Making Recycling Work

Boosting the rate of recycling in this country and increasing the use of recycled material in building products has remained an uphill challenge for one primary reason: we undervalue energy and virgin resources. Leading-edge “green” companies that strive to maximize use of recycled content do so for many reasons: because it helps them meet corporate sustainability goals, because architects ask for recycled materials to achieve LEED

^® credits, or because government programs mandate the use of such materials.

Only rarely do these companies use recycled material because it’s economically advantageous to do so—and that’s too bad. Virgin plastics are so cheap that it usually costs less to use brand-new resin than to recover and purify the plastics in our waste stream. The same goes for fiberglass insulation, which often costs less to make from virgin materials than to pay for the collection, separation, and purification required with the use of recycled glass.

If the true societal costs of energy use, resource consumption, pollution from manufacturing, and waste disposal were incorporated into the costs of our building materials—of all materials, for that matter—using recycled-content materials wouldn’t have to be an altruistic, feel-good practice. It would simply be the most economically attractive option.

Estimates of the “societal costs” of petroleum consumption range up to $5.00 per gallon ($1.32/liter) of gasoline equivalent, or even higher. Some years ago, the American Lung Association calculated that just the healthcare costs of automobile-caused air pollution in the U.S. totaled about $100 billion per year, or roughly $1.00 per gallon (26¢/liter). Our military costs of ensuring access to Middle East oil (even excluding the costs of our war in Iraq) amount to $30–$50 billion per year, or about 30¢–50¢ per gallon (8¢–13¢/liter)

of gasoline.

The undervaluing of these societal costs can be addressed through

tax shifting. As EBN has argued in the past (see

Vol. 12, No. 4), tax shifting has the potential to put market forces to work for environmental improvement. Imposing significant additional taxes on fossil-fuel use, on nuclear-generated electricity use, on raw-material extraction, on pollution, and on solid-waste production would release market forces encouraging the use of recycled materials. These new taxes should be offset with reductions in taxes on things we like to encourage, such as labor and savings—this is the principle of tax shifting.

If societal costs were incorporated into the price paid for fuel, how we recycle materials might well change. With some curbside recycling

programs today, high energy consumption offsets much of the net benefit of the recycling—this is one reason life-cycle assessments (LCAs) of some recycled-content materials are often not very attractive. Higher transportation costs combined with lower labor costs would inspire more efficient mechanisms for collecting recycled materials—generating more jobs and less pollution. At the same time, with greater demand for recycled material, significant economies of scale would likely be realized in the recycling industry, further improving efficiencies.

Such a shift in tax policy would provide tremendous economic

incentives to increase the use of

recycled materials. Manufacturers would boost recycled content not only because it’s the right thing to do but because it would be the most economically prudent thing to do. Shareholders and management-level bean-counters (chief financial officers) would insist on it. We would all be winners.

– Alex Wilson