In his article “Think Globally, Act Irrationally: Recycling” for The Library of Economics & Liberty, Michael Munger, Chair of Political Science at Duke University, makes a prima facia persuasive case against mandatory municipal recycling programs based on the negative economics of this most widespread of environmentalist practices. As a committed recycler (I pack home my plastic cottage cheese containers in the bicycle pannier bags because my employer only recycles paper & aluminum), I read Munger’s article with interest but a bit of apprehension.

Munger argues that the environmentalist’s credo of “recycle, regardless of cost” amounts to harmful lunacy: Those who support mandatory recycling even when it is cheaper to dump at least certain classes of recyclable waste into a landfill and harvest virgin resources for new production are imposing an unnecessary economic burden on their fellow citizens, thereby placing a drag on the economy. Further, these recycling zealots ultimately act counter to their espoused values of protecting the environment because the higher costs of recycling indicate that more energy & resources are required to recycle than to dispose of waste & manufacture new, imposing harm on the environment. In the “Eight Great Myths of Recycling” (PERC Policy Report 28, 2003), cited by Munger, Daniel Benjamin makes an even more compelling case for the anti-mandatory-recycling thesis that Munger advances.

As an advocate of an economic approach to environmental protection, these arguments resonate with me. I agree with the central economic argument advanced in these articles: If recyclables were a resource, companies would pay us to take them back rather than citizens footing the bill through taxes or waste management fees. Personally, I would much prefer that the market took care of recycling materials rather than municipalities. That only a small number of materials are currently recycled by private firms without government mandates indicates that the practice is somehow flawed. However, I remain unconvinced that “Recycling is Garbage” even if the economics don’t currently support the practice.

Now, I’ll admit to a certain biased basis for that judgment. I hate waste. I grew up in a low income family and was inculcated with the ethos of frugality and reuse from my grandparents, who lived through the Great Depression. Moreover, my obsessive, neat-freak personality makes me averse to waste heaps. I find reuse and recycling much more emotionally palatable than trash. I am drawn to quality management practices like Lean and 5S in part because of their emphasis on the elimination of muda (waste). I avoid the use of the term “trash” (something unwanted, worth little or nothing) in preference to the word “waste” just to emphasize that the material is not just (worthless) trash, but that it represents waste.

However, those personal/ity quirks aside, I believe there are solid, rational, and economic grounds for not dismissing recycling, perhaps not even mandatory recycling, at least at the present time.

First, as my UW-Madison systems science mentor Tim Allen taught me, recycling is the only sustainable solution to dealing with waste. The simplest systems analysis proves this indisputably. Take the following input-processing-output system:

  • input = natural resources & energy
  • processing = manufacturing production
  • output = products, waste heat & waste material

It’s obvious that without recycling to close the loop & bring the waste material back into the resource category of the system’s inputs, waste material stocks will increase without limit & that finite natural resources will decrease without limit until the system’s context can no longer support the load & the system collapses.

It is significant to note that much of the waste material we produce today will not degrade in any short period of time, leaving us with a mountain of 2 million more plastic bottles every 5 minutes, as artfully illustrated by Chris Jordon’s visualization included at the head of this blog entry. When not reused, recycled, or disposed of safely, this long-lasting waste poses a multitude of environmental threats, especially to marine life.

Now the skeptic will argue both that (1) proper disposal will eliminate the environmental threats at a lesser cost than recycling and (2) our civilization is no where near its limits in the I/O system I described & until we are, it’s irrational to pay more/use more energy to close the loop. I recognize some validity in both points. First, while not environmentally neutral, properly maintained landfills will sequester waste to prevent the most deleterious environmental consequences. Second, we’re not going to run out of landfill space anytime soon & except for fossil fuels, our consumption of other nonrenewable resources is not close depleting the Earth’s supply. (Technological optimists such as me will argue further that even when we reach the point of exhausting the Earth’s resources, we still have the moon & the asteroids even in our local solar system to mine for resources and the vastness of space to dump waste. While I agree, I won’t speculate on the potential economics of those endeavors.)

That said, the underlying systems point remains: recycling is the only sustainable solution to dealing with waste. That is why we see a series of intricately evolved closed-loop systems in natural ecosystems. Waste from one natural process becomes the input to another process to create a seamless interconnected, interdependent whole. The waste oxygen emitted by plant respiration becomes an energy input for animals. The waste CO2 emitted by animal respiration in turn provides the energy and material input for plant respiration. No muda, only harmonious cycles. Thankfully, a small but growing number of manufacturers are taking the Lean-thinking “zero waste” philosophy to the next step (the Natural Step), engineering in their manufacturing processes the ubiquitous recycling inherent in natural processes.

While this systems view provides a useful theoretical lens to understand the necessity of recycling, the economic realities arguing against recycling remain. However, I believe there are two reasons to call into question Munger’s economic analysis.

The first is unfair competition. As detailed in the Grass Roots Recycling Network’s 1999 report Welfare for Waste, the United States taxpayers spend billions of dollars each year subsidizing the timber, mining, and energy sectors. (Lester Brown of the Earth Policy highlights other environmentally destructive subsidies in both Eco-Economy & Plan B 2.0.) These subsidies for virgin resource extraction create an unlevel competitive marketplace for recycled substitutes. While these subsidies may have been in the national interest when they were instituted, I believe they now represent wasteful and destructive corporate welfare, counter to our vital interests both in free market capitalism and environmental protection. Further, they represent a double wasting of taxpayer’s money, as the Federal income-tax derived outlays to fund virgin resource harvesting end up making local taxes higher to fund the now more costly municipal recycling programs that have difficulty marketing against their subsidized competition. If you want to talk about economic irrationality, this is the place to start! However, I’ll stop there, only adding, as I have argued before, that I believe government subsidies to be dangerous instruments because they often become autopoietic. The bottom line is that any holistic economic analysis of the merits of recycling must take into account the market-distorting effects of these subsidies, calling into question any conclusions reached by analyzing only recycling’s current cost-competitiveness.

The second reason to question the irrationality of recycling is the exclusion of externality analysis. An externality, in economic terms, is a cost not built into the price of a good or service. Like The Library of Economics & Liberty’s “10 Key Ideas” economic primer page which lists under the topic heading “Externalities” only “Coming Soon”, Munger’s analysis excludes consideration of the externalities of virgin material harvesting and waste disposal. For example, I am interested to know whether the environmental clean-up costs of leaking landfills are included in their operational costs or whether the burden is shifted to taxpayers through EPA cleanup programs.

More significant than any potential pollution remediation costs, though, are the ecosystem service costs not currently included in any market pricing for goods produced from virgin resources. Functioning ecosystems provide vital supports to human civilization, supporting food supplies, filtering water, decomposing biodegradable wastes, sequestering carbon, etc. The cost to replicate these essential services artificially would likely equal or exceed the entire output world economy. (See the Nature article “The Value of the World’s Ecosystem Services and Natural Capital” and the must-read Natural Capitalism by Hawken, Lovins, & Lovins.) However, few if any of these shared-services costs are built into the costs of resource harvesting that may degrade the quality of these services. (Strip-mining & clear-cutting come to mind as salient examples.) Our continued existence depends on these ecosystem services. Until we fully value their costs into the price of goods, either through regulatory environmental protections which result in decreased virgin resource availability or higher extraction costs through more selective harvesting regimes or through some form resource-extraction taxes which offset the costs of any resultant environmental remediation required, we will not be able to judge the relative economic viability of recycling vs. virgin resource extraction.

When both virgin resource extraction subsidies are eliminated & ecosystem services are valued into resource costing we will be able to judge the irrationality of mandatory recycling. In those circumstances, I would support the repeal of mandatory recycling laws & leave it to the free market to ensure that whatever waste society produces is recycled or disposed of as efficiently as possible. Until then, however, I think that recycling simply amounts to making the best of a bad situation.