First version: November 2001
Second version: July 2002
This version: September 2002
*This revised paper was prepared for the Society for Environmental Economics and Policy Studies, Hokkaido, Japan, 28-29 September, 2002, and for the Fourteenth International Conference on Input-Output Techniques, Montréal, Canada, 10-15 October, 2002.
The Relationship BetweenCapital and Waste Accumulation:
An Application of Dynamic Input-Output Approach
In the long run, we cannot examine the dynamic path of waste accumulation without evaluating a path of capital accumulation (investment decision) at the same time. This paper explores the dependent relationship between capital and waste accumulation. Through this exploration, I find some important conditions in terms of both balanced growth paths and finally reveal a functional relationship between capital and waste accumulation process.
Examining the dynamics of waste accumulation is fundamental to evaluating the relationship between environmental externalities related to waste generations and recycling technology innovations.1 What are the structural determinants of the dynamic path of waste accumulation? And what are the economic and environmental impacts of the structural determinants?
In order to analytically answer these questions, I (2001) recently proposed a simple dynamic multi-sector model for waste analysis by following Leontief’s dynamic tradition (1953, 1970b). The crucial point of the model is that a technical coefficient matrix of intermediate waste was definitely incorporated into the traditional Leontief dynamic system and it was indicated that a dynamic path of waste accumulation largely depends on a recycling technology of the intermediate waste. More concretely, assuming that the number of ordinary marketable commodities, and non-marketable wastes is n,2 the continuous dynamic equilibrium for waste distribution can be described by