Paper Details
Title Investments in Recycling Technologies and the Effects of Tightened Environmental Policy

Recycling is seen as a means both for reducing the environmental impact of the residuals of production and consumption as well as a source for secondary resources. Thus, it may enable a company to adjust to environmental needs as being imposed either by nature itself, by consumers, or by government employing environmental policy instruments. This paper examines how the willingness to invest in such technologies is affected by tightening environmental policy. By employing a two-step evaluation approach, it will be possible to identify the determinants of the price ceiling of such an investment under imperfect market conditions. This price ceiling depends on the (corrected) net present values of the payments and on the interdependencies arising from changes in the optimal investment and production programmes. Although the well-established results of environmental economics for a single investment can be confirmed, tightening environmental policy may lead to sometimes contradictory and unexpected consequences for investments in recycling technologies. However, they can be interpreted in an economically comprehensible manner. Keywords: Recycling Technology, Environmental Policy, Investment Appraisal, Corrected Net Present Value, Price Ceiling, Imperfect Markets, Production Planning.

Pages 15-33
Volume 4
Issue 1
Part 1
File Name Download (1172)