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Recycling to save the planet: another great environmental hoax

By Brendan O'Reilly - posted Thursday, 12 September 2019


Garbage by definition has negative value. You pay to get it taken away. Recycling can sometimes salvage value, and recycling that passes the cost-benefit test deserves support. That is, when the value of the salvaged product (as well as any landfill or environmental costs saved) exceeds the cost of the recycling process itself, recycling efforts can be deemed worthwhile. The problem is that most current recycling is merely wasteful virtue-signalling, that is overwhelmingly uneconomic.

As currently practiced, recycling is largely driven by government regulations, charges, and subsidies, that greatly distort the market. Spurred on by green activists, governments have progressively expanded recycling to the point that it has now become a costly end-in-itself.

Most of our well-meaning public mistakenly have gone along with this. Research commissioned by Planet Ark for National Recycling Week found more than 90 per cent of Australians believe recycling is the right thing to do and 59 per cent have a high level of trust in kerbside recycling.

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Historic practice for dealing with rubbish was one of simple removal and disposal (usually to landfill). This was cheap, and ease of disposal helped avoid littering. Land reclamation was a fringe benefit in some cases.

About 20 years ago, governments began forcing their citizenry to spend ever more time and resources separating, recycling or reusing many kinds of garbage. Garbage collection services have become subject to more-and-more complexity and regulation, and accessing landfill has been made increasingly expensive. The costs of recycling now far exceed what is possible to recover in salvageable material of any worth.

Some years ago the Productivity Commission assessed that the costs of recycling schemes far outweighed their benefits. Its report was largely ignored and forgotten.

Recycling had some chance of being viable in large urban centres, where quantity kept costs down. For several decades, however, small rural councils regularly complained about being forced by state governments to offer shire residents recycling options, that (due to their small scale and high dispatch costs to far-away processors) had no hope of viability (ever). Similar problems affect places like the Northern Territory, where recycled material is often trucked thousands of kilometres out of the Territory because of a lack of local recycling factories.

The recycling process has recently hit a wall.

Asia has shut the door on Australian exports of trash, especially plastics, while the domestic market is awash with unwanted salvaged glass, plastics and waste paper. (Australia sent 4.3 million tonnes of waste overseas last year.) Most recycled materials now have no commercial value, often partly because the waste is contaminated (e.g. by food or labels) and because imports (e.g. of manufactured glass containers) are cheap. Recycled metals and some cardboard are the main exceptions, and still have a positive value to potential re-users.

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Because most recovered glass, paper, and plastics are now unwanted and often can't even be given away, a number of recycling companies have gone bust (eg SKM in Victoria). The recycling industry is in crisis, and waste contractors in some Victorian shires temporarily suspended household collection services. More than 700 shipping containers of material for recycling at the Port of Melbourne were left in limbo (because they can no longer be shipped overseas).

Recycling is now a substantial burden on consumers, business, and the taxpayer, and has reduced our standard of living. Local councils now, instead of receiving revenue for recycling, are now generally paying a substantial price, while recycling companies now often want to charge to accept recycled material. When the cost of collection is added, you can sometimes be talking of costs of more than $100 a tonne for local governments to ensure the continuation of the recycling service.

In many cases, this costly recycling still fails to help the environment.

Most recycling probably is a net environmental cost in terms of wasted energy, additional transport and separation costs, and collateral environmental negatives. These negatives include illegal dumps in every state and territory (often containing toxic material), growing stockpiles of unwanted recycled materials (a lot of which is now ending up in landfill anyway), and regular fires at recycling centres (that put toxic fumes into the air of cities).

Underlying the entire hoax is the notion that sending garbage to landfill (generally the cheapest option) is inherently undesirable and to be avoided. For densely populated countries lacking disposal sites or for toxic waste, this idea may have limited validity. Incineration does, however, provide an alternative (that can also generate electricity) and is widely used in places like Singapore.

Australia itself has abundant land and (for its major centres) plenty of potential landfill disposal sites. Consequently, disposing of household and industrial waste used to be cheap and easy.

There had been common re-use of containers, particularly glass bottles, until about the 1960s. [We still re-use gas cylinders and the like without subsidy.] Re-use of glass bottles became uneconomic in developed countries because of rising real wages (though that did not stop a number of State governments from re-introducing such policies). Unsubsidised re-use of glass bottles still occurs in the Third World, because low wages continue to make it viable.

The slippery slope that has led to excessive and uneconomic attempts at recycling started with savage increases in tip fees. [I will use Canberra, where recycling has been heavily promoted by its Labor-Greens' Government, as an illustration of absurd attempts at recycling, as well as to show the sharp difference between government rhetoric and reality.]

In Canberra, in order to promote recycling, households are issued with two main wheelie bins: a modest 240 litre bin for general garbage (collected weekly) and a 360 litre yellow-topped bin for recyclables (collected fortnightly). The general garbage bin is deliberately small in order to force residents to recycle. Households can also purchase a bin for green waste. In the ACT, household waste (self-delivered to the tip) currently attracts a landfill fee of $98.45 per tonne, and $68.15 per tonne is the rate for clean soil or bricks. Commercial waste attracts a much higher disposal fee of $170.55 per tonne.

The ACT in November 2011 also taxed "single-use" plastic bags. The tax applies to all retailers in the ACT for lightweight polyethylene polymer plastic bags. The Territory government has made a feature of its "green" credentials with policies such as "No Waste", and a move towards 100 per cent of electricity sourced from renewables.

A 2017 submission from the ACT's Minister for Transport and City Services claimed that:

...the ACT is one of the leading jurisdictions in waste management in Australia with around 70 per cent of waste generated in the ACT being reused or recycled. In 1996 the ACT was the first jurisdiction in the world to adopt a "No Waste" strategy .

Recycling therefore has been "highly successful" in the nation's capital, if its local politicians are to be believed. The unmentioned reality, however, is that it has involved much collateral environmental damage.

The first unintended consequence of high landfill fees in Canberra was a sharp increase in illegal (often night-time) dumping of rubbish on surrounding rural roads. The bureaucratic response was the erection of (ineffective) "no dumping" signs, which also called on citizens to report offenders.

A further related consequence (initially) was diversion of (especially commercial) rubbish to small tips in surrounding NSW, as far as 100km away. This eventually forced councils in these areas to place full-time attendants at these tips (many of which subsequently became uneconomic to operate and were closed). Those country tips that remain open (far fewer in number) now charge fees.

The next stage in market reaction to the ACT's high tip fees has involved builders and entrepreneurs in the ACT buying farms in nearby NSW (preferably farms with extensive gullies or an old quarry). The farms are being used by Canberra construction companies to dump thousands of tonnes of fill just over the border to avoid the high cost of disposal in the ACT. The savings to builders amount to millions, though it comes at the cost of thousands of truck movements annually.

In December, Yass Valley Council approved the latest project - 90,000 tonnes of Canberra construction fill to be dumped on a property near Hall in NSW. There are reportedly at least five similar projects just over the border in that area and around Sutton, with clean fill being used to fill-in erosion gullies. Council plans modest levies to recover truck damage to affected local roads.

An even bigger issue is illegal dumps, where entire gullies have been filled with discarded tyres or other waste, and then been covered over.

This brings us to the next area of absurd recycling policies, namely how the market has responded to the growing mountains of unwanted recovered glass.

  • In a prominent case, one entrepreneur in 2014 reportedly was paid $38 a tonne (by a recycler at Canberra's main Mugga Lane dump) to take away glass (originating from Canberra's yellow-topped recycling bins). At the time, it was said that $140 a tonne was the charge for dumping the glass in landfill in the ACT.

The entrepreneur claimed the waste glass would be used in the manufacture of pavers. Instead, he allegedly (without permission) made a tidy profit dumping 900 tonnes of glass on a relative's non-residential farm off the Federal Highway near Lake George. The (contaminated) glass still remains there (in a heap) despite protests from the affected relative and her neighbours. The same entrepreneur is also accused of storing glass fines on a block in Fyshwick around 2015, and subsequently abandoning the stockpile. The owner of this block says he spent $300,000 last year cleaning it up.

Following the collapse of end markets for recycled glass, ACT Minister for Transport and City Services, Chris Steele, is now talking about reprocessing glass into sand (for use in construction and to make asphalt). Given the ready availability of cheap commercially sourced building sand, this is going to be some of the most expensive sand in the country to produce.

At one stage the ACT's recycling centre at Hume was temporarily shut down. A spokeswoman said recyclables from there were dumped in landfill as a "stop gap" solution, while the plant struggled with an increase in deliveries, especially from the ACT government's Container Deposit Scheme.

This scheme was the fourth of its type to be introduced in Australia. Because NSW launched its own scheme in December 1, 2017, the ACT (not wanting to be outdone) was certain to follow. Under the Scheme, consumers are able to return eligible, empty beverage containers and receive a 10 cent refund for each container. It is widely claimed that the scheme wasn't justified environmentally and merely passed on a substantial tax to consumers of beverages.

A report by the Independent Pricing and Regulatory Tribunal of NSW found that non-alcoholic beverages had increased by an average of 10.1¢ due to the NSW scheme, and alcoholic beverages by 5.1¢. An aluminium can prior to the commencement of these schemes would have had a scrap value of about 3¢, but its surrender value instantly became 10¢.

The ACT, prior to its scheme, (through its yellow recycling bins) already had one of the biggest capture rates in the country of plastic bottles and aluminium cans (so there was no need for the scheme). The diversion of used aluminium cans away from kerbside recycling almost certainly has further reduced the viability of that scheme. There is also a substantial cost on consumers in terms of their time, and from the transport costs taking containers to collection machines.

Overall, where should recycling policy go?

The green enthusiasts for recycling commonly suggest the following:

  • Expanding recycling of plastics (just 12 per cent of the 103kg of plastic consumed per person was recycled in 2016-17).
  • Forcing households to further sort and wash their recycled material, including separating soft and hard plastic.
  • Introducing organic waste collection and container deposit schemes in states/territories that still have not introduced them.
  • Educating the public about how to better recycle. (Common mistakes are said to include putting soft plastics into the kerbside recycling bin, putting bagged recyclable material into recycling bins, and puttingfood scraps, organic waste, soiled disposable nappies, or other non-recyclables into recycling bins.)

They also propose a long term recycling aim of "Zero Waste"

The problem with these proposals is that they would merely add further costs to existing uneconomic recycling. Additionally, it is simply not economically possible to live totally waste-free.

A sensible outcome would be to move in the opposite direction advocated by the greens, and to only recycle those items, whose salvage value exceeds the recovery cost. Items such as plastics and paper should be incinerated or (along with unwanted glass) go to landfill.

While I agree that there is a major problem with plastics in the environment, we are told that 90 per cent of the plastic in the sea comes out of ten rivers in Africa and Asia, something out of Australia's control. There may be scope to encourage use of glass bottles instead of plastic ones or to develop more biodegradable plastics. As much food comes wrapped in plastic for safety reasons, it is impractical to attempt the total elimination of plastic packaging.

An under-discussed issue is that about 800 million disposable nappies end up in Australian landfills every year, with approximately 91 per cent of Australian parents (for obvious reasons) preferring to use disposables. The recycling lobby, however, is somewhat muted in its support for reusable cloth nappies and wipes (a women's issue?). This is despite disposable nappies being both a lot more expensive to use, and taking as long as 500 years to decompose in landfill.

I don't support banning or heavily taxing disposable nappies. It would, however, seem that (for the majority of recycling enthusiasts) virtue seems to have its limit!

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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