Re: Please help with internalized costs argument
Fri, 22 Jan 1999 16:52:47 -0500

On the question of how to communicate the problem that uncosted
environmental (and other) externalities pose for recycling, it
might be helpful to emphasize to people that this is one of the
many ways in which markets as we use them often don't work as
advertised. Clearly markets do many wonderful things for us,
and could be used more effectively, but a balanced 'diet' of
ideas and methods requires many other approaches as well.

One advantage that source reduction has over recycling is that
I believe that much more of it is cost effective at _current_
prices even though source reduction would also benefit from
incorporating costs that are currently externalized. As we
have learned from experience with understanding energy use and
efficiency, there are many barriers to the optimal functioning
of market mechanisms that create inefficiencies that can be
remedied through deliberate action (e.g. information, standards,
etc.). Such efforts cost money, but can be generally shown
to be very good investments for society.

Ironically, for much source reduction (not all of it though),
attention environmental impacts and externalities can distract
from close examination of costs already being incurred that
could be used as good rationales for source reduction. For
recycling though, quantification of the externalities does
seem to be an important part of policy-making.


Bruce Nordman
Lawrence Berkeley National Laboratory
510-486-7089; fax: 510-486-4673