It would be hard to find an environmentalist who does not see recycling as a way to reduce resource consumption, and subsequently improve our natural environment. But there is no clear evidence that the emergence of recycling has reduced resource consumption. In fact, there is a solid theoretical argument that recycling has limited impacts on decreasing consumption of the targeted resource, and is likely to increase consumption of other resources. This alone should not be controversial to economists, but the real question is why we continue to perpetuate the myth. Let’s start digging to the bottom of this mystery.
I’m not really sure how to explain this succinctly, but I will give it a go. It is best to have in mind throughout this explanation a particular material – think glass, paper or aluminium. There are two cases to consider – one in which recycling is subsidised by the government, and one where it begins via market forces.
Imagine that the glass industry realises that it is cheaper to source glass through recycling then from sand mining. If recycling was not an option, glass would be more expensive than what recycling enables it to be. Because glass is cheaper due to recycling, it enables the industry to produce glass products more cheaply, creating a higher demand for these products. Of course, glass is rarely a final product itself, and thinking of bottles here, cheaper glass and products will require more caps, labels, cartons and shipping. Furthermore, because of the access to recycled glass has decreased demand for new glass, the price of new glass may fall, encouraging greater consumption. In all, recycling can reduce the consumption of new resources by a much smaller amount than first thought, and can increase consumption of other resources. In fact Valerie Thomas, in the Journal of Industrial Ecology, shows that second hand goods (the equivalent of recycling) can actually increase the consumption of those goods with large second hand markets.
The second type of recycling, the subsidised variety has similar results. It artificially makes recycled materials cheaper and therefore makes the goods made from both recycled and new materials cheaper – again increasing demand for the resource in question, as well as complementary resources.
So why then, if recycling can at best result is a minor reduction in resource consumption and an increase in consumption of other resources, and at worst result in an increase in consumption of the resource in question as well as others, do we persist in advocating it as an environmental cure all?
I would suggest the reason is simply that environmentalist do not know any better. Also, if you acknowledge that recycling is not effective it leaves very few options remaining that do not involve radical social upheaval. Governments must surely know about the ineffectiveness of recycling, but perpetuate the myth as a way of appearing active on the environmental front.
The most important point to take from this is that recycling may very well be counterproductive. Shouldn’t we at least know if what we are doing is helping or harming the environment?