Waste-to-energy (WtE) could prevent the production of up to 50 million tons of CO₂ emissions that would otherwise be generated by burning fossil fuels. Yet, support for a large deployment of WtE plants is not universal because there is a widespread concern that energy from waste discourages recycling practices. Moreover, incineration plants generate air pollution and chemical waste residuals and are expensive to build compared to modern landfills that have appropriate procedures for the prevention of leakage of harmful gasses. In the context of the EU, this paper aims to provide a picture of the actual role of WtE as a disposal option for municipal solid waste (MSW), enabling it to be utilized as a source of clean energy, and to address two important aspects of the debate surrounding the use of WtE; namely, (i) the relationship between WtE and recycling, and (ii) the effects of decentralization, waste mobility, and plant ownership. Finally, it reviews the role of the EU as a supranational regulator, which may allow the lower government levels (where consumer preferences are better represented) to take decisions, while taking spillovers into account.

This paper analyzes the possibility to generate indeterminacy and equilibria with short-run non-neutrality of money in a model with flexible prices, constant returns to scale in production and constant money growth rules. The model recovers previous results in the literature as particular cases. It is shown that real effects of monetary shocks, as observed in the data, can arise in four regions of the parameter space. Two regions are characterized by unreasonable assumptions, which lead to inferiority of consumption or leisure. Two regions are characterized by reasonable assumptions and by normality of the goods. However, real effects of monetary shocks require implausible parameter values.