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1 Introduction

1.1 Background and objectives

Waste minimisation – processes to minimise the quantity of material that requires final disposal – is encouraged in New Zealand through policies and programmes at national, regional and local levels. This has included the establishment of targets for recycling of individual materials.

Government intervention to encourage waste minimisation is justified on the basis of market failure. In the national waste strategy, examples of market failure are used to define the waste problem; these include the environmental effects of landfill and inefficient resource use.1 In this report we examine the nature of the externalities and other market failures; we combine these impacts with other costs and benefits of recycling to address the following questions:

  • What are the economic costs and benefits of diverting a number of waste streams from current disposal practices?

  • What is the net economic effect of given levels of recovery of each of these wastes? ie, how do the costs and benefits compare?

  • Are there opportunities for net economic benefits from increased levels of diversion of individual waste streams?

1.2 Scope

The study is not comprehensive of all waste streams but assesses the costs and benefits of recycling some of the more important materials by volume. These are:

  • paper

  • plastics

  • glass

  • organic waste (kitchen waste and green waste)

  • construction and demolition waste

  • tyres

  • used oil.

In addition, the report does not consider the costs and benefits of all waste management options. Rather, it compares the costs and benefits of recycling, and particularly household kerbside recycling, relative to landfill disposal. Other options include waste reduction measures that limit waste at source and alternative approaches to collection of materials for recycling, including through deposit refund schemes or bring systems. This wider level of analysis is beyond the scope of this work. Also excluded is direct business-to-business recycling for which few data are available. In any case, this is not part of the problem and these quantities are not included in existing landfill waste data, but it is noted that this means recycling levels are likely to be under-estimated.

1.3 Report format

The report covers in turn:

  • general issues to do with the approach to analysis, including the assumptions underlying cost benefit analysis (Section 2)

  • the waste, landfill and recycling data used as inputs to the analysis (Section 3)

  • the estimated benefits of recycling associated with reduced waste collection and landfill costs, the externalities associated with landfill and the direct benefits to consumers from recycling (Section 4)

  • the size and value of markets for materials collected for recycling (Section 5)

  • the costs of recycling including collection and treatment (Section 6)

  • the net benefits of recycling, weighing up the costs and the benefits (Section 7)

  • overall conclusions are made in Section 8.

1 Ministry for the Environment (2002) The New Zealand Waste Strategy: Towards zero waste and a sustainable New Zealand.

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