The Economics of Municipal Recycling: A Preliminary Analysis
Folz, David H., Public Administration Quarterly
Recycling is an increasingly popular strategy for dealing with the solid waste imperatives common to many US localities.(1) Whether faced with dwindling landfill capacity, rising charges for waste disposal or tougher federal, state, and county solid waste management policies, the appeal of recycling lies in its potential to be a primary method, along with source reduction and composting for managing the municipal solid waste stream (Blumberg and Gottlieb, 1989). Recycling can help to control the sky-rocketing costs of landfill disposal and incineration by diverting a significant proportion of the solid waste produced locally.
Some observers characterize this growing volume of waste and the increasing cost for disposing of it as a "solid waste crisis" (Good et al., 1991).(2) While the actual potential for diversion depends upon the composition of a locality's waste stream and the market for various materials, one estimate suggests that over 80% of the typical municipal solid waste stream technically can be recycled or composted (Denison and Ruston, 1990:1).
For the growing proportion of citizens concerned about the quality of the local environment and the conservation of natural resources, recycling presents a tangible, intrinsically satisfying way to participate in solving an environmental problem to which everyone contributes (De Young, 1986). Its remarkable embrace by citizens in hundreds of communities across the country signifies a fundamental shift in municipal waste management policy (Folz, 1991a; West, Feiock, and Lee, 1992). Clearly, recycling is more than a fleeting eco-fashion; it is a coproduced service that has the potential to strengthen citizens' commitment to the community and to forge a stronger bond between administrators and citizens (Folz, 1991b; Brudney, 1990; Levine, 1984; Frederickson, 1982).
The premier challenge for local officials is to deliver on the promise of recycling within the constraints imposed by available fiscal resources. Recycling must compete with other, equally popular programs for a portion of budgets already stressed or bridled by revenue shortfalls. The size, scope, and type of recycling program determine the capital investment and operating budget required. Substantial cutbacks in recycling budgets for some of the nation's largest cities are only the most widely publicized events in a pattern of cutbacks in the growth of state and local government expenditures (Watson, 1991).
When strapped for cash, funds for recycling planning, technical assistance, public education, and marketing are particularly vulnerable since these efforts typically yield measurable dividends over a period longer than the annual budget cycle. To justify, defend or preserve priority spending for recycling programs advocates would be in a stronger bargaining position if they document the benefits and costs of a recycling program.
Revenues from the sale of recovered materials rarely recoup the costs of operating a recycling program but as Denison and Ruston (1990:105) observe, some assessments of recycling are predicated on the assumption that it "must be entirely self-supporting from the sale of reclaimed materials before it can qualify as a legitimate waste management option." Calculation of both program costs and the full range of "avoided costs" attributable to recycling will yield more accurate estimates of the economic value of recycling and "provide a cost-effective rationale for the financial and policy support such a program needs in order to reach the goals it is capable of achieving" (Blumberg and Gottlieb, 1989:215).
This article examines several issues germane to an evaluation of the economics of a local materials recovery program. How do cities fund their recycling programs? How much do different types of recycling programs cost? Why do some cities have lower unit operating costs for similar recycling programs? How much revenue is generated from materials sales? …