waste is more complex than simply choosing the option with the lowest price: Legislation may hold a waste generator responsible for cleaning up a badly contaminated waste disposal site if the operator of that site goes bankrupt. This paper estimates conditional logit models of a generator's choice of waste management facility (TSDF) for shipments of halogenated solvent waste originating in California in 1995. The probability that a facility is selected as the destination of a shipment depends on the cost of shipping to and disposal at the facility, on existing contamination at the site, and on the track record of the facility, suggesting that generators do seem to balance current disposal costs with the likelihood of future liability. There is no evidence that generators prefer facilities owned by publicly traded firms, but when generators do choose TSDFs belonging to a publicly traded company, they prefer wealthier companies. (JEL Q21)     

International Trade in Hazardous Waste

This paper combines a gravity model with country characteristics to examine trade in hazardous waste. A significant pollution haven effect is observed as rising per capita income reduces the amount of hazardous waste countries' import. However, this effect is outweighed by high-income countries' relative capital abundance, and by rising GDP creating larger increases in disposal capacity than waste production. Simulating the volume and direction of hazardous waste trade in the absence of distance costs, leads to a 153% increase in waste traded, and a larger increase in shipments from non-OECD countries to OECD members than from the OECD to nonmembers.     

The Missing Pollution Haven Effect

This paper examines the effect of recent increases inhazardous waste disposal taxes on employment growth inindustries that generate hazardous waste. Mostexisting literature has found that interjurisdictionaldifferences in environmental stringency havenegligible measurable economic consequences. Commonexplanations for this lack of effect include claimsthat (1) measures of environmental stringency arepoorly quantified, (2) compliance costs are modest,(3) variation in compliance costs among jurisdictionsis small, and (4) cross-section data are insufficientto explore the consequences of increasingly stringentstandards. This paper addresses these four concernsby quantifying hazardous waste disposal taxes,demonstrating that they are large and varied acrossjurisdictions in the United States, and showing thatthey have had a significant effect on hazardous wasteshipping among states. The paper then uses a panel ofstate and county-level data to show that despite thesefindings, state hazardous waste disposal taxes do notimpose large employment losses on industries thatgenerate waste.     

On and Off the Liability Bandwagon: Explaining State Adoptions of Strict Liability in Hazardous Waste Programs

We test a model of states' adoption of the hazardous waste liability regime (negligence, strict liability) providing greater net benefits. The likelihood of adopting strict liability increases in a state's number of chemical-intensive manufacturing plants, decreases in the number of large mining establishments. Also predictive: severity of state's hazardous waste problem, effectiveness of other state environmental programs, and political climate. States may view strict liability as better for industrial than mining pollution, and may be partly motivated by "precaution targeting" and "deep pockets" mentality. Non-adopters may wish not to discourage business or have other programs that substitute for strict liability.     

Hazardous waste sites and property values in the state of New Jersey

The polluter pays principal is justified as a deterrent to future pollution. However, the US experience suggests that it has considerably reduced the clean up rate of existing hazardous waste sites. Coaseapos;s theorem is used as basis to propose that a partnership between the polluters and property owners near these sites will not only ease financial burden but will also speed up the pace of cleanup. A hedonic price model is used to empirically estimate the impact of siting of hazardous waste sites on property values and determine the economic feasibility of the proposed partnership. The empirical estimates are based on municipality level data from the state of New Jersey. The benefis from speedy clean up of hazardous waste sites to New Jersey property owners are observed to exceed the cleanup cost of these sites.     

Strategic Environmental Policies when Waste Products are Tradable

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.     

Wasting Time? Recycling Incentives in Urban Taiwan and Japan

What makes recycling work? We study the factors driving household waste disposal and recycling in 18 cities in Taiwan and Japan in order to understand the impact of alternative waste management incentives. We show that this depends on the effect of distinct policies on the relative costs of the main alternative disposal methods: recycling, disposal to landfill and illegal dumping. The willingness both to recycle and to dispose to landfill depends on the relative costs of the waste collection regime, and these are dominated by the time cost of alternative disposal methods. The higher the frequency of waste collection, the less recycling and the more disposal to landfill there will be. This is because frequent collection reduces the marginal time-cost of disposal to landfill. Curbside collection of recyclable material, and the frequency of that collection, has a similar effect on the recycling rate. Although direct incentives, such as unit pricing are important in the waste disposal decision, recycling depends primarily on management of the time-costs it involves.     

Resource and Waste Taxation in the Theory of the Firm with Recycling Activities

The management of solid waste has become an urgent problem in nations with a great population density. Accordingly, waste reduction through source reduction and recycling has become increasingly important. Our purpose is to show how prevention, recycling and disposal of waste could be part of a theory of the firm. We first derive efficient production functions from production processes with waste as a by-product. Waste obtained as new scrap can partially be recycled by using additional inputs in order to cut back the purchase of virgin material. Waste not completely recyclable will leave the firm as disposal which also entails cost to the firm. We use the dual cost function approach to develop a theory of the firm under solid residual management.Since the producer does not bear the full cost of disposal, there will be a bias toward virgin materials and away from recycling. The goal of the government is to stimulate the firms to recycle with respect to the preservation of exhaustible resources. An incentive to recycle is a tax on resources or on waste. In order to determine the tax levels the government maximizes welfare subject to the dynamic constraint for decumulation of land fill for waste deposits. This gives the user cost and its time profile for taxing waste disposal or virgin material.In a comparative statics analysis we compare the effect of taxes on waste vs. virgin material on effort to produce in a resource saving manner, on the quantity of recycled material, on output, and on the reduction of waste. Since the impact of environmental regulation on employment is important, our model detects seven effects on labor demand as part of resource conservation policy. We finally carry out a comparative statics analysis of waste intensive firms operating in different market structures. Of interest is the impact of a resource or waste taxation on market volume, on the number of firms, on resource saving effort, and on profit.     

Assessing the Effectiveness of State Regulation and Enforcement of Hazardous Waste

This paper assesses the effectiveness of different state hazardous waste regulations and policies in promoting compliance using data for 8000 facilities across the United States. Because data on compliance is available only if a facility is inspected, the analysis uses a censored bivariate probit. Adoption of voluntary pollution prevention programs appears to decrease violations in general while adoption of strict liability and allocating a higher percentage of employees to regional offices appear to decrease Class 1 violations only. Although spending on waste programs also appears to decrease Class 1 violations, spending is positively correlated with the overall probability of violation.     

Challenging the enforcement of environmental regulation

If a firm can contest the enforcement of an environmental regulation, neither increasing the probability nor severity of the fine will guarantee a reduction in a firm's illegally dumped waste. A policy that can unambiguously decrease illegal dumping is lowering the cost of legal disposal. This result occurs because the use of monitoring and fines to increase the probability or severity of enforcement triggers investment to evade enforcement, while a decrease in the costs of legal disposal does not. Investment in the resources to evade enforcement decreases the attractiveness of monitoring by significantly increasing the costs of environmental audits, administrative hearings, and judicial procedures. This occurs even with a high degree of regulator information about the firm's cost structure and no monitoring errors. In addition, if the regulator can only imperfectly monitor a firm's behavior so the firm can be accused of another firm's behavior, observable commitment to challenge enforcement will lead to overinvestment in resources to evade enforcement, an increased level of illegal dumping, and an overall increase in total costs relative to the unobservable case.     

ILLEGAL DISPOSAL AND WASTE COLLECTION FREQUENCY

A model of household refuse production is presented in which the implications of the presence of dumping incentives for the public choice of garbage collection frequency under a user fee system are analysed. Insofar as governments wishing to balance their waste collection service budgets can set the marginal benefit of collecting garbage equal to its marginal cost, no externality arises through pick‐up frequency. However, when the expected punishment for dumping is zero or independent of its extent, the public provision of refuse collection frequency turns out to be negatively affected by the amount of garbage that individuals dump and, therefore, intervention in the management of household waste is required. The optimal policy is found to consist of taxes on consumption goods and subsidies for curbside (or legal) disposal and recycling that are directly linked to collection costs.     

声誉激励、社会监督与质量规制——城市垃圾处理行业中的博弈分析

我国实施市政公用事业市场化改革以来,民营企业通过竞标等方式从政府手中获取特许经营权,凭借其垄断地位和信息优势降低服务标准,导致垃圾处理行业陷入质量规制的困境。本文针对城市垃圾处理行业的问题,先是构建以规制机构与垃圾处理特许经营企业为参与者的博弈模型,分析了声誉激励和社会监督对博弈参与双方损益及其策略的影响;然后构建纳入举报机制的由社会民众、规制机构和特许经营企业三方参与的序列博弈模型。研究得出四点结论：（1）减少规制成本,增加对违规垃圾处理企业的惩罚力度,可减少企业违规概率;（2）声誉激励和社会监督均可减少垃圾处理特许经营企业违规概率;（3）社会监督有助于节约规制成本,减弱规制机构与企业间信息不对称程度,提高规制效率;（4）规制机构的检查行为与公众举报行为之间存在明显的互补性。最后针对性地提出了提高城市垃圾处理行业质量规制效果的政策建议。     

Burn or bury? A social cost comparison of final waste disposal methods

This paper evaluates the two well-known final waste disposal methods, incineration and landfilling. In particular we compare the social cost of two best-available technologies using a point estimate based on private and environmental cost data for the Netherlands. Not only does our comparison allow for Waste-to-Energy incineration plants but for landfills as well. The data provide support for the widespread policy preference for incineration over landfilling only if the analysis is restricted to environmental costs alone and includes savings of both energy and material recovery. Gross private costs, however, are so much higher for incineration, that landfilling is the social cost minimizing option at the margin even in a densely populated country such as the Netherlands. Furthermore, we show that our result generalizes to other European countries and probably to the USA. Implications for waste policy are discussed as well. Proper treatment of and energy recovery from landfills seem to be the most important targets for waste policy. Finally, WTE plants are a very expensive way to save on climate change emissions.     

On the Second-best Policy of Household's Waste Recycling

This study analyzes the second-best household's waste recycling policy. If we assume the first-best economy with no illegal disposal or transaction costs, then unit pricing, an advance disposal fee and a recycling subsidy are required in order to achieve the social optimum such that both the sum of unit pricing and an advance disposal fee and the sum of unit pricing and a recycling subsidy are equal to the marginal disposal cost. Furthermore, the first-best outcome can also be obtained by a producer take-back requirement system.In the real economy, however, various factors prevent the first-best optimal outcome. In this study we consider two factors, one being the transaction cost associated with a recycling subsidy (or refund) and the other being illegal disposal by the consumer. If a recycling subsidy (or a deposit-refund system) is adopted, a transaction cost associated with it will be generated. Alternatively, if unit pricing is adopted, some of the consumed goods may be disposed of illegally. We show the complete trade-off between unit pricing and a recycling subsidy. In other words, we can not adopt unit pricing and a recycling subsidy simultaneously. As a result, there are three candidates for the second-best policy: unit pricing with an advance disposal fee, a deposit-refund system, and a producer take-back requirement system.Which of these three policies is the second-best policy will depend on the relative magnitude of the price of a recycled good and the marginal transaction cost associated with a recycling subsidy (or the refund in a deposit-refund system). Generally, if the price of a recycled good is positive and the marginal transaction cost is relatively high, unit pricing with an advance disposal fee is the second-best policy. However, where the price of a recycled good is negative and the marginal transaction cost is relatively high, a producer take-back requirement system is the second-best policy. Further, where the marginal transaction cost is relatively low, a deposit-refund system is the second-best policy, regardless of whether the price of a recycled good is positive or negative.     

Towards equilibrium offers in unit commitment auctions with nonconvex costs

We compare two types of uniform-price auction formats commonly used in wholesale electricity markets—centrally committed and self-committed markets. Auctions in both markets are conducted by an independent system operator that collects generator bids and determines which generators will operate and how much electricity each will produce. In centrally committed markets, generators submit two-part bids consisting of a startup cost and a variable energy cost. Self-committed markets force generators to incorporate their startup costs into a one-part energy bid. The system operator in a centrally committed system ensures that each generator recovers the startup and energy costs stated in its two-part bid, while no such guarantees are made in self-committed markets. The energy cost ranking and incentive properties of these market designs remains an open question. While the system operator can determine the most efficient dispatch with a centralized market, the auction mechanism used to solicit generator data compels generators to overstate costs. Self commitment might involve less efficient dispatch but have better incentive properties. We derive Nash equilibria for both market designs in a symmetric duopoly setting. We also derive simple conditions under which the two market designs will be expected cost-equivalent.     

An estimate of the producer cost of liability for oil spills

Governments often impose liability for environmental harms on firms when direct monitoring of operations is difficulty or costly. In the case of oil production, little is known about the private cost of liability. This article takes advantage of a natural experiment to estimate the loss in projected future profits of oil and gas production after the Oil Pollution Act of 1990, which imposed liability on some producers and was exogenously timed in response to the Exxon Valdez spill. I find no evidence of economically substantial firm costs of the Oil Pollution Act’s liability rule.     

Choosing and sharing

Implementing a project, like a nationwide nuclear waste disposal, which benefits all involved agents but brings major costs only to the host is often problematic. In practice, revelation issues and redistributional concerns are significant obstacles to achieving stable agreements. We address these issues by proposing the first mechanism to select the efficient site (the host with the lowest cost) while simultaneously allowing for the implementation of any individually rational division of the whole hosting cost. The subgame perfect Nash equilibria of our simple mechanism are efficient, budget-balanced and individually rational. Moreover, the truthful equilibrium is immune to coalitional deviations.     

RISK, INFORMATIONAL ASYMMETRY AND PRODUCT LIABILITY: An Enquiry Into Conflicting Objectives

Abstract.  Risky products inflict two costs on society; the accident and the insurance costs. The expansion in the scope of product liability since the late 1970s has increased the cost of third-party liability insurance. However, the economic analysis has, traditionally, focused on only the accident costs. Some recent works suggests a strict trade-off between minimization of the accident costs and the insurance costs. In this paper, we extend the analysis by considering both types of costs. An efficiency characterization of product liability rules is provided by assuming informational asymmetry about the risk. We show that it is possible to achieve efficiency with respect to the insurance costs as well as the care levels.     

ACCOUNTING FOR SOCIAL COSTS ASSOCIATED WITH RESALE PRICE MAINTENANCE

Resale price maintenance (RPM) can provide a positive or negative effect on social welfare. The evaluation depends on many factors, such as whether a high-demand or low-demand state exists, storage/holding costs, and disposal costs. A number of articles addressing the welfare effects of RPM conclude they enhance social welfare. Disposal costs for manufactured products are real and increasingly accounted for in firm costs, and are an essential issue in environmental economics. This article examines the case for RPM with disposal costs. When not incorporated into firm profits, RPM may be welfare reducing. (JEL D42 , D62 , D81 )     

A Post-Consumer Waste Management Model for Determining Optimal Levels of Recycling and Landfilling

The present study examines the optimal recycling rate for municipal solid waste. First, an optimal control model is developed to account for the physical costs of recycling, the social costs of landfilling, and consumers' environmental preferences. Second, an optimal solution is simulated using waste disposal data from the Helsinki region in Finland. The benefits from recycling are included in the simulation using the results of a recent contingent valuation study. The results of the present research suggest that mandates for achieving 50% recycling in municipalities are not far-fetched and are both economically and environmentally justified.