Almost everything that’s said about recycling is wrong. At the very least, none of the conventional wisdom is completely true. Let me start with two of the most common claims, each quite false:
1. Everything that can be recycled should be recycled. So that should be the goal of regulation: zero waste.
2. If recycling made economic sense, the market system would take care of it. So no regulation is necessary, and in fact state action is harmful.
If either of those two claims were true, then the debate would be over. The truth is more complicated than almost anyone admits.
There are two general kinds of arguments in favor of recycling. The first is that “this stuff is too valuable to throw away!” In almost all cases, this argument is false, and when it is correct recycling will be voluntary; very little state action is necessary. The second is that recycling is cheaper than landfilling the waste. This argument may well be correct, but it is difficult to judge because officials need keep landfill prices artificially low to discourage illegal dumping and burning. Empirically, recycling is almost always substantially more expensive than disposing in the landfill.
Since we can’t use the price system, authorities resort to moralistic claims, trying to persuade people that recycling is just something that good citizens do. But if recycling is a moral imperative, and the goal is zero waste, not optimal waste, the result can be a net waste of the very resources that recycling was implemented to conserve. In what follows, I will illustrate the problems with each of the two central fallacies of mandatory and pure-market recycling, and then will turn to the problem of moral imperatives.
1. A Visit to Oz
My first experience with the recycling debate was in 2008, when I was asked to keynote a conference in Freemantle, Australia. The conference, called “Australia Recycles!,” was a gathering of recycling professionals and equipment vendors from around the Pacific rim. And I was clearly the tethered goat left out for the tyrannosaur to gobble up.
The core argument was that market prices, not emotional choices or regulatory mandates, were the best guide to whether a community should try to recycle a particular material. No one has to tell us to do those things, because price is a good guide. We scrap cars because they are valuable metal. The leftover rice and chicken go into the fridge, for tomorrow’s casserole. And toilet paper…well, we throw it away, after using it.
I focused on glass, especially the kind of green glass used for wine bottles. Glass is heavy and inert. That means it’s expensive to cart around and handle, in addition to the problems of breaking and cutting workers. Glass is harmless in a landfill and breaks down into something very like the sand it came from.
The commodity that glass can be ground into, called “cullet,” just isn’t very valuable. Mixed cullet, even from glass that looks similar, turns a dull black; sorting to avoid mixing takes time. Recyclists seem to believe that everything should be conserved, except time, the one resource we can’t make more of.
The alternative to recycling green glass is to use virgin materials—sand—and add the chemical compounds and color required. A cubic yard of mixed cullet can actually be much more expensive to convert into usable glass than a cubic yard of sand, depending on conditions. That means that “recycling,” when you add on the fuel costs and pollution impact of collecting small quantities of the stuff from neighborhoods, actually uses more energy, and wastes more resources, than using virgin materials.
There are exceptions. If disposal costs are high and there is actual demand for the cullet, then green glass is highly recyclable. The best example is northern California, with valuable land, a large population, and lots of manufacturers eager to put new wine in recycled bottles.
Still, given the costs and lack of demand in most areas, opportunities for environmentally responsible recycling of green glass are rare. As a result, hundreds of municipalities across the United States have tried to suspend their glass recycling programs. Interestingly, in some of these (including my home town of Raleigh, North Carolina) there were legal or political barriers that forced the resumption of curbside glass collection. Citizens voted to force the city to pick up the glass in those plastic bins, because they don’t like to throw the glass away. The glass is picked up, trucked to the recycling facility, and either bagged or boxed and then shipped, in a different truck, to the landfill. In effect, citizens are paying the city extra to throw away the glass, so that they can pretend it’s being recycled.
As I was going through my presentation, I was surprised at the reaction of the audience of the conference. They weren’t angry; they were bored. When I finished, a man stood up and gave what seemed to be the response of the entire audience, given their nods and smiles: “Look, professor, we all know this. Everyone knows that there are problems with green glass. We all understand that there is no market for cullet. But it doesn’t matter. The main thing is to get people in the habit of recycling, because it’s the right thing to do.”
I guess I shouldn’t have been surprised, since everyone in attendance made their living from selling recycling equipment to cities and local governments. But let’s be fair: no one in that room was cynical. No one thought this was fraud the way I did. Recycling gives people a chance to express their concern about the environment, and concern about the environment is good. Sure, sometimes the actual effect on the environment is harmful, as in the case of green glass, but that’s a small price to pay for developing the right habits of mind. I wasn’t wrong, I just didn’t understand their objectives.
2. The economic problem of recycling
I once proposed a guessing game to determine whether something is a resource or just garbage, to be disposed of at the lowest possible cost, including costs to the environment. The answer comes down to price. 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 it, then the item is garbage.
As a society, we should recycle resources, but not garbage. Recycling resources saves resources. Recycling garbage uses up resources. Of course, the ideas of “price” and “cost” were a little vague here, because prices we observe in a market fail to capture the full opportunity costs of foregone alternatives. So the formulation above, to be valid, would require information about the “correct” prices.
Remember, what is at issue here is mandatory recycling. Voluntary recycling is done because it’s cheaper, saves resources by definition, and will happen without state action of any kind other than the usual enforcement of contracts and property rights.
There are two quite different defenses of mandatory recycling programs. These are (again, by definition) policies that require people to recycle commodities that appear to be garbage, not resources. The two explanations are: (1) the resource is actually valuable, but markets underprice it; and (2) landfills are scarce, dangerous, or need subsidies to avoid dumping, meaning that throwing resources away is too cheap.
2.A. Underpricing Valuable Resources
It seems as if just throwing something away must be wasteful; it would be better to reuse it somehow. The state of North Carolina, where I live, has a law against disposing of yard waste in a standard landfill. This makes some sense. Yard waste decomposes naturally and turns into compost eventually, so it can be disposed of more safely than the dangerous waste we put in landfills. But the city of Durham, where Duke University is located, decided that they would do the state one better. The city council required all citizens to dispose of their yard waste at curbside, where it was picked up by city trucks and taken to the city composting facility.
The city collected an extra fee—about $60—from residents to operate this service. Expenses were much greater than that, but the theory was that the composted yard waste could be resold to pay the rest of the costs of the operation. Best of all, there would be no need for landfilling the yard waste once the operation was up and running: yard waste in, compost out, with no waste going to any other kind of disposal.
The problem was that much of the yard waste was large stumps and tree limbs, resulting from several hurricanes and large storms. The “compost pile” quickly became the “stump dump,” an enormous pile of rubbish. The idea that the stuff was valuable was just wrong. It was garbage, not “black gold.”
And then it caught fire. Spontaneous combustion deep inside the pile, a common result of decomposition and pressure, found enough oxygen to begin to smolder. The city tried to put it out by soaking the pile, but that just made the smoke worse. 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 remember, 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 cost Durham an extra $1 million compared to landfill disposal.
The citizens of Durham were disgusted, but not in the way you might expect. People such as Frank Hyman, a garden designer and former City Council member, argued that they had paid for yard waste collection with the understanding that the city would reuse it because it was valuable. “That’s my expectation, and I think that’s the expectation of most people,” [Hyman said.] “A lot of people may be angry when they hear the city is shipping the yard waste to the landfill.”
This kind of reaction is common, and it’s a chief reason why many people support recycling. The stuff we are throwing away seems too valuable to throw out. The problem is that 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 because they are not really valuable.
Of course, there are exceptions. Aluminum cans, some kinds of paper, and corrugated cardboard are all valuable, once they are sorted and packed into high-density containers where the volume is large enough for industrial-scale recycling. You may have seen homeless people picking through garbage for aluminum cans: They can sell these for about $0.50 per pound, or about 1.3 pennies per can. The fact that people can sell some recycled products means that there is a market, when the stuff is actually valuable.
2.B. Landfill Cost/Scarcity
The second argument in favor of recycling is that even if the stuff isn’t valuable, it’s cheaper to recycle it than to dump it in the landfill. The argument I made above, which might be summarized, “Let markets do it, and if markets can’t do it shouldn’t be done!” rests on the comparison of two prices: the price of disposal through trucking the waste to a landfill, and the price of disposal through recycling. It is important to include all costs of both approaches, which is tricky since there may be a variety of external costs imposed by each method. But the argument for abandoning mandatory recycling (remember, voluntary recycling always makes economic sense) has at its base the comparison of these two prices of disposal.
Empirically, this often comes out badly for recycling. Recycling, including the costs of collecting the waste in tiny, mixed amounts, transporting the waste to a handling facility, sorting it, cleaning it, repackaging it, and then transporting it again, often for great distances, to a market that will buy the commodity for some actual use, is almost always more expensive than landfilling that same waste in a local facility.
The problem is clear once we come to understand the problem of pricing landfill space. If there are only two alternatives for the waste, landfill or recycling, then landfills should be priced at the sum of the opportunity cost of the space used for the landfill and the externalities and costs of managing pollution resulting from landfill disposal. In these circumstances the price comparison would be valid: if the recycled material costs less than the full economic cost of landfilling, then landfilling will be economically justified. Of course, if those were the only two options, recycling would be voluntary, up to the margin where the price for the recyclable commodity falls to the cost of landfilling.
But that’s not how we price landfills, and for good reason. There is a third alternative, or a whole category of alternatives, to landfill disposal or recycling. That alternative is illegal dumping, illicit burning, or other extra-legal “free” disposal. The problem is that these alternatives are only “free” to the illegal dumper or burner. The impact on society can be horrific.
One solution would be to police illegal dumping or burning very aggressively. We try to do this, but covert dumping is easy, and burning in rural areas is very hard to police effectively. Another solution, the one we generally settle on, is subsidizing landfill disposal. In effect, we charge far less for landfill disposal than it actually costs society.
Unfortunately, landfill disposal is actually quite expensive, in terms of actual economic costs and externalities. Yet because dumping is also very expensive, the optimal implied subsidy is large enough that the price we charge for landfill space is negligible.
And that, my friends, is why mandatory recycling may be justified: we can’t charge disposers the economically “correct” price for the legal alternative, landfills, because then many of them will resort to the illegal alternatives, dumping or burning. Recycling is economically justified if it costs less than the true total social cost of landfill disposal, but we cannot actually charge that price for landfill. So we underprice landfill space and then try to persuade people to divert as much waste as possible from the landfill, if recycling costs less than that invisible “true” price. Consequently, those who have argued that unaided markets can handle this problem are at least partly wrong: for markets to work, we have to get prices right. But prices are distorted here, against recycling, although for good reason (we want to avoid random dumping). So, the answer is to require recycling, even though it seems more expensive, because recycling may be less than the “true” cost of landfill disposal.
3. Morals, Not Markets
Of course, the astute reader may have detected a flaw in the logical justification for mandatory recycling. If charging the “real” price for landfill causes dumping, why wouldn’t mandatory (and costly) recycling have the same effect? After all, if recycling is expensive (though cheaper than the true cost of landfilling), then charging that cost will induce illegal dumping, right? In fact, any cost greater than the (presumably optimal) price of landfill disposal will divert waste to dumping. If that weren’t true, we could charge a higher price for landfills. Wouldn’t we have to subsidize recycling, also?
The answer is much more complicated than space allows here. But it is worth noting that we do in fact subsidize recycling, heavily. There are colorful plastic bins, work crews, and specialized trucks that travel around neighborhoods picking up garbage as if it were a valuable commodity.
That subsidy by itself would not be enough, however. We have to use another weapon to make mandatory recycling work, and not just be shifted over into illegal dumping. That weapon is moral suasion: you should recycle because good people recycle, and recycling is the right thing to do. The shift seems minor, but in fact it changes everything. How could we tell if recycling is cheaper, since we don’t actually know the “correct” price of landfills? We simply assume that recycling is the right thing to do, and then apply subsidies and requirements until desired level of recycling is achieved. And what is that “desired level”? Without prices to guide us, the answer is simply “more.” Putting garbage in a landfill is no longer expensive; it’s evil.
Three brief case studies will help illustrate this point.
3.A. Running Garbage through the Dishwasher
When I was working on recycling policies for cities, I read a lot of web sites that described what was expected of good citizens. Note that these policies were not mandatory; they were just what a moral person was expected to do. The duties of good citizens came down to three things: (1) recycle everything; (2) sort it assiduously; and (3) wash it carefully.
Note that this whole approach is entirely insulated from costs or the logic of price. The reason “we” recycle is that people in our town are good people, not people motivated by money. The value of the landfill is raised far above even its economically correct price for disposal. In fact, the real value of the landfill approaches infinity, in this view. The ideal amount of waste is zero; everything should be recycled.
The result is that people drive, sometimes several miles or more, to sort their garbage into little bins like they were playing demented Tetris. Bottles and glass here, plastic here, paper here, aluminum there. In many cities, the resulting separated waste is actually picked up, re-mingled, and landfilled, because it has no economic value whatsoever. But that’s okay, because the important thing is the moral act of recycling, not the saving of resources.
The strangest part of this fetishization of garbage—running afoul of the “it’s really valuable!” fallacy I talked about above—is the practice advocated by many small towns: run your garbage through the dishwasher. Here are two examples of the genre:
“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…” http://www.beverlyma.gov/Public_Documents/BeverlyMA_Recycling/faqs (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.” http://www.mason-city.com/SOAR/RecycleCollection.htm (Mason City, IL, accessed May 28, 2006).
Curious, I phoned the public relations officers with the recycling departments in several small cities in the Northeast. I asked one extremely cheerful and energetic young woman how her city could justify asking people to put their garbage in the dishwasher. Isn’t that pretty expensive, in terms of human time, and the energy to heat the water, compared to the value of the garbage?
Using the same tone of voice one would use to talk to a five year old—she clearly thought I was not the sharpest can lid in the recycle bin—she gave me the most concise explanation I have encountered in the whole genre. She said, “Oh, you have to understand, sir. Recycling is always cheaper, no matter how much it costs!” For her, and for millions of people like her, recycling is not an economic activity at all, but a moral duty, without limits and for which cost is irrelevant.
Now, perhaps we need to use moral arguments to compensate for the fact that we have to charge “too low” a price for landfills. But moral arguments are blunt. Prices allow contingent imperatives: recycle when, but only if, it’s cheaper. Moral claims about recycling cannot be modulated: if recycling is good, more recycling is better. And the ideal is to recycle everything. The problem is that, from economic perspective, from the perspective of balancing resource use, that’s just not true. If you are trying to save energy and resources such as water and time, it never makes sense to put your garbage in the dishwasher.
3.B. Moral Imperatives Defeated by Incentives at Duke Dining
In 2007 and 2008 North Carolina suffered a significant drought. Durham County, home of Duke University, was at one point at least 10” below normal rainfall levels. The reservoirs and aquifers were extremely low and falling fast. Water had become a very scarce commodity.
For years, Duke (like most universities) had made a concerted effort to reduce its waste stream, and to divert waste that was created away from landfills. This effort had focused particularly on “saving trees,” or reducing the use of paper. And paper that was used was to be recycled, with containers placed on most floors in most buildings.
But during the drought, the scarcity of water led the university to try to make changes. This was perfectly sensible, given that water (used for washing china dishes, cloth napkins, and metal flatware) had become more expensive than landfill space (used for disposing paper dishes, napkins, and plastic utensils). The Commons, the faculty dining room, moved with many of the other food service units to use paper plates, plastic utensils, and paper napkins. The nature of these products, made from low-quality fibers and stained with greasy food products, made them poor candidates for recycling, even by the usual friendly standards of universities.
At first there were grumbles. Then there were outright protests. Students and faculty complained that “we all know it is wrong” to dispose of waste in the landfill. (I asked at least twenty people, and I never got an answer for why “it is wrong,” they just knew that it was.)
The problem was that the university was trying to respond to the change in relative scarcity of resources in a responsible way. The effective price of water had shot up. It would be irresponsible, in terms of the opportunity cost of the resource, to continue to use water as if it were plentiful.
But that’s not how the students and faculty who had been exposed to moral suasion saw it. No one had ever said, “Recycle because it’s cheaper”; instead, they had been told “Don’t throw anything into the landfill, because it’s wrong!” By that logic, the protesters had a point: moral imperatives shouldn’t respond to relative scarcity. If it’s wrong to throw things into the landfill, it’s not an excuse to say “it’s expensive.” Using moral suasion to solve the problem of charging a low price for landfill is actually dangerous, because people confuse sensible frugality, contingent on prices, with morality, which is only contingent on the good or bad character of the citizen.
3.C. The Church of Recycling: Holy Communion in Vitacura
I spend a lot of time in Santiago de Chile, in South America. One of its wealthy neighborhoods is Vitacura.
Like most poorer countries, Chile has next to zero household recycling. Still, people wanted to show that they were morally good citizens, and so the city had created a small recycling facility in one of the lovely parks that dot the neighborhood.
We went on a Saturday morning, and found…church. A long line of cars, engines idling, waited to pull up to the recycling facility. The facility itself was beautiful, sparkling clean, and with attendants in clean coveralls. As soon as one of the bins filled up, it was lifted with a built-in winch system onto one of the waiting trucks.
I watched for nearly an hour. The waiting time varied, but it was never less than ten minutes and sometimes ranged up to twenty. The queue curved up the hill and around a corner, as citizens waited for their chance to share recycling communion. Since the line moved slowly, but moved, no one turned off their engine the whole time they were waiting. These were all Audis, Volvos, BMWs, and other nice cars, the kind of cars good people drive.
After ten minutes of idle pollution, the church-goers arrived at the altar. They parked, and got out, and put their precious garbage into the spotless bins. I saw one young mother, with a baby in one arm, take a cardboard box and a 2-liter soda bottle out of the back of her Volvo. She put the box in its bin, and bottle in its bin. Why would a busy young woman spend a substantial part of her Saturday morning recycling such a small quantity of stuff? The answer is just what it seems: she was recycling, in a very public way, along with other good people from her city. Because that is what good people do. If I had asked her if it was worth it, I bet she would have given some Spanish version of “Recycling is always cheaper, no matter how much gasoline you burn waiting in line!”
Neither the simplistic “if it’s recyclable, it should be recycled!” view nor the “let unfettered markets handle it!” perspectives are defensible. For sound economic reasons, advanced nations underprice landfill space, often by substantial margins. If you think that doesn’t matter, just take a look around at all the ad hoc dumps, burning, and trash in developing nations.
The problem with underpricing landfill space is that we throw away many commodities and old packaging that could be disposed of more cheaply in some other manner. It is at this point that the price system would be of value, but it’s because people are insulated from actual prices that we have the problem in the first place.
As a “second-best” solution, since we are denied the first-best price solution, we try to divert commodities out of the waste stream using moral suasion, appealing to public spirit rather than to the self-interest of the citizen. But this requires that we elevate the value of the landfill space somehow in the minds of those we are trying to reach. Unfortunately, without prices to guide us there is no limit on the value placed on landfill space, and we begin to make a fetish of garbage. In extreme cases, citizens and public officials may even begin to try to divert garbage that should, on economic grounds, actually be disposed of in the landfill. And when the relative scarcity of commodities changes because of the dynamics of modern economies, it may be very difficult to explain adjustments to those citizens who are persuaded that “Recycling is always cheaper, no matter how much it costs.”
Ultimately, the solution is to refocus on market incentives rather than moral imperatives. The organizations with the cheapest means of enacting change, and who have the last best chance to reconsider packaging of all kinds, whether it’s liquid, food products, or microwaves, are the manufacturers and retail distributors of the products we buy. At present, no one is responsible for disposing of packaging, and so the state does its fumbling best to try to solve the problem. The solution is to reconsider responsibility for disposal, at the level of initial production. A property rights system that assigns disposal responsibility, and ultimately liability, to the manufacturer would encourage the use of effective market incentives to reconceive the very nature of waste itself. And that might be less wasteful than recycling old ideas that threaten to bury us under a mountain of garbage.
 See, for an illustration of this reasoning, Donald Boudreaux, “I Recycle! Market Prices Compel Us to Recycle when Recycling Is Appropriate,” The Freeman, May 1, 2002. Accessed May 14, 2013. http://www.fee.org/the_freeman/detail/i-recycle#axzz2U1axcEcO. To see the problems created by trying to recycle garbage, consider this: Gwynn Guilford, “China doesn’t want your trash anymore—and that could spell big trouble for American cities,” Quartz, Accessed May 14, 2013. http://qz.com/82640/china-doesnt-want-your-trash-anymore-and-that-could-spell-big-trouble-for-american-cities/
 There is a third (and probably fourth and fifth) justification for recycling, one that will not be considered much here. That is effects on the environment, either from disposal or otherwise failing to recycle, that are much higher than the private costs of disposal, imposing externalities on neighbors, the nation, or the planet. So, for example, the cost of using paper made from virgin materials is that trees are cut down. And (someone might argue) trees have an intrinsic value for their beauty, and an external benefit in terms of habitat and clean air. The problem with these explanations is that they often come close to ascribing an infinite, or at a minimum arbitrarily high, value to the external or public effects. Those who advocate such revaluation are not really arguing for more recycling, but less total use of the resource in the first place.
 Don Fullerton and Thomas Kinnaman, 1995. “Garbage, Recycling, and Illicit Burning or Dumping.” Journal of Environmental Economics and Management, 29: 78-91.
 Fullerton and Kinnaman, 1995: 78-79.
 As Fullerton and Kinnaman, 1995, show, the sign of the optimal price may even reverse under some plausible circumstances, leading authorities to buy garbage rather than to charge people to put it in the landfill.
 These containers were generally overflowing, and not picked up, because the paper they contained was mixed and not actually worth anything as a commodity. But people would still stack more paper beside the bins, in hopes that someone might find it valuable. And “at least it isn’t going into the landfill.” The odd thing about this, of course, is that paper is actually a renewable resource. Large old-growth forests are rarely cut down anymore, and if they are those trees are used for lumber. Paper comes almost exclusively from fast-growing pines on farms specifically planted for that purpose.
 Interestingly, recycling as a proportion of the waste stream is very highly correlated with national income. Clearly, recycling is expensive, and costs money, illustrating again that these are not actually commodities in the usual sense. If something can possibly be reused in South America, it will be. Recycling is for the rich, like many other (possibly) environmentally responsible activities.