Striking an environmental balance:A new vision for the next generation of recycling.

LOS ANGELES--(BUSINESS WIRE)--July 26, 1996--"Recycling has a role to play in resource and energy conservation but sometimes recycling costs more than traditional collection and disposal," according to Lynn Scarlett, vice president for research at the Reason Foundation.

Scarlett, a renowned expert in market-process environmentalism, is available for comment via phone.

    According to Scarlett:

1.  Whether recycling will "save resources" varies by material,
    product and production process and whether recycling increases or
    reduces waste management costs varies by location and situation.
    For example, manufacturers use 95 percent less energy by making
    new cans from basic minerals.  On the other hand, other recycling
    efforts are more ambiguous.  For example, a forthcoming Reason
    Foundation study shows some (but not all) plastic recycling
    costing more resources than it saves.

2.  Whether recycling increases or reduces waste management costs
    varies by location and situation.  For a city with high disposal
    costs -- say, over $120 per ton to collect and landfill waste --
    recycling may save money.  For cities with disposal costs under
    $70 per ton, recycling may be more attractive.  When recycling
    scrap values are high, like they were in late 1994 and early
    1995, the economics of recycling looks attractive for more
    cities.  When scrap values are low, the bottom-line of recycling
    rises.

3.  Recycling programs require a city-by-city and material-by-
    material analysis.  Generalizations are misleading.  Recycling
    is really many different businesses all rolled into one label.
    Waste managers need to figure out what recycling costs in their
    local area, how it compares with alternatives, and what local
    citizens want.  For manufacturers, whether using recycled
    materials makes sense depends on many "devilish details" that
    determine what really will save resources.

"Recycling is neither a black or white issue as its proponents or
detractors claim.  There is, instead, a grayness to being green."

A New Vision for the Next Generation of Recycling

Does recycling make sense? News headlines in the early 1990s trumpeted that "Garbage is Gold." By July 1996, a New York Times Magazine article proclaimed, "Recycling is Garbage." Yet the verdict for recycling is neither so black nor so white as its detractors or proponents suggest.

Recycling is really many different businesses all covered by a single label. For waste managers, recycling is all about figuring out how to collect, clean up, and ship old cans, used paper and other discards. Their challenge is to figure out what this effort costs, how it compares to alternatives -- like burning or burying waste -- and how they can keep program costs down.

For product manufacturers, deciding to use recyclables is really no different a challenge than deciding what other raw materials to use. What makes sense depends on all the devilish details that determine how to produce quality products at least cost -- and with the fewest possible resources.

Question 1: Does Recycling Save Resources?

Recycling has a role to play in resource and energy conservation. But whether recycling will save resources varies by material, product and production process.

We know that much recycling makes economic and environmental sense. For example, manufacturers consume about 95 percent less energy by making new cans from used beverage cans than is required to make cans from bauxite ore. Using less energy yields environmental benefits; it also lowers production costs, enabling aluminum cans to be more competitive with other containers.

Recycling of glass also saves energy, but the savings are modest: for each 10 percent of recycled glass used, producers reduce energy use by about 2.5 percent. On the downside, contaminants like bits of stone, ceramic, or even window glass mixed in with recycled bottles and jars can wreak havoc in glass furnaces.

In addition, because glass is heavy, proximity to glass plants is important. Transporting recycled glass long distances to a glass plant can reduce or eliminate any economic -- or environmental -- benefit from recycling glass.

Paper recycling can make sense, but not all the time. Paper comes in many grades and is put to many uses. Whether recycling makes sense depends on the type of paper. For example, producers often require less total energy to make newsprint using some recycled paper than to make it from scratch.

Some end uses, like cereal boxes, can be cost-effectively made from 100 percent recycled content without compromising performance. Other products, like high-performance paperboard, which has special strength and durability requirements, loses strength if too much recycled content is added.

To compensate, producers then need to add more "virgin" pulp. This can increase costs and reduce hoped-for environmental benefits. At a recent wastepaper conference, one speaker summarized the matter this way: "The multitude of factors influencing the behavior of recycled pulps during papermaking makes it difficult to make predictable sense from existing information."

So, what's the bottom line? Some recycling generates real environmental (and economic) benefits, but other efforts increase costs and have questionable environmental benefits. This complexity suggests that decisions regarding recycling need to be made on a case-by-case rather than on a one-size-fits-all basis.

Question 2: What Does Residential Recycling Cost?

A lot of recycling critics have argued that it carries a high price tag -- that it increases local waste management costs. But generalizations like this are misleading. For some (but not all) cities, curbside recycling programs cost more than simply hauling trash away to a landfill.

However, costs vary widely by location and program design. Some cities have more efficiently operated programs than others. Suburban areas have population densities more conducive to cost-effective recycling than rural, sparsely populated areas.

So what is the bottom line? A well-run curbside recycling program can cost anywhere from $50 to more than $150 per ton of materials collected. Typical trash collection and disposal programs, on the other hand, cost anywhere from $70 to more than $200 per ton. Cities with high-end disposal costs are likely to find recycling a cost-effective option. Cities with very low disposal costs will find recycling programs increasing their total solid waste expenditures.

Moreover, this picture is a dynamic one. When prices for recyclables are very high -- like they were in early 1995 -- net costs of recycling can fall dramatically, since collection and processing costs are offset by sales of bottles, cans, paper and other items. But when scrap values are low, as they have been in 1996, out-of-pocket recycling costs rise.

Question 3: Who is Engaged in Recycling?

According to BioCycle magazine, well over 7,000 cities now have curbside recycling programs. The paper industry recycles more than 40 percent of all paper produced in the United States. Over 60 percent of aluminum cans are recycled. Over 30 percent of glass containers are recycled. Some plastics -- like soda bottles -- have fairly high recycling rates; others -- like plastic meat trays -- are seldom recycled for cost, health and other reasons.

In short, recycling is a big business, with a large infrastructure for collection, processing and production using recycled materials. Virtually all of this effort is economically driven, though some efforts have been propelled through legislation.

Information for this brief memo comes from: Lynn Scarlett, Richard McCann, and Robert Anex, "Recycling Policies: Costs and Benefits," forthcoming (Fall 1996), Reason Foundation; Lynn Scarlett, "Solid Waste Recycling Costs: Issues and Answers," Reason Foundation Policy Study, August 1995; "Recycling Costs: Clearing Away the Smoke," Solid Waste & Power, August 1994; "Packaging, Solid Waste and Environmental Trade-Offs, Illahee: Journal for the Northwest Environment, Spring 1994.

The Reason Foundation is a national public-policy research organization with a practical, market-based approach to policy issues. Based in Los Angeles, the Reason Foundation is recognized for its sound economic analysis and practical policy solutions.

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