Monday, 27 July 2015

Glass Mountain

We always kept a sharp eye on the ditches when I was a kid riding in the back seat. Why? The glint of a beer bottle meant $0.10. Collect a dozen of them and you've got a $1.20. So Mom and Dad would have to keep a foot hovered over the brake just in case one of us saw a bottle - or even better, an abandoned case of empties. Then off to the Altamont Hotel to turn them in.

The Canadian system worked because all the bottles were standardised. There were two dominant brewers who used identical bottles. State-run liquor outlets combined with a bit of distribution through licensees like rural hotels meant a very limited number of distribution outlets: the trucks that dropped off the bottles could presumably pick up the empties for the run back to the distribution outlet.

I don't know whether the economics of the Canadian set up stacked up, but it was a system that could have made sense given the way the rest of it ran. In all cases, you have to weigh up the costs of picking bottles up, making sure none of them were chipped or damaged, cleaning them, and getting them back to the bottler, against the costs of making new bottles. If you don't like monetary calculations and prefer some kind of environmental accounting, there's carbon costs from picking up old bottles, from the hot water needed to clean the old ones, the cost of the water itself, and of the detergents that then go out into the sewers.

Radio New Zealand reported on a pile of broken glass bottles in an abandoned quarry down in Southland. It looks like Invercargill does not have a great sorting facility, so Auckland's glass recycler doesn't want the product.
The director of Invercargill's recycling contracter, Southland DisAbility Enterprises, Ian Beker says even if OI would take the glass in Southland, the cost of freighting it there is not economic. He told New Zealand Geographic that the best thing Southlanders could do is put their bottles into the general rubbish bound for the landfill.
This prompted some twitterings about how New Zealand needs to move to a deposit scheme like the one I grew up with in Canada. But that's really unlikely to be a good idea.

First, we have beautiful diversity in packaging styles. Tuatara won awards for its lizard-themed bottles. Some brewers use a standard bottle, but lots of the bigger ones have their own custom bottles. That means that a deposit scheme would have to sort the bottles before they could be returned to their homes. The costs would not be low. Different shapes and sizes would mean a harder job cleaning them all properly. Further, you'd have to store small-volume niche bottles until you'd accumulated enough to send back to the brewer.

Second, any brewer who wants to run his own deposit scheme can do so. Some of the craft brewers with more expensive glass did so in Christchurch, but I've lost track of the state of play on that one.

If it is more expensive to clean and reuse a bottle than to press new bottles, we waste resources in recycling them. And I can't see any plausible externality story around it. Landfill operators have to buy land in competitive markets; if old quarries were more valuable as something else, somebody else would have bought it instead. Councils typically charge for rubbish collection. If they have the marginal cost of rubbish collection wrong, that's a bigger issue than just glass bottles. But think about it more carefully: glass is about the safest, easiest thing in the world to put in a landfill. It doesn't leach or leak. Nothing dangerous. No smells and nothing to blow away in a stiff breeze to inconvenience neighbours. It won't emit methane while decomposing. It eventually will turn into coloured sand.

It would be very easy to waste a pile of resources by requiring Invercargill to upgrade its facilities, just because some folks don't like the idea of that there is an old quarry full of old glass.

There's no shortage of land in New Zealand that can be used for storing old glass. If there ever were, the price of it would bid up, the cost of dumping would increase, and things that today aren't worth recycling would be. When I lectured on environmental economics as part of my current policy issues course at Canterbury, I'd figured that if Christchurch went through a Kate Valley sized landfill every year instead of every thirty, and if they were built on prime dairy land instead of scrub wasteland, it would still only cost about $2 per person per year in land costs for landfill.

Bottom line:

  • Landfills should charge tip fees that reflect the cost of building, maintaining and running them. There can be reason for undercharging to reduce littering, but the resulting mild subsidy to landfill will be general across all waste streams, not specific to glass, and glass is one of the less harmful things to have in landfills.
  • If it is cheaper to dispose of a glass bottle in a landfill than it is to clean it and return it to the bottler, or to use it as feedstock in making new bottles, that typically means we would be wasting real resources if we forced it to be recycled. Since transport costs matter and since small centres can't afford expensive sorting facilities, it can make perfect sense for some places to recycle glass and others to use landfill.



  1. There's presumably a net carbon externality: melting sand to make bottles must take more carbon than cleaning old ones. On the other hand, carbon pricing is the way to handle that.

  2. Maybe - you also have carbon costs in sorting (minor) and transporting (potentially major) old bottles. Agree that carbon pricing is the more appropriate mechanism.