Waste Management Should be Driven by the Market Pricing

Americans like to recycle, and recycling is indeed an important part of our integrated waste management system. This system recognizes that some portions of our waste are most efficiently recycled, some are most efficiently placed in landfills, and some can be burned in incinerators. The key is finding the mix of options that conserves the most resources, while protecting the environment. Market-driven competition is the best way to achieve this goal.  The price of each option represents its costs to society: the value of the water, energy, land, labor, and other resources that the disposal option requires. Hence, by allowing competition between disposal options, we enable the most resource-efficient (the least expensive) option to win in any given case. Yet state and local governments do not follow this advice. They try to manage their waste with plans similar to the economic plans of the former socialist nations, creating a host of economic and environmental problems.

Local governments often develop 30-year waste management plans, an approach that presents serious problems. Public officials cannot possibly estimate future waste generation, nor can they envision future disposal technology. As a result, they often make poor decisions, invest in the wrong technologies, and choose less efficient disposal options.  For example, many states and localities have invested in oversized waste disposal facilities—primarily waste-to-energy incinerators—only to find that they did not have enough waste to keep them running because there were other, more affordable options.  As a result, states and localities went so far as to ban competition with these plants.   

With government involvement, waste management increasingly serves politically popular goals at the expense of safe and efficient disposal. In particular, the EPA’s system of politically preferred waste disposal options, called the waste management hierarchy, governs most state and local waste management plans.  According to the hierarchy, waste policy should first focus on reducing the amount of trash that people make—so-called source reduction.  Second, it should emphasize recycling.  And wastes that we cannot reduce or recycle should go to the politically unpopular options: to the landfill (third on the list) or to an incinerator (fourth on the list). By relying on this political formula, bureaucrats often work to promote source reduction and recycling at any cost to the environment and consumers.