Extended Producer Responsibility and Policies Selection: An Analysis Based on Product Life Cycle

A product life cycle general equilibrium model incorporating recyclability decision is built to analyze the policies prompting EPR. It indicates that while recycling market function perfectly, Pigovian tax can reach social optimal. However, if illegal dispose exists, Pigovian tax can not function and substitute schemes, such as deposit-refund, input and output tax substitution, must be selected. The policies which can reach social optimal are not unique. These policies can take effect only when they give birth to both output effect and substitution effect. If transaction cost results in recycling market failure, policies become more complicated because Pigovian tax and other policies ( such as deposit-refund ) may be complementation rather than substitution.