s recycling a loser, fiscally speaking? "That's been a tricky question," says Frank Ackerman. A Tufts University economist, Ackerman is the author of Why Do We Recycle? (1997). In the big picture, he notes, recycling prevents almost incalculable costs levied on society as a whole. But individual communities have to think about immediate cash flow, and while some of them make money in the short term, "that has not been easy to generalize."
The economic problems stem mostly from market volatility. In 1995, for instance, a ton of newsprint at the paper mill sold for $205 delivered. Six months later the value was $6. Last year's fiscal downturns also sent prices for recycled materials way down. A slow economy means fewer ads in newspapers and magazines, for instance, which drives down the demand for paper, which drives down the price of used paper. Or take plastics: Virgin plastics are made from oil, so normally it's cheaper for manufacturers to start with existing plastic -- even factoring in the cost of collecting, sorting, and cleaning. But when oil prices are as low as they are today, recycling plastic is no longer economically attractive.
Suppliers of virgin materials also face price fluctuations, of course. But municipalities find it harder than most businesses do to take a long-term, ride-it-out approach. And the market for recycled materials has its own unique chicken-and-egg problem. Communities complain that low demand for recycled materials pushes prices too low to make recycling profitable. Industry, on the other hand, complains that the supply and quality of recycled materials are too erratic. Hence, low demand.
Michele Raymond, who publishes the Portland, Oregon-based Resource Recycling, says that on top of all that, inefficiency is built in because recycling is run by individual communities. "Nothing is standard," she says. "Everybody wants to do their own thing. In most cases, the states put the mandate on the local government, saying, 'You shall recycle this much.' And they have different rate goals and different ways of counting toward the goal."
Factor in the nation's relatively cheap landfill tip fees, which average about $37 a ton, and sometimes the collection companies just give up. Waste Management, Inc., recently acknowledged that for more than a year, it had been dumping recyclable cans, bottles, and paper collected from three North Carolina towns into landfills. Raymond believes dumping is common when markets are poor. But, she says, "when you jack your tip fees up to $100, industry recycles. All of a sudden it becomes economic." Recycling-minded Europe has tip fees of up to $200 and $300 a ton. And the United States could soon follow. The cost of exporting trash out of state is climbing so much that even New York City has conceded that, within this decade, recycling will be cheaper than landfilling.
Yet recycling programs can and do work. It's a multibillion-dollar industry in the United States, with at least $14 billion in the sale of recyclables alone. Done right, it can generate new jobs and revenue for a community.
For the most part, this country doesn't do it as right as Europe, where recycling rates for some materials can approach 90 percent. Even a technically advanced mill such as Visy, which is able to accept any grade of paper and easily handle plastic bags and other contaminants, owes its superiority to German machinery and Australian ownership.
Europe's success is due largely to legislation that makes manufacturers responsible for the cost of disposing of packaging, electronics, refrigerators, and other goods. Germany, for instance, passed a law in 1991 saying that by 1993 two-thirds of all consumer packaging in the country would be recycled by the manufacturer. In the United States, such a step would make a huge difference, since packaging alone accounts for about 35 percent of the entire waste stream.
Mandates like Germany's create a national recycling system and steady funding for it. They also provide for standardized public education, which is critical when success depends on individual citizens putting the right trash in the right bin. "Weak public education is one reason New York isn't saving money yet on glass and plastic," says NRDC's Mark Izeman. "If people don't understand the system they put all sorts of things in the recycling bin, and separating them costs money." In 2001, an independent survey firm found that only 0.03 percent of New Yorkers knew which of twelve items of basic household trash were recyclable and which weren't.
But there's hope. Less than two weeks after New York pulled the plug on glass and plastic, Congress was holding its first discussions on recycling-related legislation in a decade. Senator Jim Jeffords (I-VT) perennially sponsors a national bottle bill; the rest of Congress is finally noticing. The bill would require beverage companies to ensure that 80 percent of their bottles and cans are recycled. How? By putting a minimum 10-cent refundable deposit on all non-dairy beverage containers. The ten states with deposit systems already in place recycle beverage containers at a rate of 70 to 95 percent. Those that don't average less than 30 percent.
Beverage companies are not too keen on the proposal. The industry has calculated that its additional costs could be as high as $10 billion. Both sides nonetheless agree that increasing the recovery rates for bottles and cans would help provide a steady, predictable supply of recycled aluminum and PET (polyethylene terephthalate) plastic. And that, in turn, would enable beverage companies to use more recycled material in their containers. The chicken-and-egg dilemma would be solved. "We need every can back," says Robin King of the Aluminum Association. "The more we can recycle, the more efficient the closed loop is."
