LITTER AND WASTE MANAGEMENT - DISPOSAL TAXES VERSUS USER CHARGES

Littering and rubbish collection involve a divergence between private and social costs. This note suggests there is a need to consider these two problems jointly: viewed in isolation, a user charge for rubbish collection has often been suggested as a means of internalizing the waste management externality; however, viewed as part of the wider problem, it turns out that this charge should be negative; that is, there should be a refund or user subsidy associated with the proper disposal of rubbish.