Can recycling be bad business? On February 9th, 2010 Matthai Kuruvila wrote in the San Francisco Chronicle describing how the City of Berkley, California had recently reported a $10 million deficit and that $4 million of it was directly due to a decline in refuse revenues. The decline in these revenues is primarily due to the absence of that crucial market component: “demand."
The City of Berkeley charges only for refuse collection; it does not charge its citizens for the collection of recyclables. Berkley’s residents have increased their recycling and composting efforts and since either of these activities reduces the amount of material that is considered waste and subsequently hauled away for a fee, this double whammy has had a huge impact. The amount of waste that has been diverted from Berkeley’s landfills has increased by 8% and the city’s diversion rate is now second only to that of San Francisco’s stellar 72%. The growing---or shrinking depending on which perspective you choose---garbage problem is also traced back to the struggling economy. An economy in decline simply doesn’t generate the amount of waste that a very active and prosperous one does. Kuruvila points out that, in particular, the collapse of the construction industry has decreased refuse collection revenues by 15 percent. The many other struggling businesses account for an additional 15 percent.
--Jonathan Chopper
