Maine's New Recycling Tax and Asking Ourselves to What Extent Recycling Is Rubbish

In the past few decades, recycling has become so prevalent that 85 percent of people end up recycling. It has become a secular, environmentalist ritual of sorts if you think about it. The mainstream environmentalist thinking is that all recycling is good. It is the sort of mentality that led Maine's Governor Janet Mills signed a first-of-its-kind "extended producer responsibility" (EPR) into law earlier this month. 

The premise behind an EPR is to shift the costs to the producers of products that have significant environmental impact. In this case, the State of Maine is going to use the EPR to charge packaging producers for the environmental impact of cardboard boxes, plastic containers, and other inputs related to packaging. The money paid by these companies will go towards stewardship organizations that will fund local governments to deal with packaging management costs. Essentially, it shifts the costs of packaging producers to pay for the recycling of their products. 

We can get into questions of whether the brunt of the cost will be passed onto the consumer or to the producer. The real question we have to ask is whether recycling all of these products is worth it.  I asked this question about eight years ago when analyzing the economics of recycling. Back in 2013, my response was not a simple "yes or no." The reality is that not all recycling is created equal. Such materials as iron, steel, aluminum, and cardboard made more sense to recycle. These materials are suited for recycling and have high recovery rates. On the other hand, such packaging materials as polystyrene, PVC, and film (not to mention cullet) have high recycling costs, low recovery rates, and recovery costs that are economically or environmentally unsustainable. Recycling paper makes less sense than ever. This is not only because of the environmental costs (e.g., hazardous emissions), but also because there are more trees now than there were 35 years ago.

Recycling has become a less profitable action over time. A study from the Recycling Partnership found that the value for recycled materials has dropped by 41 percent since early 2017. Also, China closed its doors by 2018 with regards to accepting foreign-based recyclables that were contaminated. Since then, municipal recycling has become a financial drain (Husock, 2021). Tangentially, the increased prevalence of single-sort recycling has drastically increased contamination rates, which makes it more difficult to recycle products. A former Manhattan Institute scholar details in his cost-benefit analysis of recycling how the costs for the single-sort recycling for plastics, glass, and certain paper products is unjustifiable (Husock, 2020). As this New York Times article points out, the economic argument for recycling as a whole is all but nonexistent. 

In summation, there is a chance that the consumer could pay for the cost of recycling with an EPR. We are subsidizing a process in which the benefit has declined because the value of the material has declined. Additionally, we have dealt with increased costs of recycling (e.g., sorting, transporting) as well as increased rates of contamination, the latter of which makes it all the more environmentally impractical to recycle. Some goods make sense to recycle, but as we have seen, there are a fair number of materials that do not make sense. If I had to make an educated guess, Maine's experiment with EPR will be the first case study to show why an EPR for packaging goods is rubbish.