Realist, not conformist analysis of the latest financial, business and political news

We’re Doing Recycling All Wrong, Seriously, Entirely The Wrong Way

Why should I pay for yours?

Assume that we do in fact desire to recycle everything. I don’t think so, in fact I know not so but that’s another matter for the moment. Sure, we want to save resources but sometimes recycling uses more resources than not-recycling. So, therefore, in order to save resources we shouldn’t recycle.

But as I say, let’s leave that aside. Let us now think of how we should recycle if we’re going to. There are two basic structures we can use. Shovel everything into a factory and let that machine sort it all out. This has downsides, of course it does. Certain waste streams will contaminate others for example. We certainly don’t want to mix sewage and surplus food if we’re to be sending the surplus food to hungry people. On the other hand if we’re going to send all organic waste to digesters of organic waste then we can do that just fine.

So, the system we use does depend – that usual economic answer to any question, it depends.

The other system is the idea that everything is sorted at the point of it becoming waste. We end up, in each household, with a food bin, a tins bin, a plastics bin, paper, cardboard and on and on. The separation is done by hand.

Sure, this has upsides, no mixing of streams, it also has downsides, it takes time. It generally being true – generally and not always – that hand doing something is less efficient, uses more resources, that sticking it all through a girt big factory.

We thus need a method of testing the propositions. Which system uses more resources. Recall, we’ve already agreed that we’re going to be recycling. Now we want to know what is the least resource intensive manner of doing so. And we know how to do that, use the price system. Or, if we’ve a system in which things are currently unpriced we can do a cost benefit analysis. Where we fiddle about to price those things currently unpriced so that we can make a decision.

Cool – so, one of the things we’ve got to put into our calculation is the time it takes people to do that home sorting. All the labour costs of the factory model are already in the factory model, they’re explicit. The home sort costs are implicit and not fully costed. We need to add them in.

Hmm, but, you know, 5 minutes here and ten there, perhaps 30 minutes per household per week, we don’t need to charge – charge in the sense of include in our model costs – do we? Well, that depends. We could say that humans don’t value their own time in that manner and not include it. we could say that people would be glad to worship Gaia in such a manner. Or, if there is some value to that time what is it?

Interesting new research showing that actually people do value their time. Even in little 5 and 10 minute chunks. Because we can go look at what people will pay in order to save 5 and 10 minutes here and there in waiting for a lift. Sorry, a Lyft. What is that number?

The value of time determines relative prices of goods and services, investments, productivity, economic growth, and measurements of income inequality. Economists in the 1960s began to focus on the value of non-work time, pioneering a deep literature exploring the optimal allocation and value of time. By leveraging key features of these classic time allocation theories, we use a novel approach to estimate the value of time (VOT) via two large-scale natural field experiments with the ridesharing company Lyft. We use random variation in both wait times and prices to estimate a consumer’s VOT with a data set of more than 14 million observations across consumers in U.S. cities. We find that the VOT is roughly $19 per hour (or 75% (100%) of the after-tax mean (median) wage rate) and varies predictably with choice circumstances correlated with the opportunity cost of wait time. Our VOT estimate is larger than what is currently used by the U.S. Government, suggesting that society is under-valuing time improvements and subsequently under-investing public resources in time-saving infrastructure projects and technologies.

Hunh. People value their time at about the average wage. Seems reasonable, the decision as to whether to have leisure or not is compared against the price of not-leisure. We go fishing when that’s more valuable to us than the money we can earn by working. Standard substitution effect stuff – and logically the decision as to the value of leisure is going to be about what can be earned by non-leisure.

This really is the underlying assumption made about the Laffer Curve, the supply of labour working hours and all sorts of other stuff. All of which make sense themselves, so we know that it is indeed one of those things that’s true about human beings.

The implication of this for recycling is that we now have to price that 30 minutes per household per week at about this average wage. That $19 an hour translates into some £12 or £13 for the UK (mean, full time and part time wages). Call it £12, that’s £6 per week per household.

25 million households, 52 weeks a year, our home sorting system has a cost in it of £8 billion a year. A cost which our current calculations of the system cost do not include.

My contention would be that the inclusion would entirely tip the decision to using the centralised, one waste stream, factory model. You know, if only we counted resources used properly.

But then my conclusion would be that if we added £8 billion into the costs of the recycling system then we’d conclude we should just chuck it all in a hole in the ground anyway. Something which has the advantage of being true even if unfashionable.

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Spike
Spike
3 years ago

But the Value Of Time will differ for different people – Washing and sorting your trash will compare to other things you don’t want to do and could get paid a lot to do. It will also vary at different times of the day, as at 11 p.m. even the highest-paid have no gainful alternatives. And for different reasons; I have a near-zero VOT driving uptown for cheaper gasoline. But a gov’t seeking one-size-fits-all “data driven” solutions will come up with a single, universal, VOT and use it to justify compulsion. As always, this number will not measure anything but… Read more »

HJ777
HJ777
3 years ago

I don’t think anyone spends anywhere near as much as 30 minutes per week sorting their recycling. It takes just a second or two to throw an item in the correct bin.
In fact, I think it saves time because I now separate organic material from non-organic waste ‘as I go”. The non-organic waste will sit there quite happily without producing unpleasant odours, so the only waste I need to remove from the house regularly is the organic waste which is lower in volume than mixed waste and hence easier to remove (and it needs to be done less frequently).

Spike
Spike
3 years ago
Reply to  HJ777

Demanding that you recycle is merely the start of the demands. The typical municipal recycling “authority” demands that you wash your empties and perhaps soak off the labels. Single-receptacle recycling is emerging as a big business, though not when it’s homeowner-to-municipality. The original New Jersey recycling mandate made it illegal for a homeowner to just toss stuff and pay a contractor to sort it out. That’s a lot of hassle for the municipality to collect rubbish it winds up paying someone to landfill.

Mohave Greenie
Mohave Greenie
3 years ago

The other thing that this calculation leaves out is the space this home recycling center takes up. The factory model includes it as part of the capital expense. Here, the cost of residential property is between $100-$200/sqft. Each waste bin takes up about 2sqft. Multiply that by the roughly 100 million households in the US and you are talking about governmental amounts of money.

Besides, each recycling bin I have takes space away for my plastic Jesus collection.

jgh
jgh
3 years ago
Reply to  Mohave Greenie

I – and many other residents – had to significantly reconfigure my yard to fit multiple bins in it. I share a “bin shed” with my two neighbours and I’ve stored half the bins in my cellar as we never fill them enough to need 3 x three bins.

jgh
jgh
3 years ago

It depends on the arrangement of your househould waste system. I have two bins under my sink and a waste peper basket in the office, and three bins in the yard. Taking the waste paper bin outside and dropping the contents into the blue bin is close to identical the same effort as dropping it into the black or brown bin. When I use a tin I open the sink door and drop it to the right instead of to the left, same effort each. There’s a fractional addition effort carrying both kitchen bins into the yard and maybe an… Read more »

David Moore
David Moore
3 years ago
Reply to  jgh

Isn’t that last point supporting Tim’s central point? The labour of households is being used to reduce the capital costs of the ‘system’.

john77
john77
3 years ago

Anyone who has ever observed the NHS will realise that the management ascribe Zero to the value of the peons’ – oh, sorry, patients’ time.
All bureaucrats value their own time highly and that of their employees when they are asked to prepare a budget for a project other than “staff-training” (when the trainees time is valued at zero), but outsiders don’t count. Hence the planners justify the imposition of hours of work on the general population because it saves minutes of time of those paid to do the recycling.

dodgy geezer
dodgy geezer
3 years ago

We live on Earth, which is a closed system. EVERYTHING is recycled, eventually. All we are talking about here is varying the speed at which this happens.

Addolff
Addolff
3 years ago
Reply to  dodgy geezer

Absolutely right Dodgy. I recycle EVERYTHING. Everything gets put in the wheelie bin and goes to landfill. It gets recycled but over a ‘slightly longer’ timeframe.

David Moore
David Moore
3 years ago
Reply to  dodgy geezer

Yes. I’m building three recycling plants currently, and make exactly the same point to some of those who are ‘believers’.

TD
TD
3 years ago

I don’t think I’ve ever given the time I may put into tossing trash into different garbage cans much thought. It’s not much. I think a better question might be is the increase in rates necessary to pay the garbage company for its investment in three garbage cans per household and different trucks to pick up each can worth the benefit from the reuse of the recycled materials?

Bathroom Moose
Bathroom Moose
3 years ago
Reply to  TD

To be fair, you now get 2-in-1 and 3-in-1 trucks.
Plus the volume of waste doesn’t drastically increase, so neither should the volume of waste receptacles.

TD
TD
3 years ago
Reply to  Bathroom Moose

With online shopping it seems the volume of packaging waste has increased, or there have certainly been weeks when my recycling can is pretty stuffed. True, our three cans get picked up by two trucks, but does the garbage company need to buy more trucks even if they are 2-in-1? The time spent inconveniences me so little that I’ve never thought about it, but I am curious as to what it’s done to rates. I didn’t find any sort of study on this but did find this quote: “Rates have been driven upward by California state rules that prohibit mixing… Read more »

jgh
jgh
3 years ago
Reply to  TD

Back in the 1970s as a nipper my school encouraged us to bring waste paper in, they dedicated half a covered play area to storing it, they made significant money from selling it bulk to processors. By the time I left to go to Big School the bottom had fallen out of the market and the school was strenously telling parents to please stop bringing in waste paper dammit. See also Blue Peter and milk bottle tops. Spool on 30 years and I was deputy environment on the council, and the only money we made from municipal waste was selling… Read more »

Snarkus
Snarkus
3 years ago

The assumption being that recycling actually happens, which as the last two years has shown is often false, especially in Oz. I have noted that any volunteer movement management eventually assumes tacitly that volunteer time is free, implying zero value to volunteers which is not correct. Said manglement then wonder why volunteer turnover is so high.

David Moore
David Moore
3 years ago
Reply to  Snarkus

I’m actually building recycling plants in Oz now. You are correct, for the most part it simply hasn’t been happening in any real scale.

On volunteer’s, watch what happens to the RNLI now it’s largely run by the woke.

Jamed
Jamed
3 years ago

The author did not mention incineration. This is an elegant solution that provides electricity and potentially heat to local people. The ash waste is low volume and high value metals and glass are easily extracted before it is turned into building materials.

No system is perfect but incineration seems a good solution to me.

Quentin Vole
Quentin Vole
3 years ago
Reply to  Jamed

A lot of our waste (in Bucks, England) goes to an incinerator. But trying to get one built against vociferous ‘green’ resistance (from people who can spell ‘dioxin’ but have no idea what it means) is a major undertaking.

Boganboy
Boganboy
3 years ago
Reply to  Jamed

When the Chinese decided they didn’t want to recycle our rubbish anymore, some bloke immediately suggested that all the burnable stuff be used to run a power station down in Newcastle. Needless to say, the howls of the Greens drove a stake through the heart of that one.

Esteban
Esteban
3 years ago

In the U.S. John Tierney has done a lot of work & written quite a bit in support of the argument that recycling is wasteful and not good for the environment. Many cities in the U.S. still collect it but are quietly sending it off with the rubbish because of the cost. Discussed this with a friend who leans left & he admitted that, yes, he’d heard this was true, but we should keep making people recycle in case it ever does make sense, it’d be too hard to retrain the proles.

HJ777
HJ777
3 years ago
Reply to  Esteban

Sorting rubbish has value even if you don’t recycle it. Valuable gas (usable methane) is harvested from decomposition of organic material in rubbish dumps, but the equipment to do this is expensive and has to be moved regularly. If all the decomposable waste is concentrated together, then it is much easier and cheaper to extract gas and to extract a higher proportion of it. Also, some rubbish presents a problem because leaching from dumps can affect water supplies so expensive precautions have to be taken against this. If rubbish is sorted then the materials which don’t present such a danger… Read more »

David Moore
David Moore
3 years ago
Reply to  HJ777

Landfill gas is not economic without subsidies. All landfills produce leachate, it has got a lot stronger since landfills in the UK are largely organic and plastics. A lot of the buffer materials (paper/carboard etc) no longer make it into landfill.

We looked into landfill mining a decade or so back, those old landfills from the 50s have a lot of valuable minerals, but also a lot of problem materials.

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