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Economic benefits of extended producer responsibility initiatives in South Africa

Client: REDISA
Project leader: Tara Caetano
Project team: Tara Caetano, Faaiqa Hartley, Bruno Merven and Reza C. Daniels

The recovery, recycling and reuse of waste materials are potential sources of economic activity and employment in South Africa. In 2016, the ERC completed two phases of a REDISA funded project that aimed to highlight the opportunities and benefits of reintroducing recycled waste products into the South African economy through extended producer responsibility initiatives.

Phase 1: The general equilibrium impacts of monetising all waste streams in South Africa

The first phase of the project investigated the economy-wide impact of an increase in commodity supply as a result of recycled goods. A computable general equilibrium model for South Africa (SAGE) is used to assess the impact of 13 waste streams monetised by the Department of Science and Technology in its 2014 Waste Roadmap Report. Three levels of recycling are considered in the analysis (i.e. a recycling rate of 29, 47 and 100 per cent). The exercise, however, does not include the benefits and costs associated with the recovery and recycling of waste streams, meaning that the catalytic impacts from expanding the recovery and recycling industries are not included. The impact of waste management fees is also not included.

 

Phase 2: Economic benefits of extended producer responsibility initiatives in South Africa: The case of waste tyres

To address these shortcomings, Phase 2 of the project estimates the economy-wide impacts of reintroducing recycled waste products in a more complete way. The example of waste tyres is used. The CGE model (and underlying SAM) is extended to include waste management fees, extended producer responsibility organisations (EPRO) and recycling industries. Two tyre recycling scenarios are considered with recycling rates of 25 and 100 per cent.