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Waste Recycling: Cost Benefit Analysis Online version
7 Net Benefits of Recycling
This section summarises the results of the analysis and the comparison of costs and benefits. The initial set of figures is presented using a 10 per cent discount rate. Sensitivity analysis is undertaken at a 5 per cent rate.
The quantity input data used in analysis are shown in Table 30. The recovered percentage is the quantity currently recovered for recycling; the technically recoverable is an assumption based on what is achievable given the methods of collection that are used to derive the costs.
Table 30: Recyclable material quantities
View recyclable material quantities (large table).
The analysis for each material uses three sets of assumptions:
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an initial rate of recycling based on benefit estimates that include savings in landfill costs (social cost estimate rather than a market rate) but ignore external costs associated with emissions, leachate and the direct consumer benefits
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a low benefit estimate that uses the low assumptions from Table 19
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a high benefit estimate that uses the high assumptions from Table 19.
Under each material in the following pages, the net costs or net benefits of recycling that material stream is shown. In each case the y-axis represents the marginal net benefits (or net costs when the line goes below zero) of recycling successive amounts of a given material; the x-axis represents the cumulative quantity of material recycled up to a total equal to the technically recoverable quantity. This is equivalent to the aggregate amounts in household, commercial and other waste streams in Table 30.
7.1 Paper
The net benefits of recycling household paper are shown in Figure 11. In Figure 11 there are positive net benefits for recycling 225,000 tonnes of household paper under all assumptions.
Figure 12 shows the net benefits of recycling commercial paper. The analysis of costs is undertaken such that all current systems have net benefits; these systems occur under commercial contracts and, by definition there will be positive (or at least zero) net benefits.
7.2 Plastics
The net benefits of recycling individual plastic streams are shown in the following charts. There are positive net benefits for recycling PET and HDPE for all quantities that are recoverable.
For PVC and LDPE, the value of recycling depends crucially on the estimates made of the value of external benefits and particularly the direct consumer benefits.
7.3 Glass
The net benefits of recycling coloured glass are shown in Figure 17 and clear glass in Figure 18. The recycling of these materials is limited by the capacity (70,000 tonnes) at OI and the low value in other uses (assumed to be zero).
The results of the analysis for clear glass are shown in Figure 18. The O-I capacity is assumed to be 10,000 tonnes; beyond this clear glass is assumed to have a market value of zero.
7.4 Metals
Figure 19 shows the net benefits of recycling steel. Above approximately 6,000 tonnes, recycling is justified when account is taken of the external benefits (direct consumer benefits).
Recycling of all aluminium containers provides net benefits even without the inclusion of external benefits (Figure 20).
7.5 Organics
The net benefits of recycling organics are shown in Figure 21. These results need to be interpreted carefully; the analysis suggests that up to approximately 200,000 tonnes can be recycled at a net benefit including low benefit values, although this is less than is currently recovered (Table 30). The difference results from different assumptions regarding collection method. The analysis here assumes a separate kerbside collection system for organics rather than the drop-off system that is currently used; such a system appears to be justified only under the high benefit value estimates (see Table 19 on page 26).
7.6 Tyres
The net benefits of recycling end-of-life tyres are shown in Figure 22.
The analysis suggests a significant quantity could be recycled at a net benefit, even in the absence of the external benefits.
7.7 Used oil
The net benefits of recycling used oil are shown in Figure 23. The inclusion of direct benefits increases substantially the estimate of the quantities that can be recycled at a net national benefit.
7.8 Construction and demolition waste
The net benefits of recycling construction and demolition waste are estimated below for the two streams – concrete and rubble and timber.
For concrete and rubble there are few external benefits – only those associated with landfill disamenity and these provide little additional benefit. There are positive net benefits from recycling 650,000–700,000 tonnes.
For timber waste, there are estimated net benefits from savings in greenhouse gas emissions in addition to the savings in disamenity impacts. However, the estimates are that there are substantial private benefits from recycling timber waste because of its value as an energy fuel.
See figure at its full size (including text description). 
7.9 Summary
The results are summarised in Tables 31 and 32. It shows the total quantity generated, that technically recoverable using current technologies, that currently recovered and quantities that could be recycled for each material with positive net benefits under high and low benefit assumptions. It shows the results at two discount rates: 5 per cent and 10 per cent.
Table 31: Summary of results – recoverable, currently recovered and quantities that could be recycled with positive net benefits (000 tonnes)
Table 32: Summary of results – recoverable, currently recovered and quantities that could be recycled with positive net benefits (%)
