South-Western College Publishing - Economics  
How Do We Get People to Recycle More?
Topic Environment and the Economy
Key Words recycling, benefits, cost
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Reference ID: A164603326

News Story We all know that we should recycle. But many of us don’t recycle. What will make us recycle more?

Most studies now indicate that recycling is, in fact, good for the environment, even if issues such as the gasoline used by the recycling trucks to transport recycled goods is considered. Part of the problem is that the process is considered difficult by consumers; separate paper from paperboard from cardboard, separate clear glass from brown glass from green glass, etc.

First, technologies exist that allow for “single stream” recycling; that is, a heap of trash is dumped onto a conveyor belt, and a combination of capital and labor sorts the paper from glass from aluminum. This eliminates the sorting problem for consumers; all they have to do is separate what can be recycled from what can’t.

It may also be beneficial to consider selling recyclable materials to developing countries, as distasteful as that may sound. Recycling has significant economies of scale, however, and the more we can get people everywhere in the world to use recycled materials, the less virgin resources will be consumed. Some people are concerned that the material will simply be dumped into a landfill; however, if you bought something prepared to use it, would you just then throw it away? That doesn’t make economic sense.

Finally, why not compensate people for recycling? If society benefits from recycling, then those benefits can be redistributed. Individuals can see reduced bills if they choose smaller trash bins and larger recycling ones. People charged by the bag for their trash could see their total trash bills fall by recycling more. It’s just like taxing firms to curb unwanted behavior; does it matter how we get people to recycle more, or are we just glad that they are?

Discussion Questions:
1. Which of the following gives people more incentive to recycle: charging them a fixed monthly rate to pick up all trash, or charging them on a per-bag basis? Why?
2. What are the benefits of selling recyclable materials to developing countries?
Multiple Choice/True False Questions:
1. The difficulty expressed by consumers in separating their recyclable materials can best be described as a(n):
  1. Sunk cost
  2. Opportunity cost
  3. Variable cost
  4. A and C
2. The practice of compensating consumers as they increase their recycling can best be described as a(n):
  1. Tax
  2. Subsidy
  3. Opportunity cost
  4. A and C
3. As the technology used to recycle material improves, and more material is recycled, what should happen to the cost of goods made with recycled material?
  1. Price should rise.
  2. Price should fall.
  3. Price should remain the same.
  4. Insufficient information in the summary to answer the question.
Source “The Price of Virtue,” The Economist, June 7, 2007.
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