Analysis of recycling activities using multi-sectoral economic model with material flow

The objective of this research is to evaluate optimal solutions taking into consideration not only conventional economic activities, but also activities for environmental preservation such as waste management and environmental investment. In order to investigate these activities, we constructed and performed simulations with a multi-sectoral dynamic macroeconomic model, which includes waste generation from each sector as well as the waste reduction, recycling, and final disposal processes. Although recycling activities are more costly than other waste management processes such as incineration and direct final disposal, there are some economic benefits in terms of recovery of economic goods. Our simulations revealed that in cases where there will not be a severe shortage of space for final disposal in the future, the incinerator process can be expected to be adopted for the reduction of waste for final disposal. On the other hand, in cases where severe space constraints exist, the recycling process will become the method of choice because waste management costs will rise exponentially and the economic recovery benefit of recycling activities will be recognized as being much more important. Simulations performed with a version of the model that separates industries supplying equipment for environmental control from other conventional manufacturing sectors demonstrated that environmental industries have a large potential for both environmental improvement and economic progress.