Week 7: Recycleable Resources Flashcards
How do we determine an efficient rate of recycling?
Types of relevant costs.
Factors that determine the efficient rate of recycling:
- Cost – Virgin resources (e.g. extraction and disposal)
- Costs – Recycling (e.g. transport, labour processing costs, energy costs, and compliance cost)
These costs are heavily dependent on the quality of recycling (i.e. purity, contimination levels)
What does resource scarcity depend on?
Scarcity rent = the difference between price and the marginal cost of extraction.
- With a high scarcity rent, lead to more exploration activities
Technological progress (new ways to extract, process and use the resource)
- Rising extraction costs à new technologies
- High resource scarcity à new technologies
Substitution:
Are there widely available minerals available.
What is the cost of disposal?
What creates a disparity between private marginal cost and marginal social cost of disposal?
2 factors:
- Environmental costs (=negative externalities) or
- Inappropriate pricing in the way disposal costs are recovered (=inapppropriate government intervention)
- Waste is collected on an annual fee basis (marginal cost of disposal of waste is 0) no additional cost for each unit of disposal, but marginal social cost, does not equal 0.
If the agent (i.e. those who dispose of) do not bear the full cost of disposal, they will be biased toward virgin materials.
Where do we find an efficient level of recycling?
The efficient level of recycling occurs where the marginal cost of recycling intersects with the marginal cost to society.
What are the market failures in recycling?
- Cost of disposal is not priced properly (inappropriate government intervention).
- The negative externality of using virgin resources is not taken into account.
What are the policy options to mitigate market failures?
- Pay as you throw (PAYT) disposal
- Curbside Recycling
- Deposit refund schemes
- Plastic bag ban and plastic bag fees
- Extended producer responsibility
What is the pay as you throw (PAYT) disposal?
A volume-based system, better reflect the true social cost of disposal.
Curbside Recycling
Attempts to achieve an efficient balance between disposal and recycling.
- More effective in combination with PAYT program.
Without low cost (opt-out), efficient levels of recycling may not take place.
Deposit refund schemes
10c a bottle:
- Used typically when monitoring costs are high.
Refunds the cost of disposal once individuals have self revealed their ‘type’
Plastic bag ban and plastic bag fees
The policy aims to focus on plastic pollution in the environment (e.g. waterways, a hazard for marine mammals, seabirds).
Effectiveness of policy depends on availability and suitability of substitute:
How durable are ‘green bags’ are they recyclable?
Extended producer responsibility
Requiring producers to take back packaging, and even the products at the end of its useful life.
Duales System Deutschland (DSD):
How does it work?
What are the outcomes?
Criticisms?
Since 1991 manufacturers in Germany have been required to take care of recycling or disposal of any packaging materials they sell.
DSD was setup as an industry-funded waste collection system.
- Picked up with municipal waste, DSD only collects packaging from manufacturers who pay a license fee.
Criticisms:
- Lack of demand for recycled materials
“warm glow’ à Green Dot products may increase the consumption of these products.
What is E-waste:
What is the case in:
- California
- EU
- China
Two issues:
- The volume of waste and complexity in recycling it
- Hazardous materials (contain cadmium, mercury, lead)
California – CalRecycle
- Since 2003
- Consumers pay fee at the time of purchase of $8-$25 depending on monitor size.
European Union:
- Puts onus on manufactureres and importers to take back their products and properly dispose of them.
- Set collection, recylcling and recovery targets
- E.g. 4kg per head, per annum by 2009
China & E-waste
- Stopped taking e-waste
Recycling center in Guiyu, high levels of hazardous materials.
