Is recycling sensible?

Evaluation of the Efficiency of Germany’s Municipal Solid Glass Waste Management System


Seminar Paper, 2011

28 Pages, Grade: 2,7


Excerpt

Table of Contents

Abstract

Table of Contents

List of Abbreviations

1 Introduction

2 Optimal Recycling Model
2.1 Amount of Recycling
2.2 Household’s Behaviour
2.3 Social Costs

3 Empirical Recycling Determinants
3.1 Recycling Behaviour / Recycling Shopping Behaviour
3.2 Glass Recycling
3.3 Cost-Benefit-Analysis

4 Process of Glass Recycling

5 Glass Recycling in Germany
5.1 Municipal Glass Waste Management System
5.2 Policy Proposals

6 Conclusion

Literature Sources

Internet Sources

Abstract

Die vorliegende Seminararbeit beschäftigt sich mit der Frage inwieweit Recycling als sinnvoll und lohnenswert anzusehen ist. Spezifisch wird das vorhandene System des Glasrecycling in der Bundesrepublik Deutschland auf zuvor präsentierte theoretische und empirische wissenschaftliche Zusammenstellungen hin verglichen. Dabei wird der technische Prozess des Recycling fast gänzlich außer Acht gelassen. Vielmehr werden Bezahlstrukturen und Anreizmodelle für Haushalte und Unternehmen betrachtet. Es wird dabei sowohl das Duale System Deutschland als auch das System der Mehrwegflaschen berücksichtigt. Schlussfolgernd kann festgehalten werden, dass die derzeitige Struktur zwar nicht alle zuvor präsentierte Ergebnisse optimal implementiert, jedoch die realen Gegebenheiten und Interaktionen mit anderen Materialen hinreichend berücksichtigt. Insofern wird das System des Glasrecycling in Deutschland aus ökologischer und ökonomischer Perspektive durchaus positiv bewertet.

The paper at hand tackles the question of recycling being sensible and social desirable. In fact, the current German glass recycling system is going to be compared to theoretical as well as empirical findings which are presented first. The technical process of recycling is going to be neglected. The focus is rather on payment schemes and incentives regarding the consumer as well as the industry side. Both streams of glass recycling(the Duale System Deutschland and the system of reusable bottles) are taken into account. Thus, one can sum up, that not all of the aforementioned results are incorporated into the current German system. However, real world circumstances as well as interactions with other materials are adequate considered. The final assessment from an ecological and economical point of view is consequently positive.

List of Abbreviations

illustration not visible in this excerpt

1 Introduction

According to the ‘spaceship earth’ metaphor, first introduced by Kenneth E. Boulding in 1966, the earth can be considered as a closed system, where no resources can either enter or leave the ‘spaceship’.[1]This metaphor has been commonly used to introduce the role and importance of recycling in a desirable circular flow economy. Therefore, economies should not use more resources than they are able to reuse. The minimization of external by-products of the industry should be seen as one of the main goals. This can be considered as a quite foresighted perspective in 1966.

However, implementing this idea into policy decisions and even reaching the goal of a circular flow economy is taking some time. Germany, which can be considered as a pioneer in municipal waste management, aims for a circular flow economy, at least for municipal solid waste, by 2020.[2]

Most definitions consider recycling as the reuse of resources while other include also the extraction of industrial by-products from nature.[3]However, with this technical point of view from the latter one, recycling is better considered in terms of energy.[4]Using the idea of how much energy is needed for a specific recycling process, the optimal amount of recycling, as well as the technical efficiency of a given system might be evaluated. But as this paper is less concerned about technical procedures and more about the management of a recycling system and the behaviour of the different players within this system, the German legal definition will be used throughout this paper. This definition is well defined and of better practices for this paper than the more technical ones. Therefore, only the substitution of industrial inputs by resources gained from waste can be considered as recycling, which also excludes possible energy generation from waste.[5]

Nevertheless, before an evaluation of recycling processes and systems can be done, the question arises if recycling should be done at all. According to some futurist,[6]the difference from today’s society to a few generations ahead will be as different as it is to the middle ages. If such a dramatic change in technology can be assumed, cannot we just trust in future technology fixing current problems? Some econometric time-series models on the prices of natural resources predict none or tentative rising prices,[7]what would question the economic sensibility of recycling. But as these kinds of models are solely based on past data, their explanatory power is highly doubtful due to the uncertainty in future exploring of resources. Other findings do predict rising prices for natural resources as long as recycling is not applied in a sufficient manner, what basically refers to a Kuznets curve for recycling.[8]But however technology or societies will develop, there exist some limits in conservation laws that do make recycling extremely necessary.[9]Therefore, waste can be considered as resources at the wrong place.[10]

The following analysis of the efficiency of the German municipal solid glass waste management system is divided into two parts. The first part will deal with recycling in general, whereas the second one focuses on glass recycling. In chapter 2 general results of an optimal recycling system will be summarized. Empirical findings on household behaviour with respect to recycling are introduced in chapter 3. This chapter starts with results in general but will already emphasis some glass specific facts. Chapter 4 will be the accurate switch to the second part and presents the existing process of glass recycling in Germany. Finally chapter 5 compares the implementation of the aforementioned theoretical and empirical findings with respect to glass, while the conclusion can be found in chapter 6.

2 Optimal Recycling Model

This paper takes only recycling models into account, which are constructed to maximize total welfare, which is then called an optimal recycling model. The first subsection briefly tries to answer the question of an optimal amount of recycling, whereas the second one examines the fee structure of a waste management system for any given amount of recycling in more detail.

2.1 Amount of Recycling

As already briefly mentioned in the introduction, recycling itself is assumed to be sensible, due to the aforementioned limits on conservation laws. However, the process of recycling is not costless. Therefore, an optimal amount of recycling, that maximizestotal welfare,has to be determined.If one considers landfill capacity as an exhaustible resource, recycling can be assumed as a technology with higher costs but with unlimited capacity, which is then referred as a backstop technology. Therefore, the technique of optimal control might be applied to solve this optimization problem, which is done by Highfill, Jannett, Michael McAsey (2001). Assume a consumer who’s utility does only depend on consumption but not on recycling. Let the utility function be quasiconcavewith .If all consumption becomes waste that needs to be disposed in a landfill or recycled , the disposal constraint can be written as . Furthermore, the cost of recycling shall be higher than the cost of landfilling and should increase per unit with an increasing amount of recycling. Besides the disposal constraint, the consumer faces a budget constraint which is growing over time and reflects a growing income. When maximizing the consumer’s total discounted utility, it can be shown that recycling is growing over time. In general, the optimal path decomposes into three periods. In the first one all waste is disposed in the landfill, whereas the second one is determined by landfilling and a growing percentage of recycling. Finally, complete recycling is obtained in the last period.[11]Hence, complete recycling is optimal in the long run, even though consumer’s utility might not depend on recycling and even with an increasing marginal cost of recycling.

Another optimisation approach could be a mixed integer linear programming (MILP) model, which is done by Bratz, Brian W., Alan W. Neebe (1994). They compare traditional waste management systems of collection, transport and landfilling to more complex ones.In those more complex systems, all waste passes through a recycling programme and ends either as recycled material, on a landfill or in a waste-to-energy facility. The MILP model is more concerned about the technical efficiency of a waste management system, than consumer’s utility or total welfare. However, the result remains the same, namely that recycling programmes in solid waste will continue to grow in complexity and particularly in the percentage of recycled materials.[12]

According to these two studies, the aforementioned aim of the German Federal Government to reach a circular flow economy without any traditional landfilling is highly desirable.Nevertheless, the optimal time path for Germany is not proven here.

2.2 Household’s Behaviour

Household’s recycling behaviour with respect to different choices in handling waste is examined by Fullerton Don, Thomas C. Kinnaman (1993). Their model incorporates two different settings. In the first, households can choose between garbage and recycling, while the second setting also includes illicit dumping as a third disposal option.

In the first setting, household’s consumption function depends on garbage and recycling . It is assumed to be continuous and quasiconcave, so that a household is able to shift between the two disposal methods.[13]Utility depends furthermore on the total amount of garbage of all households, , and home production , which can be considered as leisure use of time and resources. Therefore it holds that:

, with

.[14]

It is important to notice that the utility of a household decreases with garbage. This assumption is strictercompared to the model of Highfill, Jannett, Michael McAsey (2001). Nevertheless, it can be considered as more realistic as will be shown in the empirical findings (see chapter 3).

The production side uses input materials and recycled materials with the respective production function:

The model is constrained by a situation without any stocks , as well as by the resource constraint , where denotes the resources used for garbage collection service and the resources for home production. Optimizing total welfare leads to the result that households have to pay a per unit fee for garbage collection that equals the sum of direct resource costs and external costs.[15]These external costs are in fact the disutility for those individuals living close to landfills caused by noise, odour, litter and extra traffic.[16]

If one considers the second setting with three disposal choices for the household, the utility function enlarges to: where is the amount one single household dumps illicit and the total dumped amount of all households. Even though, it is assumed that punishing illicit dumping cannot be enforced, it involves time and psychic costs. These costs are captured by and lower household’s utility. The new resource constraint becomes and again, the social planner seeks to maximize total welfare. It is assumed that illicit dumping imposes a higher negative externalities on other households than proper garbage disposal, what can be written as . If this assumption holds, it can be shown that the optimal fee for garbage collection changes sign in order to install the first best solution. In fact, a negative fee for garbage collection boils down to a refund system on proper disposal and recycling. In order to finance this deposit system, there has to be some kind of payment for the undesirable action of the households, which is illicit dumping. However, illicit dumping is not a market activity, as it is not observable. For this reason it cannot be taxed directly. Though a tax on all consumption goods is discouraging illicit dumping indirectly, if there exists a refund on disposal and recycling. Households are then incentivised to participate in proper disposal and recycling. Furthermore, this deposit refund system is capable of installing the first best solution.[17]

Even though theoretical models might result in the first best solution, it cannot be assumed that all external costs of waste can be incorporated exactly in real life problems. Furthermore, the tax on consumption might be problematic as well. Fullerton Don, Thomas C. Kinnaman (1993) argue that there won’t be a distortion due to the tax on consumption, even though leisure remains untaxed in this model. However, as household’s disutility regarding illicit dumping varies between different materials, for example in their toxicity, a possible tax has to be set for each consumption good.

2.3 Social Costs

A fact that is not covered so far is the possibilityof a household’s recycling effort representing a social cost. This becomesimportant when performing a cost-benefit-analysis for several ways of waste treatment with different levels of effort andif this effort imposes some kind of social costs for the household. These different levels of effort could be due to different expenditures on time, how many waste containers each household has to have but also due to the social acceptable amount of effort itself. As a result, these costs could be higher than environmental gains from recycling. Most people would argue that this is not the case, since they have the implicit assumption that this kind of effort produces pro-environmental benefits that increases social welfare. Bruvoll, Annegrete, KarineNyborg (2002) constructed a model where this might not hold under some circumstances. They include the actual costs each household has due to her recycling effort, which are mainly time costs. Furthermore, they assume recycling effort to be driven by private values, what is in line with the empirical findingsthat are presented in chapter 3. The basic assumption here is individuals having a certain self-image, which could result in disutility or a social cost for each household that is not able to keep up to this self-image any more. If policy activities try to enlarge voluntary recycling rates by public appeals, the effort of keeping oneself as a responsible consumer in comparison to others may increase and could result in a social cost for thosehouseholds with a pro-environmental self-image. If this self-image is determined by the difference between an ideal effort, which might be exogenously influenced by the government, and one owns individual effort, an increase in the ideal effort follows a social cost if one wants to stick to the initial self-image.[18]

However, this social cost is strictly related to the assumption of how the self-image is determined and to constant preferences. If other ways of determining the self-image than the difference between the ideal and the own effort are assumed, the social cost might differ. Another assumption for the self-image might not be the effectiveness of one’s effort but how large her burden is. An example for this volitional burden is that somehouseholds get utility, a ‘warm glow’, from sorting waste themselves, while it might be more efficient to do this automatically by a waste separation plant.[19]This ‘warm glow’ refers to any possible nonpecuniary incentives to participate in recycling.

3 Empirical Recycling Determinants

The aforementioned model of Fullerton Don, Thomas C. Kinnaman (1993) assumes household’s utility to increase with recycling. This can be thought of a private value for recycling by feeling morally superior, what is again a nonpecuniary incentive for participating in recycling. If this ‘warm glow’ should be sufficient to make households recycle, the unit value of this private benefit from pro-environmental actions plus the unit deposit must be at least as large as any increase in time costs due to recycling compared to disposal in the garbage.[20]

In the following chapter some empirical studies are presented to prove not only the so called ‘warm glow’ of recycling, but also the reaction of households to different policies, collection services and payment schemes.

3.1 Recycling Behaviour / Recycling Shopping Behaviour

One of the most recent studies is done by Viscusi, W. Kip, et al. (2010), which is based on a 2009 survey including a total of 608 householdsin the U.S. These are in fact a subsample of plastic water bottle users from a representative sample of households. To predict the recycling behaviour anordinary least squares (OLS) as well as Tobit model is used.The dependent variable is metric in the OLS case and determines the number of bottles that are recycled out of ten used bottles. Whereas the Tobit regression model uses the followingcategorization of this variable: diligent recyclers (8-10 out of 10 used bottles), intermediate recyclers (1-7 out of 10 used bottles) and non-recyclers (0 out of 10 used bottles).[21]

Besides some socio-demographic variables like sex, age, income, etc., the impact of economic incentives compared to external social norms and private values is taken into account. External social norms are captured by a dummy if one would be upset if the respondent’s neighbour did not recycle, or if one assumes the neighbour to be upset if the respondent itself does not participate in recycling. Contrary private values are captured by a dummy if one considers herself as an environmentalist. The state recycling law, which can be of several different types, is used to measure economic incentives. Therefore, also mandatory recycling is treated as an economic incentive, even though it does not contain direct financial gains for a household if participating in recycling. But as breaking the law would induce some fines, mandatory recycling can be thought of an indirect economic incentive.

Their results suggest that external social norms are not influential at all, while private values towards the environment are of major relevance for participation in recycling.However, according to their findings economic incentives are even more important than private values. In fact, mandatory recycling is the most effective one compared to deposit laws.But even states without recycling laws with respect to plastic water bottles but with laws with respect to other kinds of garbage exhibit higher recycling rates.[22]Therefore, the time costs that are connected with recycling seem to be of a fixed type independent of the amount or the type of garbage.This might arise due to the fact that recycling centers do collect several types of garbage or that there is some learning involved in proper recycling. But these time costs might be offset by the concern for the environment, as higher income levels show higher recycling rates, although facing higher opportunity costs for participating in recycling.[23]

Taking the complete recycling process into account, recycling rates are not the only factor determining the participation in recycling. The recycling shopping behaviour, which means buying products with less packaging material or with material that can be at least recycled, is also of importance if one wants to boost recycling behaviour.

Another empirical study with 286 adult U.S. households’ heads takes recycling behaviour as well as recycling shopping behaviour into account.BiswasAbhijitet al.(2000) perform a factor analysis where both, the recycling behaviour and the recycling shopping behaviour, is measured as a nine-point Likert variable. With social norms, private values, economic incentives and some socio-demographic items, the explanatory variables are comparable to the aforementioned study. Another variable that is incorporated here is past behaviour.[24]

Both mentioned studies evaluate private values, economic incentives and higher income levels to be important for participation in recycling. Furthermore, higher educated, as well as more older individuals exhibit higher recycling rates.[25]Additionally, past behaviour, which is only taken into account in BiswasAbhijitet al. (2000),might be another driving force for recycling participation. Households that have recycled in the past are very likely to keep on recycling.[26]This result is in fact another hint that recycling incurs some fixed costs due to learning.

However, according to the magnitude of the impacts BiswasAbhijitet al. (2000) come to slightly different conclusions than Viscusi, W. Kip, et al. (2010). BiswasAbhijitet al. (2000) find social norms to be the most important factor for recycling shopping behaviour, as it isquite observable and public to others in contrast to recycling behaviour. Nevertheless, this study also finds an insignificant effect of social norms on recycling behaviour itself.[27]As a strong positive correlation between the recycling behaviour and the recycling shopping behaviour can be found, the connection between social norms and the recycling behaviour might be indirect via the recycling shopping behaviour.

Viscusi, W. Kip, et al. (2010) recommend economic incentives for boosting recycling rates, while BiswasAbhjitet al. (2000) propose to influence private values and social norms by pro-environmental marketing campaigns. According to theargument by BiswasAbhjitet al. (2000), this might not only be more effective but there could exist the possibility of extrinsic motivations, such as legal and economic incentives, crowding out the intrinsic motivations if they are perceived as controlling.[28]Nevertheless, the argument of crowding out might be questionable. In contrast to BiswasAbhjitet al. (2000), Ferrara, Ida, Paul Missios (2011) assume the consequence of extrinsic motivations, such as legal norms or economic incentives, on intrinsic motivations to be crowding in, when it is seen as an acknowledgement.[29]Policy actions should therefore aim on the motivations that are assumed to be more effective, independent of possible spillovers from extrinsic on intrinsic motivations or the other way round.

If individual behaviour, especially social norms and private values, are considered, the question arises to what extend national findings can be appliedto different societies. Cross-country studies are therefore required to give sensible policy implications for countries other than the U.S. Ferrara, Ida, Paul Missios (2011) present such an empirical study for ten countries in the three OECD regions North-America, Europe and Asia-Pacific, with around 1.000 households for each country.[30]

This study takes also the complete recycling process into account in the sense that both the recycling behaviour as well as the recycling shopping behaviour enters the model. The results indicate country specific effects in the strength of the factors but not in the order. In fact, mostly the same results as in BiswasAbhjitet al. (2000) can be found here. Private values influence both, the recycling behaviour as well as the recycling shopping behaviour, while social norms do only affect the latter one. Economic incentives are significant but of less relevance than one might expect and compared to intrinsic motivations.[31]

As country specific results do occur, it would be desirable to have some sensible assumptions about Germany, even though it is not included in this study. It can be assumed that the attitude of Germans towards the environment is most likely comparable to other European countries rather than Australia, Canada, Korea or Mexico. To choose one of the analysed European countries, Czech Republic, France, Italy, Netherlands, Norway and Sweden, to be comparable to Germany, the Special Eurobarometer ‘Attitudes of European citizens towards the environment’ by the European Commission can be taken into account.Comparing the share of the population that is worried about growing waste[32]and the share of the population that is separating most of their waste for recycling as well as the share of the population that is reducing the consumption of disposable items[33], the Netherlands seem to be most comparable to Germany in the attitudes towards recycling.

[...]


[1] Boulding, Kenneth E. (1966), p. 1 et seqq.

[2] BMU (2010a).

[3] E.g. Craig, Paul P. (2000), p. 373.

[4] Craig, Paul P. (2000), p. 374.

[5] KrW- /AbfG, Section 4, Paragraph 3.

[6] E.g. Harmon, Willis W. (1988), p. 182.

[7] E.g. Berck, Peter, Michael Roberts (1995), p. 65 et seqq.

[8] Pittel, Karen (2006).

[9] Craig, Paul P. (2000), p. 374.

[10] Schenk, Thomas (2009).

[11] Highfill, Jannett, Michael McAsey (2001), p. 679 et seqq.

[12] Baetz, Brian W., Alan W. Neebe (1994), p. 1374 et seqq.

[13] .

[14] Fullerton, Don, Thomas C. Kinnaman (1993), p. 4 et seqq.

[15] Fullerton, Don, Thomas C. Kinnaman (1993), p. 7.

[16] Fullerton, Don, Thomas C. Kinnaman (1993), p. 1.

[17] Fullerton, Don, Thomas C. Kinnaman (1993), p. 8et seqq.

[18] Bruvoll, Annegrete, Karine Nyborg (2002), p. 4.

[19] Bruvoll, Annegrete, Karine Nyborg (2002), p. 11.

[20] Viscusi, W. Kip, et al. (2010), p. 3.

[21] Viscusi, W. Kip, et al. (2010), p. 4 et seqq.

[22] Viscusi, W. Kip, et al. (2010), p. 7et seqq.

[23] Viscusi, W. Kip, et al.(2010), p. 8.

[24] Biswas Abhijitet al.(2000), p. 96 et seqq.

[25] Biswas Abhijitet al.(2000), p. 97.

[26] Biswas Abhijitet al.(2000), p. 95.

[27] Biswas Abhijitet al.(2000), p. 99 et seqq.

[28] Biswas Abhijitet al.(2000), p. 102 et seqq.

[29] Ferrare, Ida, Paul Missios (2011), p. 5.

[30] Australia, Canada, Czech Republic, France, Italy, Korea, Mexico, Netherlands, Norway, Sweden.

[31] Ferrare, Ida, Paul Missios (2011), p. 9 et seqq.

[32] European Commission (2008), p. 10.

[33] European Commission (2008), p. 22.

Excerpt out of 28 pages

Details

Title
Is recycling sensible?
Subtitle
Evaluation of the Efficiency of Germany’s Municipal Solid Glass Waste Management System
College
Humboldt-University of Berlin
Course
Environmental and Ressource Economics
Grade
2,7
Author
Year
2011
Pages
28
Catalog Number
V184268
ISBN (eBook)
9783656089797
ISBN (Book)
9783656089780
File size
2543 KB
Language
English
Tags
Glass, Glas, Recycling, Waste, Waste Management, Abfallverwertung, Stoffverwertung, Rohstoffverwertung, Kreislaufwirtschaft, Rohstoffkreislauf, Spaceship Earth, glasrecycling, Duale System, Mehrweg, Dual System, reusable
Quote paper
Roman Fischer (Author), 2011, Is recycling sensible?, Munich, GRIN Verlag, https://www.grin.com/document/184268

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