The Costs of Making, Using, and Discarding: MSW Series

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"One of the most fateful errors of our age is the belief that 'the problem of production' has been solved. Not only is the belief firmly held by people remote from production and therefore professionally unacquainted with the factsit is held by virtually all the experts, the captains of industry, the economic managers in the governments of the world, the academic and not-so-academic economists, not to mention the economic journalists ... This illusion...is mainly due to our inability to recongise that the modern industrial system, with all its intellectual sophistication, consumes the very basis on which it has been erected."

E.F. Schumacher Rhodes Scholar, Oxford economist,

and father of appropriate technology

Small Is Beautiful (1973)

 In some ways we really have solved the problem of production. For example, we can produce a lot of textiles, and cheaply. In 2011, worldwide fiber consumption topped more than 93 million tons. The scarcity of clothing that marked past ages is gone for many people. But this surplus comes at a cost: monetary, social, environmental. The World Bank projects that global urban solid waste alone will double between 2012 and 2025. Management costs of collected waste will grow from $205.4 billion to $375.5 billion. But the risks of excessive production and consumption go beyond the price tag for collecting and disposing of trash.

First, a word of caution about models—the results of studies and techniques like life-cycle assessments and economic impact analyses are not exact. The information we get is only as good as the models and data we use. These are complex situations with fickle figures and even the best model will produce unreliable results if given unreliable inputs. “Garbage in, garbage out,” as the computer scientists say; especially true in our case. So, sure, all models are wrong, but some are useful. And all the models indicate that there are serious economic and environmental consequences to extraction, production, consumption, and disposal.

Let’s look at plastics.  Last year a report was prepared for the UN Environment Programme (UNEP) that tried to calculate the negative impact of plastics in the consumer goods industry on natural capital.  They came back with a global baseline estimate of $75 billion per year. As large as this figure is, it’s important to remember that it doesn’t include many factors—the end-product manufacturing stage, the opportunity cost to future generations by using non-renewable resources, microplastics in the ocean, etc.—due to technical difficulties, scientific uncertainties, and a lack of general consensus.

The report is also sector specific. At sometime in the last few decades, clothing switched from being mostly derived from renewable resources to non-renewable resources. Of all the textiles produced each year about 60% is synthetic, that is, petro-chemically based; that is, plastic. The rest is plant-based, mostly cotton. Three materials, acrylic, polyolefin, and polyester, make up approximately all of the synthetic fibers. Polyester is the majority material at 60%.  The UNEP estimates a conservative cost for plastics in the clothing and apparel industry at more than $4 billion. About half of that comes from greenhouse gas emissions. Making artificial fibers also releases water-borne emissions like dissolved solids, acids, iron, and ammonia. Production is chemically intensive. In fact, out of all chemical use worldwide, production of man-made fibers accounts for approximately 5%.

                So, we should just buy cotton clothing then? Problem solved? Well, no, that isn't really the answer either. Conventional cotton production is chemically intensive as well; 11% of all agrochemicals and 25% of all insecticides go into growing cotton even though, as of 2000, the crop only made up 2.4% of all arable land. Social and environmental effects of agrochemical use include: “fatalities, short term illnesses, increased medical costs[,]…the build up of pesticides in human and animal food chains,…[c]ontamination of drinking and ground water, the evolution of insect resistance/resurgence, pest/predator cycle disruptions, [and] biodiversity and soil fertility reduction.” Irrigation of cotton also leads to problems such as “eutrophication, salinisation, pollution, wildlife contamination, raising water tables and habitat destruction.” So the unrestrained use of a renewable like cotton isn’t a panacea. In fact, while production of polyester fiber is much more energy intensive than production of cotton fiber, cotton can have a larger ecological footprint in terms of productive area used. Plus, polyester is more durable so it can be used longer and is recyclable—recycling polyester is 84% more energy efficient and produces 77% less CO2 than creating virgin polyester.

Anyway, if these costs are significant, why don’t we account for them in our purchasing decisions? To answer that, we should consider that the recovery rate of industrial textile waste is 75% or almost five times the U.S. recovery rate for post-consumer textiles. Why is fairly simple. First, it's easier to reuse and recycle materials and products that are uniform and in large volume. A t-shirt factory can get a much better deal on the commodities market for truckloads of just t-shirt scraps than I can for a trash bag of mixed clothing. Second, manufactures feel directly the cost of textile waste. Anything that can't be sold has to be hauled away to the dump for an observable fee. In contrast, most American consumers pay for garbage services as part of taxes. For the majority of materials, whether I put a lot or a little trash on the curb does not have a direct economic effect on me.  There is little incentive to conserve, reuse, or recycle when those activities cost me more time and money than simply just chuckin' it all. What we have is the problem of a slow and nebulous connection between an action and its consequences. We have a feedback breakdown.

As such, these economic and environmental costs are classic examples of externalities and market failure. In this situation, there are two solutions: regulation and economic instruments. The first option is more commonly known. Governments impose regulations to influence behavior. However, economists are generally wary of government intervention. The second option, economic instruments, are market solutions that try to correct for market failures.  An contemporary example would be tradable carbon credits.

If economists generally agree that internalization of environmental externalities is desirable, why is so little of the impact of waste reflected in the cost of products? Part of the reason is that there still are some technical difficulties in calculating and monetizing environmental costs. But the major impediments are political ones.  Businesses' don't want higher production costs and consumers don't want to pay higher prices for products. Environmental effects of waste are typically long-term, diffused, and hard to quantify.  The effects of more regulated production and higher prices impact the bottom line now. Meanwhile, governments, the largest actors in the political area, are largely subservient to both businesses and consumers and not interested in slowing economic throughput. This lack of will makes any comprehensive environmental pricing reform in the near future highly unlikely.

                That isn't to say we should abandon attempts at political reform. On the contrary, policy-makers play a large role in inhibiting or promoting textile recycling and reuse. The only long-term structural changes will be new policies that internalize environmental and social costs. However, the challenges of managing wastes like textiles are occurring now and require near-term solutions. Luckily, there are some fixes that can be undertaken immediately. More on that later.

- Zach Swick