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Martha Hernandez
ECON 1010
5 August 2015
Microeconomic Paper
Marginal Costs and Benefits of Recycling
Recycling is one of many environmental issues facing the 21st century. Waste recycling is
the process of changing waste materials into new reusable materials. There are several different
categories of recycling including plastic recycling, chemical recycling, and e-waste (electronic)
recycling. For the purpose of length, this paper will focus on the marginal costs and benefits of
municipal solid waste recycling in the United States. Municipal solid waste comes from
households, schools, businesses, and hospitals. It includes things of everyday use such as: food,
metals, paper, glass, cardboard, plastics, bottles, and clothing (Municipal Solid Waste, EPA 1).
In the United States on a national level the Environmental Protection Agency (EPA) sets
recycling goals, and creates regulations for landfills and harmful waste disposal. At the state and
local level, each state can create additional rules and regulations regarding recycling. While some
cities implement mandatory recycling laws, other states and cities encourage their citizens to
recycle by putting deposits on beverage cans. Another way to encourage recycling is to ban
recyclable materials from landfills.
The question of whether or not to recycle largely deals with the impact of recycling on the
economy. More specifically, does recycling have a significant positive impact on the
environment worthy of its economic costs on the public? In other words, is recycling costeffective?

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The purpose of recycling is to recover useful materials like paper, plastics, and glass from
the trash and use them to make new products, thus reducing the amount of raw materials needed
to create new products (Municipal Solid Waste, EPA 1). Aside from helping conserve resources,
recycling can also help reduce waste, and minimize the environmental harm caused by the
materials we use (Municipal Solid Waste, EPA 1).
The financial implications of recycling have been on both sides of the spectrum, on one side
being too expensive, and on the other being a good source of revenue. According to a legislative
audit of state recycling from Minnesota, it is sometimes cheaper to throw away some materials
than it is to recycle them ("Recycling- Righteous or Rubbish? | Federal Reserve Bank of
Minneapolis."). The article titled Recycling- Righteous or Rubbish? states that the city of
Aberdeen, South Dakota ran into a $105, 000 deficit because the city decided not to charge its
residents the full amount needed to cover the costs of recycling. Watertown is another city in
South Dakota that has experienced issues with its recycling budget.
Dealing with budgets and monetary losses is where the formula of marginal cost becomes
relevant. Marginal cost is defined as the change in total costs when one more unit of output is
provided (Schiller, 108). Taking into consideration the marginal cost of recycling could be a
solution to the recycling budget issues that cities like Aberdeen and Watertown, S.D. have faced.
Instead of completely getting rid of their recycling programs, cities like these should focus on
reaching an equilibrium where recycling costs will not exceed their recycling programs budget.
The marginal cost formula could help determine how the cost of recycling waste rises, and
measure that against the monetary value of the recyclable material. Additional things like job
creations and the reduction of landfill capacity should also be taken into consideration when
measuring the output (benefits) of municipal waste recycling.

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However, given that the process and cost of recycling varies from state to state, no blanket
implementation can be used across the nation. In this case, the marginal cost formula would be
adjusted according to local budgets. Another possible solution to this conundrum could be a Pay
As You Throw (PAYT) approach, which is to charge each citizen for the amount of trash
(volume-based) they need to dispose of. This approach would follow the rhetoric that people
should pay for the amount of goods and services they consume ("Recycling- Righteous or
Rubbish? | Federal Reserve Bank of Minneapolis.").
Personally, I would not mind paying an extra or higher taxes in order to fund recycling
programs. Environmental conservation should not be ignored due to monetary costs. Even if
recycling is not cost-effective, it is a worthy investment. Unlike the economy, which can be
adjusted for inflation and recessions, the environment is much more vulnerable. The environment
is our habitat, and that is irreplaceable.

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Works Cited
"Municipal Solid Waste." EPA. Environmental Protection Agency. Web. 5 Aug. 2015.
"Recycling- Righteous or Rubbish? | Federal Reserve Bank of Minneapolis." RecyclingRighteous or Rubbish? | Federal Reserve Bank of Minneapolis. Web. 6 Aug. 2015.
Schiller, Bradley. "Supply Decisions." Essentials of Economics. Eighth ed. New York: McGrawHill Irwin, 1. Print.