American Economic Review: Vol. 101 No. 3 (May 2011)


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The Environmental Consequences of Global Reuse

Article Citation

Kinnaman, Thomas, and Hide-Fumi Yokoo. 2011. "The Environmental Consequences of Global Reuse." American Economic Review, 101(3): 71-76.

DOI: 10.1257/aer.101.3.71


This paper summarizes a two-country model that solves for optimal tax rates to achieve efficiency in an economy with international trade in used consumer electronics. If only the developed nation can tax the disposal of e-waste, then the global Pareto Optimum can be obtained by either imposing an import tariff on used consumer electronics or subsidizing the return of e-waste for disposal in the developed country. The global Pareto Optimum can also be obtained by reducing the disposal tax in the developed country to a level below the external marginal cost of disposal should no other policy option be available.

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Kinnaman, Thomas (Bucknell U)
Yokoo, Hide-Fumi (National Institute for Environmental Studies, Tsukuba)

JEL Classifications

F11: Neoclassical Models of Trade
F13: Trade Policy; International Trade Organizations
H21: Taxation and Subsidies: Efficiency; Optimal Taxation
L63: Microelectronics; Computers; Communications Equipment
Q53: Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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