Quiz 8: Energy: the Transition From Depletable to Renewable Resources

Business

Glass bottles can be reused as well as recycled. While recycling offers several advantages like the bottles can be used after recycled by any another company, there are huge cost advantages when glass bottles are reused. Still, only few companies are now using this facility. Companies use glass bottles for marketing and are willing to have control over the features that it represents. Use of refillable bottles restricts their ability to make a change. This implies that the market is not making an efficient choice and that is why the government gives impetus to correct this inefficiency. Bottle bills have been legislated by many States where recycling of bottles provides cost advantages as an incentive for recycling. This program is efficient where the landfill is available, nearby States have the same program and population density is high enough to provide high return rates.

Government intervention is required in order to increase the recycling of waste lubricating oil. It has been witnessed that those countries where government makes it mandatory for residential and commercial users to recycle the waste lubricating oil as well as tax the virgin lubricating oil and subsidize recycling industry up to 65 percent of available waste oil has been collected. On the other hand, those countries which does not have rules that make it mandatory for residential and commercial users to recycle the waste lubricating oil as well as do not subsidize the recycling industry only up to 15 percent of the waste lubricating oil is recovered. Thus, government intervention can greatly increases the collection and recovery of waste lubricating oil. Those states that do nothing with regards to collection or recovery of waste lubricating oil, market for waste lubricating oil would not be successful and very little amount of waste lubricating oil could be recovered in such states. On the other hand, waste lubricating oil market would be more successful in those states that implement deposit - refund system than in those states that require all service stations to serve as collection centers because in latter case users does not get any monetary incentive for turning in their waste oil at the collection center and therefore may prevent some users from actually collecting and depositing their waste oil at collection centers while deposit - refund system provides strong monetary incentive and thus induce users to turn in their waste oil to the designated centers of collection. Moreover, waste lubricating oil collection can have macro economic and environmental impact as well. Recycling of waste oil will reduce the dependence of recycling countries on imported oil and thus save their economies from oil shocks. On environmental front, this recycling will decrease the speed of extraction of new oil and thus would lead to sustainable use of precious natural resource that is oil.