We study the recycling opportunity of an industrial sector constrained by climate, resource and waste capacities. A final good is produced from virgin and recycled materials, and its consumption releases both waste and GHG emissions. We identify the optimal trajectories of resources use, mainly depending on the emission rates of each resource and on the relative scarcity of their stocks. Recycling is sometimes an opportunity to reduce the impact of consumption on primary resources and waste but can still affect the environment. We characterize the optimal recycling strategy and we show that, in some cases, the time pace of the recycling rate is inverted U-shaped. Last, we discuss the policy implications of our model by identifying and analyzing the set of optimal tax-subsidy schemes.
Recycling; Resource extraction; Waste; GHG emissions.;
- Q32: Exhaustible Resources and Economic Development
- Q53: Air Pollution • Water Pollution • Noise • Hazardous Waste • Solid Waste • Recycling
- Q54: Climate • Natural Disasters • Global Warming
Gilles Lafforgue, and Etienne Lorang, “Recycling under environmental, climate and resource constraints”, TSE Working Paper, n. 20-1125, July 2020.
TSE Working Paper, n. 20-1125, July 2020