A recent move to a rental home has disrupted my personal waste management cycle. After nearly 30 years of composting household food to create garden soil, I’m now throwing it out with the trash. Aside from the affront to my value system (and providing me with one more item to feel guilty about when my green daughters come to visit), this has economic consequences as well. Lower Merion Township recently delivered an “IMPORTANT NOTICE” flyer to all households. Lower Merion is raising its trash fees for the first time in 10 years. They’re also rationalizing fees such that annual pickup of each additional waste disposal container will cost an added $50/year. Interestingly, the only other incentive mentioned in the flyer to reduce trash disposal besides the increased fees is through use of a new “mini-can” option which carries a reduced annual fee. This is puzzling, since the Township has one of the best recycling rates in the region and could have taken the opportunity to plug for more recycling. With a 40% diversion rate, well above the Pennsylvania goal of 35%, Lower Merion has achieved remarkable recycling success in a low key fashion. The flyer could have been an easy way to promote recycling as a mechanism to avoid higher fees, especially since the Township provides a tremendously valuable incentive: an unlimited number of recycling bins for no additional charge.
So is more recycling the way to go? The economics of waste management have been much in the news lately. From San Francisco’s mandatory composting law to Pennsylvania communities dependent financially on New York State trash to the Charlottesville, Virginia entrepreneur taking recycling market share from government waste authorities, the waste market is heating up one way or another. And it’s not necessarily a well understood market or one that operates smoothly. As consultants Eunomia and Arcadis point out in an excellent study of the European Union, the most obvious market failures in recycling are related to negative externalities (spillover costs such as environmental impacts, or law enforcement) of the alternatives to recycling such as illegal dumping, land-filling, and incineration. Because these costs are not captured, the costs of the alternative disposal methods are too low compared to the cost of recycling.
To help matters, the EPA has encouraged local governments to use Full Cost Accounting (FCA) to more accurately consider the direct and indirect operating costs of municipal waste services over time. This means, for example, that municipalities should take into account the lifetime costs of operating a landfill, including its eventual closure and remediation. But at this point FCA is only a recommendation, not a requirement.