An interindustry approach to analyzing economic and environmental effects of the recycling of waste

Recycling of waste reduces the demand for virgin materials, the amount of w aste to be incinerated and/or landfilled, and also reduces emissions from t hese sources, however, it generates waste and emissions of its own. This pa per presents a static inter-industry model for analyzing economic and envir onmental effects of the recycling of waste that is capable of accommodating these aspects of recycling. Waste can be classified into two major categor ies depending on the way it is generated: (1) those generated as 'undesired ' by-products in the production process such as wastewater or sludge, and ( 2) those originally produced as goods but have turned to waste with the pas sing of time, such as old paper or discarded consumer durables. We are conc erned with the second category of waste. This category of waste tends to be distributed over a wide geographical area because it is generated in the p lace of final use, whereas the first one is generated in the place of produ ction. Since the issue of sorted collection will thus be a non-negligible e lement of any recycling program involving this category of waste, we treat the collection and recycling of waste as distinct activities, instead of th eir being put into a black box. In this respect, our model is an extension of Duchin, 1990, Structural Change and Economic Dynamics, 1, 243-262. We re gard the amount of waste as a given stock, and do not consider the process of its generation. As an empirical illustration, we construct a numerical e xample for the recycling of old paper based on the Dutch NAMEA data for 199 2, and analyze effects of alternative recycling scenarios on the industrial activity and emission of CO2. Each scenario consists of a set of parameter s referring to the proportion of recycled goods in total input, the efficie ncy of waste collection, and the efficiency of recycling technology. (C) 19 99 Elsevier Science B.V. All rights reserved.