Wednesday 4 September 2013

Reader mailbag: Dunedin plastic mountains edition

In the inbox, from our Professor of Finance:
Oh the irony - the 'sustainability' of recycling

Ratepayers are going to be charged more to keep producing a 'good' that nobody apparently wants or needs! Now that's certainly a 'sustainable' policy…
The ODT article forwarded me by the good Professor Glenn Boyle notes:
As a stockpile of the city's plastic waste grows ever bigger, the Dunedin City Council is being warned it may have to increase rates if returns from recycling do not improve.

The amount Dunedin people recycle has increased by a third since a new service was introduced in 2011.

That increase, combined with the high New Zealand dollar and a four-month stay on sending some plastics to the main Chinese market following a crackdown on contaminants in recyclables that has put traders off selling to China, resulted in the council running the service at a loss last year.

...The situation has prompted council solid waste manager Ian Featherston to warn the council this week that although the exchange rate was falling and new markets for the materials were being sought, the reduced target of a $210,000 return this financial year might also be difficult to achieve.

In that case, the kerbside recycling targeted rate would need to be increased next year from $64 to $69, he said.

Mr Featherston said Dunedin people recycle about 30 tonnes of material a month.

The stockpile of plastics being held had now reached about 150 tonnes.
Recycling programmes can still make sense even if they run at a loss, but only if the costs of disposing of this kind of plastic via the recycling system is lower than the costs of disposing of it via landfill. If it costs $30/tonne to get rid of waste at the landfill and the net costs of a recycling programme are $20/tonne, we're still $10/tonne better off by having it.

When I'd run some ballpark numbers on Christchurch's system in 2009, it looked like we were paying at least twice as much to get rid of waste via recycling, on average, as we were paying for disposal at Kate Valley. Some recyclables are of high value and are worth sending through a recycling system, but most of it is not worth the cost.

The numbers in Christchurch have likely changed with our newer bin system that separates out composting waste; the Otago numbers too could vary. I'd be surprised if it made sense to be stockpiling plastics in hopes of shipping them to China, but it's not impossible.


  1. It would help if we didn't have two branches of central government sending out conflicting requirements.

    On the one hand councils are signed up to or required to follow the national waste minimisation strategy (Reduce, Recycle, Reuse) which is the justification for recycling schemes such as this one and their associated costs. Presumably this comes from Ministry for the Environment.

    On the other hand Foodsafety NZ (part of MoBIE) encourages more waste through increased food packaging. They also actively promote all those "use-once" items such as plastic plates, cutlery, glasses etc.

    Given that food packaging represents something like 99% of our recycling stream you would think it would be a priority of central government to develop a co-ordinated approach instead of continuing this lunacy.

    BTW this is one of those classic cases where the public sector can use divided responsibility to avoid any accountability. Central government says "not our problem councils do recycling". Councils say "Not our fault, we have to do this 'cos government told us to". Brilliant.

  2. I'm pretty unconvinced that the biggest part of recycling comes out of Foodsafety NZ requirements. Glass bottles and plastic milk containers would exist regardless of those regs. Is there a cite on this? I could imagine an argument where the lowest-value parts of the recycling stream are there because of mandates elsewhere, but I'd love to see the numbers on it.

  3. I would agree that there are also straight out financial efficiency reasons for choosing use-once packaging rather than reusable packaging or even no packaging. Even so I don't think the joint initiative between government and industry to reduce packaging at source has made much progress. At the same time all food manufacturers know that a conservative approach to packaging will help guarantee that a food safety plan is accepted by MPI/local council. So food suppliers are highly incentivised to over-package.

    I stand by the comment that two parts of government are working in opposition to each other so it's no big surprise if we find that some excess costs being passed on to ratepayers and consumers.

    If anyone finds any research in this area I too would be very interested.