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In Friday’s post we discussed one problem with measuring the success of recycling programs by showing people how much material was collected. Today, let’s think about another related problem. Good principles of economics students understand the law of supply – which tells us that if producers are able to secure a higher price for a product, they will be incentivized to make more of it (because it costs more to make more – thus, the higher price induces them to bring into production some units that would not have made sense to produce otherwise).

At the margin, you can think of recycling programs as lowering the cost of producing recycled materials. But if you do that, it is the same as increasing the relative benefit “producers” can get from producing recycled materials. In other words, programs like “free” curbside recycling, especially when put side by side with trash that must be paid for, may actually incentivize people to do more recycling than just taking stuff out of the trash and putting it into recycle bins. It is entirely plausible that not only do I substitute by putting bottles into the recycle bin instead of the trash, but that two more effects happen. First, when shopping, instead of buying products with packaging I might have thrown out, I now buy products that can have packaging recycled. But most important is the second effect, if now the total cost of my trash/waste/bottle/packaging disposal is lower, then I might increase my overall consumption of goods – both recyclable and not. In other words, the presence of zero cost recycling programs may end up having us generate more waste than without the recycling program (and of course, the distorted prices here make it hard to tell when and what should be disposed of and recycled in the first place).

Paying people to recycle, as I argue we might want to do, would actually exacerbate this “problem.” This is all a tangled way of arguing that there are possible unintended consequences of curbside recycling programs, aside from the standard consequences (e.g. the added environmental costs of the extra trucks to collect materials and the processing of these materials and shipment of the materials to new end users). An analogy would certainly clarify. There are charities in the world dedicated to mitigating the problem of slavery in modern Africa. One strategy some groups pursue is to “redeem” slaves – i.e. to pay for the freedom of existing slaves.

In a static world, that sounds like a great idea – for every slave’s freedom we buy, that is one less person remaining in bondage. However, the world is not static, and people respond to this newly found source of income. Since it is now more remunerative to enslave people, the act of redemption would incentivize slave “producers” to enslave more people. This is, in fact, what seems to have happened.

Does it mean we ought not recycle? No. But it does mean that sensible and serious evaluations of recycling programs consider these incentives and the attendant costs when evaluating the implementation of new programs and the success of existing programs.

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