A simple principle of economics is that value is subjective. Prices, and thus profit and loss, come from the (subjective) value that market participants place on goods and services. So if costs are greater than the revenues of a product, then economic value is lost; if revenues are greater than the cost, economic value is created.
Enter recycling, which has turned (even more so) into an economic loser in the current era of low commodity prices. What this means is that the cost of sorting and transforming trash into useful products is less than the revenue–and recycling should not be done.
And as the distinguished resource scholar Pierre Desrochers has explained, [1] recycling has been a loser for decades:
Domestic waste recycling has long been a money loser ever since plastics came along. Before that, there was spontaneous, sophisticated, profitable private recovery of domestic waste in all the world’s advanced economies’ urban areas.
The basic issue is that domestic waste is collection of diverse low-value stuff, whereas industrial waste is typically one large blob of uniform stuff. The economics between the two have long diverged. [2]
Houston Debate
Here in Houston, a major issue was whether the City would enter into a new contract to continue recycling. The loss economics required that taxpayers make up the different. The future of the program hung in the balance.
A number of editorials, many by the editors of the Houston Chronicle, urged ‘doing the right thing’ in the face of loss economics. Public pressure on the City resulted in a new contract with new public funding and the elimination of glass from the recycle stream.
I do not think the Chronicle published any editorial against renewing the recycling contract. And so I was moved to write a letter to the editor with a contrary view.
Regarding “Big test arises on city’s will to recycle” (Page B1, Friday), continuing money-losing recycling is not necessarily “doing the right thing,” as business columnist Chris Tomlinson asserts.
Cost in excess of revenue indicates that there is a net resource loss from recycling. I have recommended discontinuing recycling to my homeowners association to collapse two truck runs into one, saving energy (diesel fuel, in particular) and human labor, not to mention the electricity used in the recycling process itself.
Landfill technology has evolved to where they build golf courses on top of well-sealed solid waste disposal areas. This least-cost solution preserves rather than wastes scarce resources – unless it is profitable to recycle.
– Robert L. Bradley, Jr., founder & CEO, Institute for Energy Research, Houston
My view was buried in the letters section. It probably had no influence. But gentleman business-writer Chris Tomlinson thanked me in an email for my comments. And my 88-year-old mother read it without being prompted. So value was received by the author.
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[1] Email to author, April 10, 2016.
[2] Bibliography provided by Pierre Desrochers
Historical texts illustrating early domestic-waste recycling:
On the loss of value of old rags, bones and other objects because of the advent of plastics, see, among others
– Béguin, Marine. 2013. “L’histoire des ordures : de la préhistoire à la fin du dix-neuvième siècle.” VertigO 13 (3) (December) https://vertigo.revues.org/14419
The cost of collecting and transporting recyclables in our town amounted to over $3.2 million in three years. The sale of the material to the recycler brought $0.14 million in return. Subtracted, the town paid $3.06 million. If the recyclables were collected and hauled away, unsorted, with the regular collection, the town would spent only $1.4 million for this added tonnage instead of the three millions.
The result: 1.6 million (over 50 %) potential saving lost.
The leaders in our town, as in those in others in our state, know all that and say: “Recycling costs us. Nothing we can do about it – it’s a state law that we recycle.” Unfortunately this is true, and as most government programs, recycling will continue unabated.
Defenders of recycling say that there are environmental benefits and job creation with recycling that make it worth. As to the former, only 5 % of the recyclable load is recycled country-wide; the other 95 % go to the dumps or incinerators anyway. It also happens that when the recycler does not find a buyer for some items (e.g. glass) and there is no longer space open, both the recyclable and unsorted loads go to the damp.
All this hauling, sorting and repeated hauling cause harm to the environment, not benefit. There is no evidence that recycling saves energy or lessens pollution save with objects returnable for cash.
Stan Jakuba
West Hartford, Conn.