Making recycling more cost-effective.

• Author: Boerner, Christopher

In a talk to the Conference of Mayors and the National Association of Counties in the spring of 1993, Sen. Max Baucus (D.-Mont.), chairman of the Environment and Public Works Committee, outlined his "Blueprint for Recycling." The plan was designed to alleviate the local officials' fears of being buried fiscally by their highcost curbside recycling programs. According to Baucus: "[I]f recycling is going to survive and even prosper, we will need to do more - much more. The cornerstone of my strategy rests on the principle that I call manufacturers' responsibility for the lifecycle of a product.'... [A]nyone who sells a product should also be responsible for the product when it becomes waste."

This notion of manufacturers' responsibility for product and packaging waste is the latest attempt to find the deep pockets necessary to cover the escalating costs of municipal recycling. A number of news articles have highlighted just how strained local recycling budgets have become. According to The New York Times, for instance, Philadelphia was able to trim $400,000 from the city's waste disposal budget by discontinuing the collection of plastics in its curbside recycling program. As a senior environmental adviser to the Conference of Mayors observed, "Recycling is a good thing, but it costs money. Money that could go for schools is being absorbed by increasing disposal costs. We are moving into the second phase of recycling, which is deciding who pays."

City officials understandably are reluctant to tell their voters the true costs of these politically popular programs, and politicians are scrambling to find a way to force the private sector to foot the bill. Mandating "demand-side" programs to absorb the glut of recyclable material appears to have won the hearts of environmentalists and politicians alike. As the debate over such programs widens and intensifies, it is important that policymakers and voters take a candid look at the costs and benefits of these measures.

To understand why politicians and environmental groups have begun pressing industry to take responsibility for product and packaging waste, one merely need look at the enormous growth in recycling over the past few decades. According to the Environmental Protection Agency, the U.S. recycled 6.7% of the municipal solid waste generated in 1960. By 1992, that recycling rate had jumped to 15-20%. In the last three years alone, it is estimated that the number of curbside collection programs in the U.S. has swelled from 600 to more than 5,000. The National Solid Wastes Management Association reports that such efforts reach well over 15,000,000 households and thousands of businesses. In short, the number of government supply-side recycling programs has skyrocketed.

This boom in the collection of recyclables far has outpaced the demand for post-consumer materials. In many regions, the supply of recyclables is so great that states have been forced either to store the items collected or, in some instances, remix them with waste bound for dumps and incinerators.

Because of this oversupply, scrap values for recyclables have fallen dramatically. According to a study conducted by WMX Technologies, Inc. (formerly Waste Management Inc.), the world's largest hauler and recycler of solid waste, the average price paid for recycled items plummeted from a 1988 level of $97 a ton to $44 a ton in 1992. The same study puts the total costs to collect and recycle at around $175 a ton.

This suggests that, when a buyer for recycled materials can be found, the price paid covers, less than one-quarter of the collection and sorting expenses.

As Bill Brown, director of environmental affairs at WMX Technologies, observed, "We lose money on recycling. It costs $150-200 a ton to collect from the curbside and sort household refuse. We might make $40 a ton from selling waste materials, and we might avoid $30 a ton of landfill charges. But [the] bottom line is that it's not profitable."

Germany's green dot

program

With more and more communities subsidizing these costly curbside programs, elected officials desperately are trying to find some way to ease their already strained local budgets. Forcing industry to take responsibility for product and packaging waste has been embraced enthusiastically as providing a convenient (and hidden) way to pass along the expenses associated with recycling. Even Vice Pres. Gore has expressed support for this "responsible entity" approach, saying: "I think in principle it's a good idea." The program touted most often is Germany's law, commonly referred to as the "green dot" packaging and recycling legislation.

Adopted in 1991, Germany's Ordinance on the Avoidance of Packaging Waste requires that manufacturers and distributors take full responsibility for their packaging. Thus, businesses throughout the distribution chain are expected to collect, process, and recycle any...