Focus Topic: Is it cost effective to recycle?

Source

The final chapter of Landsburg’s “The Armchair Economist” provided me with some food for thought. He discusses if there is a need to protect the environment and if this will bring economic benefits.

Economics is the study of scarce resources and how people respond to incentives. The person with the greatest incentive in general is willing to pay the higher price to gain that resource. That’s why in a perfectly competitive (open market where everyone knows everything that is happening), the allocation of property rights is seen as inefficient/unnecessary. If an individual is given a property right say for example, to pollute but has no need to pollute that individual would rather sell that right to another individual who does pollute and who is willing to pay the price to obtain that right. Therefore, regardless of initial allocation of rights, whether split equally between the two individuals or not, the final outcome will always be the same.

The same can be said of recycling. Taken from a purely economic standpoint, due consideration must be made of both sides (to recycle and not to recycle) without factoring ANY moral judgements.  The side that will come out victorious is that with the greatest merits.

Here I reproduce in part, Landsburg’s argument:

“Economics is the science of competing preferences. Environmentalism goes beyond science when it elevates matters of preference to matters of morality. A proposal to pave a wilderness and put up a parking lot is an occasion for conflict between those who prefer wilderness and those who prefer convenient parking. In the ensuing struggle, each side attempts to impose its preferences by manipulating the political and economic systems. Because one side must win and one side must lose, the battle is hard-fought and sometimes bitter.” (pg 224)

A common argument for protecting the environment is for the benefit of future generations. However, Landsburg argues that “… do we have any reason to think that future generations will prefer inheriting the wilderness to inheriting the profits …?”

We must remember that in a market, there are buyers and sellers. If we stop buying something, the producer will soon go out of business which will lead to all sorts of problems including unemployment and in the case of recycling, possibly a reduction in the amount of forests as the number of trees planted goes down.

Of course we do not live in a perfect market. Among other things the deterioration of the environment could have implications for the potential of future profits .

So what do you think? Should we be recycling more?