economic components of recycling obstacles to a free market april 11, 2013

Economic Components of Recycling

Obstacles to a Free Market

April 11, 2013

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SERDC Sponsor members

2

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Let’s ExploreMarket Obstacles

Why don’t our markets behave like we think they

should?

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Regional Collaboration = Increased Access to Markets

Summary of Region Wide Findings:• 206 manufacturers • 47,525 employees• $29.4 Billion sales revenue

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What is recycling?

6

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Traditional Market Behavior

P

Q

S

D

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Negative Pricing

P

Q

S

D

0

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The Bottom Line

P

Q

S

D

Tipping fee

0

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What’s really happening: Inelastic Supply

P

Q

S D

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Super Inelastic Supply

P

Q

S D

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Market Volitility

P

Q

SD

PPI - Wastepaper

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0

50.0

100.0

150.0

200.0

250.0

300.0

PP

I -

Bas

e d

ate

12/1

986

Aluminum UBCs

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0

50.0

100.0

150.0

200.0

250.0

300.0

PPI Used Beverage Can Scrap

Year

PP

I -

12/1

989

Bas

e D

ate

Plastics

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How have Programs Responded?

Environmental concerns led to program creation.

Local governments are mission service driven, not profit motivated.

Capture Percentage Flat Lined

Daily Pounds per Person, recycled

Paper by Decade

UBCs by Decade

Plastic by Decade

Pounds per Capita

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Restraints

• Annual budget • Floor pricing in contracts– Risk vs Return

• Citizen participation• Inequitable access

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How do we move the needle?

P

Q

S D

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Possible Improvement

• Enterprise Funding• Contract Negotiations• Pay As You Throw• Cooperative Marketing• Extended Producer Responsibility• Hub and Spoke

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Increase RecyclingQualityQuantity

MethodsPolicy Practice

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SERDC Resources

www.serdc.org/regionalresources

• Economic Reports• State Recycling Resources• Market Directories• Waste Exchanges

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Contact Information

Will SagarExecutive Directorwill.sagar@serdc.org(828) 507-0123