Conference Agenda

We study reuse, recycling, and disposal decisions in a model of end-of-use product allocation. Markets over-rely on recycling because consumers systematically under-value reused goods due to behavioral frictions that depress willingness to pay beyond objective quality differences, while firms fail to internalize the environmental benefits of extending product lifetimes. As a result, recycling substitutes for socially efficient reuse, generating a weak circularity gap—a distortion in the composition of circularity whereby material recovery crowds out product longevity. We show that policies focused solely on recycling can increase total circularity while widening this gap. Endogenous product quality choices amplify weak circularity by expanding the set of goods for which reuse is privately unattractive despite being socially beneficial. We illustrate these mechanisms through simulations motivated by the clothing sector, showing how the prevalence of short-lived, low-quality (fast-fashion-type) products magnifies weak circularity and its associated welfare losses.

Large volumes of e-waste collected under formal schemes in high-income countries are still processed informally in developing ones, despite continuous policy efforts to reverse this trend. This paper shows that the persistence of informal e-waste processing is a consequence of how global waste flows interact with domestic market structure. I develop a two-country model in which a cost-minimizing broker exports low-value fractions of e-waste to a poorer country, where informal dismantlers and licensed recyclers compete to purchase material from local collectors. Because formal facilities face fixed-capacity costs, their competitiveness depends on achieving sufficiently high-value throughput. Low-value exports from the rich country increase total inflows but depress the effective high-value throughput and dilute domestic subsidies, keeping average costs high and allowing informal dismantlers to outbid formal recyclers. The model generates a formalization trap with multiple equilibria and explains why widely used policies, including per-unit subsidies, capital support, higher recycling targets in rich countries, and integration of informal collectors into formal systems, often fail to trigger a transition toward formal treatment.

We develop a dynamic game in which the supply of a critical mineral originates from

an exhaustible oligopolistic primary sector and a competitive recycling sector. Extraction costs of virgin minerals depend on the remaining resource stock, while the supply of recycled materials increases with cumulative past extraction. Allowing for strategic interactions among primary producers who account for the effect of their current extraction on future recycling, we characterize the feedback Nash–Cournot equilibrium. We then investigate how the availability of recycling affects equilibrium supply paths of virgin minerals and overall social welfare. Our results show that the impact of recycling on primary extraction crucially depends on market structure and firms’ resource endowments. Under perfect competition, recycling accelerates virgin extraction, whereas under monopoly it slows extraction. In a duopolistic primary sector, recycling induces a producer with a relatively small resource stock to front-load extraction, followed by reduced supply once recycled materials become sufficiently abundant. By contrast, a producer with a relatively large resource stock reduces virgin supply throughout.

We propose a general equilibrium model to analyze the taxation of an externality, where only the aggregate amount matters. In this common situation, regulation is traditionally considered at the source of the externality. We rigorously define how regulation can also be implemented at the end-of-chain, through taxation of the embodied externality, that is conserved along the value chain through balance or accounting identities, as in the case of greenhouse gas emissions footprinting. We identify conditions under which source-based and/or end-of-chain taxes can implement the same equilibrium. We show that implementation via end-of-chain taxes requires the existence of equilibrium price schedules under which goods are traded as bundles of quantities and embedded externalities. Our results characterize the informational and pricing structures required, and provide a unified general equilibrium framework for the analysis of environmental policies.