A Brief Look at the Economics of Recycling

Source: New Jersey WasteWise Business Network

Recycling not only makes environmental sense, but also economic sense. On a national scale, recycling has encouraged the growth of an industry and created jobs. For example, in New Jersey, recycling is an important segment of the state’s economy and one that employs approximately 27,000 people. What is even more important to the generators of waste, however, are the dollar savings that can be realized through recycling. Such savings are realized when the avoided cost of disposal, reductions in needed solid waste services and potential revenue from the sale of recyclables are factored into the overall equation. Of course, there are some costs associated with recycling, as there are with all other day-to- day operations overseen by companies and organizations, however, generators of waste will see the economic benefits of a well-run and successful recycling program over time.

The avoided cost of disposal is the amount of money that is saved by not having to send waste to a landfill, incinerator or transfer station for disposal. It will vary depending upon the fee charged for garbage disposal at the facility in your area, but the avoided cost of disposal can be significant. A successful recycling program will divert many tons of material away from disposal and thus the avoided cost of disposal must not be overlooked when considering the economic impact of your recycling program. The establishment of a well-run recycling program may also enable businesses and other organizations to utilize smaller solid waste dumpsters and to reduce the number of solid waste pick-ups (often referred to as “pulls”) made at their locale. Negotiating such changes in the level of solid waste service received with the solid waste hauler servicing your company or organization can also result in considerable cost savings. In addition, businesses and organizations can realize economic benefits as a result of the sale of their recyclable materials. While prices for recyclable material commodities fluctuate as they do for other market commodities, generators may earn revenue from the sale of recyclable material depending upon the specific material, the extent to which it needs to be processed to make it market-ready and worldwide economic conditions.

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