This study investigates recycling fund management via differentiated subsidy rates to help encourage greater effort for a cleaner environment. The Recycling Fund Management Board in Taiwan targets the environmental goal of maximizing the total recycling rate through a subsidy to the recycling industry. The industry aims to maximize its profits and is expected to use advanced technology for an environmental friendly process in order to obtain a higher subsidy rate, and it potentially exploits other instruments to increase the return rate from consumers as well. This research establishes recycling fund management and trade-off models and analyzes both goals within the realm of Taiwan's fund management of waste printers. The results show that a differentiated rate is worth executing under enough funds, but could be hard to achieve with the input of the current recycling and treatment fee and the subsidy rate. Since few subsidies have a negative impact on the return rate, the board can consider raising the fee. To reach an ultimate environmental goal of “cradle to cradle”, enough industry profits are required for improving the quality of the recycling process and providing more rewards to consumers. We recommend that the board take a further step at utilizing a differentiated rate and raising the fee to balance the long-term goals of fund management.
