It's Garbage: What's the Problem?

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Readers, writers, students, and teachers still confess to believing that there is a garbage problem. “We have too much garbage,” they claim. In a reply to a previous blog I was queried, “Shouldn’t we start training those who will inherit the waste problem?”  What waste problem, I ask?

The market generates landfill space as it is needed. The market works by responding to changing demand.  Landfills, like proved gas reserves, continue to grow as demand rises. Wait, you say, gas is a finite resource, how could gas reserves possibly increase?

Measuring gas in the ground is complex and costly. Therefore, we only invest resources to measure the gas that is believed to be economically efficient to remove. We measure the gas we think we are going to remove from the ground; that is “proved reserves.” The total quantity of gas that actually exists underground is unknown.  This means that as technology increases, which lowers the cost of gas removal, and the price of gas rises (in real, inflation adjusted terms) so does research and development and, hence proved reserves increase. This is true even though we continue to pump more and more gas out of the ground.

If gas is a finite resource, it then follows that at some point we may see a decline in proved gas reserves. If that happens the market-determined price for gas will rise indicating its scarcity. A higher gas price motivates producers to seek more and consumers to conserve and use less. It also motivates a switch to alternatives, or substitutes, which can compete at that price. At the end of the day (year, decade, century, or millennium) we will not run out of gas. Rather, we will shift into the alternative fuels that are cost competitive. So it will go with landfills.

Landfill capacity is commensurate with its demand. We will not see an enormous amount of landfill space being created until it is needed; that would be a waste of resources. Regardless, we are not running out of landfill space. It is a NIMBY (not in my backyard) problem, if anything. And that may change as more landfills provide neighbors with relatively inexpensive energy. Landfill gas is a gas substitute.

Originally posted on Environmental Trends.

Holly Fretwell is a Research Fellow at PERC and an adjunct instructor at Montana State University where she has taught  introductory economics, macroeconomics, natural resources and environmental economics. She works with the Foundation for Teaching Economics, giving workshops for  high school teachers to improve their skills in teaching and...
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