Economic Policies to Address the Environmental Consequences of Global Reuse

This paper summarizes a two-country model that solves for optimal tax rates to achieve efficiency in an economy with international trade in used consumer electronics. If only the developed nation can tax the disposal of e-waste, then the global Pareto Optimum can be obtained by either imposing an import tariff on used consumer electronics or subsidizing the return of e-waste for disposal in the developed country. The global Pareto Optimum can also be obtained by reducing the disposal tax in the developed country to a level below the external marginal cost of disposal should no other policy option be available.

Marginal Return of Infrastructure Investment on Bilateral Trade Performance

Investing in transport infrastructures such as roadways, airports and seaports has proven to improve a country's trade performance through reduction of transportation costs and providing access to production and market. This research investigates the diminishing return of infrastructure investment and also the rate of return of two types of infrastructure investment strategies on trade. An augmented gravity model is used with econometric analysis methods in this study. The results have shown that as roadway and airport densities increase, the marginal returns on trade decrease. Empirical evidence from the United States and China with all their trading partners from the past twenty years has also suggested existence of diminishing return of infrastructure investment on roadways and airports. Infrastructure investment strategy that focuses on increasing roadway and airport density experiences smaller diminishing return on trade. In contrast, seaport investment that focuses on port quality and efficiency generates higher return on trade. A trade benefiting infrastructure investment strategy that best utilizes financial resources must balance between quality and quantity based on a country's current level of infrastructure asset.