Wednesday, 10 August 2011

Smelters and baptists

Bruce Yandle says we ought to expect particularly pernicious results when a moral case for regulation (the Baptists) coincides with another group's having a strong pecuniary interest in the outcome (the Bootleggers).

Exide, a NZ battery manufacturer and recycler, is suing the government, seeking an injunction against that used batteries are exported to the Philippines and Korea for recycling.
The country's biggest recycler of toxic waste is preparing to sue the Government over its refusal to ban shipments of used lead acid batteries overseas.
It is understood the Petone-based Exide smelter is readying legal action against Commerce Minister Simon Power over his failure to stop the shipments in what it says is a direct contravention of New Zealand's international obligations under the Basel and Waigani treaties.
The treaties are supposed to stop rich nations from dumping their toxic waste on poor nations.
Exide's lawyers ChenPalmer are expected to ask the Government to slap an immediate moratorium on battery shipments and will seek an injunction if it refuses.
The move comes as sources close to Exide suggest the plant has enough batteries to stay open for just four days this week. It may have to close on August 15, costing about 40 jobs, depending on the legal action, unless a new supply of used batteries is found.
The Green lobby is supporting Exide's call for the Government to stop further exports, saying they threaten New Zealand's image as a clean green country and a responsible member of the international community.
Countries such as Australia stopped exporting toxic battery waste to the Philippines after they signed up to the Basel and Waigani conventions, which aim to limit the movement of toxic and highly hazardous waste beyond national borders. New Zealand is also a signatory but the Government argues that banning lead acid battery shipments would give Exide a monopoly.
Dr Smith – who will meet Exide bosses this week – has launched a review of shipping policy but said he would have to be satisfied that Exide was running "a world's best-practice recycling facility at Petone" if the policy were to change.
The article notes that Exide's environmental record in New Zealand has not been stellar.

A few points worth noting:
  • New Zealand is unambiguously cleaner and greener if toxic waste is sent abroad than if it is dealt with here. The folks who live next door to the smelter would agree. Maybe it could hurt our image as a "responsible" country, but I can't imagine those effects are discernible from noise. 
  • Shipping toxic waste to poorer countries like the Philippines can be efficient even if it is handled there less well than it would be here - I'm not convinced the Summers Memo was wrong, parody or not.
  • I would be very surprised if Korean standards (South Korean, anyway) were below New Zealand's; moreover, they'd have vast economies of scale as compared to processing in New Zealand. Abatement of emissions from a lead battery recycling plant seems likely to be the kind of thing that has really big fixed cost in setting up a high quality plant and then relatively low marginal cost. I'd put better than even odds that net global environmental quality goes up, not down, if we export batteries to Korea.
HT: Darian Woods

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