Monday, March 06, 2023

The Economic Case for Better Recycling Policy

The writer below draws optimistic conclusions from the undoubted success of aluminium recycling. But aluminium is an outlier. It takes huge amounts of energy to refine it in the first place but melting it back down for recycling purposes takes relativly little energy. Such an extreme gap does encourage recycling but it is not typical of recycling efforts. Recycled products can easily be more costly and less useful than making the product from scratch

Recycling is one of those things that everyone supports in theory, but too few people carry out in practice. While 95 percent of Americans believe that recycling helps the environment, fewer than half believe the current system actually works well. This is reflected by the data. According to a finding by the Container Recycling Institute, up to two-thirds of all beverage containers in the country never get recycled. This is both environmentally destructive and economically wasteful.

So, where’s the disconnect? Everyone understands the benefits of recycling, but apparently that’s not translating into tangible outcomes.

There are two primary reasons for why recycling has never really taken off at scale in America. The first is a basic lack of incentives. The cost and logistical complexity of sorting recyclable goods from regular trash have proved an economic burden on municipalities and local governments. Absent a strong consumer incentive to properly recycle materials, recycling programs have often ended up costing more money than they saved.

The second is that, because of this market failure, the U.S. has spent the last few decades simply shipping a lot of our recyclable materials overseas. In 2016 alone, we sent China 16 million tons of metals, paper, and plastic. But then the Chinese government decided it had enough, promptly embargoing the import of foreign waste goods in 2018, and causing a domino effect among other Asian nations. However, the damage had already been done: America’s long-term dependence on foreign countries to take our waste has precluded the development of a sturdy, domestic recycling infrastructure.

However, it needn’t be this way. The idea that recycling costs more money than it saves is an idea born out of bad – or absent – policy, not reality. Recycling doesn’t, inherently, have to be a trade-off between economics and sustainability.

Consider, for example, the admirable track record of aluminum recycling. Nearly 75 percent of all the aluminum ever produced is still being used today, thanks to 90 percent or more recycling rates in industrial markets like construction and automotives. Recycling aluminum for industrial purposes uses 95 percent less energy than producing new aluminum, resulting in significant cost savings. It also cuts out the additional costs associated with importing high value materials from other countries with less secure supply chains.

A similar dynamic can exist for those two thirds of beverage containers that get wasted each year – a full 140 billion individual containers. Even aluminum containers aren’t safe, with fewer than 50 percent being recycled each year, a lost retail value of $800 million annually. Not only are we polluting the environment, but we’re also losing money while doing so.

In order to overcome the current challenges of recycling, though, creative solutions are required. One such solution is quickly gaining traction across the country again – 10 states already have it, but the most recent implementation was in Hawaii, 20 years ago. Recycling incentive programs, dubbed “bottle bills,” establish a refundable cash deposit on all beverage containers, whether they be glass, plastic, or aluminum. Consumers pay the deposit, typically only 5 or 10 cents, at the time of purchase and then collect their refund when they return the empty container. This is a powerful incentive to prevent recyclable bottles and cans just ending up in the trash, overcoming the aforementioned market failure.

Not only is this kind of program highly successful – containers that get sold with a refundable deposit on them ultimately get recycled at a rate of up to three times higher than those without such a deposit – but it also makes economic sense. It doesn’t cost the government any money, can reduce roadside litter by up to 70 percent, and creates a sustainable domestic supply chain of raw materials.

Simply put, deposit programs are a convenient and highly effective incentive for Americans to do their part for the environment without spending taxpayer dollars.

They also directly benefit municipalities, giving local communities an incentive to engage in better recycling practices. A comprehensive review of 33 studies on the matter, in regions across the world, found that in nearly every case, deposit return systems financially benefit municipalities, to the tune of millions of dollars per year. Moreover, they create thousands of local jobs.

In a world dominated by all-or-nothing political proposals, seemingly small solutions like establishing a refundable deposit on containers are not just elegant, but highly effective. They also clearly show that environmental responsibility doesn’t require economic sacrifice.

At the end of the day, this is a pro-economy, pro-environment, and pro-America solution. We shouldn’t have to rely on shipping our waste to other countries and letting them deal with it, nor should we abdicate our responsibility to be good stewards of our resources here at home. The American way is finding the most innovative solution possible. Reforming our recycling policy by establishing an incentive program like refundable deposits is rooted in common sense, serving both our economy and our environment.


Governor Mike Dunleavy: Invest in Alaska to Save the Environment

After winning a second term in office, Governor Mike Dunleavy (R-AK) wants to make his case for Alaska in the Lower-48.

A natural salesman, he wants Americans to visit The Last Frontier and bask in her natural beauty. His most effective pitch came in a 2021 Travel Alaska ad campaign.

"To me, it's an amazing place," Dunleavy said during our recent interview. "I grew up in Pennsylvania—in Scranton, Pennsylvania—and left in 1983 to go to Alaska right out of college, and I thought I died and went to heaven."

He continued, "It's a place where even today I still say to myself, 'I need eight lifetimes to see the entire state and understand it.'"

The Alaska model of balancing natural resource development with conservation stewardship has worked for decades. But the model is now threatened by radical preservationist policies emanating from the White House.

"We have tremendous resources," stated the 12th Alaska governor. "Alaska was probably the only state in the country in which its admittance into the Union as the 49th state was predicated upon its ability — and a compelling argument — that they must develop their resources. The irony today is that the federal government is doing everything possible, from our perspective, to stop that view [and] that approach to resource development from occurring."

During our conversation, Dunleavy showed me a binder containing all federal government directives to devastate vital Alaska industries. Since January 2021, the Biden administration issued over 40 executive actions undermining energy and natural resources development opportunities under the guise of "fighting the climate crisis" and "protecting the environment."

These directives have incurred severe economic consequences, from placing a drilling moratorium in Arctic National Wildlife Refuge (ANWR) to reinstating the 2001 Roadless Rule on the Tongass National Forest in southeast Alaska. These actions, in Dunleavy's view, are harmful to Alaskans. "It's really an anti-individual, anti-person agenda," the governor said of President Joe Biden's environmental policies.

Dunleavy wasn't shy about criticizing the Environmental, Social, and Governance (ESG) movement— the pernicious ideology discouraging investment in oil and gas exploration.

"I think what really goads a lot of folks in Alaska is when we're talking about this ESG approach to the world," he continued. "And some of your larger banks would like you to believe that they are noble and they are saving the world."

He added, "Many of them are investing in places in which the environment is being destroyed. The political situation is horrible. Child labor issues and minority issues are being exploited. So you really want to save the environment? Invest in developing America and Alaska because we do it better than anybody."

I then asked him about Alaska Natives—a key constituency of his comprising over 20 percent of the population–and how President Biden's policies are impacting them.

The Biden administration has touted consulting Tribal interests in all policy areas but is quick to dismiss their input supporting resource development.

"I can put you in contact with hundreds— if not thousands— of Alaska Natives that believe in resource development [and] that believe in responsible resource development," Dunleavy continued. "The Biden administration is talking to a select few that don't necessarily want resource development in their area. But I can tell you, overall, the vast majority of Alaska and Alaska Native people want resource development— responsible resource development—because of what it provides. It provides a future for their kids."

Even a pastime like hunting isn't safe from the Biden administration. For example, Alaska's Federal Subsistence Board, a subsidiary of the Department of Interior, recently closed off 60 million public land acres to hunting access. Unsurprisingly, the anti-hunting Interior Secretary Deb Haaland fails to commit to a "no net loss" policy to maintain existing hunting and fishing access on federal public lands.

The avid sportsman expressed his dismay with the decision and assured me he vows to fight it.

For his tireless defense of wildlife conservation, Safari Club International recently bestowed him with their prestigious "Governor of the Year Award" at their annual convention in Nashville, Tennessee.

"If you're a hunter, we're one of the Meccas to go to," he explained. "We're the only state with the three bear species: polar bears, brown bears (grizzly bears), and black bears. We have enormous herds of caribou, musk oxen, plains bison, and we're the only state with wood bison, which are the largest bison on the planet."

"One of the reasons I went to Alaska right out of college was I wanted to be part of the outdoors," the governor stressed. "I want to be part of the wilderness, and it hasn't disappointed me. And, you know, I've gone on a hunt on a regular basis—whether it's caribou or moose."

Despite all that's transpiring, Governor Dunleavy insists his state can sustain itself and be a model for actual conservation practices elsewhere in the U.S.

"Alaska is ground zero because there's a lot of folks that can be duped into thinking that if they support no activities in Alaska, then they're saving Alaska," the former school teacher continued.

"You're not saving Alaska. To be honest with you, Alaska is doing well saving itself right now by itself."


Greenies and Cuban Communists Partner For Propaganda

“The Government of Cuba and The Ocean Foundation signed a Memorandum of Understanding (MoU) today,” announced The Ocean Foundation last week, “one that marks the first time the Government of Cuba has signed a MoU with a non-governmental organization in the United States. ..The MoU draws on over thirty years of collaborative ocean science and policy work between the organization and Cuban marine research institutions and conservation agencies.”

A prime example of that “cooperation” was a CBS "60 Minutes" program back in December of 2011 featuring another in its long line of joint CBS-Castro productions. On that program, Anderson Cooper and his production crew partnered with the Stalinist regime’s Centro de Investigaciones Marinas for a propaganda piece on the marvels of Cuban coral reef conservation. The co-host of the CBS show and conduit for this fruitful Communist infomercial was Dr. David Guggenheim, senior fellow at the Ocean Foundation in Washington, D.C. who chairs its “Cuba Marine Research and Conservation Program.” Dr Guggenheim bills himself as a “Cubaphile” and toasted Castro’s fiefdom (which he proudly claimed to have visited over 40 times) as a “magical place!”

Needless to remind, such a gold-plated visa is not handed-out haphazardly by the totalitarian Castro regime. And such a welcome mat and red carpet are not rolled out randomly.

After surfacing from their scuba dive at Jardines de la Reina reef off southern Cuba, Cooper and Guggenheim of The Ocean Foundation rhapsodized for the CBS cameras thusly:

Guggenheim: “The corals are healthy. The fish are healthy and abundant. There are predators here, large sharks. It's the way these ecosystems really should look.” “It's a living time machine. And it's a really incredible opportunity to learn from.”

Cooper: “So something here holds the key to figuring out how to save other reefs and bring them back.”

Guggenheim: “it's because this ecosystem is being protected, it's got a leg up on other ecosystems around the world that are being heavily fished.”

Yes, amazing how that Communist conservation works! You simply convert free citizens of a nation which formerly enjoyed a higher per-capita income and car-ownership than half of Europeans, and with the third highest protein consumption in Latin American, into penurious half-starved serfs! Nothing to it!

In pre-Castro Cuba, the abundant lobster, grouper and snapper that so enchanted Cooper and Guggenheim on their scuba dive served as dietary mainstays of the humblest Cuban, who owned boats, fishing gear and were perfectly free to use them at every whim and then consume their catch. For Cuban landlubbers, pre-Castro groceries stocked seafood in abundance. Now these delicacies are reserved mostly for tourists, regime apparatchiks and valued foreign propagandists. Catching and eating a lobster can land a Castro subject in jail. And owning even a dinghy is the stuff of dreams, of escape.

“In 1996, the government of Fidel Castro, a diver himself, made this area one of the largest marine preserves in the Caribbean. Almost all commercial fishing was banned,” explained a smug Cooper to his "60 Minutes" audience.

Yes, amazing how that works in Stalinist Cuba! “Ah! Think I’ll decree my favorite diving and fishing site a preserve that prohibits my subjects from doing there what I do,” brainstorms the Lider Maximo (translates into German almost precisely as Fuhrer) one fine afternoon, then presents it to his “parliament”… “Now, do I hear any objections?...No?.. No?! OK, going once, going twice…The motion passes!”

There’s just something about running a KGB-tutored Stalinist regime that encourages this type of instant and gung-ho team-playing by regime “legislators.” Many among the tens of thousands of Castro’s prison, torture and firing squad victims were his former comrades, onetime regime officials. Unlike food, clothing, shelter, feminine napkins and toilet paper, one thing there’s never any shortage of in Stalinist Cuba is rubber stamps. Not that CBS or The Ocean Foundation even hinted at such unpleasantness.

Apartheid South Africa, by the way, did a bang-up job of wildlife conservation. The segregationist governments set up many national parks and nature preserves where vigilant police kept poaching to a minimum. Came the end of apartheid and the enfranchisement of South Africa’s black population and poaching became rampant for a while, with the populations of many endangered species (rhinos in particular) plummeting.

But extolling Apartheid South Africa’s “conservation consciousness,” by the mainstream media wasn’t much in evidence during the 1980s. Apparently, in the view of enlightened opinion worldwide, the vileness of that government’s segregationist policies negated the virtue of its conservation policies.

If only Stalinist policies were regarded similarly by enlightened opinion worldwide. If only a totalitarian Cuban regime that jailed and murdered political prisoners at 10 times the rate of an authoritarian South African regime provoked a tiny fraction of the revulsion as the latter among the “enlightened” worldwide.


To defeat climate change, Australia must do the impossible

The argument between Labor and the Greens about new gas projects is strange and pointless. New projects must be included in the government’s emissions reduction target, which doesn’t change.

But it’s true that new mining and industrial projects of almost any sort will make it harder, and new fossil fuels will mean achieving that target goes from being almost impossible to impossible.

None of what the government has said about Australia’s latest plan to reduce emissions, or the media coverage of it, has properly conveyed its difficulty.

The politics has been all about the wonderful opportunity of the green energy economy, and how Australia is going to be a big winner.

This is mostly flim-flam, and sets the country up for a nasty shock.

Sure there will be opportunities – mainly digging up and shipping the lithium, copper and nickel needed for batteries, but we can’t make batteries here because of the carbon emissions that would cause, taking us over our limit.

But as hard as the emissions reduction task is going to be, it will have to be done. There is no choice, and it would be helpful if the government told the truth about it.

The plan is to reduce greenhouse gas emissions by 43 per cent from Australia’s 2005 level by 2030, and to net zero by 2050.

That was an exercise in split-the-difference back-engineering: 43 per cent was roughly halfway between the Coalition’s 28 per cent target and the Green’s 75 per cent, so they started with that number and worked backwards. Spreadsheet jockeys were paid to assure them, and us, that it could be done, no problem, which they duly did.

There’s no mention of “apart from new gas projects” in the fine print. It’s unconditional, and it looks like an election promise that can’t be broken … unlike those about taxes.

Much of the work of emissions reduction has to be done by the 215 firms that each belch more than 100,000 tonnes of carbon dioxide a year into the atmosphere and are responsible for 28 per cent of Australia’s emissions. They have to cut their total emissions by about a third over seven years, from this year’s estimated 143 million tonnes to 100 million.

Sitting comfortably atop that list of very anxious big emitters is Woodside’s North West Shelf gas project, at 6.78 million tonnes last year. The company’s huge, lucrative Scarborough project is due to come onstream in 2026. and Woodside has said its emissions will be 880 million tonnes over 30 years, or about 30 million a year, on average.

All going well, and assuming no other new projects, that 4.9 per cent a year legislated requirement will have reduced the emissions of the 215 to 117 million tonnes by 2026. But suddenly, thanks to Woodside and Scarborough, emissions are back to something like 147 million tonnes – and now with only four years to go!

That presumably means the task – for everyone – in the last four years between 2026 and 2030 is a 9 per cent reduction per year, not 4.9 per cent, which is hard enough.

Pressure to reduce production

It’s actually amazing that the other 214 big emitters haven’t already marched on Canberra to support the Greens’ demand for no new projects, although they’re probably more worried about their own gas supplies.

Commonwealth Bank commodities analyst Vivek Dhar has figured out that the businesses covered by the safeguard mechanism will need to reduce their production by an average of 0.3 per cent a year to meet the 4.9 per cent a year reduction.

Considering that executives are paid bonuses to increase production and launch new projects to satisfy shareholders, that is going to require a very big and unlikely change in corporate culture and remuneration.

It results from the collective need, if they don’t reduce production, also calculated by Vivek Dhar, to reduce emissions intensity – that is, carbon dioxide per unit of production – by 35 per cent by 2030.

The National Electricity Market (NEM) is an example of what can be done on this score. Thanks to a huge increase in renewable power generation, the NEM has cut its emissions intensity in the seven years from 2014 to 2021 – by 24 per cent.

So the 215 largest Australian emitters are being asked to do almost 50 per cent better than the NEM has done with all the renewable electricity that’s been added to its grid.

They won’t cut production and can’t cut emissions intensity that much, so they’ll buy lots of offsets to obey the law, or Australian carbon credit units (ACCUs) that are generated by planting trees or not cutting them down.

Anticipating massive demand for ACCUs leading to a brutal carbon tax, the government has said that the price will be capped at $75 a tonne and then increased by CPI plus 2 per cent per year after that.

But that’s not quite true. That’s just the price at which government itself will trade them, as buyer and seller of last resort. Others can buy and sell them for whatever price they want.

Trees, millions of trees

And if the non-government market price goes above $75, no one will want to sell to the government at $75. So how will Energy Minister Chris Bowen get hold of enough to satisfy what is likely to be enormous demand for cheap government ACCUs?

That’s not explained, but it looks like Mr Bowen will have to create them, like the Reserve Bank prints money, by planting trees! Presumably we’ll see harried public servants driving around in utes packed with seedlings and spades, planting trees on every spare bit of dirt they can find.

Without government forests springing up everywhere, it’s likely that two things will happen:

Companies in the safeguard mechanism will be forced to choose between cutting their production and losing market share to imports from countries with less rigorous climate change policies, or increasing their costs and prices by buying ACCUs

The non-government price of ACCUs will go very high indeed, which will be a new cost to businesses in the safeguard mechanism, or those that have voluntary committed to net zero by 2050 themselves, and have said they won’t engage in “greenwashing” by buying cheap, dodgy offsets from overseas.

Normally I’d say that when this rubber hits the road in five years’ time, and everyone realises how hard and expensive the carbon abatement task actually is, politicians will run a mile and the country will go off the whole idea and exhume Tony Abbott to repeal Labor’s legislation again.

Australia, and specifically the 215 hapless big emitters, will have to do the impossible, and the Prime Minister needs to start telling them and us that yesterday.




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