ABSTRACT
This chapter provides a simple control model of the economics of waste recycling. Pollution, litter, or waste disposal is assumed to enter the economic system as a public bad in household utility functions. The problem of waste accumulation is viewed as the joint result of household and firm decisions to "litter," that is let waste degrade by natural biological and chemical processes, instead of recycling waste into production. The opportunity cost of recycling arises from the public utility losses of waste accumulation and the labor required to produce new commodity materials or containers. The cost of raw material itself is zero, and there is a zero technological cost of disposal. The chapter shows how the model can be amended to deal explicitly with natural resources that can be saved by recycling, and how the model can be interpreted in terms of a pure waste or pollution reduction model.
