Using Life-Cycle Assessment and Pigouvian Taxes to Internalize Environmental Externalities : the Case of Water Bottles

Details

Supervisors

Jean-Marie Baland

Faculty

Faculté des sciences économiques, sociales, politiques et de communication

Degree label

Master [60] en sciences économiques, orientation générale

Abstract

This study addresses the issue of pollution from water bottles. It uses life-cycle assessment to compare the emissions linked with each life phase of three containment methods, namely, (i) PET, (ii) PLA, and (iii) glass bottles. Considering the cradle-to-grave system boundary, glass bottles are found to be most sustainable, emitting 0.141kg of CO2eq per 1L bottle. PET bottles follow with 0.2291kg of CO2eq per 1L bottle emitted and PLA rank last with 0.3631kg CO2eq. A Pigouvian commodity tax is recommended for implementation at the international level. The optimal tax on carbon is shown to be worth 23.8 USD per ton of carbon. The consequence of this tax brings the outcome closer to a social optimum as it reduces emission externalities. However, this comes with concerning distributional consequences across countries and, possibly, within countries. The blend between environmental and economic literature provides a promising avenue for further research in attempts to tackle climate change.