Recycling Common Materials: Effectiveness, Optimal Decisions, And Coordination Mechanisms

A growing amount of municipal solid waste (MSW) is generated worldwide, and common materials (paper, plastic, metals, and glass), which account for more than half of MSW, exhibit low recovery rates. In this paper, we aim to investigate some key questions about recycling across three dimensions: greenhouse gas emissions, operational costs, and aggregate costs (social costs of emissions plus operational costs). We obtain a novel result, which shows that a deposit/refund scheme implemented by a social planner with a refund to local governments might lead to a socially optimal collection rate.