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[GreenYes] Re: markets and planning and everything in between


You know, sometimes it seems like that¹s really what we¹re doing as
environmentalists?forcing the accountability for subsidies and
externalities. But, indeed, the market can be a very powerful force, albeit
crude, in determining what can work. Take recycling, for instance. We
wouldn¹t be where we are if the supply and demand situation with disposal
options hadn¹t forced a ³crisis.² Incinerators are only marginal options
still partly because recycling has taken enough of the slack up (and because
of the externalities they engender)?and because landfills are still cheap in
comparison. Generally speaking, this whole new energy economy is going to be
driven first and foremost by the high cost of electricity, natural gas, and
oil. Recycling will benefit too, at least in urban settings, since you often
don¹t need to truck your recyclables as far as your trash.

Yes, there are problems with the market, but investment banking firms, even
venture capital companies, who make a habit out of due diligence and RTIs
tend to make pretty rational decisions over time. The key here is over time.
This is the problem with the market. It is very rough, raw and sort of a
blunt instrument at any given moment, but it tends to sort itself out given
Time. It often seems to me that in fact just as the market sorts itself out
on something it begins to fuck up somewhere else. Take nuclear power for

Our biggest problem as change advocates is that we just don¹t have the
resources or the smarts to discern the whole picture competently. No one
does! With recycling you have labor markets, union issues with trucking,
insurance, liability, the cost of capital, and the ever changing world of
the markets?both for finished product and for secondary materials?and how
those markets interact with their ³virgin² and raw material markets. I keep
talking about rational pricing structures in the solid waste field and
people look at me like I¹m speaking gibberish, but that is the key?both for
residential and commercial applications. Philadelphia pays for residential
recycling and trash out of the general fund. There¹s no way that can work
forever. It¹s also the main reason that we have a 5% recycling rate. There¹s
no accountability and no true consequences.

I¹m far afield of this St. Lucie County Arcwielding Wizard¹s Coven, I know.
Sorry. The real point I¹m trying to make is that as a planner I have to say
that most of the issues I¹ve looked at over the years are just so darned
complicated that as soon as I go outside of the realm of economic analysis I
can¹t tell you whether something will work or not.

So, if we keep reminding folks about the subsidies and the externalities?and
we keep accounting for them on both sides of the fence--then we¹re doing our
jobs and may the best Utopian vision win (and be highly profitable).

Sorry John, it¹s been a long week.


on 6/30/06 3:16 PM, Reindl, John at Reindl@no.address wrote:

> Hi David ~
> I wish I could agree, but since the market not only ignores the externalities,
> but also includes horrendous amounts of subsidies, I don't beleive that it can
> do the analysis.
> On the other hand, if we would get rid of the subsidies and add in the cost of
> externalities, I think that the market might be able to do as suggested.
> John
>> -----Original Message-----
>> From: David Biddle [mailto:Dbiddle@no.address]
>> Sent: Friday, June 30, 2006 2:12 PM
>> To: Alan Muller; Reindl, John; Greenyes List
>> Subject: Re: [GreenYes] Re: with $400 million, I think we could get
>> darnclose to ZW!
>> Not to be glib here, but market driven economics does the analysis for you
>> over time. I know that planning is better, and not going down certain roads
>> is preferable, but in lieu of good data and heavy consulting and research
>> fees, the market tells you what you need to know. Yes, yes, externalities
>> and subsidies muck up the equation, but still...

David Biddle, Executive Director
Greater Philadelphia Commercial Recycling Council
P.O. Box 4037
Philadelphia, PA 19118

215-247-3090 (desk)
215-432-8225 (cell)


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