Re: [GRRN] Subsidizing recyclables with poor markets

Doug Koplow (
Thu, 01 Jul 1999 15:49:10 -0400

It is my impression that few municipalities properly cost their solid =
waste management operations. Without accurate cost accounting in place, =
it is rather difficult to discuss whether or not recycling is being =

Solid waste management aims to move discards away from people. If it =
costs $20 per month to send trash to a landfill, but less than $20 per =
month to send some to a landfill and some to recycling, then recycling is =
economic. It is irrelevant whether or not the cost of recycling collection=
and disposal is a positive number (i.e., shows a net revenue gain on =
scrap sales), so long as the revenue loss is less than what it would be =
for landfilling (or incineration) alone.

I am interested in whether there are cities that have looked at their =
costing for solid waste carefully. What have these assessments shown? =
Are there commodities that don't break even through scrap revenues alone, =
but are highly economic in terms of avoided costs? Are any of these =
assessments publicly available? =20

Doug Koplow
Industrial Economics, Inc.
2067 Massachusetts Avenue
Cambridge, MA 02140
tel: 617/354-0074
fax: 617/354-0463

>>> Kat Bennett <> 07/01 3:32 PM >>>
"Rick Anthony and Janet Matthews have had an exchange concerning whether =
is a good idea to temporarily stop collection of those materials which, =
to transient poor markets, become uneconomic to recycle from time to time,
with Janet suggesting that it is not a good idea to mandate continued
collection of materials during their severe down markets.

There are two problems with this. In a static sense, applied literally,
that could be used to eliminate all recycling, especially since the =
are so hard to nail down and reluctant localities could always produce
numbers to support such a result.

In a dynamic sense, there are several problems with this. For one thing,
residents are unable to adjust to in-and-out materials. Attempting this
tact with effectively undermine overall participation and send the program
into a irreversible decline. But, for another and more important,
recycling suffers from a chicken and egg problem: i.e. which is going to
have to show its face first, the supply of the recyclable material or the
markets for it. The reality is that the major investments in e.g. =
capacity are not going to be made if investors do not believe society is
serious about recycling. And mandates are the proven way to do that.

The best answer in my view is to push the structures of each material --
including the product design and recycled content components, along with
R&D on innovative high end uses -- so that the long term economics make

I copied Peter Anderson's comments about the exchange between Rick Anthony
and Janet Matthews because he makes great points about the logistical
problems of making recycling a political ping-pong ball, and stresses the
need for long-term economic development within the markets themselves.

I'd like to add another argument against the view that "it is not a good
idea to mandate continued collection of materials during their severe down
markets." I assume the argument here is that it's a fiscal drain with
little or no return to the taxpayer. Why, then, should taxpayers pay for,
unwittingly in most cases, subsidies that promote resource extraction and
the landfilling of resources? Why is it recycling is expected to pay its
own way, yet we don't mind paying $20 a month for someone to take our
garbage to a big hole in the ground, which benefits no one but the hauler?
I don't see pollution from mining, for instance, anything but an economic
and environmental drain, yet we pay millions to the mining industry =
ever seeing the line item.

To paraphrase Coy Smith, from the San Francisco'-based Materials for the
Future Foundation, "What gives the better rate of return on your
investment?" For my money, I'd subsidize recyclables any day, knowing that
markets change, and in the long and short run, the recyclables will create
more jobs and opportunities than a landfill ever will.

Kat Bennett

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