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Posted
17 April 2005

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The Business Case for Recycling

Let's talk about recycling. No wait, where are you going? Put down that mouse! Don't click the next headline in bloglines!

Oh sod it.

OK seeing as I've alienated the audience already (except perhaps for the one member that really counts) there's no harm in drawing this out and starting at the beginning.

I'm a fan of the Penn & Teller Bullshit! show. (Sorry no link to the show's website because of corporate cluelessness.) If you haven't seen it, it's an amusing show where anti-magicians Penn & Teller pick on most of the usual skeptic targets — mostly new age hippy crap — and rip them to shreds with amusing blind tests on unsuspecting punters. There's also gratuitous swearing and nudity.

Most of the P&T shows are excellent, like when they demolish some fraudulent bastard for claiming to talk to the dead, or hilariously expose Feng Shui for the nonsense it is. Unfortunately they sometimes let themselves and audiences down by calling bullshit when there isn't any, and relying on some highly questionable sources. This critique of Penn & Teller's show explains in great detailed the flawed arguments of P&T and their sources, for several different topics, not including recycling.

When I saw the episode on recycling I was pretty surprised, as some of the claims were pretty startling. However after discovering the above-mentioned critique I thought I'd have a go at examining some of the P&T arguments about recycling a bit more closely. I don't claim to be an expert on this topic, but I can use google and at least think about it.

The first point that P&T bring up is that people mainly recycle because they feel good about it. To which the obvious response is: so what, if it doesn't do any harm? The show goes on to make some reasonable arguments (eg the employment benefits are largely imagined) and some not-so-reasonable ones (eg recycling is bad because the New York Times says it is). But the fundamental theme underlying the show is that recycling is bad because it costs money.

In order to make the business case, there is a lot of hand-waving and apples-to-oranges comparisons going on that it's hard for ordinary punters to see what the costs and benefits are, and who is paying for and benefiting from the activity of recycling.

The business case argument is expressed in different ways such as: if recycling is so good then why does it need to be subsidised by the guvmint? This is nonsense. If we accept that subsidised = bad, then we are obliged to abolish, well, prettymuch all government activities. Healthcare, defense, education — I look forward to these becoming profit centres soon.

So it's all about the Benjamins. Appropriately enough one of the main anti-recycling sources they use for the show is another Benjamin: Daniel Benjamin, author of the Eight Great Myths of Recycling. This seems to be fairly widely quoted and cited in conservative circles, and like the P&T show it mainly relies on economic arguments.

[Aside: I particularly like this one from an economist who argues that recycling is bad because, well, Adam Smith says so. Actually not quite, there's more: persuing private interests alone is beneficial to the public interest, hence you should not explicitly act in the public interest. No I don't quite follow it either.]

Benjamin (and hence P&T) concedes some legitimate points in favour of recycling, and also raises a number of legitimate problems with the economics of recycling. The latter are unsuccessfully challenged by the pro-recycling interviewees. One of them goes so far as to say that the "net economic benefit of recycling is as great as the net environmental benefit of recycling." However, the ex-EPA guy goes on to say that it costs $50/ton to dump trash in a landfill, and $150/ton to recycle it. I'm guessing that the $100/ton difference buys a lot of 'virgin' material production (obviously depending on the material). Either way, it's the wrong argument for the pro-recyclers to make.

The argument that should be made is that evaluating the benefit of recycling in purely dollar terms is missing the point. Dog knows there are stupid things we all do in our lives which cannot be justified purely on economic grounds. It might be that recycling is one of those things: sure it costs money but we are going to make the right decision and do it anyway.

Besides monetary cost, there are other, admittedly more complex, criteria that I believe we should be applying to the question of justifying recycling. A few off the top of my head:

  • Energy/water usage. Does recycling uses more energy than the combined cost of dumping plus manufacturing from virgin materials? Ditto for water and other valuable resources.
  • Renewable materials. To me there's no problem dumping paper in a landfill if we can easily grow more trees (assuming all other factors are equal). A variation on this is where materials are produced as by-products of other processes, such as plastics from petroleum production. The plastic is not going to run out before the oil does, so it's effectively renewable for the medium term at least.
  • Toxic waste. Does the recycling produce more toxic waste than the original manufacturing process? Is there an additional risk of exposure to toxic waste when recycling? This needs to be weighted against the risk of toxic waste leaking from landfills, for example.
  • Other waste production. Even if it's relatively harmless to humans (eg waste heat) or if the effects are relatively non-localised (eg greenhouse gas emmissions), the downstream effects on the ecosystem are not to be ignored.

I believe economists call most of these externalities, and by definition they are not adequately reflected in the business case for recycling.

Some people on the environmental side seem to take the view that everything should be recycled, and that if we were to do this Gaia would smile on us. This is an understandable reaction: throwing things away when they could be reused just feels wrong. However I believe we need to be more rational than this in order to make the right decisions. Recycling has it's costs and we need to dispassionately assess these on a case-by-case basis. Another way of saying this is that landfills are not necessarily evil.

So lets say that we've done this assessment and found a circumstance where it makes sense to recycle. The questions that naturally arise next are: does it make economic sense, and if not, who should pay for it?

It seems to me only fair that the economic cost of recycling an item should be built into the cost of production of that item, and hence born by the purchaser. It should be another cost of doing business, like the raw materials, labour, broadcast spectrum licenses, etc. P&T claim that there are currently huge government subsidies for recycling, and this clearly isn't the way to go.

However the key point for me is that you need to separate the environmental decision from the economic decision. This allows us to change the economic conditions in order to ensure that a correct economic decision will also result in a correct environmental decision. Lets change the way the economic costs of recycling are structured to ensure that they are correctly accounted for in the marketplace, based on an understanding of the full environmental costs.

For example I could imagine landfills paying insurance against the risk of leaching toxic materials into the ground water (an analogy might be the indemnity insurance paid by medcial professionals). This might then encourage them to separate the incoming trash into high-risk and low-risk, to be deposited in landfills with differing degrees of protection (ie insurance policies). Just an idea.

The intent here is to use the marketplace as a tool for the greater public good. The reverse idea, defining the greater good to be whatever is served by the marketplace, seems to be what P&T and others are propagating in their show, and that really is bullshit.

18 Comments

Posted by
Chris
2005-04-17 09:49:00 -0500
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Another approach to this is that taken by "Natural Capitalism" (http://www.natcap.org/). Instead of referring to the items you listed off the top of your head as non-monetary, perhaps we ought to actually treat them as economic capital - and cost them appropriately.

At present, the economic cost of using a non-renewable resource (say, oil) is basically the cost of extracting it; essentially, it is costed as an expense only. Instead of this, the authors propose we should also view the use of such a resource as a spending of capital...

"Natural capital refers to the natural resources and ecosystem services that make possible all economic activity, indeed all life. These services are of immense economic value; some are literally priceless, since they have no known substitutes. Yet current business practices typically fail to take into account the value of these assets—which is rising with their scarcity. As a result, natural capital is being degraded and liquidated by the wasteful use of such resources as energy, materials, water, fiber, and topsoil."

I've got a copy you can borrow, if you're interested :)


Posted by
Alan Green
2005-04-17 09:49:00 -0500
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Chris is spot on... the priniciple that things are not owned by anyone until they are used is deeply embedded in our society. It comes to us from the Romans (from where we get the name "res nullius") and, IIRC, the Romans got it from the Greeks. However, humanity is getting too big for the planet. Perhaps the principle should now be revised to "if it's not used by someone it belongs to everyone".

http://en.wikipedia.org/wiki/Res_nullius


Posted by
Rascar
2005-04-17 09:49:00 -0500
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Mainly wanted to mention that if you've never seen it Penn & Teller are on constant repeat from saltwaterchimp.com so you can watch it through Winamp. (Christ on a Stick! (As Penn or Teller says..) You guy's had too complicated answers for me to read on an empty stomach. I just find it wrong to put economic and enviromental expenses against each other.)


Posted by
Bob
2005-04-17 09:49:00 -0500
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There's a great set of ideas put forth by William McDonough and Michael Braungart in the book "From Cradle to Cradle: Remaking the way we make things".. which suggests that our waste stream should be split in (at least) two parts, one being "Natural Nutrients", and the other "Technical or Industrial Nutrients".. so that what today is tossed out and seen as useless is able to become available material later without being corrupted by incompatible compounds, etc, just as composted soil serves already in the natural world. These guys are pro-business, but also pro-environment, with authors who have helped companies structure solutions that have made clear economic, social and environmental sense.

I think a core problem in our awareness of the waste and pollution that we have been generating is tied to the cheap energy we've enjoyed (?) for a century and a half. It has made it too easy to grab tons of materials to fuel the 'disposable' society and blindly think there's nothing wrong with it, and made it also too easy to ship off, bury and burn the evidence of this unusual excess. It makes it cheap to create and distribute all the excesses in packaging and junk-mail, and cheap to create things like disposable diapers, which are one of the greatest contributors to the landfills, and are an ideal example of an untenable blend of Technical and Natural Nutrients which, when tied to each other become unreusable for either system (without the input of great amounts of additional energy)

I was disappointed to see Penn and Teller take this issue on with such vehemence, but understood where it originated a little better when I realized that the American Enterprise Institute was involved. They don't mind Exxon getting a Billion-dollar tax break in their ~or anybody's~ most profitable year in history, but they shudder to think that these precious IRS receipts should be used for school lunch programs and student loans, or something that attempts to improve our use of resources and the massive amount of disposal that we have to manage. I was also unimpressed in how much Teller (big guy?) had to rely on 'Fuck' to endorse his points. It was pretty weak.


Posted by
matthew
2005-04-17 09:49:00 -0500
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Man I am so confused, i"ve been pushing for a recylcing program here in out building and I feel lik the gustepo now. I finally concluded that the dollars are not relative to my objective how ever the creation of more wate in the process and greater energy usage are stcking points for me.

In the end I imagine no matter what the cost or damage done there is a threshold where it makes more sense to recyle than not. I suppose my question is how close are we to that thresh hold, and which side are we one.

thanks


Posted by
niel
2005-04-17 09:49:00 -0500
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this site ain't good


Posted by
FredBear
2005-04-17 09:49:00 -0500
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The real question is: who will be better at deciding whether or not recycling is worthwhile? The Government? Or the People?

The government is obviously SUPPOSED to weigh costs and benefits, reflect our general opinions on how much to value a pristine wilderness versus an ugly, bulldozer-infested landfill. Do you really trust the government to do the right thing, and not be swayed by special interests?

Personally, I think the best we can do is get rid of all the subsidies and corporate welfare and corruption, and make the costs of everything we do more explicit, rather than trusting the government. Yes, there are a reasonable roles for government regulation of truly shared resources (I'm a fan of the Migratory Bird Act, for example).

Recycling should be unsubsidized and voluntary. If it gives you warm fuzzies to recycle your newspaper, fantastic! Just don't ask me to pay for it, because I think your warm fuzzies are polluting the environment and wasting money.


Posted by
Sy
2005-04-17 09:49:00 -0500
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if recycling should be unsubsidized and voluntary, then why not extend this to refuse collection? its exactly the same system of government subsidies.

dumping your refuse outside your neighbours front yard would save billions of taxpayers dollars a year. if people want to pay to have refuse collection let them. the free market argument is that it shouldn't be a centralized and dictated system subsidized by taxes.

next lets move on to education. why should i pay to educate your kids? you want them educated, you pay for it. If you can't afford to have them educated it's not my problem.

Let the people decide these things, not the government. Oh and when i say the people, i mean the ones that matter. The ones with serious amounts of money.


Posted by
Richard
2005-04-17 09:49:00 -0500
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You've got some broken (well, not hyper) links in the article and comments above (I blame one of many migrations).

E.g. this one. I'm sure its just a matter of fixing the mystic markup to whatever Mephisto uses.


Posted by
Alastair
2005-04-17 09:49:00 -0500
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Richard: you're seeing a bug in the Ruby Markdown implementation. It was also present when I was running Typo but no one noticed :)


Posted by
Steve
2005-04-17 09:49:00 -0500
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Forgive my nearly ten-month reply here, but I just stumbled across this article recently. Having read the entire piece, as well as the comments, I would like to add my own thoughts:

(1) Concerning the Penn & Teller episode: Having watched the entire show, I was not given the impression that "recycling is bad mainly because it is generally economically unfeasible to do so", as alastair has suggested. Rather, the message I got was "recycling is bad mainly because it causes more pollution than it prevents; additionally, as the icing on the cake, it is generally economically unfeasible to do so". I too have Googled, and have had trouble finding refutations of what I consider to be this true claim of the episode. Perhaps someone can point me in the right direction?

(2) Concerning Sy's comment: You asked, "if recycling should be unsubsidized and voluntary, then why not extend this to refuse collection?" I have an answer to this question... As libertarians, Penn & Teller no doubt believe that each individual should have the right to do whatever that individual chooses, so long as it does not infringe on the rights of another individual. If one accepts their claim that recycling pollutes more than it prevents, then my recycling, in fact, violates your right to breathe clean air. Similarly, concerning refuse, if I leave my refuse on my own front lawn for months, and you are my neighbour, then my refuse starts to stink up your yard, and - taken to the extreme - can infect you with disease. Therefore, if recycling can be conclusively and scientifically linked to higher levels of pollution (therefore violating individual rights), it should not be subsidized, but rather, handled in an appropriate manner by government to uphold individual rights (ie. a government ban on recycling). Likewise, if personal refuse build-up on a front lawn can (and - in this case - has been proven to be) conclusively and scientifically linked to neighbouring odours and disease (therefore violating individual rights), it too should be handled in an appropriate manner by government to uphold individual rights (ie. government-funded refuse collection).

The "free market argument", as you have put it, only applies when the definition of a free market includes a clause where no individual is permitted to infringe on the rights of another individual, and most free market advocates, including libertarians like Penn & Teller, would accept only this working definition of said argument. I hope this has highlighted why (if it is to be accepted that recycling causes more pollution and disease while refuse collection has the opposite affect), that these two services currently offered by government are not exactly the same system of government subsidies: Recycling pollutes, whereas refuse collection prevents.

"Let the people [individually] decide these things, not the government." Yes, let the people individually decide on things only that do not infringe on others' individual rights, such as education, as you have pointed out - regardless of each individual's own personal wealth or lack thereof. But that is a debate for another day.

Has this reply been in vain, or will it be read and responded to? :-)


Posted by
Alastair
2005-04-17 09:49:00 -0500
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Steve, thanks for the comment, no matter that some time has elapsed since the article was written...

This article was written in 2005, and I can barely remember writing it, let alone the P&T episode on which it was based. Still, the argument that recycling is bad because it causes more pollution than it prevents is a new one to me. Care to restate the P&T position? (or your own?)

I'm not entirely sure I follow the libertarian argument you propose, in fact it strikes me as something of a straw man. But seeing as it seems to rely on the premise that recycling causes more pollution than it prevents, perhaps lets just start there.


Posted by
shibby
2005-04-17 09:49:00 -0500
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I've just caught on the P&T show, just want to say that i googled the show and got onto your blog.

interesting books and comments for sure. as a layman, i paused the show at the 18 min to google ;), cos i think yes, to rely on the free market, and using money to measure everything and anything is but a fallacy. adam's smith's hand didn't ensure everybody has healthcare and education etc. or that everybody has street lights etc.

the free market can only work to a certain extent, that's why in every country there is a government.....and they are supposed to make decisions about externalities.

i'm sure recycling has hits and misses. there just isn't enough technology and balance into it as yet. plastic is highly non-degradable (even bio-degradable ones take very long), and the cost of dumping cannot be measured in the cost of land that is used to dump plastics. things like water contamination and other side effects of the disintegration of plastics has to be considered. and worse of all, oil is used in producing plastics, and if you argue from the nuclear standpoint or coal in producing energy, at least oil isn't used.

i was quite disappointed with the one P&T treated some of the topics, especially the recycling one and the hippie global warming one. they used a trick to get goodwilled and possibly guillible people to PROVE that this is representative of the opposing camp and that what they believe is hence BS.

that is waaaay not true. tricking people into believing is called a scam. to prove your point using a scam.....is not only immoral, but also naive.

their episode on feng shui and foot reflexology is also very naive and ill-informed. the foot reflexologists in US (or those who they show) are boogey, but the real reflexologists can really cure long term ailments (esp pains) just like acupuncture. as for feng shui, you only have to ask Hong Kong's richest man Lee Kah-shing.


Posted by
Julian
2005-04-17 09:49:00 -0500
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Sorry to barge in, but I just had to laugh at the unintentional hypocrisy.

Shibby argues that:

using money to measure everything and anything is but a fallacy

but then tries to prove feng shui works by suggesting:

you only have to ask Hong Kong’s richest man Lee Kah-shing.

In any event, this is a case of an Appeal-To-Authority fallacy.

I'll think I will use evidence-based medicine when I want to get better, and reflexology when I just want my feet rubbed.


Posted by
Steve
2005-04-17 09:49:00 -0500
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To Alastair and Shibby:

Thanks for commenting! I'm glad to see that this debate has been re-sparked. It's also been a while since I last watched this particular Penn & Teller program, but Alastair's initial article seems to mis-characterize its message. The actual messages that I got from the show were...

(1) Recycling is bad mainly because it causes more pollution than it prevents (primary argument): Extra colletion and delivery trucks exhaust fumes, added chemicals clean and remould materials, additional byproducts are polluted into the environment, etc. All of this, they claim, pollutes more than simply throwing this waste into landfill, and then reharvesting new, unrecycled material.

(2) Recycling is also bad because it is generally economically unfeasible to do so (secondary argument): The precise costs involved in recycling, even tallied up against revenues earned from selling recycled product, are still greater than the costs of dumping into landfill.

However, Alastair (and also Shibby, it seems), completely missed message (1), the primary message. If message (2) was the only message, I agree, it would be flawed and incomplete - cost alone should not be the primary reason to bash recycling. But is not the only message, or even the primary message, that Penn & Teller convey. Rather, if message (1) is taken as accurate (and I'm not entirely sure that it ought to be), then we don't even need argument (2) - it's just icing on the cake, like I said.

Anyway, I've Googled and Googled, but have had trouble finding rebuttals to message (1). Can someone point me in the right direction?

And I don't think Penn & Teller are trying to trick, misinform, or scam people (on any of their shows). Their evidence seems to be scientifically sound. And, as mentioned, when I've tried to search for rebuttals, I haven't found any. This either means that my search-work could use some improvement, or this counter-evidence simply does not exist.

Regarding the libertarian argument, this was not a straw man at all. Rather, it was a direct rebuttal to Sy's further mis-characterization of Penn & Teller's argument.


Posted by
qingl78
2005-04-17 09:49:00 -0500
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Hey Steve (if you are still here),

Call me a skeptic but I doubt a couple of magicians who have no background in either engineering or economics to come up with an argument based on doing accounting on how much extra pollution is created by recycling. Sorry, but unless they start publishing in peer reviewed journals I call BULLSHIT. Oh ya, I forgot, peer review is for pussies. As long as you have a stage show....you must be right. Oh there I go again, there is the "Appeal-To-Authority fallacy".

Much love,

Out


Posted by
Alastair
2005-04-17 09:49:00 -0500
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Steve,

With respect to:

Recycling is bad mainly because it causes more pollution than it prevents (primary argument): Extra colletion and delivery trucks exhaust fumes, added chemicals clean and remould materials, additional byproducts are polluted into the environment, etc. All of this, they claim, pollutes more than simply throwing this waste into landfill, and then reharvesting new, unrecycled material.

I suspect the reason you're not finding any rebuttals of this is that it's just too vague. In what way is pollution generated in producing goods from recycled material "more" than that from non-recycled material? More in terms of mass? More toxic? More concentrated?

Even if we were to settle on a method of quantifying pollution, we would likely find that the answer is different for different types of recycled material. So in my opinion you are likely to find cases where production from recycled materials generates more pollution than from non-recycled materials. And you're also likely to find cases where the reverse is true.

I think these problems are reason enough to disbelieve the general claim about recycling causing more pollution than it prevents.


Posted by
Tim
2005-04-17 09:49:00 -0500
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You can't disregard cost. If something like recycling costs more then not recycling, that means uses more resources. Cost isn't something made up. It's directly tied to use of resources.

The problem really - is consumption. We buy too much crap.

Recycling is basically allowing us greedy overconsumers to feel better and being greedy overconsumers. It doesnt matter if recycling is better or not, its not going to solve any real problems. It makes the problem worse. You can make people feel bad about throwing things away, but if you make them feel good about recycling it, they're not going to change their consumption habits.

Recycling does nothing for the real environmental issues:

  • Overpopulation
  • Global Warming - an energy issue, which recycling makes worse since now every city in America drives twice as many collection trucks
  • Ozone Depletion - a CFC issue
  • Habitat Destruction - recycling delays the impacts of consumption, but doesn't decrease them, since items can only be recycled a finite number of times. Where do you think items that have been recycled more then 2 or 3 times end up? IN A LANDFILL.
  • Increased Waste - 27% of trash is recycled, but now we consume and throw away more things. The rebound effect. If theres more space in the trash, we'll find some way to fill it. After recycling has been introduced, there is still the same ammount of trash being thrown out.

Bottom line, theres a lot of grey area in recycling for something that doesnt have the capability of doing much for the environment. If it makes you feel good then do it, but stop evangalizing and making laws forcing people to do it. Thats ridiculous.