Pursuing Extended Producer Responsibility in the Context of EIPs by a Hotelling Model

This paper offers a prescriptive suggestion to preserve the extended producer responsibility goal in an eco-industrial park. A novel Hotelling model in reverse trading direction is developed to examine the technology-position decisions between specialized recycling processors. We find that the notion of eco-industrial parks may not always be compatible with extended producer responsibility, which motivates producers to improve their eco-design in clean production within the context of competition. Based on our analysis, competition helps certain types of parks become self-organized such that constituent firms spontaneously improve their eco-design. If eco-design is not improved in a park due to the existing competition and production conditions, an ordinary tax-subsidy should be sufficient to make the parks self-organized. Therefore, eco-industrial parks can be re-aligned to their environmental goals.