Michael Munger

Think Globally, Act Irrationally: Recycling

Michael Munger*
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"The claims for recycling rest on an assumed, if not always articulated, moral imperative rather than on trade-offs or costs. But underlying this claim, for many people at least, is some murky idea that recycling 'uses up' fewer resources than making things from scratch."
Two empty bottles, still cool from their malty contents. I glance at my lovely wife. And as always after a couple of beers, she looks strikingly attractive... as an audience for an economics lecture.

Her reaction, also as always, is to pretend to focus intently on her book, and probably to wonder how we ever managed to have children.

I press on, though. "These two bottles. Suppose you value earth stewardship, and want to use the fewest resources. What if you want to minimize the negative impact on the environment? With that as your goal... should these bottles be made of recycled glass? Should anything be recycled? How would we know?"

Turning them, I can't tell just from looking if they are made from "cullet," the industry name for ground recycled glass. But I keep talking. "Of course, we don't need to know after the fact; we can predict! Markets price resources by opportunity cost; if recycling is more expensive than using new materials, it can't possibly be efficient. And no producer would choose to use packaging that costs more for the same result. Economics rescues us again!"

I look up from my reverie. Donna seems to have gotten up and gone to bed, a while ago. The easy chair isn't even rocking anymore. Oh, well. Now that certain other options are foreclosed, I can focus on analyzing recycling. Let's think it out together.

Moral Imperatives Rule Out Trade-Offs

Near my own hometown in North Carolina, two recent news items caught my eye. The first was a statement by Greensboro councilman Tom Phillips:

"The net cost for recycling is more than double the cost for regular garbage collection that will go to the transfer station. (This is after selling the recyclables we can.) A lot of what we recycle winds up at the landfill anyway because of contamination or lack of markets for the recycled material.... While it "feels good" it is too expensive and we must look for better alternatives." (public comment, March 17, 2006)

This made me wonder: how could we know if recycling makes sense? What are the standards? Is Mr. Phillips right: should we look at costs?

The second was more remarkable, a parable of the costs of ignoring costs. It happened in Durham, home of Duke University. Here are the facts:

  • Durham residents pay $60 per year for separate pick-up of "yard waste" (grass clippings, stumps, tree limbs, etc.) Residents must separate the waste streams, putting yard waste in separate containers. Yard waste is "too valuable," as compost-in-training, to dump in the landfill.
  • The city operated a facility that had become clogged with huge amounts of stumps and rotting vegetable matter. The $60 per year fee didn't come close to covering the extra costs of collection. No one offered to buy the "valuable" yard waste, for some reason.
  • The stumps at the yard waste facility caught fire, deep in the huge pile. The fire could not be completely extinguished for weeks, and neighbors for miles downwind complained of the pollution. So the waste that homeowners paid extra for reusing was dumped instead in the main garbage staging facility.
  • But the law prohibits disposal of yard waste in landfills in North Carolina.
  • So, Durham shipped all its trash, including grass clippings, to a landfill more than 85 miles away, in Lawrenceville, VA.
  • The clean-up and the extra hauling charges have already cost Durham an extra $1 million, compared to landfill disposal.

The reaction of the citizens of Durham? We can catch a glimpse in this newspaper story:

People such as Frank Hyman, a garden designer and former City Council member, pay for yard waste collection with the understanding that the city is reusing it.

"That's my expectation, and I think that's the expectation of most people," he said.

"A lot of people may be angry when they hear the city is shipping the yard waste to the landfill." (Dees, 2007; emphasis added)

Reuse it? For what? The city is desperate to save money, and would surely use the stuff if they could. A question for Mr. Hyman: If yard waste is so useful, why do you have to pay the city to take it away?

There is a simple test for determining whether something is a resource (something valuable) or just garbage (something you want to dispose of at the lowest possible cost, including costs to the environment). If someone will pay you for the item, it's a resource. Or, if you can use the item to make something else people want, and do it at lower price or higher quality than you could without that item, then the item is also a resource. But if you have to pay someone to take the item away, or if other things made with that item cost more or have lower quality, then the item is garbage.

If yard waste were a resource, then trucks would drive up and down streets in your neighborhood, bidding up the price of your bagged grass clippings. That doesn't happen. Ipso facto, yard waste is garbage. No amount of wishful thinking, or worship of nature as a goddess, can change this basic calculus. Let's go back to the problem of recycling glass bottles.

Clear as Glass: If Recycling is Expensive, It's Not A Resource

One of most interesting treatments of the problem of markets and waste disposal is by an old friend of mine, Peter VanDoren. He writes:

Some policy analysts justify government intervention in refuse collection by invoking market-failure arguments in the collection of recyclables. Why don't free markets for recycling work? Well, in some circumstances they do. Scrap yards, for example, recycle iron and steel. The growth segment in the U.S. steel industry is the so-called "minimill" whose raw material is recycled. Recycling markets work fine in this sector of the economy because making steel from virgin iron and coal is more expensive than making it from recycled raw materials. In other areas of the economy involving glass, paper, and plastic, for example, the discrepancy between recycled and virgin prices often does not justify the development of markets for recycling.... [S]upport for recycling is more religious than economic in nature.

Markets can handle lots of things that look like "recycling." We reuse copper, even stripping it from old homes before they are torn down. I rent a car at Hervis, and take it back two days later so someone else can use it. And when I finish with the turkey at Thanksgiving, or the ham at Easter, I always boil the bones to make soup. That soup is much cheaper, and better, as a result of recycling the bones. None of these things is mandatory; we do them automatically, because they make economic sense.

What VanDoren means by "religious" is that the claims for recycling rest on an assumed, if not always articulated, moral imperative rather than on trade-offs or costs. But underlying this claim, for many people at least, is some murky idea that recycling "uses up" fewer resources than making things from scratch. Or, in the case of glass, making bottles from sand. As one earnest young staffer at a public works department in the northeast told me, "Recycling is cheaper, no matter how much it costs!" You can believe, if you want, that there is some mystical quality of products that make them valuable, and that price is the wrong measure of value. But if prices matter, lots of recycling we now do is irrational.

The difference between cullet (glass ground up by machines, using electricity) and sand (rocks ground up by nature) is clear: most cullet is full of additives, contaminants, and impurities. These contaminants are trapped in the cullet, inert and harmless. But if someone melts the cullet, an important step for making new glass, the contaminants can become toxic releases into the atmosphere, water, or soil. The impurities introduced by even small amounts of merged colors or types of glass in waste streams make mixed cullet nearly useless.

Sand, by contrast, is cheap and can be made into glass without extra steps, extra expense, or extra danger to the environment.

So why do we recycle glass? Why is it against the law, in many cities and counties, to dispose of glass as garbage? The fact that glass made from cullet is much more expensive than glass made from sand should be a hint that recycling uses more resources and more energy.

Interestingly, in many cities, the answer to the "why recycle glass?" question is, "We don't!" Green glass, in particular, is so plentiful, and the cullet market so overwhelmed by excess supply, that disposal of green glass through recycling is prohibitively expensive. A number of cities have tried to delete green glass from the list of recyclable materials, but they face a political veto from recycling enthusiasts. And, interestingly, the political opposition comes precisely from those people who will end up paying more for the inefficiency of the recycling they insist they want. Taxpayers, citizens, the folks who take their garbage out to the street, want to ask the city to put green glass back on the recyclable list, regardless of the cost.

Incredibly, the pressures have been strong enough that some municipal systems have caved in, and either continued, or have restarted, accepting green glass. In a number of areas, private companies under contract with the city collect the green glass as recyclable, and then under direction from the city simply put the green glass back into the garbage waste stream. Given the resource costs of recycling, treating green glass as garbage is the environmentally responsible thing to do.

Save Resources, Recycle at All Costs

Let me close this essay by focusing on "contaminants," another example of good intentions gone badly wrong. Two of the sources of contaminants in cullet that make it less valuable, or even useless, are (a) mixed types and colors of glass, and (b) food residues that remain on glass surfaces.

The first problem was discussed in a news story in 2006 in the Arizona Republic. Here's the interesting part:

Nearly one-quarter of everything tossed into Phoenix's blue [recycling] barrels shouldn't be there. Removing all that non-recyclable trash costs the city nearly $1 million each year....

For residents who treat their recycling barrel like a garbage bin, the fact is sometimes lost that other people will eventually have to rummage through their cast-offs. "The question that I always ask children and adults alike is, 'Would you want to sort this stuff?' " said Sheree Sepulveda, Chandler's environmental programs education coordinator. "It really puts a different perspective on it." (Purtill, 2006; emphasis added)

My mouth gaped when I read this. "Would you want to sort this stuff?" That's exactly what recycling zealots want us to do. Sort by color, sort by type, store separately, carry to facility and deal out your garbage in half a dozen little cubbyholes. It's as if time, our most precious resource, the one thing we can't make more of, has no value whatsoever.

Here's my perspective, which is rather different: does it make more sense for (a) a few workers, and specialized equipment, to separate waste streams, or for (b) all the rest of us, with far more valuable uses of our time, to spend time, gas, and effort separating "recyclable" materials and feeling good about ourselves by putting them in little separate slots in some expensive facility dedicated to this purpose?

Trick question! The answer is: Neither. It makes no sense for either the waste worker, or the homeowner, to separate waste streams, because the price system is telling us this is an inefficient and wasteful activity. If recycling were efficient, someone would pay you to do it. Disguising the costs by forcing citizens to do the labor, instead of paid government employees, changes nothing. It just reduces the explicit budget of the recycling program, and raises implicit taxes on the people.

And that brings us the second type of contamination, food residues. Now, I have long heard of people running their mayonnaise or spaghetti sauce jars through the dishwasher before recycling them. But I had assumed this was an urban legend, since no rational person could justify the time and hot water need to run garbage through the dishwasher.

 

"Do I need to rinse out my bottles and cans? Yes! Rinsing cans, bottles and jars helps to reduce odor and discourage pests from invading your bin. An easy way to do this is to place cans and bottles and plastics in your dishwasher...." (Frequently Asked Questions, Beverly, MA, accessed May 28, 2006)

"Helpful Hints—Keep a container for recyclables near your dishwashing sink (A medium-to-large wastebasket work well). Wash or rinse out cans, bottles, milk jugs, etc., while you are cleaning up after meals, or run tin cans and glass jars through the dishwasher." (How to Collect and Sort Your Recyclables. Mason City, IL, accessed May 28, 2006)

To my surprise, it is actually easy to find examples of cities encouraging this lunacy. I found two examples very quickly, one from Beverly, MA, and one from Mason City, IL. But it is surprisingly common all over the U.S., in towns large and small.

Why would a city do this? Two reasons, and both of them are bad. The first we have already discussed: any costs imposed on citizens is avoided by city budgets strained by the irrational insistence on "recycle at all costs." Cleaner glass is worth more as cullet, and citizens' time and effort cost the city nothing.

The second reason is more disturbing. A generation of Americans has been indoctrinated into a "save resources, recycle at all costs" mindset. "Recycle!" is used as a moral bludgeon. This is different from "Don't Litter!" Littering is a collective action problem, a genuine social dilemma: cheaper for me to throw that cup out the window. But I myself would prefer a world where no one throws cups out of windows over a world where everyone does. "Don't litter" is an attempt to solve a real problem.

"Recycle, regardless of cost!" doesn't solve a problem; it creates one. Laws requiring recycling harm me, the environment, and everyone else. We have to take prices into account, because prices are telling us that we can't save resources by wasting resources.

 

For more on this topic, see Recycling by Jane Shaw in the Concise Encyclopedia of Economics.

Well, it's late, and it's time I head upstairs. I put the glass bottles in the recycle container. They are brown glass, and though their "value" is negative, at least they can be recycled at nominal cost. Besides, it makes me feel good. I'm saving the Earth, one piece of expensive garbage at a time.


* Michael Munger is Chair of Political Science at Duke University.

To comment on this article and listen to the related podcast, go to Munger on Recycling, on EconTalk. For more articles by Michael Munger, see the Archive.
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