Category: Waste and Recycling

Economics of Recycling in Houston

Waste Management, a company started in Houston, Texas and now serves more than 20 million customers around the United States and Canada, started its business with commodity prices at an all-time-high and made contracts with municipal governments based on a deal that required a commodity price floor of $65 a ton. However, when the revenue falls below $65 a ton, the city of Houston does not make any money and Waste Management takes a loss.

  • The sorting process at a recycling facility costs between $75 to $150 on average, depending on how contaminated the recycling load, while Waste Management sells the recycled material for just $80 on average.
  • Contracts were made when average recycled commodity prices rose 20 percent in 2011 and received as much revenue as $140 per ton.
  • The city of Houston gets 70 percent of any revenue over $65 per ton.
  • Last March, Houston’s recycling process contamination rate was 17.4 percent.

The Waste Management contracts with municipal governments have been profitable for both over the past few years. However, with recycled commodity prices as low as they now are, Waste Management’s contracts might have to expire. Cities like Houston could lose their popular recycling programs due to hasty decisions that were made a few years ago.

What can you recycle curbside in Houston?

Paper: Newspapers, magazines

Cardboard: Broken down to no more than 3-feet-by-3-feet and clean. No soiled pizza boxes, for example.

Plastics: Nos. 1-5 and No. 7 only

Metals: Tin, aluminum, empty aerosol cans

Glass: Only on routes with 96-gallon bins

Laminated cartons: Milk cartons, for example.

EPA Final Rule Revising Definition of Solid Waste

The Environmental Protection Agency’s (EPA) final rule on the definition of solid waste will become effective on July 13, 2015. Perhaps the biggest revision in the rule is EPA’s withdrawal of the transfer-based exclusion codified in the 2008 rule. In its place, EPA created the “verified recycler exclusion.” This new provision requires that all recyclers operating under this provision have RCRA permits or obtain variances prior to reclaiming hazardous secondary materials. Factors in the new provision:

  • hazardous secondary material must provide a useful contribution to the product or recycling process
  • recycling process must produce a valuable product or intermediate
  • hazardous secondary material must be managed as a valuable commodity
  • recycled product must be comparable to a legitimate product or intermediate

According to analysis conducted by Bergeson & Campbell, PC:

The rule retains the exclusion for hazardous secondary materials that are legitimately reclaimed under the control of the generator (generator-controlled exclusion), but adds several conditions to the exclusion, including notification and recordkeeping requirements and emergency preparedness and response conditions. EPA also modified the transfer-based exclusion by adding several conditions, including one that recyclers have financial assurance in place to manage the materials left behind when the facility closes. An addition to the rule is the remanufacturing exclusion, which exempts certain higher-value solvents transferred from one manufacturer to another for the purpose of extending the useful life of the solvent by remanufacturing the spent solvent back into commercial grade solvent.

NE Expanding Waste Management Program

In places like Nebraska, a city’s trash could become one group’s treasure. A new project from Nebraska Organic Waste Energy (NOW) and Uribe Refuse Services Inc. is looking to turn a portion of the city’s organic waste into energy, compost and fertilizer.

The project will take 1,450 of the 52,000 tons of organic waste produced by Lincoln residents and convert it into electricity, as well as compost and liquid fertilizer for lawn care, gardens and golf courses, reports The Journal Star.

Uribe Refuse predicts that the project will save them $39,000 in landfill gate fees and $20,000 in electricity bills per year. The overall return from the 20-year project is estimated to total $1.2 million.

Currently, Nebraska is a net-exporter of energy. But the state’s energy expenditures have been steadily rising over the last decade, from $4.4 billion in 2000 to $9.1 billion in 2008. The total cost for the Lincoln project is unknown, and the verdict on the efficiency of waste-to-energy programs is still out. If the profits outweigh the costs, the program could be a good way to generate clean energy and eliminate waste.

The project intends to target commercial customers, including restaurants, schools and corporations, and will offer sign-up incentives to customers who commit to becoming “zero waste” businesses.

Another aspect of the project excites city planners: the corporate involvement. As part of the state’s energy plan, Nebraska is seeking to address more energy issues through public-private partnerships. Gene Hanlon, Lincoln’s City Recycling Coordinator, says he’s pleased to see private companies taking initiative.

“Local governments can’t do it alone,” says Hanlon. “We need to work in full partnership with the private sector to develop innovative efforts to conserve resources and reduce waste sent to the landfill.”

To get the project up and running, NOW Energy has applied for a $735,000 grant from the Nebraska Environmental Trust to cover its start-up costs. Uribe Refuse and NOW intend to push through with a scaled-down version of the project if the grant doesn’t come through.

Megan Simons is a research associate at the National Center for Policy Analysis

Bag Bans are Bad Business

This past year the NCPA published numerous studies on how both bag bans, and bag regulations were harming consumers. The details of the studies revealed that not only were the local governments cashing in on taxpayers, but that the environment would still be suffering as a result. How can this be? Wouldn’t a decrease in the plastic bags being sold help the environment? After all, ecosystems suffer from trash and pollution daily, this could be the next steps towards cleaning up the country. However, this is a free market, and unintended consequences from government interaction has been an issue since people started submitting themselves to others.

Paper Bags: Plastic bags were at one time our nation’s solution to paper. Deforestation was running rampant in the world, and environmentalists were demanding paper bag removal from stores. Plastic bags, which were more efficient, cheaper and did no harm to any forests or the ecosystems within. It is also extremely important to note that paper bags create a far bigger environmental footprint than plastic, and are not able to decompose in landfills. As we approach an alternative to plastic it seems that reusable bags are in. Despite numerous reports of E.coli collecting on them, and the fact that stores are able to sell them for a bigger profit than free plastic bags, our economy is not ready to suddenly change overnight.

Increasing Taxes: Many local governments decided that instead of a ban they would propose a tax on every plastic bag used. DC for example, utilized a 5 cent fee on every plastic bag sold to consumers. The more groceries you bought, the more you would be charged. While it seemed like a good idea at the time, other countries who did the same thing ended up having to raise the tax repeatedly over time. Their tax began at 15 cents in 2001 and jumped to 22 cents in 2007. The government was forced to raise the tax after they noticed that bag use was increasing as consumers began absorbing the cost of the bags. This exact identical situation also happened to Ireland.

The Other Side of Solar Trash Cans

Do solar trash cans save time and money?

Solar trash cans are popping up all over some of America’s largest cities. Their popularity with local governments has turned it into the latest fad as it seeks to combine waste and recycling with energy conservation and carbon emission reductions. Some city leaders are claiming the solar trash cans, like the ones from BigBelly, are saving the cities millions.

However, a 2010 report from the Philadelphia Controller Allan Butkovitz claims that the $4,000 solar trash cans are wasteful and unkempt:

  • Pictures of trash cans with overflowing garbage
  • Trash cans still sitting in in warehouses long after purchase
  • Trash cans lacked damage and repair warranties from the manufacturer
  • Crews said they were not trained to operate and care for the new machines, which replaced $100 wire baskets
  • Crews did not have operating manuals or tools and were not performing the recommended maintenance
  • The night trash collection crews did not have access to the system that wirelessly reports when each trash can is full and serviced trash cans anyway
  • Daytime crews that responded to trash can full alerts said the alerts are often wrong and hours old
  • Clouded solar panel covers
  • Malfunctioning alerts
  • Physical damage

During a two-month observation, crews collected trash from Big Bellies 10 times a week on average, more than double the anticipated frequency. Moreover, it takes more time to empty the machine compared to the old-style baskets. The solar trash cans have also invited more graffiti, meaning a burden on the city to clean it up. Altogether, the extra time and costs associated with having solar trash cans were not factored into the overall savings.

Just from this one report, there is a good chance that the cities that have introduced solar trash cans may actually be exaggerating the benefits. Those cities should rethink their plans to waste more money on these trash cans and other cities that are thinking about making this change should also reconsider.

Bag Bans Don’t Save Dollars

Today the NCPA released my new study, examining the claim that banning or taxing plastic grocery bags will save cities money.  I found no evidence that cities which have already enacted plastic bag restrictions have saved any money — and they have actually harmed the environment.  It seems that plastic grocery bags are the green alternative when choosing what type of bag to use to carry your groceries or other items.

Some results from the study are below:

Consumers choose plastic bags far more often than paper or reusable bags to carry their purchases. Compared to paper and reusable bags, plastic bags are lightweight, strong, flexible and moisture resistant. In addition, they are easy to store and reusable for multiple purposes. Despite these characteristics and their popularity, a growing number of municipalities and some states are enacting laws aimed at reducing the use of plastic (and sometimes paper) grocery bags.

  • Advocates have given a number of justifications for placing restrictions on consumers’ use of carry-out plastic bags.
  • These include concerns about the scarce resources used to create the bags, environmental harms when they are disposed of improperly, the visible blight of roadside litter, and the cost of disposing or recycling them.
  • However, an examination of the bag bans and budgets for litter collection and waste disposal in San Francisco, San Jose, and the City and County of Los Angeles, Calif.; Washington, D.C.; and Brownsville and Austin, Texas, shows no evidence of a reduction in costs attributable to reduced use of plastic bags.

Consider the County of Los Angeles.

  • A November 2010 Los Angeles County, Calif., ordinance outlawed retail use of thin-film polyethylene bags.
  • Los Angeles County faced significant spending cuts during the 2010-2011 and 2011-2012 budget years of more than $175 million and $35 million, respectively.
  • Budget cuts did not extend to solid waste collection or disposal.
  • Spending for solid waste rose 30.17 percent from the budget year 2006-2007 to 2011-2012, and projected spending rose 5.9 percent from 2011-2012 to the adopted budget for 2012-2013.

In the cities that have adopted bag bans, fees or taxes, there is little evidence so far that banning or taxing plastic bags will reduce waste disposal costs and save money. Those who make this claim must provide evidence to back it up, but they have rarely attempted to do so, and when they have, the evidence has proven questionable at best.


Obama and Alarmists Slapped down on Nuclear Policy and Polar Ice Claims

On August 13, a Federal Appeals Court found that the Obama administration is violating the law by not continuing its work on the Yucca Mountain nuclear waste disposal site.  In a gift to Harry Reid, early in his first term, the President decided to stop the licensing process for Nevada’s Yucca Mountain project.  In a sharp rebuke to the administration the Court ruled that Nuclear Regulatory Commission (NRC) has been violating federal law by delaying a decision on a proposed nuclear-waste dump in Nevada, the court said the nuclear agency was “simply flouting the law” when it allowed the Obama administration to continue plans to close the proposed waste site 90 miles northwest of Las Vegas. The action violates a federal law designating Yucca Mountain as the nation’s nuclear-waste repository.

Though other options exist for the reuse or storage of spent nuclear fuel, the law currently specifies Yucca Mountain as federal government’s designated storage area.  Establishing such a facility is critical to a successful restart of the nuclear energy industry.  Absent secure storage lenders and investors are wary of getting behind new nuclear plants.  In addition, under the law, because the federal government missed the statutory deadline to open a federal storage facility, the government is to paying nuclear power plants hundreds of millions of dollars to store spent nuclear fuel and nuclear waste on site.

Unfortunately vis-à-vis the federal deficit and nuclear security, the administration and its allies in Congress will likely continue to flout the law by refusing to fund licensing and disposal at Yucca Mountain – so much for the Federal Court’s power.

On a second topic, it seems that what NOAA says about global warming is less important than what it found in the fine print of their reports.  The National Oceanic and Atmospheric Administration recently released its “State of the Climate in 2012” report, which states that “worldwide, 2012 was among the 10 warmest years on record.” But the report ignores the fact that it was one of the coolest years of the previous decade, and thus reinforces the fact that no global warming has occurred for going on 17 years.  And, although NOAA reported that in 2012, “the Arctic continues to warm” with “sea ice reaching record lows,” it also stated that the Antarctica sea ice “reached a record high of 7.51 million square miles” on Sept. 26, 2012.  Indeed, the most recent figures for this year show that there’s been a slowdown of melting in the Arctic this summer as well, with temperatures at the North Pole well below normal for this time of year. Meteorologist Joe Bastardi calls it “the coldest ever recorded.”

I’d say I’ts time for global warming alarmists to get alarmed at their increasingly regular “mistaken” claims and missed predictions.

Are Plastic Grocery Bag Bans Good for the Environment?

One of the new environmental trends sweeping local governments is the push to ban plastic grocery bags. The argument is that such bans protect wildlife by preventing the bags from getting into the water. This is just one of a range of claims about plastic bags and the environment, many of which are false or exaggerated. Here is a quick rundown of the claims about plastic bags and the actual data and science.

Plastic Bags Contribute to a Massive Garbage Patch in the Ocean

This is a common claim and one of the first arguments mentioned by advocates of the ban. It is, however, almost entirely false. While advocates say the Pacific Garbage Patch is about “twice the size of Texas,” the fact is that what does exist is much smaller. Angel White of Oregon State University released a statement last year noting “The amount of plastic out there isn’t trivial. But using the highest concentrations ever reported by scientists produces a patch that is a small fraction of the state of Texas, not twice the size.” She went on to say “There is no doubt that the amount of plastic in the world’s oceans is troubling, but this kind of exaggeration undermines the credibility of scientists.”

Woods Hole Oceanographic Institute echoed this conclusion in a study that found “the concentration of floating plastic debris has not increased during the 22-year period of the study, despite the fact that the plastic disposal has increased substantially.”

This doesn’t argue that plastic in the ocean has zero impact, but it provides a basis for understanding how best to address the real extent of the problem.

Plastic Bags Kills Thousands of Marine Animals

The obvious implication of the claim about garbage in the ocean is that it will harm marine life. One such claim was included in a packet for a city council in Washington state considering a ban. City staff claimed “the ecological impacts of this plastic include over a million sea-birds and 100,000 marine mammals killed by either plastic ingestions or entanglement.” This is simply false and the National Oceanic and Atmospheric Agency (NOAA) has debunked this one thoroughly. On their FAQ regarding plastic bags, NOAA writes “We are so far unable to find a scientific reference for this figure.” They go on to speculate the number comes from another source relating not to plastic bags but to “to active fishing gear bycatch and not marine debris.” Banning plastic bags does nothing to address this problem.

As a side note, there is a serious problem with lost fishing gear — nets that continue to kill even after they have been lost. Confusing that real problem with unscientific claims about plastic bags, however, is dishonest.

Reusable Bags are Better for the Environment

The reason grocery stores moved to plastic bags is quite simple: they cost less. One key reason is that they use less energy to produce. Substitutes all use much more energy. Paper bags, for example, use about four times as much energy as plastic bags. Environmental activists often point to reusable bags as the preferred alternative, but research shows this is far from a panacea. For example, one study completed by the U.K. Environment Agency found reusable cotton bags took 173-times as much energy to produce as plastic bags. Assuming one trip to the store a week, it would take more than three years of use simply to break even, energy-wise. That may be possible, but if people regularly wash their bags (as they should) it is questionable how well the bag would hold up. Banning plastic bags would eliminate the lowest-energy product in favor of high-energy alternatives, which would likely increase overall energy use.

Plastic Bags Aren’t Recycled

This is largely true but misleading. Fewer than ten percent of plastic grocery bags are recycled, whereas paper bags are recycled at much higher rates. The reason, however, has much to do with the environmental mantra of “reduce, reuse, recycle.” Although plastic bags are rarely recycled, they are frequently reused. The City of Seattle estimates that about half of plastic grocery bags are reused as garbage bags, to pick up after pets, and similar uses. As noted above, plastic bags also do well when it comes to the “reduce” calculation as well, reducing the amount of energy-per-bag. Banning plastic bags doesn’t eliminate the need for garbage bags or the other uses, it simply requires consumers to buy other bags. A ban would neither reduce nor reuse.

Banning Plastic Bags is a Net Benefit for the Environment

This is, to some extent, in the eye of the beholder. If you believe that reducing plastic in the ocean is a good thing at any cost, then you probably support bag bans even if they have little benefit. That, however, is a simplistic approach that ignores huge environmental costs (not to mention economic costs). We are constantly lectured that climate change is the most important environmental issue of our time, yet the energy costs of banning plastic bags are often ignored. Indeed, we can even estimate the environmental value of banning the bags to see if we are receiving the environmental benefit we pay for.

When the Seattle City Council proposed taxing plastic bags, The Seattle Times tallied the overall reduction in resource use that would result. The city expected to spend $10 million, projecting that water use for bag production would be reduced by 39 million gallons each year and would cut CO2 emissions by 6,000 tons per year (this does not examine the costs of replacing the bags which, as noted above, would likely increase emissions). These numbers sound large, but actually the impact is quite small. To put a price on the value of the CO2 reductions, we can use the European carbon market price of about $20. Reducing 6,000 short tons of CO2 would cost about $109,000, or one percent of the cost of the bag tax.

The numbers for conserving water are similar. Each day, Seattle uses about 130 million gallons of water. Reducing water use by 39 million gallons a year is less than one one-hundredth of one percent of water used in Seattle, or less than one-third of one day’s consumption. So, the amount of water saved by this tax would be infinitesimal. How much is that amount of water worth? Using residential rates, which have the highest marginal rates, the cost of 39 million gallons (5,213,904 cubic feet) is between $169,452 and $553,716 depending on the amount used, assuming use during peak times.

In other words, the bag tax would cost $10 million to gain environmental benefits that could be acquired for as low as $278,452.

Like so many trendy environmental ideas, banning plastic bags is a policy that fares quite poorly when examined with a rigorous economic and scientific approach. That, however, hasn’t stopped a number of jurisdictions from banning the bags, sending out press releases proclaiming their commitment to saving the environment, and encouraging other cities to follow suit. Ultimately, the bans are more about politics than the environment.

Westin Makes the Free-Market Green Choice

If you have stayed at a hotel recently, you have seen a card in the bathroom exhorting you to help the planet by reusing your towels, thus reducing the amount of water, energy and detergent used by the hotel. Such appeals are typically based on guilt – you reuse the towels and the hotel receives the financial benefit.

The success of such efforts, however, is tenuous because it is entirely contingent on the convenience and good will of the guests.

Westin Hotels, however, have harnessed the free market to find a better way.

When I checked into my hotel in Charlotte last week, I noticed a door hanger lying on the bed which read:

“Make a green choice. Enjoy a $5 voucher at participating food and beverage outlets or 500 SPG Starpoints awarded at checkout for each night you decline housekeeping.”

Instead of guilt, Westin recognizes that sharing with their customers the benefit of conserving resources is likely to make the program more successful. And they are seeing results.

Chris Para from the Westin Charlotte said the program has grown in each of the three years they have offered it. He estimates that 16 percent of guests take advantage of the program. This is a remarkable result considering what it might take otherwise to cut water use for laundry by about one-fifth.

The program was actually conceived at the Westin and Sheraton in Seattle where the “green” ethic is ubiquitous. But it goes beyond simply cultivating a green image. Westin enjoys financial benefits in two ways. First, it saves money by reducing the laundry and housekeeping costs. Second, it is an initiative Westin can use to attract corporate customers from organizations requiring their employees to stay at “green” hotels.

The group most likely to be incentivized by the program and use it are business travelers, and Westin’s Starwood points are a particularly attractive reward.

Interestingly, Para seemed sheepish when I asked if the hotel benefited financially from the program. By providing benefits to the hotel and customer, however, the program is more likely to stand the test of time. Too many green programs are based on people being willing to endure inconvenience or cost and are jettisoned when times get tough. With the hotel benefiting, they are more likely to continue and even expand the program.

Instead of apologizing for the benefits they receive, Westin should be proud. Those financial rewards may encourage other hotels to follow suit, further reducing overall resource use.

By harnessing the incentives of the free market, Westin, its customers and the environment all benefit.

U.S. Congress Offers Environmentalism for Dummies

In case you are visiting the Congressional gift shop, you might want to pick up the “Green Living” wheel which offers tips on how to live a more environmentally friendly life. Emblazoned with “U.S. House of Representatives” at the bottom, the cardboard wheel can be turned to reveal bits of environmental wisdom in a cutout window. The bits of advice, however, range from the simplistic to incorrect.

Here are a few examples of the advice being offered by a well-meaning U.S. Congress through the powerful vehicle known as “the gift shop.”

“Turn heat down at night and when you are away from home.”
If you need to buy this little cardboard wheel to figure this out, you probably are not capable of finding your way to the Congressional gift shop in the first place.

“Do not use disposable razors, pens or other items that have permanent options.”
I have a reusable ink pen, but short of everyone returning to quills, I’m not really sure how this is feasible. It also ignores that while the razor and pen case may be re-used, you still discard the blades and ink cartridges. This isn’t likely to make much of a difference in the global scheme of things.

“Use digital cameras instead of film cameras. Hazardous chemicals are used to process film. Avoid disposable cameras.”
This wheel was published in 2008. My question is, where would one even find a film camera in 2008 or 2012? Practically everyone has a digital camera in their pocket these days and don’t need to buy disposable cameras any more. This is a good example of the technology from the free market eliminating what might previously have been an environmental concern.

“Use voice mail instead of an answering machine. Answering machines use energy when plugged in & ultimately end up in landfills.”
Again, I don’t even know where I would find an answering machine today. Maybe I could sort through a local landfill.

“When traveling choose an eco-friendly hotel, they use less water and less energy.”
I don’t understand this. Are there hotels that intentionally waste water and energy? I do enjoy the cards at hotels that encourage me to re-use towels “for the planet” when their motive is really to cut down on laundry costs. Hotels already have a strong incentive to cut costs associated with using water and energy, and my guess is that every hotel wants to use less water and energy.

“Purchase locally when possible. It conserves energy that would be used to transport goods.”
This is actually bad advice and may do more harm than good to the environment. Transportation is only about 10 percent of the energy used in food production and ignoring the other 90 percent to make small improvements in the 10 percent is foolish. Growing food where it is most appropriate is a far more responsible use of resources than worrying about the final distance a food product travels.

Add all of these eco-fads together and the environmental impact will be extremely tiny or even negative. Like so much of the environmental movement these days, these steps are primarily designed to give people a sense they are helping the planet and making them feel good about themselves. That is the real value of such facile recommendations — to inculcate a sense of mission and participation in a movement larger than you.

By way of contrast, technology that emerged from the free market made a couple of these recommendations irrelevant. The price signals of the free market made others extremely obvious.

Given the choice between trendy environmental moralizing and free-market incentives to do more with less, the planet (like people) chooses the freedom and personal responsibility of the free market.

Come to think of it, maybe it is better if you don’t buy a “Green Living” wheel. It will just end up in the landfill.