econlife - Why We Should Care About Curbside Cardboard Crime by Elaine Schwartz

In 2016, the dumpsters in Madrid got smaller holes to prevent cardboard theft.

It didn’t work.

Called “beige gold,” curbside cardboard is picked up by cities and then sold for recycling. But in Madrid, where thieves were arriving first, authorities have estimated a multi-year €16 million (close to $19 million) revenue loss. Now, New York and California are also reporting cardboard thievery.

Recycling Revenue

We had had the perfect setup. The shipping containers that arrived here from China were going home empty. Decades ago, Chinese entrepreneurs figured out they could pay us for our trash, recycle it into raw materials, and then remanufacture it. By 2016, we had been sending upwards of 700,000 tons a year of trash to China. The system let cities get the recycling revenue that could support trash management.

But then, during January 2018, China said it was banning most trash imports. The decision was a whopper.

China had two reasons:

1. The waste was too dirty. After all, our Amazon boxes are okay but not all of the plastic and foam inside. And beyond that, we discard our clothes hangers, shoes and garden hoses. Most then go to sorting machines that inadequately separate the filthy and hazardous materials from everything else. China used to get it all. Now they are saying “No.”

2. They are more affluent. China can afford to purchase the new materials they need to make carpets and pipes and all they send us. They can import new plastics.

When China limited the kind of cardboard it would recycle, price plunged as their demand curve shifted to the left:

However, there are still markets for recycling cardboard. Like most commodities, used cardboard’s supply and demand push price up and down. Currently,  recycled cardboard is selling for somewhere between £70 and £80 per ton in England (with price spiking to £130 a ton when coronavirus first spread).

Our Bottom Line: Tragedy of the Commons

Because curbside cardboard, the ocean, and the air are shared resources, some of us mistreat them. Called the tragedy of the commons, thieves take the cardboard, we overfish, and factories pollute. The reason is the “commons.” When no one owns a resource, there is less incentive to care for it.

For years, the recycling revenue that came from China created an incentive for municipalities to recycle. Now, with China banning most of our trash and cardboard, it has disappeared.

My sources and more: Thanks to Marginal Revolution for alerting me to cardboard theft and this BBC article. From there it made sense to look at recycling in The Atlantic, an NPR report, WSJ, and from a WTO press release, Please note that several of today’s paragraphs were in a previous econlife post.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.

econlife - Why It’s Tough to Plan Congestion Pricing by Elaine Schwartz

It might cost me $11.52 to drive south of 60th Street in Manhattan. And that’s after paying $12.50 at the Lincoln Tunnel and a Jersey Turnpike toll.

That extra $11.52 (I’m not sure how they got that amount) would be the congestion pricing fee. Now that the New York State legislature said yes to the plan, NYC will become the first U.S. city to use downtown congestion pricing.

Here an economist might say that the law of demand kicks in. When price rises–it’s free now–the quantity people are willing and able to purchase decreases. So, if you charge to drive in a certain area like below 60th Street in Manhattan, then you wind up with fewer cars.

Yes?

It’s not quite that simple. Today, let’s look at the details. Then, we can consider the externalities.

Congestion Pricing Plans

The NYS legislative just said yes to congestion pricing and a commission to figure it out. All they know is that there will be a charge and the revenue will go to mass transit.

Why

Because the average speed in midtown Manhattan is between 4.5 and 9 MPH, congestion pricing advocates want cars to move faster. With fewer cars, air quality could improve. Space also could be used differently when fewer cars occupy the streets and we don’t need as many parking spaces. It all could add up to a more efficient, less aggravating, and healthier city.

How Much and Who

The basic concept involves charging a fee to people who drive in the “cordoned” area. The question though is how much and who. You could have one amount or it could be variable, depending on traffic volume. It could apply to all vehicles or depend on the type. After all, people drive commercial, passenger, and emergency vehicles. They ride on motorcycles and mopeds. They take taxis, Uber, Lyft and other ride-sharing options. There are horses leading small carriages.

We also have different categories of drivers to consider. There are the disabled. You have low income households.

Where

We know the targeted area is below 60th street. But we have to consider the vehicles that want to move from lower Manhattan to above 60th Street. On the east and west sides of the city you have the FDR Drive and the West Side Highway. Along those roadways, there could be no charge. But what about the exits? How to monitor who enters midtown? Also, you have drivers who live in the priced area that need to move their cars from one parking space to another because of alternate side of the street parking rules.

When

The fee could apply only during businesses hours. From there, we could ask about weekends and evenings. Do holidays count? Or, it could relate to the number of vehicles.

Technology

If we look way back to 1975, Singapore had people purchase paper decals for its congestion pricing plan. When the Hong Kong system started, drivers were to install an Electronic Number Plate under a vehicle. Then, electronic loops under streets read the plates so drivers could be charged. For Manhattan, planners object to EZPass transponders because they require gantries. It appears they hope someone will invent an app or a GPS device that simplifies the revenue side.

This is a gantry:

Our Bottom Line: Externalities

As economists, we could say it is all about externalities. Defined as the impact on an uninvolved third party, an externality can be negative or positive. People want congestion pricing because too much traffic creates negative externalities. You know what they are. We waste huge time, the air is more polluted, the noise is irritating. Congestion slows business and diminishes pleasure.

As you might be thinking, the gargantuan number of details that compose a congestion pricing plan will surely lead to a slew of new externalities. Who you are and what you do will determine whether the impact is positive or negative or both.

However, I can be sure that my hour’s drive to and through NYC will certainly change.

My sources and more: With NYC’s congestion pricing almost a done deal, the articles are everywhere. Politico, WSJ, Medium, the NY Times, Curbed, AMNewYork, and City Lab are some possibilities.

Ideal for the classroom, econlife.com reflects Elaine Schwartz’s work as a teacher and a writer. As a teacher at the Kent Place School in Summit, NJ, she’s been an Endowed Chair in Economics and chaired the history department. She’s developed curricula, was a featured teacher in the Annenberg/CPB video project “The Economics Classroom,” and has written several books including Econ 101 ½ (Avon Books/Harper Collins). You can get econlife on a daily basis! Head to econlife.