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Realizing the Value of Recycling – Assessing the Elements of a Policy Package

Discussion Papers 2069, 34 S.

Xi Sun, Karsten Neuhoff


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We investigate policies for increasing recycling to facilitate decarbonization within the basic material sector, including market-based policies, such as carbon pricing, advanced disposal fee and minimum recycled content requirement, and non-market policies, such as product design standard. We develop an analytical model to assess the role of these policy instruments for recycling related choices of manufacturing industry, consumers, and waste management. We find that individual policy instruments can deliver some benefits in terms of emission reductions and welfare improvements, but that a package of policy instruments is necessary to reach the welfare maximum and effective scale of emission reductions and resource saving.

Xi Sun

Research Associate in the Climate Policy Department

Karsten Neuhoff

Head of Department in the Climate Policy Department

Topics: Climate policy

JEL-Classification: D62;H23;Q53;Q54
Keywords: Industry decarbonization, market failure, high-quality recycling, policy package
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