Pricing Wastes for Financing Sustainable Circularity in Case of Data Deficiency: Mattress Recycling as an Example

Abstract

More than 30 legal recyclables were proclaimed by Environmental Protection Administration (EPA) in Taiwan of those producers and importers are liable for paying a Resource Recycling Fee (RRF). The Resource Recycling Management Fund determines both the tariff of RRF and the subsidy rate for recycling activities based on a predetermined pricing formula and collects the revenue to finance its collection and disposal. While contemplating on whether to proclaim waste mattress as a legal recyclable, EPA is facing several critical challenges, particularly the lack of data required for setting a tariff–subsidy mix. In this chapter we critically review the formula and propose an innovative pricing rule. Also, we develop a science-based approach to demonstrate how a tariff–subsidy mix could be determined under the circumstance of data deficiency. By doing so, we avoid not only the difficulty in solving the nonhomogeneous and nonautonomous first-order difference equation that governs the stock accumulation of waste mattress but also the distributed lag model of multiperiods linking quantity of mattress discarded and the quantity of new mattress sold. Such an approach could be applied to the durables for recycling pricing particularly when relevant data are limited.

Citation

Ting, C.-Y., Huang, C.-H. and Hu, A.H. (2023), "Pricing Wastes for Financing Sustainable Circularity in Case of Data Deficiency: Mattress Recycling as an Example", Lee, C.-F. and Yu, M.-T. (Ed.) Advances in Pacific Basin Business, Economics and Finance (Advances in Pacific Basin Business, Economics and Finance, Vol. 11), Emerald Publishing Limited, Leeds, pp. 69-87. https://doi.org/10.1108/S2514-465020230000011004