| Dear Gerry:
Well, as an active businessperson, I'd say the logical fault is to look only at costs and exclude income.
Any real business tries to balance costs and income at a minimum or they don't last long. No matter how business enterprises are organized in relation to the tax law, they all yearn for profits, defined here as excess income after costs are fully paid.
In the case of the business of reusing, recycling, and composting, the costs can be offset -- often more than offset -- by the income, because reuse, recycling, and composting have something of value to sell. Where landfill costs are high, materials recovery enterprises can sell cheap, convenient, quality disposal service. Where they can figure out how to create clean predictable commodity flows, they can enjoy top prices and strong demand from domestic, often quite local, markets.
By contrast, other than disposal service fees derived from wasting permitted airspace for burial, landfills have nothing of value to sell other than landfill fumes, and selling landfill fumes requires substantial unknown capital costs and unknown but probably substantial risks. Why bother with this option except as a last, last resort? Simply to extend the life of the waste management profession? Why do that?
This is the fundamental source of the competitive advantage materials recovery has over wasting:
Materials recovery from the discard supply has two income streams, one from competitive disposal service fees, one from product sales. Add them up, and you have a winning business formula.
Dan Knapp, Ph.D. Urban Ore, Inc. A reuse and recycling business since 1980
On Jul 22, 2007, at 4:24 PM, Gillespie Gerry wrote: Dear all, I am all for the best economic use of community financial resources for the "away process" or as Dan Knapp more correctly says "disposal". I am always concerned that any discussion on the benefits or disbenefits of landfill the principal points seems to be made around the notion that at a pure 'cost' level, wasting can out-compete saving, destruction can out-compete conservation, one off use can out-compete reuse. Is it just me? Surely there is a fundamental fault in the logic of such errant nonsense. The old chestnut and only supposedly quantifiable benefit that the waste industry drags out in Australia at the moment is the enormous benefits that they generate from landfill gas. The same type of claptrap is being proffered for mixed waste processing - what humbug! Below I attach a response I sent recently to an Australian Waste Management Association Paper on the future of the industry. According to sources as varied as the US EPA and a collection of consultants around the world, the successful capture rate for gas is anywhere between 80% and 8%. While at the moment it may be the variation between the 80% and the 8% which is driving the discussion, it will inevitably be the difference between 80% and 100% which will end up with waste managers facing the legal system for knowingly putting Greenhouse Gas into the atmosphere. At a recent tour of facilities of the Canberra Mugga landfill, I asked contract management staff, who conducted the tour, if the ultimate contractor for landfill management would be indemnified by the Government against all forms of legal action regarding the release of Greenhouse gases. It was not the blunt 'no' response that concerned me so much as the total lack of understanding of the question. Fundamental to the difficulties facing the industry is the fact that no part of the environment can be snapped off and treated in isolation We, of all the people who deal with the outputs of society must soon commence to "join the dots" in relation to environmental matters. All available organic material belongs back in the soil. There is not other option than to return quality, source-separated organic products to our soils to provide us with some hope for sustainable agriculture. There are a number of ways this can be achieved, but to get to the point where these are seriously considered by all of us in the industry, we need to regard ourselves as true environmental managers, stewards of the soil more than the garbage truck. In a Climate Change world entire new international markets will open up to us, where our nation, with its 700 million hectares of agricultural land, degraded by farming and desecrated by tree clearances, will become the greatest carbon credit market in the world. We need to get our business out of the bin and onto the farm. Our engineers should be working with farmers to develop new products based around compost, biochar and liquid biology, connecting the population back to the only thing which can feed and clothe them - the soil. We need to begin to realise that the only repeatable part of any economy is farming. The part we can play in maintaining that economy while developing more productive and profitable businesses holds the future for our industry. My concerns about landfill gas were heightened recently when the Canberra Government in our National Capitol announced that it had spent an additional $11.8 million dollars creating a new landfill cell (with gas capture). This is more than double than the amount it usually spends on recycling contracts in any one year. The fools have failed to realise that they have spent an enormous amount of taxpayers' money building a new Greenhouse Gas Generator. It may have taken some time, but we have come to a point in human endeavour where even the dumbest political leaders such as those in Australia and the US have conceded that Climate Change is an issue of major importance. The economic effects of our industrial farming practices and resource destructive systems are coming home to roost. Many peripheral discussion have occurred in the past on this matter but perhaps the best referee in the matter of "for and against landfill " are our social economic risk takers. It is time to call in the Insurance companies and insist that the waste industry and landfills be fully insured against potential environmental harm. Landfill must be the most infantile and absurd thing you can do with a resource base, economically, socially, environmentally and geologically. As I was once told by the Chief Engineer at Wellington City Council, Capitol of New Zealand, in a discussion on landfill risk: "They don't call NZ the 'shaky isles' for nothing - remember, all landfills leak and water runs downhill." As Dan Knapp says, nothing beats source-separated, quality goods - Cleanstream versus Wastestream. On any level playing field the resource recovery industry can out-compete the waste industry - what we need is for the waste industry engineers and government to get out of the way. Bring on the insurers - let's see landfill at its true cost, let's see the abusive use of organics for gas generation in landfill outlawed, let's see regulation that ensures that all organic materials return to agriculture as clean, quality products to produce healthy food for healthy people. Resource recovery through true full-cost accounting is the way of the future. Gerry Gillespie President Zero Waste Australia This is a reply to all who have posted so far on this important issue. I am an operator of a materials recovery enterprise that regularly competes with wasting industries for what they sometimes regard as "their" supply of materials. Wasting industries are manufacturing specialists that turn resources into wastes which they then dispose of by burying them in permitted airspace (landfill). They are granted the exclusive use of this permitted airspace by governments in return for providing various mitigations and accepting limited liabilities. Wasting industries are fewer and bigger than they used to be, but the number of landfills they control is diminishing. Nevertheless, they want as close to 100% of the discard supply to go to landfills as possible, partly because they are used to profit margins for wasting resources that are routinely guaranteed by government never to fall below a floor of about 15%. This structure was undertaken in the name of sanitation, but leaky landfills and air pollution from garbage burners have undercut the legitimacy of this claim. Also, landfills are extremely unpopular new uses for any property anywhere. In contrast to the wasters, I want to conserve that same discard supply, or at least as much of it as my company can. I want to trade, upgrade, and sort it, then sell it on to someone who will use it and care for it. My primary business is reuse, and if something can't be reused, my employees have become pretty adept at recycling it. It's very rare for businesses that conserve rather than waste to enjoy guaranteed profits, and mine certainly does not. That is why many of us call fiscal practices like free or cheap landfilling a subsidy for wasting. We do quite a bit of "diversion" but we're a small company, and fortunately we are not alone. In fact, we're part of a recycling infrastructure that is already the size of the US auto industry, according to the USEPA (2003). And we're growing fast and aggressively in response to genuine business opportunities. Using the 2003 figures, we're about five times the size of the waste industry in cash turnover. Not bad. That's why I agree with Dr. Jeff Morris when he says the short answer to the long question posed by Mr. Pollard is "yes." We MREs are growing at the expense of the waste industry, which is why we are now seeing worldwide an upsurge in highly sophisticated government and private sector interventions to protect wasting's diminishing share of the disposal marketplace. From an operator perspective, the short answer to Mr Pollard is: if it weren't cost-effective, reuse, recycling, and composting wouldn't be happening on such a large scale. Other listserve posters are correct that disposal service pricing stimulates and leads to high recycling rates. But ideological blinders aside, everyone should know that disposal is a competitive service right now, and applying full-cost accounting procedures is an accelerant. Every ton of "diversion" my company does is also a ton of stuff that has been "disposed of safely," to use Mr. Pollard's terminology. If I can dispose of something more cheaply by reusing or recycling it rather than wasting it, then discard suppliers are going to bring their stuff to me. The most important price of all is the default price for wasting. It should be high, reflecting the actual value of permitted airspace as a scarce and diminishing resource. Permitted airspace for landfilling should be very precious; using it should be costly. Think-tanky arguments that landfilling is good for the environment are specious. The landfill-as-energy-source "option" is already burning a nasty brew of toxic gases along with any methane it captures, because landfill fumes are a lot more than methane. Beware to those living downwind! Unfortunately, making landfilling free, or hiding its costs in the tax system of government, is still How Things Must Be Done in many localities. But not where I live, thank goodness. In our part of California right now, the going rate for wasting is $100 per ton. At that rate, lots of different forms of recycling are quite cost-effective. More importantly, they are cost-competitive. I am indebted to Mr. Pollard for establishing a connection between the radical EPR-ites and the wasting industries. It's the first I've been able to document, and it appears a couple of times in his email. The radical EPR-ites hold that recycling is unnecessary, a failure, and a prop to wasting, and should be abandoned in favor of a combination of Extended Producer Responsibility, Product Redesign, Design for Reuse, and Manufacturer's Responsibility. (For the record, I'm in favor of EPR, just not EPR uber alles.) In this context it is telling that Mr. Pollard floats the idea of somehow summarily ending collection of bottles at curbside and spending the dollars saved instead on "programs targeted to the diversion or perhaps elimination of high-risk products." Why get rid of glass collection? Because the waste industry's preferred method for recycling has been a huge move away from proven source separation into a much more risky investment. Overall they've changed to a single-stream collection system where all sorts of unlike resources get mixed up just as they used to before recycling caught on. The cost, however, because of the rough handling and deliberate contamination at the source, is extreme downstream contamination for the paper fraction, (and perhaps other fractions) leading to what must be high operating costs for the MRF operator due to rejected loads from paper brokers and having access only to lower-paying overseas markets that can find and eliminate the contaminants using near-slave labor. Glass is the main culprit for this contamination, and it is extremely destructive to papermaking if not caught. Having said this, certainly there are other sharp sources in MSW that could contaminate paper and other feedstocks. Still, getting the glass out by banning it from single-stream recycling collection would be a big plus for the single-streamers. Then use the "money saved" on eliminating "high-risk" products through take-back and other schemes: very EPR. Yours for less solid waste management and more materials recovery enterprises. A reuse and recycling company in Berkeley California since 1980 On Jul 21, 2007, at 10:40 AM, Pete Pasterz wrote:
It depends on the COSTS you're comparing. Are the long term human and ecosystem health effects of landfill disposal fully costed?? LCAs are expensive; I have yet to see an LCA which has not been funded by a well heeled vested interest. I have yet to see an LCA which includes TRUE COST accounting. From what I've been able to gather so far, Dr. Mort Barlaz at NC State [I wonder if he drives a Prius, or rides his bike to campus, since gas savings are important to him???] in my new home state of NC seems to have a pro-landfill bias; I'll look a the full studies you've cited, but I will NOT be surprised to find missing elements of Environmental cost, or for assumptions which have no scientifically supported grounding [i.e. 75% or 100% of LF GHGs being recovered], just like in all the others I've reviewed. Pete Pasterz Harrisburg, NC
From: GreenYes@no.address [mailto:GreenYes@no.address] On Behalf Of Stephan Pollard
Sent: Saturday, July 21, 2007 11:03 AM
To: GreenYes@no.address
Cc: Jeffrey Morris
Subject: [text][bayes][heur] [GreenYes] Re: Dubner's interview on Good Morning America
Importance: Low
Jeff,
I presume we're talking about he U.S.
Are you suggesting that no matter where you go (in the U.S.), no matter the time, no matter the mix of the plethora of factors/variables including the attributes of the recycling collection program or the differences of the recyclable content from waste stream to waste stream or simply what it takes to recycle or compost, for each commodity collected for recycling and composting, that the benefits outweigh the costs?
To repeat parts of a post made to this group on 9/26/06 RE: Informed Solid Waste Management...LCA is an analytical tool that examines the often complex environmental impact of a product, process, or service. Information returned from LCAs can be used as an important input to informed solid waste decision-making...decision-making that should incorporate periodic reassessment. Such reassessment includes, for example, measurement of the efficacy of diversion programs at the material/commodity level. Depending on ever-changing circumstances, halting the diversion of glass bottles and jars in favor of spending the saved money on programs targeting the diversion or perhaps elimination of high-risk products might be an indicated course of action. Given the more than appreciable expense of curbside collection of recyclables, a dollar spent on the collection of glass, paper, or PET might be better spent elsewhere, perhaps on drop-off or deposit programs or take-back schemes as has been suggested (Lave et al., 1999; Barlaz et al., 2003). As Barlaz et al. (2003) point out, saving gasoline has a lot more potential to reduce greenhouse gas emissions than does PET recycling.
It is important to note that failure to consider that the rarely-static mix of circumstances/management techniques/parameters/inputs differ between locations could result in suboptimal or worse-than-before solutions when applying LCA results in a cookie-cutter fashion. Additionally, not all LCAs are created equal. Some are more accurate and(or) thorough in their consideration of input parameters and externalities than others. Quantifying tangible and intangible social benefits and costs can be very difficult. Concerning the input data and the quality of the LCA, the old adage (and pardon the pun) "Garbage In Garbage Out" certainly applies.
Lave, L.B., Hendrickson, C.T., Conway-Schempf, N.M., McMichael, F.C., 1999. Municipal solid waste recycling issues. Journal of Environmental Engineering 125(10): 944-949. Abstract
Municipal solid waste (MSW) recycling targets have been set nationally and in many states. Unfortunately, the definitions of recycling, rates of recycling, and the appropriate components of MSW vary. MSW recycling has been found to be costly for most municipalities compared to landfill disposal. MSW recycling policy should be determined by the cost to the community and to society more generally. In particular, recycling is a good policy only if environmental impacts and the resources used to collect, sort, and recycle a material are less than the environmental impacts and resources needed to provide equivalent virgin material plus the resources needed to dispose of the postconsumer material safely. >From a review of the existing economic experience with recycling and an analysis of the environmental benefits (including estimation of external social costs), we find that, for most communities, curbside recycling is only justifiable for some postconsumer waste, such as aluminum and other metals. We argue that alternatives to curbside recycling collection should be explored, including product takeback for products with a toxic content (such as batteries) or product redesign to permit more effective product remanufacture.
Barlaz, M.A, Cekander, G.C., Vasuki, N.C., 2003. Integrated solid waste management in the United States. Journal of Environmental Engineering 129(7): 583-584.
Best,
Stephan Pollard
Jeffrey Morris wrote:
Hi Folks, Re: Stephan Dubner's interview on Good Morning America, we (Scott Matthews of Carnegie Mellon and the Carnegie Mellon Economic Input Output-Life Cycle Assessment model online at eiolca.net, Frank Ackerman of Tufts and author of Why do We Recycle and co-author of Priceless: On Knowing the Price of Everything and the Value of Nothing, and myself) have developed the Consumer Environmental Index (CEI) that measures and tracks the climate change, human toxics and ecosystem toxics impacts of consumer expenditures each year - from resource extraction to production to retail sale and consumer use and through to end-of-life management of discards. The short answer to Stephan Dubner - recycling and composting a household's discards (paper, glass/metal/plastic containers, yard debris and food scraps) is equivalent to reducing consumption of vehicle fuels, motor oils and repairs by 25% through using mass transit to commute to work frequently enough to attain that 25% reduction. So the environmental benefit of recycling and composting is enormous, even though we sometimes have to pay more to recycle than we do to throw discards in the garbage. The reason that economics and environment are often at odds - emissions to air, water and land of pollutants is typically free, i.e, free disposal of these toxic and climate changing wastes, so the profit or cost/benefit bottom line driven household or business or governmental or non-profit agency saves dollars by throwing things away. The fact that polluting and wasting is mostly free is at the heart of why we have such a difficult time finding ways to make recycling compete economically with wasting. You can see a quick description of the CEI at our website www.zerowaste.com and download the presentation slides that Scott and I used when we unveiled the CEI for Washington State at the Washington State Department of Ecology on July 9. There's also a report that you can download if you want more details. The Economist on June 7th ran an article in their print edition on recycling -- The Truth About Recycling -- that came to the opposite conclusion from Dubner. The Economist is not known for being a liberal rag so that's another good source to point to for the opposite conclusion. Jeffrey Morris, Ph.D.-Economics Sound Resource Management 2217 60th Lane NW Olympia, WA 98502-0903 360-867-1033 360-319-2391 mobile jeff.morris@no.address www.zerowaste.com
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