The economics of recycling

by Michael F. Byrne
alifornians are now recycling an astounding eight out of every 10 beverage containers in the state. Despite public opinion polls showing that the environment has taken a back seat to other more pressing economic concerns, recycling is a healthy habit in California. Furthermore, at a time when California is challenged to find new industries to create jobs in the state, recycling presents an exciting opportunity to both protect our natural resources and create an environment-friendly engine of economic growth.
The recycling industry is creating private sector jobs up and down the state. For example, a study on the City of San Jose, California's recycling efforts estimated that reaching the goal of 50 percent diversion by the year 2000 could create nearly 800 new jobs in that city.
Beverage container recycling alone offers a major business opportunity in California. Just look at a recent California Department of Conservation survey in which 144 manufacturers expressed an interest in siting plants for recycled material in California. Considering that beverage containers make up 10 percent of all waste that has been successfully diverted from California landfills, there will be plenty of material for those new manufacturing plants when they arrive.

Choosing recycled

While new and different ways to use recycled materials are invented every day, the public must be encouraged to consciously choose recycled products. A key goal of the Department is to use recycling as a tool for economic expansion by introducing and promoting programs that create new markets and public demand for recycled products.
One of the ongoing debates in the recycling industry is how to increase the value for recycled "feedstock," including glass and plastic used for beverage containers. Some argue for increasing or imposing the processing fee - the fee charged to beverage manufacturers utilizing glass containers to make up the difference between the cost of recycling beverage containers and the value of the individual container's recycled material.
Yet, government-imposed, "command-and-control" policies rarely invigorate the economy. Rather, government must establish specific goals and broad parameters, such as minimum recycled content and reduced emissions, and then allow businesses to achieve these goals by determining the most cost-effective methodologies and strategies. This flexibility takes into account the realities of running a business - the profit-loss margin, staffing considerations, cost of services or products to consumers, competition, etc.
Thus, a solid strategy for public policy is to foster demand for recycled-content products so that the value of the recycled material outstrips the cost of recycling. So, the Department is launching a major "buy recycled" campaign. The campaign encourages consumers to complete the recycling process by purchasing products made from recycled materials.

Spreading the word

The Department of Conservation is also taking an active role in national efforts to promote recycled products, including the National Recycling Coalition's Buy Recycled Business Alliance (BRBA). The BRBA is a nationwide effort to encourage businesses of all sizes to increase the use of recycled content products in their day-to-day operations.
Recycling is the way of the future. Government, the business community and the public agree: recycling not only reduces the amount of waste that we dump into the earth but makes good economic sense.

Michael F. Byrne is director of the California Department of Conservation.