The Optimal Strategies on Product Recyclability and Durability under Extended Producer Responsibility

The notion of a circular economy has attracted attention in recent years. Taiwan’s government also set circular economy as one of their core policy goals, however, there are many problems which are hard to solve in Taiwan. Especially, our policy maker only focuses on the solutions for the end of the product cycle which we called as the stage of waste dumping, but that does not pay attention on the product design which is the beginning of the product cycle. That is, there has a huge difference in the designing of waste dumping policy between Taiwan and European Union (EU). EU considers the development of circular economy seriously, and sets up the extended producer responsibility (EPR) as their core concept of circular economy policy. EPR was first formally introduced in Sweden by Thomas Lindhqvist in the 1990 report to the Swedish Ministry of the Environment. EPR entails making manufacturers responsible for the entire lifecycle of the products and packaging they produce. In fact, the producer can decide what types of product design induce a better environment at the beginning of the product cycle. That is, the producer can decide the optimal product recyclability in the beginning. Moreover, the producer also can consider how to reduce the pollution which caused by their waste of product. That is, the producer can undertake decision of the optimal environmental research and development (ER&D) to reduce the pollutions. In addition, the product durability is also an important issue at the product design stage and the waste dumping stage. Thus, we will also consider the producer’s optimal product durability in the 2-year project. Therefore, this project will investigate how EPR policy affects the producer’s optimal decisions of product recyclability and ER&D in the first year. In the second year, this project will consider how EPR policy affects the producer’s optimal decision of product durability.