Cost-Benefit Analysis of Paper Recycling: A Case Study and Some General Principles

This paper sets out the legislative background to the recycling of waste materials in the UK. Relevant items in this background include: the provision of recycling credits under the 1990 Environmental Protection Act; the draft EC Packaging Waste Directive; and the German DSD scheme. We next set out the elements of a cost‐benefit analysis of waste paper recycling, including the environmental impacts of recycling. The method is then applied to a recycling scheme in central Scotland. We find that whilst on private, financial grounds the scheme is unattractive, it passes the cost‐benefit test in the base‐line case; this justifies government support for this recycling scheme, given the data used.