There’s good reason recycling is mandated

If there were ready markets for these products, they’d sell themselves

Jason Hayes, Mackinac Center for Public Policy

The Michigan Legislature is considering a package of bills that would promote new recycling and composting requirements. This package, consisting of House bills 4454 to 4461, was passed by the House on April 22.

While the idea of recycling seems almost sacrosanct, when you dig in, you actually find a host of problems in these bills: expanding government mandates, new fees and increased costs, and (at best) dubious environmental gains.

With the House having given its approval, it’s now up to the Senate to take a sober second look.

The House Fiscal Agency’s legislative analysis of the bills explains that together, they will amend the state’s regulations covering solid waste, including coal ash and recyclables. The analysis recognizes the bills will have a mixed fiscal impact as they push to increase Michigan’s recycling rate from its current 18%, which is below the national average of 34%. But the majority of the added costs will fall on households, consumers, and taxpayers, as communities and businesses are forced to cover the costs of the programs the bills call for.

HB 4454 and 4455: As well as defining several new sections of Part 115 of Michigan’s Natural Resources and Environmental Protection Act, these two bills push the state toward a 30% recycling rate by 2029, with a targeted rate for household waste of 45%. The bills also require materials management plans to replace solid waste management plans.

HB 4456: This bill establishes prices and requirements for state permits for landfills, coal ash impoundments, and various other sites or facilities that manage waste. The bill also has requirements about how landfills manage the gases they produce. In addition, they describe how the state must inspect landfills and what landfill operators must do to maintain and monitor a landfill after it is closed. The bill’s final section covers the management and operation of waste diversion centers, which separate certain wastes — hazardous or liquid materials, electronics and batteries, pharmaceuticals, light bulbs, sharps, pesticides, or devices that contain elemental mercury — from the general waste stream.

HB 4457: Increases bonding requirements for landfills and coal ash impoundments. It also requires landfill operators to increase their estimates of how much it will cost to close and then maintain a landfill. The bill also removes a landfill operator’s right to request a lower bond requirement and calls for a new landfill care fund for landfills covered by section 11523(1)(b).

HB 4458: Establishes inspection requirements for materials utilization facilities, which recycle, compost, or convert waste to energy, rather than disposing of it. It also requires companies that pick up residential trash to establish recycling programs for their customers. The bill also affects solid waste management plans, which are currently created by counties and other local governments. It will transfer the responsibility for creating them to the state Department of Environment, Great Lakes, and Energy. Finally, this bill prohibits residents from burning leaves and yard or household waste when they live in communities with 7,500 or more people.

HB 4459: Expands the list of things that the solid waste staff account can spend money on. They would include planning, education and outreach, developing a recycling market directory, and dispensing grants to pay for planning, outreach, marketing, and education related to recycling. It also allows the Michigan Economic Development Corporation to hire an employee to promote recycling markets. Finally, this bill establishes funding and loan programs to promote recycling marketing, innovation, and infrastructure programs.

HB 4460: Attempts to regulate almost every conceivable aspect of composting, from simple residential yard waste, to commercial composting facilities and anaerobic digesters.

HB 4461: Creates additional regulations for materials management plans (as opposed to solid waste management) as the state focuses on recycling, composting, and waste recovery. It also directs the Department of Environment, Great Lakes, and Energy to ensure that each county has an approved materials management plan. The bill outlines the procedures for a County Approval Agency to appoint a materials management planning committee and create a materials management planning grant grogram to fund county-level materials management planning.

These eight bills represent a lengthy and involved attempt to rework much of the state’s waste management processes. They have received support from a mix of many industries and communities that appear ready to profit from the additional grants and other state funding they might receive. But free-market proponents have reason to pause before lending their support.

There is a very simple reason these materials management and recycling programs must be mandated by legislatures or government agencies: They do not make economic or environmental sense. If there was money to be made in recycling, opportunity-seeking businesses would do it.

But since China stopped allowing shipments of recycled materials in 2017, the market for them has dried up. Industrial recycling tends to produce a much cleaner and more reliable supply of uniform product, which is easier to sell. But materials collected from households tend to be mixed and are often contaminated with food and other residues. That makes sorting and cleaning them far more expensive and resource-intensive. As a result, communities and commercial interests are likely to resist the costs of household recycling programs unless they are either forced to have them, or their efforts are heavily subsidized, by bills like HB 4454-HB 4461.

These bills also often adopt an arbitrary measure — such as the 45% household recycling rate targeted in this package. Their targets are regularly based on the national recycling rate, but higher rates of recycling are not always desirable. A 2014 paper published in the Journal of Environmental Economics and Management estimated that the “optimal recycling rate in Japan is 10%.” Pushing beyond this rate imposes unnecessary costs and inefficiencies onto citizens and communities.

The situation is not that much different outside Japan, a densely populated country. Franklin, New Hampshire, also learned this lesson and actually cancelled its household recycling program when shrinking markets for recycled materials turned a break-even proposition into a heavy financial liability. In 2010, when the city began the recycling program, it was able to sell its waste for $6 a ton, letting it barely break even. But changing Chinese policies radically altered the market for recycled materials and now the town has to pay to have them processed. Handling facilities now charge the town $125 a ton for recycling, or $68 a ton for incineration.

Similar costs will be loaded onto Michigan residents if legislation forces municipalities across the state to meet the arbitrary 45% recycling rate. Communities will be obligated to spend limited dollars establishing a second waste collection infrastructure, as well as expanding their energy use, emissions, and personnel expenditures. Stricter quality controls on recyclable materials that have been brought on by changing market pressures will make it increasingly expensive to carry out intensive sorting and cleaning.

That’s a problem for many communities. Significant worldwide markets exist for clean bales of PET (polyethylene terephthalate) and HDPE (high-density polyethylene). (PET is commonly found in products such as water bottles or takeout containers while HDPE is common in milk jugs and shampoo bottles.) Smaller markets for PP (polypropylene) and LDPE (low-density polyethylene) also exist, but much of the demand for these plastics is driven by recycling mandates or regulations. A change in policy could easily depress the market. Other forms of plastics often cannot be recycled because of energy requirements, or because they “degrade every time you try to reuse [them].”

Markets for glass are, at best mixed, because when sorting, cleaning, reprocessing, and transportation costs are taken into account, it’s often less expensive and just as environmentally friendly to make new glass. There is also a market for clean paper products (read: no food or other residue). Again, as with plastics, industrial processes that produce glass or paper waste tend to produce a cleaner and more uniform product that is easier for recyclers to use efficiently.

The presence of incorrect grades of plastic, foreign materials, food waste, or even rainwater will ensure many of the collected materials do not meet minimum quality requirements. The presence of an unwashed yogurt container or a greasy pizza box can cause many of these materials to be rejected as unrecyclable. If rejected, the items that were once placed in recycling bins will be sent to the same landfill or incinerator as the remainder of the waste.

While few people would question the motivations or intentions of those advocating for increased recycling, good intentions don’t always make for the best policies. It would be more honest, efficient, and green, and much less expensive to admit that there is often no market for these materials.

Doing so would allow us to avoid the added costs and expenditures on personnel and energy for collecting, transporting, separating, washing, and sorting recycled materials.

Editor’s note: Jason Hayes is the director of Environmental Policy for the Mackinac Center for Public Policy.


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