Beschreibung:
Different policy instruments have been used to reduce the production and consumption of plastic products, and increase recycling. In particular, several countries have imposed either a ban or a tax on single-use plastic packaging, motivated by their contribution to marine plastic pollution. However, a separate tax on plastic products alone could lead consumers to choose similar unregulated products, for example, paper or cotton packaging. Such incomplete environmental regulations can imply that the intended effect of the policy instrument is weakened or even counteracted due to an increase in the use of unregulated substitute products. On the other hand, life-cycle-analysis studies show that substitutes for plastic products that are made of plant-based materials could have a significantly higher carbon footprint, and hence their contribution to climate change could be higher. The purpose of this study is to theoretically and empirically compare the welfare effects of the Pigouvian tax with two alternative second-best policy instruments: a tax on plastic products alone, and a uniform tax on all packaging materials. The analysis considers the impacts of these policies on both marine pollution and greenhouse gas emissions. The results indicate that, in situations where the “first-best” solution cannot be implemented, a uniform tax on all packaging materials would result in a higher welfare gain than a tax on plastic products alone. Sensitivity analysis suggests that the magnitude of the second-best taxes and their associated welfare impacts are dependent on assumptions regarding the damage functions