Economic Incentive Structures

In contrast to recycling, the avoidance of waste as a business model and the economic incentive structures underlying the production of packaging waste have so far hardly been systematically considered. The construction and subsequent operation of waste disposal plants require investments that sometimes exceed the billion mark. As a result, investment decisions are generally based on a comprehensive cost-benefit analysis. On the other hand, if one considers the level of waste prevention, such a cost-benefit analysis only partially takes place.

In this research, a theoretical analysis framework of waste prevention will be developed based on transaction-cost-based concepts[1] and the mode of action of formal and informal rules identified as relevant will be validated in empirical research. The focus is on transaction costs of using market mechanisms, particularly in the collection, validation and processing of information, which, in contrast to the neoclassical theory of perfect markets, seems to be a significant barrier to the prevention of waste.

Research Questions

  • How can the economic benefits of packaging waste prevention measures be systematically presented and recorded?
  • Which barriers and incentive structures arise from the distribution of these benefits along the value chain – who would have to invest, who would benefit?
  • Which measures can be used to prevent packaging waste in a particularly cost-efficient manner? What conclusions can be drawn from this for public measures to prevent packaging waste?

 

[1] Vgl. Caballero, Miguez Gonzalo, & Garza Gil, María Dolores. (2011). The new institutional economics and the economics of natural resources: Commons, institutions. Governance and institutional change. Economía Agraria y Recursos Naturales – Agricultural and Resource Economics, [S.l.], p. 61-91, Oct. 2011. ISSN 2174-7350.

Contact
Dr. Henning Wilts
Wuppertal Institut für Klima, Umwelt, Energie gGmbH

Döppersberg 19, 42103 Wuppertal

Germany

+49 (0)202 2492-290
henning.wilts@wupperinst.org