WASTING AWAY: Mismanaging Municipal Solid Waste
(Competitive Enterprise Institute Monograph, May 1994)
James V. DeLong

Executive Summary

Everyone knows that the United States faces a Municipal Solid Waste (MSW) crisis. The nation is throwing away too much and landfill space is running out. Everyone also knows that the nation is responding with laudable efforts to convert waste into energy, to recycle, and to reduce the volume of trash.

Unfortunately, what "what everyone knows" turns out to be wrong. The reality is that:

• MSW presents a minor national housekeeping problem, not a crisis.
• The responses are for the most part pointless, wasteful and both environmentally and economically destructive.

In 1990, the U.S. produced about 195 million tons of MSW. This may sound like a lot, but the practical import is small. Compressed to the average 30-pounds-per-cubic-foot density that exists in a landfill, a year's worth of MSW could be placed on one square mile of land, in a pile less than 500 feet high. Given that the nation has 3 million square miles of territory, and that landfills can be covered over and used for other purposes, finding sufficient space for MSW disposal is simply not a serious problem. Already, the combination of improved transportation combined with the construction of "megafills" that can handle massive volumes of trash is putting many problems well on the way to solution.

One response to the assumption that space is at a premium has been the construction of 170 incinerators to burn waste and produce energy. Incineration does not appear to be a particularly efficient method of either waste disposal or energy production, however, and combining the two functions does not solve the problems of either.

Perhaps the most prevalent response to the we-are-running-out-of-space argument is recycling. As of 1993, 39 states and the District of Columbia had some form of recycling law. Over 5,000 curbside pickup programs were in operation.

Most substances in MSW are at least potentially recyclable, and proponents tend to equate possibility with practicality. Much recycling makes no economic sense because the effort uses up resources-capital, energy, labor-that are worth more than the value of the recycled product.

Recycling raises complicated technical and economic issues that do not yield easily to arbitrary policies cut from ideological cloth. Three points are crucial:

• Recycling is itself a manufacturing process. It uses resources of energy, capital and labor, and produces wastes. Recycling is not automatically superior, as a matter of either economics or morality, to the process of manufacturing a product from original raw material.
• It is very difficult to generalize about recycling, and careful attention must be paid to the particular characteristics of individual industries and products. Steel, aluminum, glass, paper, plastic, and yard waste each presents a different set of issues.
• Recycling requirements have a potential to undermine the quality of industrial products and processes.

Most of the substances that are commonly recycled-aluminum, steel, glass, and some paper and plastic-have some value when delivered in pure form to a manufacturing plant. The problem is that for most substances this value is not great because the ordinary raw materials used to make these substances are plentiful and cheap. Collecting, sorting and processing trash is expensive, and the costs far exceed the value of the materials recovered. The reality is that municipalities that expand recycling must cut other programs to subsidize the effort.

Recycling is sometimes justified by the arguments that there is a need to conserve such non-renewable resources as iron ore and petroleum and that recycling paper saves trees: neither argument is valid. Most paper is made from trash wood or from small trees produced on tree farms. Thus, recycling paper has little relevance to preserving majestic trees or old forests. Proven reserves of most resources are expanding and commodity prices are declining.

Despite the defects in the arguments underlying MSW policies, governments are developing a whole new generation of misguided policies. These include:

• Requirements that products contain an arbitrary percentage of recycled material.
• Compulsory source reduction efforts.
• Efforts to hold manufacturers responsible for ultimate disposition, as exemplified by Germany's Green Dot program, and Advanced Disposal Fees.

All of these policies have serious flaws. Recycled content mandates represent arbitrary quotas imposed without regard to technical or economic realities. Yet imposing arbitrary quotas is a silly way to run anything. The system is also creating a growing administrative apparatus that will burden both industry and consumers.

Source reduction diverts attention from the positive benefits of packaging and can be harmful. Reduced packaging can increase spoilage waste, for example, and mandatory source reduction prevents consumers from making choices about preferred characteristics. As with other responses to the MSW crisis, the result is actually destructive.

Manufacturers' responsibility programs combine the worst features of all the other policies and are based on faulty premises. An examination of the German program leads to the conclusion that if has few, if any, benefits. As with other misguided MSW policies, it diverts investment into uneconomic uses and undermines the quality and efficiency of important industries.

The solution to the MSW non-crisis is to recognize that trash disposal is a commodity, like coal or asparagus, and to treat it accordingly. The government could establish a few rules to avoid externalities and cost shifting, and then let the free market work. Operating within this framework, waste disposal companies, truckers, railroads, municipal officials, recyclers, waste generators and others could all perform their receptive functions. The result would be a complex amalgam of regional landfills, short- and long-haul transportation by truck and rail, incineration, recycling, and source reduction. In a few years people would wonder what all the shouting was about.