Month: December 2015

ENVIRO-ECONOMIC INSTRUMENTS AND WASTE MANAGEMENT: THE PROSPECTS OF APPLYING THE INDIFFERENT CONSUMERS –PAY PRINCIPLE IN MALAYSIA

Shamsunnahar KHANAM

Centre for Poverty and Development Studies, Faculty of Economic and Administration, University of Malaya, Kuala Lumpur, Malaysia. Phone: +60-166-708-083
shamsunnahar_khanam@um.edu.my
(Corresponding author)

A.K.M. Muzahidul ISLAM

Malaysia-Japan International Institute of Technology, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone +60-111-6253-083
muzahidul.kl@utm.my

Megat Johari Bin MEGAT MOHD NOOR

Malaysia-Japan International Institute of Technology, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone +60-0197518700
megatj.kl@utm.my

Abu Bakar JAAFAR

Pardana School of Science, Technology and Innovation Policy, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone: +60-3-2615-4518
abakarjaafar@utm.my

Abstract

The continuing struggle of local authorities in addressing waste management issues would call for a close examination of the economics of waste management and the need to search for the most appropriate enviro-economic policy instrument that can be introduced in the context of a fast developing economy such as in Malaysia. A number of instruments had been put into practice by various authorities in Malaysia and in other countries, however, the effectiveness of each one of them is being questioned. Moreover, in Malaysia, there has not yet been any widely published research that has described the prospects of Indifferent Consumers Pay Principle. It is hereby proposed that a new instrument be introduced in Malaysia, which is a variation of the “Polluters-Pay” Principle, as outlined in the 9th Malaysia Plan (2006-2010), its first target ought to be the consumers, not necessarily the producers: those who participate in a recycling scheme are not required to pay a certain levy, when purchasing new goods. In return, when they deposit the unwanted items into recycling bins designated for different types of material, they will be rewarded with equivalent credit points which can be redeemed at points of sale. The anticipated positive impact of the application of the proposed instrument would be as follows: (i) waste-materials will be sorted at source into: “dry”, “wet”, and “toxic”; (ii) any litter in the streets or drains will be somehow picked up by “poor” souls, because of its value on redemption;  (iii) those indifferent consumers would in effect pay for the “collection” services; (iv) the costs of collection and sorting will be greatly reduced; (v) thus, the costs of production of packaging materials containing recyclables will be lower, (vi) the recycled goods will be more competitively priced; and (vii) any  Waste-to-Energy scheme will become more viable now than ever. Only under such a management that it would attract private investment to develop and finance the full-chain of waste sorting-to-materials, logistics, recyclables-exchange, and waste-to-energy streams, and waste-residue repository. In short, instead of carrying on only with the current 3R programme: Reduce, Reuse, and Recycle; the programme ought to be extended to 5R Scheme: Reduce, Reuse, Recycle, Recovery of Energy and Materials, and Repository, and not landfilling. Thus, the waste recycling industry, as envisaged since the 8th Malaysia Plan (2001-2005), would soon be realized.

Keywords: Waste, Indifferent Consumers-Pay Principle, Polluters-Pay Principle, Waste to materials and energy, cleaner production, Non-profit, Non-private Organization (NP2O), Recyclables-Commodity Exchange (RCE), Malaysia.

JEL classification: Q5,Q2
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DOES CBD THEORY SURVIVE THE TEST OF SMALL CITIES? CITY-SIZE AND SPRAWL IN ITALY

Gianni GUASTELLA

Università Cattolica, Dep of Mathematics and Physics, 41Via Musei, 25121, Brescia (IT)
giovanni.guastella@unicatt.it
Corresponding author

Stefano PAREGLIO

Università Cattolica, Dep of Mathematics and Physics, 41Via Musei, 25121, Brescia (IT)
stefano.pareglio@unicatt.it

Abstract

Economic theory predicts that the equilibrium of different economic forces explains the spatial scale of a city more than the uncontrolled take of agricultural land, which is considered instead as urban sprawl. A wide range of empirical results based on US data for large urban areas supports this hypothesis, showing that the socio-economic and environmental forces explain a vast portion of the variation in urbanization across cities. In this paper, we ask whether these socio-economic forces are relevant also in small cities and if they are in a different manner, provided that sprawling phenomena may occur more easily in small areas due to the larger availability of agricultural land. To answer the question, we estimate the relationship between city size and the socio-economic and environmental forces using data for small and large municipalities in the Lombardy region, Italy, and test to what extent this model is apt to explain size variations. We find that the model is adequate also in the case of small cities but differentiating small from large cities suggests that the sprawl hypothesis cannot be ruled out by the empirical evidence as the process of land conversion from agricultural to urban is substantially faster in small and medium-sized cities compared to large ones.

Keywords: Land Use, Urban Sprawl, Central Business District, Spatial Econometrics, Italy

JEL classification: O18, Q15, R14

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NON-LINEAR REGIONAL INCOME DIVERGENCE AND POLICIES: TURKEY CASE

Hasan Engin DURAN

Izmir Institute of Technology, City and Regional Planning Department,Assistant Professor of Economics, Gülbahce Kampüsü, Izmir Yüksek Teknoloji Ensitüsü, Mimarlık Fakültesi, Şehir ve bölge Planlama Bölümü, Urla-Izmir,  Tel: +90 506 845 59 83
enginduran@iyte.edu.tr

Abstract

The literature on economic convergence is strongly influenced by Neo-Classical Growth model. It describes a monotone saddle path along which each economy converges towards a unique steady state. Commonly employed method in convergence analysis is the linear cross-sectional regressions which links the annual growth rate of regions to their initial income level. Ignoring the non-linearities is important from a policy perspective that implications obtained from a linear regression can be very different to the policies learned from a non-linear case. Aim of the present study is to analyze regional income convergence in Turkey by using nonparametric convergence regressions. We implement our study for 67 provinces and a period 1975-2000. We find that the relationship between initial income and growth takes a  inverted-U shape which means that the very low-income and high-income group of provinces experince a slow growth pattern compared to middle-income group. This has several implications for regional economic policies. First, middle-income provinces are able to stimulate their economies and fulfill their potential for convergence by market forces. Second, however, the very low-income provinces need a substantial help and assistance.It, therefore,  becomes a natural necessity to direct policy instruments such as subsidies, direct and indirect income transfers, tax exemptions and other resources  to these areas. In this way, nonparametric estimations provide a very useful guide to the way how the resources should be allocated across provinces.

Keywords: Convergence, nonparametric regressions, Regional Policies

JEL classification: R11, R12
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