Enhancing resource productivity is effective to improve trade-off between the environment and economy. For minimizing consumption of natural resources required for economic activities, it is necessary to strengthen both material recycling and energy utilization, which reduce final disposal amount and return waste to economic activities as resource.

This study seeks to clarify environmental economic policy for promoting establishment of sound material-cycle society subject to keeping or expanding the regional economic scale, and enhancing the amount of material recycling and reducing greenhouse gas (GHG) emissions. Study area is Tokyo metropolitan area. To reduce GHG emissions and final disposal amount, we consider promoting both material recycling and energy utilization thoroughly. Under these circumstances, we construct an expanded input-output model. The model includes the flows of waste and energy, and emissions of GHG. With restrictions on GHG emissions, Gross Regional Product (GRP) is maximized as the objective function. We quantitatively analyze how much tax and subsidy on discharging waste is required for sound material-cycle society along with analysis on effects of the policy by model simulation.