Files
Abstract
Centralized collection and disposal is an integral component of waste management
strategies for many solid and liquid wastes, and carbon capture and storage is currently being
considered for gaseous waste. In this paper we show how collective waste disposal systems
introduce essential changes in the design of optimal environmental policy. Absent collective
disposal, an optimal environmental policy imposes relatively stringent regulations on polluters in
regions where local environmental damage functions are “high”; however, under collective
waste disposal, the optimal environmental policy level increases monotonically over distance
from the disposal site, and this is true irrespective of the degree of spatial heterogeneity in local
environmental damage functions. We characterize the optimal spatial pattern of environmental
policy levels under collective waste disposal and identify optimal membership size for waste
disposal networks comprised of homogeneous producers.