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Markets, Technology and Environmental Regulation: Price Ambivalence of Waste Paper in Germany

22 Pages Posted: 19 Jan 2005 Last revised: 20 Feb 2015

Stefan Baumgärtner

University of Freiburg - Department of Environment and Natural Resources

Ralph Winkler

University of Bern - Department of Economics; University of Bern - Oeschger Centre for Climate Change Research

Abstract

We examine the price ambivalence of low quality waste paper (grades 1.02 and 1.04) on the German market. Since 1990 the price of these grades is at times positive and at times negative. The underlying reason is the combination of three institutional and technical characteristics of the market: (i) As a result of waste management legislation the supply of waste paper is mostly independent of its price and its demand. Supply is bounded from below by collection and utilization quotas fixed by the Regulation on Packaging Waste enacted in 1991. (ii) The only alternative to costly disposal of waste paper by dumping or incineration is its use as a secondary resource in the production of new paper, as only the paper industry is capable of using waste paper in a productive manner in significant amount. (iii) Yet, its use as a substitute for primary inputs is technically limited. In this article, we describe the technical and institutional conditions leading to price ambivalence and discuss the consequences for supply, demand and trade of waste paper.

Keywords: Price ambivalence, Waste paper, Primary and secondary resources, Waste disposal, Environmental regulation

Suggested Citation

Baumgärtner, Stefan and Winkler, Ralph, Markets, Technology and Environmental Regulation: Price Ambivalence of Waste Paper in Germany. Ecological Economics, Vol. 47, Nos. 2-3, pp. 183-195, 2003. Available at SSRN: https://ssrn.com/abstract=650241

Stefan Baumgärtner

University of Freiburg - Department of Environment and Natural Resources ( email )

Tennebacher Str. 4
Freiburg, 79106
Germany

HOME PAGE: http://www.ere.uni-freiburg.de

Ralph Winkler (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, 3001
Switzerland
+41 31 631 4508 (Phone)

HOME PAGE: http://www.ralph-winkler.de

University of Bern - Oeschger Centre for Climate Change Research ( email )

Zähringerstrasse 25
Bern, 3012
Switzerland

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