Recycling Redux

Tuesday, June 1, 2010

More than 30 years after the homeless garbage barge Mobro 4000 put recycling on the front pages, recycling remains a poster child for many who consider themselves environmentalists. In Benjamin (2003) I examined whether residential recycling warranted this status. My conclusion was that it did not. Yet proponents of municipal solid waste (MSW) recycling continue to push it, as both a centerpiece of environmental education in school systems, and as a core component of environmental policy, particularly at the state and local level.

I have recently revisited the issue in Benjamin (2010), drawing on updated evidence and taking a closer look at the arguments. Depending on one’s view of the world, the good news or bad news is that MSW recycling makes no more environmental or economic sense now than it did at the time of my earlier analysis. It is instead an activity that yields negligible environmental benefits, and does so at high economic cost. In short, if we focused our efforts on alternative means of environmental enhancement, we could achieve higher environmental quality and have more of other goods.

In the course of my reassessment of recycling’s virtues—or lack thereof—I had occasion to more carefully evaluate two questions to which I had given relatively little consideration the first time around. First, isn’t recycling a crucial element of living sustainably? Second, don’t government subsidies to fossil fuel production markedly distort the cost figures against recycling? As it turns out, the answer in both cases is “no.”

Consider first the issue of sustainable living. People routinely use the term “sustainable” without telling others what they mean, so I wish to be explicit. I presume the term means that we are responsibly conserving resources for the future. This requires that we pay for the full costs of our actions today—no less, and no more. If we “underpay” for consuming resources, we will consume them so quickly that future generations will find themselves worse off as a result. But the reasoning is symmetric: if we “overpay,” we also harm future generations.

Imagine, for example, that a concern for vistas that might be affected by new wind farms induced us to impose a prohibitive tax (or costly regulatory procedure) on the construction of such facilities. It is true that we would preserve valuable views for the future, but at the expense of inducing us to consume more energy produced by coal. One can easily imagine that the resulting damage to air quality could outweigh the improved views, leaving future generations worse off, despite their pristine vistas. The key point here is that to live sustainably we must not only ensure that we avoid overconsumption; we must also ensure that we do not induce underconsumption.

In the context of recycling, if we want to live sustainably, we must recognize that conserving a few resources (such as bauxite or iron ore) does not always constitute living sustainably. We must take into account our actions on the overall consumption of resources. My estimates are that recycling costs $120 per ton more than does landfilling— even after accounting for the value of the recycled materials. This implies that MSW recycling programs are counterproductive to sustainable living because they actually waste resources, leaving less for future generations.

But what about those energy subsidies? The production of goods from virgin materials tends to be more energy-intensive than is production using recycled materials. Consequently, it is argued, energy subsidies tend to distort the cost picture against recycling. Well, it turns out that although the production of petroleum and coal in the United States is subsidized, their consumption is taxed. The net impact on petroleum prices is likely trivial—well under one percent—so that the practical impact of tax policy on the recycling decision is in this dimension undetectable. For coal, roughly 90 percent of the subsidies go toward promoting so-called “clean coal,” which has been processed to substantially reduce its pollution potential. Just as importantly, the magnitude of the coal subsidies net of taxes appears to be miniscule (Metcalf 2007). The result is that the $120 per ton resource cost disadvantage of recycling compared to landfilling is substantively unaffected by government energy subsidies.

The overall picture that emerges is that mandatory recycling programs create a substantial waste of resources in return for environmental benefits that are questionable, at best. Once we recognize that there are other policies (such as a higher national fuel tax) that could yield environmental benefits at far lower costs, we are forced to confront the question: Why are we sacrificing so much to achieve so little? Surely that is a query that proponents of mandatory recycling programs should be forced to address.

Benjamin, Daniel K. 2003. Eight Great Myths of Recycling. PERC Policy Series No. 28. Bozeman, MT: PERC.

Benjamin, Daniel K. 2010. Recycling Myths Revisited. PERC Policy Series No. 47. Bozeman, MT: PERC.

Metcalf, Gilbert E. 2007. Federal Tax Policy towards Energy. Tax Policy and the Economy 21(1): 145–84.

The effect of government policy changes on the private sector has been the unifying theme that ties together Daniel K. Benjamin's broad-scale research. He not only examines the outcomes of policy changes, but also the reasons behind the modifications.Taxes, unemployment, risk assessment, and drugs have been the focus of much of Benjamin's...
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