Topic Area: Solid Waste Management
Geographic Area: New York
Focal Question: How do various solid waste programs affect recycling efforts?
Source:
(1) Reschovsky, J. D. And S. E. Stone, "Market Incentives To Encourage Household Waste Recycling: Paying For What You Throw Away" Journal Of Policy Analysis And Management Vol. 13, No. 1 (1994): 120-39.
Reviewer: Nancy L. Zierman, Colby College '96
Review:

Solid waste management may consist of a number of different programs. In some cases, the burden is placed on the industries rather than the consumers. This study consists of various programs to increase the incentives to recycle. With an emphasis on quantity based pricing, this study does look at other programs and their successes.

Waste disposal is a good example of a market failure as it is typically funded by lump sum taxes or flat payments. This type of funding provides no incentive to produce less waste because the marginal cost of waste disposal is zero. Households will typically chose the method of lowest cost (including the opportunity costs of their time and effort). The cost structure of waste disposal can be changed in a number of ways. Drop-off sites and curbside recycling decrease the cost of recycling for households. Whereas mandatory recycling and quantity based pricing increase the cost of disposal. Compliance of mandatory recycling depends on making recycling easy for households. When the cost structure of recycling is changed to increase the cost of disposal and decrease the cost of recycling, the probability of recycling is greater.

Quantity based pricing programs increase the marginal cost of disposal thus creating economic incentives to recycle. However, some potential problems with quantity based pricing do exist. It is anticipated that illegal forms of waste disposal, such as dumping and burning, would occur with a greater regularity. What price to charge per container of waste must also be determined. If the price is too high, a greater likelihood of burning or dumping would result. It is difficult to determine who is practicing such illegal methods of waste disposal which makes enforcement difficult. Another potential problem is that the revenue is hard to predict. Predicting the revenue is necessary when it is earmarked for the funding of the solid waste or recycling programs.

Quantity based pricing is not feasible when there are common receptacles. The use of common receptacles such as a dumpster at an apartment or office building is a problem for two reasons. First, it would be hard to determine which trash belongs to which person who lives in an apartment and has a common receptacle. Second, individuals that do not live where there is a common receptacle, may chose to place their trash in the dumpsters at apartment or office buildings. This issue is different from pure dumping of trash because the waste is being collected properly, but the individuals are not paying for the collection.

This study was conducted in Tompson County in upstate New York which includes Ithaca (population of about 28,000) as the largest community in the area. Tompson County offers various combinations of waste disposal programs. This variety allows us to compare different programs. The three predominant combinations of policies are curbside pick up only, mandatory recycling only, and mandatory recycling along with trash tags. The tags cost $0.70 each and are not applicable for those individuals using common receptacles.

The study consists of a survey of randomly sampled individuals in this primarily rural setting. The survey asked numerous questions concerning the waste management programs in addition to demographic information. The findings show that married households report a greater likelihood of recycling. In addition, more educated individuals generally reported a greater likelihood to recycle. Individuals are also more likely to recycle if they have knowledge of the availability of a drop-off center. The responses to this information question may however be biased. Whereas people who are concerned about environmental issues and waste management are more likely to know about recycling programs and drop-off centers available to them.

The results of the various programs are as follows. The most effective policy combination included both mandatory recycling and curbside pickup. Use of this combination increased the probability of recycling newspaper and glass by 22-37% relative to drop-off centers alone. Communities which had a combination of curbside recycling and quantity based pricing displayed an increase in recycling of glass (27%), plastic (36%), and cardboard (58%). Areas with mandatory recycling, curbside collection and trash tags found an increase in recycling of newspaper (23%) and glass (37%). The issue of burning and dumping is considered to be a problem primarily at the beginning of a quantity based pricing system. These various programs in which the cost structure of waste disposal is changed have proven to provide incentives in order to increase recycling.

In conclusion, these programs do increase the likelihood of recycling by changing the costs of both recycling and waste disposal. Quantity based pricing causes individuals to experience the marginal costs of trash disposal. Marginal cost pricing is much more effective than flat fee pricing because it creates incentives for individuals to recycle. However individuals are also more likely to recycle when the costs of recycling are reduced by providing curbside recycling. The combination of such programs have the greatest probability of decreasing the quantity of solid waste.