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Solid Waste

Diversion and Consolidation

Predictions of future waste management efforts

Lynn Scarlett
August 4, 2000

An old French saying cautions that "the more things change, the more they stay the same." So it is in solid waste management. Over the last decade, management of municipal solid waste (MSW) has experienced some rapid, substantial changes.

The 1990s became the Diversion Decade, as cities, responding to state laws and public sentiment, embarked on aggressive recycling and composting programs. The '90s also became the Era of Consolidation as big waste firms gobbled up smaller ones. But, for all the changes that occurred, familiar themes dot the waste management landscape.

Landfills are alive and well and...

Landfilling, for example, remains the dominant waste-management tool. Sure, the national waste diversion rate (recycling and composting) had climbed from below 20% in 1990 to nearly 30% by 2000. But most waste still ended up in landfills.

Moreover, this reliance on landfills is likely to continue well into the future. Paraphrasing Mark Twain, reports of the death of landfills are greatly exaggerated. Though the number of landfills has dropped precipitously, capacity remains steady—or has increased. In 1990, just less than 8,000 MSW landfills existed. Today, BioCycle magazine puts the tally at 2,216. A decade ago, predictions of plummeting numbers of landfills were thought to augur skyrocketing tip fees and a landfill capacity shortage. But statistics mislead. What the landfill bean counters missed was the evolution to larger and larger landfills. The typical new landfill was at least four times larger than the traditional small-town landfill that closed down. Though specific local areas face landfill-capacity constraints, most localities have access to adequate space in which to unload their trash.

A scan of the various states confirms this assessment. Though one state, Massachusetts, reports less than two years of remaining capacity, most states report 10 to 40 years of remaining capacity. Montana reports having over 1,500 years of remaining landfill capacity. And adequate capacity has generally translated into relatively stable tip fees. Though tip fees vary widely from location to location, most hover between $20 and $40 per ton. Tip fees in a few areas in the Northeast (and Alaska) exceed $60 per ton. These fees are not wildly different from fees in the early 1990s. Landfilling, then, remains a competitive and available waste management option.

Competition is robust

A quick look at the solid waste management landscape shows another familiar feature—diversity. As in 1990, location matters. While tip fees have remained relatively smooth within specific locations, they vary widely across locations. Average tip fees in Oklahoma are a mere $18 per ton; in Vermont tip fees average $70 per ton. Some states—such as Wyoming—import and export no waste. Others—like Illinois—import nearly 16 million tons of waste each year. New York is a net exporter of waste, taking in some 300,000 tons each year but sending out 4.6 million tons per year. But this web of importing and exporting is not a new phenomenon. In the early 1990s, the National Solid Waste Management Association put out a report documenting the interstate criss-crossing of waste flows.

Operationally, of course, there have been modest changes. Implementation of Subtitle D landfill regulations has resulted in an upgrading of technologies and practices. But the changes are not dramatic. Just a small number of landfills have installed gas-recovery system. Landfill mining remains a peripheral practice, with just six landfill-mining projects under way in the United States. Talk of using waste as a fuel or as a biochemical feedstock keep surfacing, but the talk has not translated into major investments in these new technologies.

Even the implications of the Era of Consolidation turned out to overstate the transformation of the waste industry. Competition remains robust, though, as in the past, some firms dominate individual markets. In 1998, despite mergers and acquisitions, Waste Management held just 15% of market share; USA Waste Systems held just 8%. The mega-merger of these two would give them 23% of market share. The 11 largest firms controlled under 45% of the market. Yes, consolidations occurred in the 1990s, but the waste management industry was still a competitive one.

Economics drives decision-making

What, if anything, can we learn from this tale of unrealized transformation of the waste management landscape?

First, economics is a powerful driver behind waste-management decision making. Many of the prognostications in the Diversion Decade sprang more from hopes than from careful analysis. Folks wanted to see the demise, or at least the atrophying of landfills result from a new recycling ethic. But land in many areas remains relatively cheap. Costs to landfill waste remain low�in most areas�relative to waste-diversion costs. And demand for recycled materials by manufacturers, while steadily increasing, remain modest largely because the economics often don't pencil out.

There is a corollary to this lesson: technology feasibility is not enough. What is feasible from a technology standpoint—such as landfill mining—may not be cost effective, or at least not everywhere. Too often, predictions about the future of waste management succumb to technology blinders—the expectation that because something is possible it will happen.

The greyness of being green

Second, as economist Thomas Sowell has quipped, "reality is tricky." During the Diversion Decade, its champions offered grand claims about unequivocal environmental benefits from recycling discards and avoiding so much waste disposal. But "big picture" environmentalism turns out to be a complex affair—a balancing act among many variables. Sometimes, recycling yields important environmental benefits, but not for all materials in all circumstances. Sometimes a shift to a highly source-reduced, but less easily recycled material yields greater environmental benefits than recycling the original material. As this "greyness of being green" became more apparent during the 1990s, waste-diversion decisions were tempered.

Of course, 10 years is a short time in the grand scheme of things. We may still see grand transformations of the waste industry. Perhaps landfill mining will flourish as more and more communities resist the siting of new landfills. Perhaps recycling and waste diversion will nudge slowly upward till waste diversion is the dominant waste-handling tool. But predictions about the future of waste management are likely to hit the target more often if they incorporate economic dynamics into the calculations.

Lynn Scarlett is president of Reason Foundation.



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