Economics of Recycling in the USA - Research Paper Example

Economics of Recycling in the USA Introduction Lately, there has been an escalated interest in environmental issues in the global arena. This has especially grown a big deal in the societies that have achieved higher industrialization levels. Subsequent to this, the demand for recycling has increased so as to couple with the global resources. The essence of the whole idea about recycling has to be examined for any environmental benefits or otherwise, though. The truth is that recycling is an end of ensuring environmental conservation and particularly the saving of raw materials- energy as well as mineral and besides this, disposal cost outlays are put in check. There is also the reduction in the pollution impacts like those from emissions. Despite the aforementioned facts, collection of recycling materials is a futile and wasteful effort, however. Recycling might even be harmful to the environment as is also supported by Dalzell in her book. That is, if recycling is not favored by the materials recovered, marketing of these reclaimed materials as well as other costs like treatment and storage outlays. More specifically the sequence below is usually considered in economics before a decision about recycling is made:- (a) Extraction of raw materials (b) Purification process (c) Basic materials of packaging production (d) Renovation (e) Utilization for the protection of product in distribution (f) Utilization by consumer (g) Disposal (h) Collection, cleaning, the recycling as well as reuse In case stage (h) utilizes fewer resources compared to the stages (c), (d), (e) as well as (f) together, thus recycling in those scenarios is effective as long as resources are concerned. The qualification of resource effectiveness does not automatically mean that the process is economically feasible, however. The biggest handle under this process comes in where there has not been a single agreed-on evaluation method of the factors involved. It is, thus, until a universal method has been devised that arguments about disadvantages and advantages of the process of recycling can there be a worldwide agreement. (Dalzell, 2000 311) The study question is, ‘Is recycling really economically feasible?” The research will vividly try and answer this question. Main Body I. Supply and Demand of Recyclable Products In a market where recyclable inputs are traded, demand as well as supply of a recyclable kind of product is shown. This suggests recycling incentives. The demand for recyclable products is derived from manufacturers who utilize the recyclable product to make a new product. The demand curve has a downward slope which means that manufacturers raise their purchases of the recyclable product as prices decline. On the other hand a supply curve relating to recyclable products has an upward slope since high price levels raise incentives for recycling in households. Figure 1: Demand curve for recyclable inputs by manufacturers Prices of a recyclable input (US $) P Demand curve Q Quantity of recyclable input Figure 2: Supply of a recyclable product by households Prices of recyclable products (US $) Supply curce P Q Quantity of recyclable input (McConnell, 2004 325) II. Efficient Level of Recycling Economically, recycling is considered efficient at a certain point. For example; containers’ recycling can be done by private firms and municipalities alike. These arrange for used containers’ collection, amassing and materials processing. Marginal costs are bound to rise economically as the recycling level rises. This is due to the costs associated with collection, separation as well as cleaning, which grew at what is labelled an increasing rate. When plotted, a curve of marginal cost of recycling should be read from right towards the left-hand side. When there is no recycling, thus, MCR- Marginal cost of recycling is nil. It, therefore, follows that as disposal levels decline, the level of recycling escalates. MCR also rises in line to this occurrence. If a graph was to be drawn- efficiency in recycling can, thus, be realized at the point where MCR equals MSC- Marginal cost of disposal. Thus, as per the illustrative graph drawn below; efficiency in recycling is achieved at point X* of industrial waste. Figure 3: Efficient Level of Recycling Cost in USD MCR MSC MC+ Refund per unit MC X* X1 Industrial waste From this graph the level of recycling industrial waste that is efficient is gotten at the point where MSC= MCR. The amount of efficiency is reached at X*, but for a private market alone it stands at X1. (Pindyck and Rubinfeld, 2005 624) III. Demerits of Recycling Governments of urban areas have increased their campaigns to encourage programs of recycling. In the onset of the 1990s the cost paid for materials that are recyclable declined to a certain point that the government, sponsored projects resulted as money-losing type of efforts. These projects’ administrators have, therefore, been forced to compare benefits and costs associated with operating them. Costs associated with the short-term efforts of recycling are instantaneous and are just defined for a local community. Most of the benefits associated with recycling are long-run and these accrue over a long period of time. Recycling has resulted into a classic social dilemma. Being a classic social dilemma means that “as long as everyone is recycling it takes little rational sense for an individual to make the effort to collect, store, and dispose of recyclables.” If everybody were to agree on this conclusion, all would suffer negative consequences. (Foddy, 1999 253) Basically, the specific recycling levels of materials as well as goods have faced a lot of limitation within developed and economies that are highly industrialized. Consistency in recycling has particularly been achieved in Japan-50% of municipal wastes have been recycled here. Also, consistency in recycling has been realized in European nations and some materials’ recycling has reached some relatively high levels. A good European example is the Netherlands where 57% of glass has been recycled and Belgium which has achieved 60% under the same category of recycling. However, the mentioned waste stream is one among many wastes from various municipals. Also this does not reflect all industrial products or the other nations’ cases. The International Institute for Applied Systems Analysis has presented figures without recycling and these show that data related to recovery of the wastes is only available in 40% of the countries. Of this 40%, a mere 6% of hazardous waste from industries was recovered. The figure related to the wastes regarded as hazardous, which formed a minute proportion of the whole generation of wastes. It can be argued that economic feasibility is only achievable in developing nations according to Jackson and Stockholm Environment Institute. This is due to the fact that in these developing countries there is a relatively low labor cost as well as a relatively high resources’ cost. For instance, in the Korean Republic 54% of particular wastes from industries are recycled as per the 1991 report. However, a challenge befalls these developing nations in terms of maintaining appropriate conditions for encouraging as opposed to a linear kind of economy. Economic assessments especially in industrialized economies show that there is a great deal of handles to achieve success in recycling. These handles are to some extent economic while others are physical. Thus, economic assessments show that recycling is not viable in the short run. Collection and transportation costs tend to be high. Economics’ obstacles particularly cite social as well as private costs and the benefits going tandem. Costs of environment are to a big extent social costs which are borne by the whole society. Industrial economies have been seen not to fully cater for social costs of any given project. They also do not account for potential recycling economic benefits. (Jackson, Stockholm Environment Institute, 1993 22, 23) Conclusion The conclusion that can be drawn from the study is that recycling is not a feasible undertaking for developed countries, but for developing ones. This is as noted earlier that; basically, the specific recycling levels of materials as well as goods have faced a lot of limitation within developed and economies that are highly industrialized. Consistency in recycling has particularly been achieved in Japan-50% of municipal wastes have been recycled here. In developing nations it is viable, economically to recycle. It can be argued that economic feasibility is only achievable in developing nations according to Jackson and Stockholm Environment Institute. This is due to the fact that in these developing countries there is a relatively low labor cost as well as a relatively high resources’ cost. For instance, in the Korean Republic 54% of particular wastes from industries are recycled as per the 1991 report. However, a challenge befalls these developing nations in terms of maintaining appropriate conditions for encouraging as opposed to a linear kind of economy. This is while trying to comprehensively answer the study question, ‘Is recycling really economically feasible?” References: Dalzell, Janet M. (2000). Food Industry and the Environment in the European Union: Practical Issues and Cost Implications. Springer. Edition 2, revised, illustrated. Foddy, Margaret. (1999). Resolving Social Dilemmas: Dynamics, Structural, And Intergroup Aspects. Psychology Press. Edition illustrated. Jackson, Tim and Stockholm Environment Institute. (1993). Clean Production Strategies: Developing Preventive Environmental Management in the Industrial Economy. CRC Press. Edition illustrated. McConnell, Campbell R. et al. (2004). Microeconomics: Principles, Problems, and Policies. McGraw-Hill Professional. Edition 16, illustrated. Pindyck, Robert S and Rubinfeld, Daniel L. (2005). Microeconomics. Tsinghua University Press. Read More