Tuesday, 20 October 2015

What They Forget To Ask About Recycling

When it comes to the issue of recycling, there is an important question we in the UK should be asking, but apparently are not:

Are we recycling too little, the right amount, or too much?

Bound up in this question are the issues of cost, time, the environment, and the question of which products we should recycle and which we should not. As far as I can tell, you won’t find this out by consulting any research papers, because from what I can see there hasn’t been any research done on this (if anyone finds evidence to the contrary, do let me know).

Never mind, even without the research, we know that millions of people spend extra time and money each week sorting, washing out and recycling their different products, which amounts to billions of extra hours and pounds consumed by these recycling projects over several decades.

Given that time is just about the only precious resource that we cannot get back, it is irresponsible to not enquire whether we are recycling too little, the right amount, or too much. Even in my lifetime there has been a seismic shift in our attitude towards recycling. The pro-recycling lobby has gathered rapid momentum over the past few years - much like an aggressively propagated religion gathers momentum. Given its similarities to a fundamentalist religious cult, this leads me to suspect that we are probably recycling too much, and that the political powers are just getting warmed up in the extent to which they'll impose their green-centric mandates on us. This kind of Gaia liturgy is quite commonplace now:

"Every home in the country will have to cope with compulsory rubbish recycling schemes by next year, according to papers released by ministers yesterday. Instructions prepared for councils have revealed a move to bring in separate collections of paper, metal, plastic and glass in order to meet recycling targets set by Brussels"

The bureaucrats in Brussels desire for our future recycling targets to be around 70% or 80%. Of course, recycling isn't a new phenomenon - market forces have been dictating its efficacy for a long time. The most obvious example is metal: gold, steel, aluminium, copper and brass - they can be recycled for profit. This means that if you had an old ring, or a car engine block, or a catalytic converter it would be worth your while recycling it because of the profit obtained (profit here meaning not against the original purchase price, but against the time consumed in the task of recycling it). Recycling tasks that add value make us better off as a society. Recycling tasks that do not add value have the opposite effect. Most things can be recycled - you could even have cement turned back into concrete if you so wished - but that doesn't mean there would be any value in doing it.

What is the right amount of recycling?
In asking this, we've acknowledged something that should be obvious to everyone, but clearly isn't. There can be too little recycling in the world, the right amount of recycling, and too much recycling. If we recycled nothing, that would be too little, if we recycled everything that would be too much; so the task of good recycling is to find the optimum amount. The optimum amount is the amount of recycling that adds the most value to society. When I see Brussels setting future recycling targets of 70% or 80% I get anxious, because they seem to be operating under the mistaken assumption that the more we can recycle, the better. Have they stopped to ask whether 50% is a good amount? On what grounds is their 70% or 80% better than 50%? As far as I can see, they never tell us. I'm always very suspicious of people who declare an agenda without justifying how they arrived at that decision. They give the impression that they believe on moral grounds that it is our ethical duty to recycle. But even if that's true, it is dangerous. If you believe that recycling is the right thing to do, you are almost certainly going to recycle too much. If in doing too much recycling you feel you're making a moral contribution to society, you're very unlikely to pay much attention to the economic arguments against excess recycling.

What about the financial implications?
As I said, I can find no comprehensive financial data to consult. But to give you an idea of how data can be skewed, have a look at this from the Green Alliance:

"The UK spends £1 billion a year in landfill costs just to dispose of plastics, wood, textiles and food – and in the process destroys these valuable commodities. If a landfill ban was introduced just on these products and materials, £1 billion worth of costs would be avoided and a further £2.5 billion of value would be recovered"

This is a good example of letting an ethical conviction blind you to the economics. Just because the UK spends £1 billion a year in landfill costs disposing of plastics, wood, textiles and food, this doesn't mean it's an argument against landfills. We'd need to know comparative costs for recycling those materials, which are not provided - and these are costs that would need to factor in all the hidden costs (transportation, congestion and, most importantly, time). The other clear anomaly is that if there really is a further £2.5 billion of value in the materials being put into landfills people would be making money out of those materials. The basic error the Green Alliance is making is in counting the value of the materials (which may well be worth £2.5 billion) but ignoring the cost of processing those materials into profit. If it costs more than £2.5 billion to process the materials (which the scarcity of a market for them suggests it does) then their intrinsic value is irrelevant.

Which products should we recycle?
You may think it's hard to determine whether something should be recycled or not. But it isn't. Consider an illustration that will demonstrate why. Suppose you're unemployed and you want to determine what you could do to put your time to good use and earn a bit of cash in hand. What would determine 'good use' in terms of a financial exchange for your efforts? The answer is that something would be considered to be good use in the market if someone will pay you to do it. Someone will pay you if the value of what your labour produces exceeds the cost in pounds and pence. You might be able to get some people to part with cash to have their car washed or their weeds pulled up and disposed of. But you won't get anyone to pay you to count the pieces of shingle in their driveway or brush the dust off their garden wall.

Recycling follows a similar rule. Suppose you have an item you want to dispose of. To determine whether that item is rubbish or a resource you'd have to find out if anyone wants it and will pay you for it. If someone will buy it from you, or if you or someone else can re-use it somehow in a cost-efficient way, then it is a resource. If no one will take it, and it is not re-usable, and you have to pay someone to dispose of it (either directly or through taxation) then it's usually rubbish. Therefore the right level of recycling should be this: recycle all the resources and dispose of all the rubbish. If we recycle resources of utility then in terms of overall resources we'll see a net gain. If we recycle rubbish then in terms of overall resources we'll see a net loss.

Writing for BusinessGreen, columnist Jessica Shankleman argues that that increasing landfill tax improves the argument for more recycling. No it doesn't. If you charge people more for one thing they will buy more of something else. If the price of apples doubles, people will buy more oranges, pears and bananas. That wouldn't mean that apples are not over-priced. Similarly, landfill taxes encourage more recycling, but that doesn't mean an increase in recycling efficiency, it means people are being coerced into recycling because of the inflated expense in landfill (an expense which, incidentally, encourages illegal dumping and burning rubbish). The facts wouldn't support Jessica Shankleman anyway - the cost of recycling (which includes collecting, transporting, handling, sorting, cleaning, repackaging then re-transporting again) exceeds the cost of landfills.

Lastly, there are other spillover effects to recycling too - one of which is our complacent wastefulness when we know something is being recycled. Take things like kitchen roll and paper towels. If you use them with the knowledge that the paper is going to be recycled you will use more paper than if you know it won't be (you might also like to know that recycling paper means there are fewer trees in the world now, not more).

The free market of supply and demand is the ideal arbitrator of our actions. It is the most efficient mechanism we have for adjusting for human mistakes. If you make mistakes in the market, the driving forces of that market will see you punished financially. Sadly, because of the ethical duress everyone is under, societal forces deem it the right thing to do to recycle as much as we can, which means that questions about cost-effectiveness become moot. Such duress is only likely to distort the truth about how much we should be recycling, and cause us to err by recycling too much. At the very least, it is utterly shambolic to fail to ask how much recycling is a good amount, and just assume that more = better.

* Photo courtesy of rcsrecycling.co.uk