Subsidy and Environmental Tax for Construction and Demolition Waste Recycling

Abstract In recent two decades, construction and demolition (C&D) waste is becoming a major source for municipal waste which causes serious damage to the environment. To solve the problem, waste recycling measures are gradually used to turn waste into treasures. Meanwhile, several kinds of policies such as waste disposal charging fees have been issued to stimulate stakeholders’ behavior to take waste recycling measures to promote the C&D waste recycling industry. However, the C&D waste recycling rate is still too low in China. In order to promote C&D waste recycling industrial development, this paper is aiming at introducing subsidy and environmental tax policies to promote C&D waste recycling. Based on system dynamics, this study establishes a model to determine the proper subsidy and environmental tax range. According to the simulation results, three kinds of incentive policies are obtained, namely, single subsidy policy, single environmental tax and combined incentive policies. Optimal single subsidy and environmental tax are in the interval [10, 30] and [20, 60], respectively. The best combination strategy is subsidy=10 yuan /ton and environmental tax=20 yuan/ton. The results from this paper could be a foundation for government to establish incentive policies to promote C&D waste recycling.