Q: What proportion of municipalities in the United States currently do some sort of recycling or composting?

Platt: There are about 4,000 curbside recycling programs. This is a significant increase from a few years ago. In 1990, about 17% of municipal waste was recycled. That's up from 10% a few years ago. So there's been a significant increase over the last few years. In terms of tonnage, recycling has gone from 16 million tons in 1985 to 33 million tons in 1990.

Seldman: Brenda is talking about curbside collection. If you count other types of programs, such as drop-off programs, commercial recycling, and source reduction programs, then just about every city in the country is doing some form of recycling. For one thing, most states require recycling in solid waste management planning.

Q: Is that because states are worried about running out of landfill space?

Seldman: It's one of several pressures. In the Midwest, the cost of landfills is rising 15% a year. And in the East and West, it's rising even faster. Recycling is also a political movement. Citizens are forcing federal, state, and local officials to change their ways.

Platt: The first states to pass mandatory recycling were the first states to essentially run out of landfill space, such as New Jersey.

Seldman: For example, in 1979 you could put garbage in the ground for $3 a ton in New Jersey. Now it's closer to $140 a ton.

Q: What proportion of existing recycling programs are economical?

Platt: Most curbside programs collect only about 7% to 8% of the waste stream. The generally recycle only newsprint, aluminum cans and glass containers. Yet the more you recycle, the lower your per-ton costs. And currently, most recycling programs are add-ons to existing solid waste collection infrastructure.

We found that the cost-effective recycling programs share at least three key characteristics: the program is integrated into existing infrastructure; a wide range of materials are targeted for recycling; and yard waste is collected for composting.

Recycling can be more expensive than more conventional disposal methods. But it's not necessarily because the inherent costs of recycling are higher. Recycling projects have temporary start-up costs or they recover low levels of materials in their early stages. Or the current landfill costs of conventional programs may be temporarily low.

Q: A program does not necessarily have to turn a profit to be economical?

Seldman: Garbage does not pay for itself. Your garbageman does not pay you to come and pick up your trash. You pay him. Recycling offers the chance to reduce your disposal costs. That's the key. It's cost effective when it's the cheapest alternative.

Platt: Another consideration is that recycling offers more economic development opportunities than incineration. For example, a city of 1 million people can support about 30 scrap-based manufacturers and create about 2,000 jobs. That is an important addition to a city's economy. Recycling wins three ways: it lowers operating costs, employs more people, and offers the potential for high-wage manufacturing employment.

Q. Do municipalities accurately calculate the true costs of their waste disposal, such as the long-term costs of landfills?

Seldman: The answer is some do and some don't. Seattle does. And Los Angeles is starting to. But other cities are running on a day-to-day or year-to-year basis without contemplating the future. So you have a mixed bag.

Platt: Communities vary in other ways as well. They may own the landfill, or they may not. It might be publicly operated or privately run. It depends on who is paying for which costs. A community may have a lot or a little control over its situation.

Q. How are communities financing their recycling programs? Is there much innovation taking place in this area?

Seldman: There's a lot of innovation. But it's slow in coming and there are many problems. Our observation is that most recycling is financed out of current budgets. That's a major disadvantage because landfills and incinerators are, of course, financed through bond issues. We've seen many cities issue $500 million in bonds to build an incinerator and then say they don't have any money in their budget for recycling.

In general, it's very difficult for recycling to gain capital. But we have made some breakthroughs here. For example, in the last two years, you could go to an underwriter and issue a system bond for recycling. Under a system bond, a city can use the money to do things like educate its citizens about recycling and buy trucks and processing equipment. Essentially, it's non-facility-oriented bonding.

This is critical because a recycling system also needs an industrial facility for processing. These can cost anywhere from $2 million to 10 million. Clearly, bonding is needed for something like that.

We've also found ways for cities to bypass the bond market. A city can use its existing garbage collection crews to collect recyclable materials. The crews take the materials to a nonprofit corporation that does the processing and marketing. This allows a city to have its own recycling system without spending its own capital.

Q: Where do these nonprofit corporations get their funding?

Seldman: They are nonprofit community development organizations. And they turn to corporations and foundations for grants and program-related investments. With this, you literally eliminate a capital need for a city.

Q: How do you feel about taxing the waste stream so the people generating the waste pay for its disposal?

Seldman: Taxing products is okay. But we prefer minimum content legislation. It's a nontax mechanism. You tell manufacturers that they have to use a certain percent of recycled materials in their products. If it costs more, that cost is passed on to the consumer. By this method, manufacturers adjust their production processes. And that's generally the efficient way to do it.

There are about 20 states that have either voluntary or mandatory minimum content requirements enacted in the last few years. Most of them now focus on newsprint.

Q: Where does recycling stand in historical terms? Are we still in the dark ages of recycling or further along?

Seldman: We're still in the early stages. Recall that the post-World War II generation is the only generation in U.S. history that has not recycled. But things are now booming. There's not only a revolution in the actual recycling side of it, there's also a revolution in the legislative side of it.

Most of this is happening on the state and local level. Garbage is a local issue. In the early 1970s the federal government concluded that people would not recycle. So during the 1970s the federal government promoted the commercialization of incineration.

But in the early 1980s the politicians promoting incineration got a rude awakening. Citizens and citizen groups began opposing incinerators. Since 1985, about 150 incinerators have been defeated and about 30 have been built. That's a pretty good record. Many incumbent officials lost elections because they pushed incineration.

Q: Why were so many politicans pushing incinerators instead of recycling programs."

Seldman: A city might have asked itself: Do we want an incinerator that costs $500 million initially or a recycling system that initially costs $50 million? The bottom line is, Wall Street is going to push for the $500 million deal. The bigger the deal, the bigger their commission will be.

The city's mayor is another factor in this dynamic. The mayor will probably also want the bigger bond issue. Most mayors want big bond issues because they provide financial patronage. Between the underwriters, tax consultants, and lawyers, about 10% of a bond issue goes to companies at the discretion of the mayor. So a $500 million bond issue means $50 million that the mayor gets to give out to companies in his city. That's a very powerful tool in a re-election campaign.

So the combination of Wall Street and incumbent officials has been a powerful force behind incinerators in the last 10 or 15 years. But that's all been changed by the grassroots movement against incinerators and for recycling.

Q: Are the environmental and financial aspects of recycling complementing each other more as time passes?

Seldman: That's right. Here at the institute, we're economic analysts, not environmentalists. We promote recycling for the economic benefits, and consider the environmental benefits a nice dividend.

And as landfills fill up and technology advances, recycling becomes more economically viable. There's an inevitability about recycling making it easy to be pro-recycling.

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