A hypothetical system that incentivizes waste disposal

Recycling and waste disposal are two chief concerns of modern world. Governments in rich countries spend a lot of money on it and yet across the world untreated garbage is pilling up. What if we could come up with an alternate system of pricing commodities that incentivizes recycling/disposal? For such a system to be sustainable it has to be profitable in terms of trade and not require much external support. I have one such proposal. Note that this is purely hypothetical so I haven't dwelled too much upon its practicality.

The basic idea is to include expected cost of disposing the commodity into its price. The standard way of pricing products takes into account only the effort that went into its production. For example, an Iphone is more expensive to make than a low-end Samsung phone and hence they are priced accordingly. If you include the cost of their disposal into their prices, then both of them get more expensive (but the Samsung is still cheaper). So, nothing interesting. Yet.

Consider two carry bags - a standard polythene bad and a jute bag. A polythene bag is way cheaper than a jute bag---something that encourages its use. But once you include the cost of their disposal, the situation is flipped. Plastic disposal is difficult while jute is bio-degradable. In terms of disposal cost, plastic-disposal will be much more expensive than jute disposal. Thus, effectively in the proposed system, a jute bag will become cheaper than a polythene bag.

One can similarly argue that more eco-friendly commodities will be preferred in this system. Not only that, we might even see more research into ways to dispose of difficult-to-dispose stuff. To promote such efforts, we might even allow trade of disposal credits.


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