Georgia Institute of Technology
In response to growing post-consumer waste and associated environmental concerns, environmental policies have become increasingly widespread around the world. In this context, Extended Producer Responsibility (EPR) – a concept that holds producers responsible for environmentally safe treatment of their post-consumer products by imposing collection and recycling/disposal obligations – has gained traction for durable products such as electronics and consumable products such as pharmaceuticals. In this talk, we present operational perspectives on the effective implementation of EPR for these product categories.
The main part of the talk focuses on durable products: Although there is a rich body of analysis on EPR-based policies for products with durable nature, the existing approach ignores durability of the products and presence of secondary markets. Motivated by this gap in the analysis, we identify the interaction between EPR and secondary markets through analyzing the effect of EPR obligations on a durable good producer's secondary market strategy. Based on this interaction, we show that EPR may result in unintended adverse environmental outcomes such as curbing product reuse, shortening useful lives of products, and increasing production. In this context, we also identify the impact of trade regulations in the form of export restrictions to developing countries. We show that seemingly effective restrictions on export can further exacerbate the unintended effect of EPR on the production and reuse levels. These findings allow us to provide policy guidelines for effective EPR implementations in the context of durable products.
This is joint work with Atalay Atasu (College of Business, Georgia Institute of Technology), Vishal Agrawal (School of Business, Georgetown University), Özlem Ergun (Mechanical and Industrial Engineering, Northeastern University), and Beril L. Toktay (College of Business, Georgia Institute of Technology).