Econation Blog

The Wellington City Council recently proposed to phase out the green recycling bins and replace them with black recycling bags which would cost 60¢ each. This was apparently because rubbish collectors were getting injuries from lifting the bins. It seems that this excuse may have been a red herring and the real reason was to try and make the cost of recycling more "user pays".

The fact is that collecting rubbish costs money – whether it is recycled or not. Recycling does cost more because the rubbish needs to sorted and handled but then again the recyclables can be sold to generate income. Even so recycling costs the Wellington City Council (i.e. ratepayers) $2.6 million a year.

In a press statement from the mayors office about a council report on recycling, we're told the collapse in prices of glass, plastic and steel has raised questions about whether recycling is the best way to deal with reusable rubbish.

"While it makes us all feel good to know that our bottles, can, tins, paper, cardboard and plastics aren't going straight into the landfill, recycling is a very expensive service," the mayor, Kerry Prendergast, said. "There are questions about whether the shipping of thousands of tonnes of recyclables overseas to places like China is good for the environment."

It was recently reported that the economic downturn has meant that it is uneconomic to recycle material. The mostly East Asian buyers of recyclables have reduced their orders and prices. This means that New Zealand's recyclables currently have nowhere to go; they must be stockpiled. This means the cost of recycling will get higher still.

Hence the idea of user-pays bags. The problem with this idea is that we are penalising and disincentivising people for being good. It's like getting a smoker to pay $10 for not buying a packet of cigarettes.

In another move a lobby group is attempting to revive deposits on bottles and other containers. This was used in the past to reduce litter, and it worked well. However the problem with using this initiative now is that it will have a negative economic impact on existing recycling companies because their source of income is from the "free" recyclables.

Other local authorities have shown far more commitment to their recycling schemes than Wellington: Christchurch, for example, has a new system that provides three different bins: an 80-litre bin for the weekly collection of organic waste, a 240-litre bin for the fortnightly collection of recyclable materials, and a 140-litre bin for the fortnightly collection of household waste. It's good that some local authorities are showing leadership on recycling, because central government isn't.

Who is paying for recycling now?

1. Service providers?
   No. Recycling service providers cannot generate enough income by selling waste to those who can re-use it. Local authorities must subsidise these providers or they would not exist.
   
2. Producers?
   No. It is true that producers of goods are responsible for their own waste streams and US studies have shown that a massive 94% of all inputs (energy, raw materials, parts) are wasted before the final product is produced. However all costs a business has are passed on to the end-user, so consumers end up paying for a producer's inefficiency and wastefulness.
   
3. Consumers?
   Yes. Consumers pay for goods (including their packaging) and then use them or waste them. The same consumers also pay rates (or rent to landlords which covers rates) for managing the waste, including recyclables.

This being the case there are several practical solutions that will reduce the financial burden of recycling (as well as having the neat effect of reducing, perhaps eliminating, all waste), including:

1. Raw materials are made to cost more than recycled materials.
   In a practical sense this means that a cost for recycling the 'virgin' raw material would be added to the cost of extracting it. This would be a tax used to subsidise recycling.
2. Producers reinvent their processes to minimise, even eliminate, waste.
3. Producers redesign their products so that they can be recycled back into their own products – the product 'boomerangs'.
4. Consumers are more discerning – which assumes that suitable labeling allows them to be.
5. Consumers are less wasteful.

With initiatives likes these the onus is on everyone to be less wasteful. Producers, in particular, would have the responsibility to redesign their businesses, products and their whole supply chain.

And the black recycling bags?

There was such a backlash against the proposal that the Wellington City Council thought it best to drop the idea.