Disposition Choices Based on Energy Footprints Instead of Recovery Quota
CentER Discussion Paper Series No. 2008-74
37 Pages Posted: 11 Sep 2008
Date Written: August 25, 2008
This paper addresses the impact of disposition choices on the energy use of closed-loop supply chains. In a life cycle perspective, energy used in the forward chain which is locked up in the product is recaptured in recovery. High quality recovery replaces virgin production and thereby saves energy. This so called substitution effect is often ignored. Governments worldwide implement Extended Producer Responsibility (EPR). Policies are based on recovery quota and not effective from an energy point of view. This in turn leads to unnecessary emissions of amongst others CO2. This research evaluates current EPR policies and presents six policy alternatives from an energy standpoint. The Pareto-frontier model used is generic and can be applied to other closed loops supply chains under EPR, exploiting the substitution effect. The measures modeled are applied to five WEEE cases. We discuss results, pros and cons of various alternatives and complementary measures that might be taken.
Keywords: extended producer responsibility, disposition, energy perspective, substitution effect, government policies, Pareto efficiency
JEL Classification: Q28, K32, C61
Suggested Citation: Suggested Citation