Jobs and sales double when trash is recycled instead of disposed, report finds

By Sarah Yang, Public Affairs

03 October 2001 | The environment isn’t the only thing benefiting from recycling. Diverting garbage also gives the California economy a hefty boost, according to a report by a Berkeley economist.

An analysis of 1999 data from government and private industry reveals that diverting trash in California created twice as much personal income and generated twice as many jobs as dumping it into landfills.

The analysis is the first attempt to calculate the economic impact of the state’s waste disposal and diversion system. It was written by George Goldman, a cooperative extension economist in the Department of Agricultural & Resource Economics at the College of Natural Resources, and by Aya Ogishi, a doctoral student in the same department.

Their findings will be presented, likely in the next few months, to the California Integrated Waste Management Board, which commissioned the report. The board is the agency responsible for managing the trash produced in the state and encouraging recycling efforts in local communities.

When calculated per ton of waste, diverting garbage produced $254 in sales and $209 in personal income. Disposing of garbage, in contrast, produced $119 in sales and $108 in personal income. In addition, for every 1,000 tons of waste disposed, 2.46 jobs are needed compared to 4.73 jobs for waste diversion.

From recycled bottles and feedstock to transformation of biomass products into energy, the reach of recyclable materials extends farther than that of waste simply taken to landfills. The extra steps involved in recycling — including sorting, processing, manufacturing and distribution — lead to “spin-off effects” of more jobs and sales, explained Goldman.

“The economic models we use allow us to see how the money spreads out over the whole economy,” he said.

The report found that in 1999, solid waste disposal and diversion accounted for 179,000 jobs, generated $8 billion in personal income, and produced $9 billion in sales statewide. Had all the garbage in the state been sent to landfills, those numbers would have seen declines of 17 to 20 percent, according to the analysis.

There has been a concerted effort to increase waste diversion in California since state legislators passed AB 939 in 1989. That year, the state generated 45 million tons of solid waste and recycled only 10 percent of the trash produced. The bill called for a 50 percent reduction in the amount of trash going to landfills in the year 2000.

By 1999, California had diverted 37 percent of its 60 million tons of waste from landfills, significantly higher than the nationwide average of 27.8 percent. In 2000, the state recycling rate increased to 42 percent, just short of the 50 percent goal called for in the bill. “We will get to 50 percent (reduction of waste disposal), most likely next year,” said the chair of the waste board, Linda Moulton-Patterson.

So, should Californians eventually strive to recycle every scrap of trash? Not necessarily, at least from an economic standpoint. Ogishi, the doctoral student, said recycling rates that go far above 50 or 60 percent become less cost-efficient. “The question then is, ‘How much is our society willing to pay for a better, cleaner environment?’” she said.

Ogishi also noted that while the state felt a positive economic impact overall from diverting trash, the Eastern region of California — Alpine, Mono and Inyo counties — did not.

“There’s no recycling infrastructure there, so most of the waste is going to be transported outside the region,” said Ogishi. She said setting up an infrastructure in those areas would be costly in the short term, but that it would be beneficial down the road.

Goldman noted that more remote communities may need subsidies to help establish an effective recycling infrastructure, and that setting up such a system is ultimately “good for their economic health.” Rural areas that were left behind during the state’s high-tech boom may stand to benefit the most, he said. Developing a strong recycling industry in an area could help stimulate economic activity, said Goldman, and “most communities regard that as a good thing.”