More on Recycling

Recycling Globe

A very interesting discussion on recycling has broken out it seems. It started when that firebrand, Danielle, posted “RECYCLING WASTES RESOURCES, NOT SAVES”, which she has recently followed up with “THE TRUTH ABOUT SUBSIDIES: PART 1”, the first in a three-part series, at my provocation. That she would throw herself into it with such vigor reminds me of G.K. Chesterton who wrote one of his most famous books in response to a critic. In the introduction to that book Chesterton quipped that if certain points required elaboration, “Mr. G.S. Street has only to throw me another challenge, and I will write him another book.” Love It!

I am still fairly agnostic on the issue of recycling, so I’ll play devil’s advocate here. One might say that “recycling” as a mere service performed in our market economy is a private good because its provision is both excludable and rivalrous, as Danielle has stated clearly. But how does one respond to the claim that recycling, in as much as it contributes to a clean environment, is a classic public good, the environment being both nonexcludable and nonrivalrous?

Or the argument might be stated in game theoretic terms: All members of the community have an interest in conservation of natural resources both to sustain present enjoyment and health and to maintain resources for posterity. Such conservation requires that individual consumption of goods be engaged with an eye to that end. Individuals, recognizing that their own contribution to the overall goal (in our case, recycling) is negligible, are likely to contribute to a suboptimal degree. Such an individual might reason that his own contribution to the overall goal is personally costly, but only trivially related to the attainment of the goal and might decline to contribute. If he declines to contribute but a sufficient number of others do contribute, he will still enjoy the benefits of the goal being achieved. On the other hand, if he contributes and a sufficient number of other people do not, his contribution would be futile. Either way, many individuals may decline to contribute to a goal they all share and thus the goal is not achieved–a tragedy. So why not use a commitment device whereby some small portion of tax revenue is allocated to subsidize the provision of this service to the degree necessary to shift the balance toward the achievement of a goal each member of the community values but is otherwise unlikely to instantiate?

I suppose the above arguments rest on the crucial assumption that recycling is an efficient method to achieve conservation goals. This assumption is challenged by Danielle’s quotation from the Cato paper:

 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.

If all of the relevant costs are incorporated into the price mechanism (an assailable proposition), then the greater cost associated with recycling a plastic bottle versus producing one from virgin resources is per se evidence that recycling is actually counterproductive to the goal of resource conservation. If the price mechanism argument holds up, we should not merely oppose subsidization of recycling, but oppose recycling itself! This argument would hold so long as the relative cost dynamics hold.

But here’s another challenge, Danielle. Can we argue that we need the subsidy to help the recycling industry grow, become more sophisticated, and reverse the cost dynamics over time? “The recycling industry is an infant and needs time and support to become self-sufficient.”

Thoughts?

 

A.K.

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2 thoughts on “More on Recycling

  1. Pingback: The Truth about Subsidies: Part 2 | Economics & Institutions
  2. Pingback: The Truth About Subsidies: Part 3 | Economics & Institutions

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