chapter  24
Waste
Pages 15

Much effort is devoted to waste management, but sometimes the policies being pursued appear to be more symbolic than effective. In many countries, a large amount of political effort is devoted to promoting recycling. Germany is a good example, where extensive legislation requires the recycling of various categories of waste. It seems, however, that not enough effort has been devoted to the issues of what should be recycled, why, and which policy instruments should be used. The price mechanisms on the markets for used goods must be understood in order to discuss recycling. Some products have a high price, so the market “recycles” them automatically. Consider gold: have you ever heard of piles of gold (or other precious metal) waste? If a good becomes scarce, its price rises, creating incentives for reuse and recycling (see Chapter 22). Typically, this incentive does not apply to goods that can be produced industrially, including many minerals that are industrially excavated and processed. For many goods, the normal process of technological progress results in a decreasing price, at least measured relative to average income. A common description of a prospering economy is that income grows when measured at constant prices. Another way of describing it would be to keep income constant and say that the (income-deflated) prices are falling.