Recycling Wastes Resources, Not Saves

A friend referenced an article today on Forbes about the adverse effects of recycling and it made me jump with joy inside to know that a highly read financial news source discussed what many Americans fail to believe–recycling is not as “cheap” as mainstream America thinks! I often tell my students in class how recycling is something I don’t believe in, as if it is a fairy tale or Biblical story.  What I more accurately mean to say is that I refuse to recycle, because the costs of recycling are higher than the benefits.

The CATO institute provides a great background on common public arguments in favor of recycling that you probably have heard of before:

1. Recycling helps preserve landfill space.

2.  We protect the environment by recycling since burning trash causes health issues.

3. Recycling conserves scarce resources

CATO then goes on to refute these claims that I will sum up briefly:

1.  We are not running out of landfill space. “All of the trash America will produce over the next 1,000 years could fit into a landfill 15 square miles in size.” Politicians like to claim that we are running out of space, because states are not building new landfill facilities, while many facilities have shut down due to high regulatory costs in recent years.  With fewer landfills and the same, or more, amounts of trash there will be less capacity for trash.  However, we are not lacking space to build new landfills if regulations and costs were cut down.

 

2. Burning trash does not cause cancer. “Solid waste landfills pose a lifetime cancer risk of less than 1 in 1,000,000 (about the same risk inherent in drinking a glass of tap water.”   Further, landfills are so heavily regulated by the EPA that if anything landfills have gotten safer over time.  Recycling, however, also poses similar risks to burning trash so trading off between burning trash and burning plastic is negligible.

 

3. In economics the price mechanism is used to divide scarce resources among people. If new plastic bottles are cheaper than using recycled plastic it is because less resources are used.  Forcing citizens to recycle means that we are using more resources than if we used virgin products.

This article was written in 1992 and is still very accurate today.  Recycling is not as economical as many people think! Clemson economist and Professor Emeritus, Daniel Benjamin, has researched on this topic for years and also finds similar results.  His 8 great myths of recycling are a must read to inform you on the grittier details of why recycling is not economical.

Lastly, if you have not seen Penn & Teller’s Bullshit episode on Recycling you must. It is not only hilarious, but it displays how wrong Americans are when it comes to recycling and its economic costs.

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13 thoughts on “Recycling Wastes Resources, Not Saves

  1. Pingback: Marc Hays: Recycling, Feeling Good For No Good Reason - Kuyperian Commentary
  2. Recycling is far from perfect, but refusing to recycle is not a good alternative. In fact, it is a stupid and outrageous one.

    Recycling is good for the environment, reduces space at landfills, and provides less demand for raw materials. Not to mention it is a growing industry, which as an economist, you wouldn’t want to shut down.

    In addition, what your blog fails to recognize, are the advances in recycling since the articles referenced and the Penn & Teller video. For example, right here in Woodbridge Township, New Jersey, we have implemented an automated single stream recycling system. Single stream recycling, meaning all recyclables including glass, aluminum, tin, plastic, bottles, cans, newspaper, cardboard, junk mail, magazines, phone books, computer paper, colored paper, etc. (I can keep going) can be placed in our blue recycling cans. There is no need to separate recyclables anymore. It all goes into one can.

    Recycling is picked up once a week by an automated side loading garbage truck operated by one municipal sanitation employee. The old way of recycling had a three-man crew and recycling was collected twice a week.

    Woodbridge did this because it was easy, environmental, effective, and efficient. And most importantly, it saves our taxpayers money.

    The Township continues to save taxpayer money with this aggressive recycling program by sending less tonnage to the landfill (tipping fees) and selling more recyclable materials to outside vendors. Decreasing our garbage crews from three employees to one has drastically lowered out sanitation salaries. If you don’t believe me, our township budget is available on our town website.

    This is recycling innovation at its best. Pro-environment, pro-business, and good government practices all in one. It is the present and future of recycling. When you go green, you save green.

    • Jeff,

      I welcome your comments, but I agree and disagree with you on some points. First, I agree that recycling reduces space at landfills. This is true and does not negate anything I posted about. Landfills have been shutting in recent years due to high regulatory costs. Further, with the growing number of substitute outlets for trash, i.e. recycling centers, less trash should land in landfills, all of which causes landfill space to be reduced. As an economist, I don’t care about growing an industry for altruistic purposes. The “feel good” feeling recycling may cause does not alone produce sustainable real growth, higher per capita real GDP which results in better health care, highways, products etc. Economic growth occurs when we are utilizing our resources in an efficient manner, which is the least-cost method. If recycling is the least cost method, than, yes, growth in this industry would be desirable.

      However, recycling is not the least cost method. If it was, the government would not need to subsidize an industry. Humans are self-centered and want to profit–this is why businesses start in the first place. No one enters a new business if they do not think the demand for the product is there OR if they think costs are too high. For example, the U.S. does not produce much low quality clothing anymore, because costs are too high. We outsource to China, which is a country that can produce at a cheaper cost (mainly due to low labor costs). It would be silly for workers in the U.S. to continue to do something that we do not have a comparative advantage at doing. It is more costly for us to have a low quality clothing manufacturing business than what we could profit from it. The same can be said for recycling. If there was a profit to be made, companies would have entered the recycling business long before government subsidies. But, they didn’t. Costs exceeded the benefits (i.e. revenue). The only reason we see an abundance of recycling centers today is because the government heavily subsidizes recycling to reduce cost. By collecting a subsidy it lowers the cost to do business and actually allows companies to make a profit.

      If you don’t believe how heavily subsidized the recycling industry is, let me take an example from the Woodbridge Township budget for FY 2008 and FY 2013. In FY 2008, Woodbridge received a recycling tonnage grant of $35,418, Recycling Enhancement Grant of $7,844 a Reserve Recycling Enhancement Grant for $5,000, and a Recycling Subsidy of $221,957. Trash disposal received zero grant money in FY 2008. In FY 2012 the Recycling Tonnage Grant jumped to $123,282 and still there are zero grants for trash disposal.

      What this means is that the government artificially changed the relative prices of two goods, recycling and trash, in such a way that recycling is now cheaper relative to trash. You may be thinking, “Well this is great, see recycling is cheaper.” However, all this does is distort real prices in the market and changes the choice that consumers and business owners would naturally make amiss government interference. Recycling centers were not profitable, so many businesses did not open up. If they were, people would jump in to collect the “rents”, or surplus (profits) from this business. All subsidizes do is shift jobs and businesses from one industry to the next (a loss of trash centers and trash jobs, while an increase in recycling centers and recycling jobs.) More importantly, the money spent subsidizing recycling can be spent more efficiently elsewhere in the economy.

      And refusing to recycle may seem stupid to you, but wasting tax dollars and resources in order to recycle seems far worse for society. Recycling is not pro-business and does not reflect ‘good’ government practices. All recycling does is shift demand from one industry to another, while having the government pick winners and losers. That is not good government to me–one that takes the freedom of choice out of the hands of consumers in order to pick what the government deems as most desirable. A great quote from Daniel Kish, Senior VP at The Institute for Energy Research, in his article “Subsidies for Green Energy Do Not Help American Consumers” describes this:

      Simply, the government should not be picking winners and losers. No source of energy requiring heavy government subsidies or that government forces you to buy should receive taxpayer money. In the end, the government is hurting the American people.

      You should really read the article. It is very informative. Most environmental arguments fail the economic test for efficiency. I quoted old articles, because the stories are the same and they were among the first to take a look at the issue in the early 1990s. However, I will provide more up to date articles on Recycling that you may want to look at:
      Mike Munger, Professor of Political Science, Public Policy and Economics at Duke University, on “Recycling: Can It Be Wrong, When It Feels So Right?”
      Jane Chastain, Property and Environmental Research Center, “Let’s Talk Trash”
      Daniel Benjamin, Professor Emeritus at Clemson University/ PERC Research Fellow, “Recycling Myths Revisited” (update in 2010)
      Andrew P. Morriss et. al, PERC Research Fellows, “7 Myths about Green Jobs”

      I invite you to read some of the economic arguments behind recycling and I welcome a rebuttal to the economic efficiency of recycling. In all of my economic research and knowledge, I have found that forced recycling is counter intuitive to economic growth goals of the U.S.A. If it was the least cost method, then we would not need enormous subsidies to operate.

      Best,
      Danielle Zanzalari

      • Danielle,

        Your rebuttal is a better argument then your initial blog post, but I still think it misses the point. You only look at the bottom line figure and argue that recycling doesn’t promote sustainable economic growth. You believe in a “free-market” economy, where the market will solve every problem we encounter. However, I’d argue that businesses cannot grow and prosper without some government subsidies.

        Government subsidies have helped build our infrastructure, helped maintain our roads, bridges, tunnels, seaports, as well as support our railroad and airline industries. Our public schools have received government subsidies for research grants and students have received student loans to help pay for their education. Businesses and industries from agriculture, fisheries, oil, energy, and transportation, etc. have received subsidies such as tax breaks, incentives, abatements, and exemptions, loan guarantees, block grants, and research & development grants, to name a few.

        We both get to live in a society with clean air, clean water, good school options, an expansive pubic transportation system, etc. and government subsidies are to thank. Not because business couldn’t do it themselves, but because government helped them along.

        As for the recycling tonnage grant that Woodbridge received, you need to understand that recycling is the law in New Jersey. Government, businesses, and all residents are required to recycle. That grant money (subsidy) is based on the total amount we recycle in the township. Meaning, the more we collectively (government, businesses, & residents) recycle within the township, the more money we get back, which in turn helps lower the cost of local government. It is a tax incentive and we are taking full advantage of it. You clearly pointed that out as our Recycling Tonnage Grant has increased since 2008.

        I’d argue that if our garbage stream included all of our recyclables, the cost of government would be increased due to tipping fees, lost recycling revenue, increased salary, fuel, and transportation costs for garbage collection, etc. Not to mention, landfills would fill up quicker and raw materials would need to be extracted more to produce products.

        It’s not just recycling for recycling’s sake, but recycling as a small piece of a larger sustainability paradigm. Because the green/environmental movement is more than just recycling.

        I agree that recycling is far from perfect. But government subsidies have helped improve upon it. In my opinion, it is better to subsidize the recycling industry than to continue to subsidize the oil industry that continues to see record profit. But that is a debate for another day.

        Jeff

        Side note: I enjoy reading your blog. Even though we obviously come from different sides of the political spectrum, it is good to have a public debate about the issues. Hopefully our generation can help solve the logjam and ineffectiveness in D.C. and move our country forward.

  3. Danielle, you may clear the air a bit with a distinction between public goods and private goods. Many of the things Jeff mentions as receiving subsidies are public goods and can be justified on that basis. Where does recycling fall and why?

  4. Pingback: The Truth About Subsidies: Part 1 | Economics & Institutions
  5. Pingback: More on Recycling | Economics & Institutions
  6. Pingback: The Truth about Subsidies: Part 2 | Economics & Institutions
  7. Pingback: The Truth About Subsidies: Part 3 | Economics & Institutions
  8. The video really does a good job at showing why recycling is counterproductive. The arguments for recycling are everything it doesn’t do to help the environment. According to the video, it takes more energy to transport, clean and mold recycled bottles then it would just to make new ones. Recycling doesn’t give the results Americans expect because of the false information they have been told to believe by environmentalists. It makes sense as to why it is counterproductive

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