Abstract
Environmental policies have recently been designed to reduce the quantity of solid waste disposal and to stimulate recycling . In Japan, the Containers and Packaging Recycling Law was enacted to promote recycling of containers and packaging materials, which account for more than 40 % of the total volume of municipal solid waste. Under this legislation, municipalities have to bear the collection costs, which are a large part of the total recycling costs . In response, the Tokyo government has attempted to establish 'voluntary collection' systems, which require business sectors using packaging materials to bear the costs for voluntary collection. The authors analyze how much the social welfare loss in voluntary collection systems differs from that in municipal collection systems, using a partial equilibrium model of PET bottle recycle scheme as a case study . The simulated results show that annual welfare loss of a voluntary collection system is 785 yen per capita, exceeding that of municipal collection systems by approximately 700 yen . Further, the long-term equilibrium of these recycling systems is considered by applying transaction cost theory. Considering the magnitude of transaction costs when municipal collection costs are subsumed into the price of products, we predict that voluntary collection systems will realize optimal results in the longer term.
