By: Emily Hurley ’22, an Economics and Philosophy major and Asian Studies minor.
The following work was created for ECN 317: Environmental Economics
Brief description: Composting is an easy way to reduce carbon emissions and the impact of harmful landfills. However, composting on a municipal scale can be expensive for local governments who prioritize short-term costs over long-term benefits. By examining New York City’s organics collection program, it is evident that monetary costs should not be the only input considered when assessing the viability of a public policy. Non-monetary benefits that come from protecting the environment must also be considered when estimating the full amount of costs and benefits associated with a project.
It is common within the United States for individuals to throw leftover food and other organic materials into the trash. It is estimated that uneaten or spoiled food makes up the largest proportion of items that reside within American landfills. This wasted food is not only bad for the environment, as it creates methane while decomposing in landfills, but it is also very expensive to transport, costing the nation roughly $1.3 billion annually to do so.[i] Large cities experience those transportation costs and emissions most acutely because more trash is produced within these densely populated areas. In New York City, the Department of Sanitation for New York (DSNY) collected 9,962.5 tons of garbage per day during the 2015 fiscal year.[ii] That means that the DSNY collected about 3.6 million tons of garbage that year alone. To try and address these environmental and economic costs, the City Council of New York passed Local Law 77 in 2013, mandating the creation of a DSNY-ran organic materials curbside collection program which would engage at least 100,000 home residences and 400 schools.[iii] Using evaluative and analytical techniques from the field of environmental economics, this policy is shown to be an effective example of moral suasion, implicating a strong desire on the behalf of NYC participants to mitigate the negative environmental impacts of their actions.
Before this initiative can be evaluated, it is important to understand what the goals of the program actually are. It was previously mentioned that Local Law 77 codified this program to serve at least 100,000 homes and 400 schools, but this goal was surpassed by the end of the 2015 fiscal year.[iv] The question of how to evaluate the program quickly shifted onto a new city goal established by Mayor Bill de Blasio in 2015, to reduce the amount of trash sent to landfills by the city, stating that NYC should add no amount of waste to landfills by 2030.[v] The amount of waste that the city diverts from landfills, also known as the diversion rate, allows one to evaluate the effectiveness of the city’s organics collection project in achieving the goal of reducing the amount of waste sent to landfills. Instead of storing the city’s organic waste at landfills where it decomposes anaerobically (without oxygen) and produces methane, composting the organic materials collected allows the materials to decompose aerobically (with oxygen) which creates and stores carbon dioxide as nutrients within the soil in which the materials were composted.[vi] The organics collection program, as well as the city-wide recycling program, divert a significant tonnage away from these environmentally harmful landfills, which have not only affected New Yorkers but people all over America.
Not only are New Yorkers affected by this waste when its contents end up in their state landfills, but it also affects the residences of other states to which NYC sends their trash. This includes landfills in New Jersey, Pennsylvania, Connecticut, Ohio, Kentucky, Virginia, and South Carolina.[vii] The people who reside by these landfills often inhale putrid smells, experience unpleasant scenery, and deal with a constant flow of dump trucks coming to and from the landfills.[viii] These environmental damages are hard to quantitatively measure but are not insignificant to the people who experience them. The DSNY also spends a significant amount of tax-payer money on trash transportation. In the 2016 DSNY budget, $368 million were allocated for waste disposal alone.[ix] The desired result of this organics collection program, as well as other recycling programs funded by the state, is to reduce the financial costs of waste transportation and improve the lives of those who live near landfills by reducing the amount of pollution that landfills emit. By composting the organic waste that is diverted from landfills within local New York facilities, the DSNY hopes to cut transportation costs significantly. The larger goal of eliminating all landfill waste by 2030, which the organics collection program can help achieve, will also ensure that more landfills are not created, and more waste is not added to already existing landfills.
The method that this program uses to encourage people to compost and reduce their total trash production is called moral suasion. In environmental economics, moral suasion is a type of policy where the government or some agency asks polluters to abate or reduce their pollution, appealing to polluters and their desires and values rather than the desires of the governing agency.[x] Polluters are shown the significant effects that their actions can have on their environment as well as the costs associated with these actions through educational or advocacy efforts. This education can be seen in NYC’s organics collection program. As Queens residents Lina Lei and Zigeng L. noted during the residential pilot program, they have “been participating every week since the staff members handed us the flyer. The food scrap drop off makes lots of sense…we want to make sure that we give back to the environment that grows our fruits and vegetables. We also want to throw away less garbage so that our newborn can grow up in a greener environment.”[xi]
The values that Lina and Zigeng are preserving are types of non-use values called bequest values and existence values. A bequest value is the value that comes from leaving a resource or an environment well-off for the benefit of future generations, while an existence value comes from the preservation of the current benefits one receives from a resource or environment.[xii] These non-use values arise when a resource or environment is not used or exploited and are difficult to measure because of their conditional and subjective nature.[xiii] Lina and Zigeng demonstrate the prioritization of these values by showing concern for their newborn’s future environment and the future existence of the nutrients they consume. The effectiveness of moral suasion depends on how effectively one educates the public about these various non-use values, which are less obvious in the daily lives of possible participants. The DSNY understood this fact, and the organics collection pilot program came after decades of partnerships with local composting sites and gardens to promote composting and organic waste diversion.[xiv]
Using data collected by DSNY, one can perform a cost-benefit analysis on both the organics collection program and all other waste diversion programs, to evaluate the effectiveness and usefulness of the program. A cost-benefit analysis weighs the benefits of a program against the costs with which it is associated.[xv] The first step in this analysis is to establish a viewpoint of which to evaluate the program from.[xvi] For this program it would be beneficial to look at the most recent and accurate dataset which, because of the Covid-19 pandemic, is the dataset for the 2019 fiscal year. Examining this data, we can see that in total, 12,056.5 tons of materials were collected by the DSNY per day: 9,875.8 tons being trash, 154.7 tons being organic materials collected by this program, and 2,026 tons being recyclable materials.[xvii] This means that if the DSNY wanted to achieve their zero landfill waste goal for 2019, they needed to divert all 12,056.5 tons per day, representing the total possible amount of pollution emitted for 2019 on the x-axis in the graph below.
One way to determine if the marginal cost of abatement is greater or less than the marginal damages/marginal benefits that the abatement produces, is to examine the amount of money DSNY spends to collecting organic materials and dispose of trash. The costs of collecting the 154.7 tons per day, or roughly 56,465.5 tons per year, can be estimated by examining the city’s budget for the compost program. For the 2021 fiscal year, DSNY’s budget proposal showed a decrease of $21.1 million after the City Council suspended the organics collection program due to Covid-19.[xviii] Because of this, the cost for collecting those 157.5 tons per day in 2019 is estimated to be around $21.1 million. If you divide this $21.1 million by 157.5 tons per day multiplied by 365 days per year, you get a yearly marginal abatement cost of $373.70 per ton for 2019.
Also shown on the graph is the amount of pollution abated by the collection of recyclable materials. This value is to reflect an accurate cost of transportation for the trash sent to the landfill in 2019, because recyclables materials are not sent to landfills. In the 2021 budget proposal, the figures for the 2019 fiscal year are also recorded. In 2019, DSNY spent $794,259,000 on “collection and street cleaning, $18,506,000 on “waste disposal – general,” $61,896,000 on “waste disposal – landfill closure,” and $409,772,000 on “waste export.”[xix] These amounts add to $1,284,433,000. If you divide this number by 9,875.8 tons per day, multiplied by 365 days, you get $356.33 per ton for 2019. However, this amount does not fully represent the marginal damages that each ton of trash has on the environment and society.
The societal and environmental benefits that come with this program, and the loss of these benefits if the program is not running, should also be considered when determining the value of the marginal damages for each ton of pollution. These benefits include the aforementioned non-use values that arise from leaving the environment better off for future humans and for preserving the existing environment, but there are also other benefits and damages which should be considered. Indirect damages and benefits — such as the devaluation of property caused by the presence of nearby landfills, the abundance of nutrients in soil due to composted organic waste, and the reduction of climate change inducing emissions — would make the marginal-benefits/marginal-damages/marginal-willingness to pay for this policy higher than the marginal costs of this policy, which will be the case up to a diversion rate of 100%. There may also be inherent social benefits to this program as well, especially in connection with collecting organic waste from schools. By teaching children about environmentally sustainable practices while they are still young and giving them the tools and resources necessary to practice making these decisions, they receive vital education and training that will allow them to act in a more environmentally sustainable way when they grow up.
Despite the seemingly small level of abatement caused by this organics collection alone, seen on the graph above as the green area, the overall impact of this program has just started to emerge. With the recycling program and the organics collection program combined, represented by the blue and green areas in the graph above, the diversion rate for 2019 was 18%.[xx] It is also important to note that even though the cost of abatement might increase over time due to increased collection amounts, as represented in the upward sloping marginal abatement cost curve, the marginal benefits of the program will always be above the marginal abatement costs in this situation. This is precisely because of NYC’s goal to reduce all landfill waste. This prioritization of reducing waste has increased NYC’s communal valuation of hard-to-measure, non-use values. This can be seen by the increasing diversion rates reported by the program over time: in one high-rise building, the diversion rate jumped from 37% to 43% during the span of one year.[xxi] The consideration of these non-use values as well as the relative costs associated with the program indicate that NYC’s organic collection program is an effective example of moral suasion.
However, there are some problems that accompany the type of policy that NYC is using to solve its trash problem, and about the distribution of program benefits. Moral suasion is very fair, and in a sense, is a libertarian policy because it allows people to choose to participate within a program rather than coercing them into participation. However, this attribute makes moral suasion hard to enforce because. this policy does not use governmental means to influence individuals’ actions; instead, the government relies on social pressure and education to encourage and enact change. This may cause diversion rates to not grow as quickly as Mayor de Blasio may require in order to reach his zero-landfill waste goal. In addition to of the unenforceability, it is also difficult to access the program. Because of their designs, high-rise buildings are much harder for DSNY workers to collect and separate waste items from, making it so managers from high-rise buildings must enroll in the organics collection program instead of the individuals themselves.[xxii] Many historically underprivileged groups, such as black and brown communities, are also not given the chance to participate in these programs due to where they live.[xxiii] These logistical issues prevent different people from having the same access to the benefits of this program, which indicates that this program struggles to provide vertical equity to those who do not have access to the program.
These weaknesses have not caused the organics collection program to cease. The program was only recently temporarily halted due to budget cuts, resulting from the economic strain caused by Covid-19.[xxiv] While it is unclear when and in what capacity the program will resume, the passion that New Yorkers have for composting and organic waste diversion is still alive and well. Vivian Lin, a New Yorker herself, created a small organics collection business in the aftermath of these budget cuts, trying to keep the composting tradition alive.[xxv] While the state-run collection program may not be a perfect policy, its suspension leaves many environmental advocates and compost enthusiasts concerned due to the program’s categorization as unessential.[xxvi] One thing is certain, when waste is not diverted from landfills, the suffering of those people who live and are exposed to landfills will increase. The carbon emissions released from the constant transportation of trash to and from these landfills will continue to accumulate. Eventually, the emissions caused by this collection and accumulation of trash will also affect those who don’t live near existing landfills. It is important that this pollution is abated and that the organics collection program be reestablished, as eventually it will affect all of us, whether through its contribution to global carbon emissions or through the opening of additional landfills
[i] Jarrett Murphy, “Life Near a Landfill: The Towns and People Who End Up with NYC Trash,” (February 4, 2017), https://citylimits.org/2015/05/22/life-near-a-landfill-the-towns-and-people-who-end-up-with-nycs-trash/.
[ii] NYC Department of Sanitation. “Annual Report: New York City Curbside and Containerized Municipal Refuse by Borough and District: Fiscal Year 2015”,(2015). https://www1.nyc.gov/assets/dsny/site/resources/statistics/annual- reports-for-dsny-curbside-collections. Page 1.
[iii] 3 NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 5.
[iv] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 5.
[v] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 6.
[vi] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 8.
[vii] Jarrett Murphy, “Life Near a Landfill: The Towns and People Who End Up with NYC Trash,” (February 4, 2017), https://citylimits.org/2015/05/22/life-near-a-landfill-the-towns-and-people-who-end-up-with-nycs-trash/.
[viii] Jarrett Murphy, “Life Near a Landfill: The Towns and People Who End Up with NYC Trash,” (February 4, 2017), https://citylimits.org/2015/05/22/life-near-a-landfill-the-towns-and-people-who-end-up-with-nycs-trash/.
[x] Romans, J. T. “Moral Suasion as an Instrument of Economic Policy.” The American Economic Review 56, no. 5 (1966). http://www.jstor.org/stable/1815305. Page 1,221.
[xi] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 13.
[xii] Scott, Brian. “Environmental Economics: Chapter 7 – Benefits”, (September 2020). https://washcoll.instructure.com/courses/2951108/files?preview=183180937. Slide 15.
[xiii] Scott, Brian. “Environmental Economics: Chapter 7 – Benefits”, (September 2020). https://washcoll.instructure.com/courses/2951108/files?preview=183180937. Slide 15.
[xiv] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 10.
[xv] Scott, Brian. “Chapter 6: Framework of Analysis”, (September 2020). https://washcoll.instructure.com/courses/2951108/files?preview=183174410. Slides 7-9.
[xvi] Scott, Brian. “Chapter 6: Framework of Analysis”, (September 2020). https://washcoll.instructure.com/courses/2951108/files?preview=183174410. Slides 7-9.
[xvii] NYC Department of Sanitation. “Annual Report: New York City Curbside and Containerized Municipal Refuse and Recycling Statistics by Borough and District: Fiscal Year 2019”, (2019). https://www1.nyc.gov/assets/dsny/site/resources/statistics/annual-reports-for-dsny-curbside-collections.
[xviii] The Council of the City of New York. “Report to the Committee on Finance and the Committee on Sanitation and Solid Waste Management on the Fiscal 2021 Executive Budget for the Department of Sanitation”,(May 14, 2020). https://council.nyc.gov/budget/fy2021/. Page 3.
[xix] The Council of the City of New York. “Report to the Committee on Finance and the Committee on Sanitation and Solid Waste Management on the Fiscal 2021 Executive Budget for the Department of Sanitation”,(May 14, 2020). https://council.nyc.gov/budget/fy2021/. Page 1.
[xx] NYC Department of Sanitation. “Annual Report: New York City Curbside and Containerized Municipal Refuse and Recycling Statistics by Borough and District: Fiscal Year 2019”, (2019). https://www1.nyc.gov/assets/dsny/site/resources/statistics/annual-reports-for-dsny-curbside-collections.
[xxi] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 27.
[xxii] NYC Department of Sanitation. “2015 NYC Organics Collection Report”. (October 2015), https://www1.nyc.gov/assets/dsny/site/resources/reports/organics-reports. Page 26.
[xxiii] Amelia Nierenberg, “Composting Has Been Scrapped. These New Yorkers Picked Up the Slack.,” The New York Times (August 9, 2020), https://www.nytimes.com/2020/08/09/nyregion/nyc-compost-recycling.html.
[xxiv] Amelia Nierenberg, “Composting Has Been Scrapped. These New Yorkers Picked Up the Slack.,” The New York Times (August 9, 2020), https://www.nytimes.com/2020/08/09/nyregion/nyc-compost-recycling.html.
Emily Hurley ’22 is a passionate Economics and Philosophy double major with a minor in Asian Studies. She is the current President and co-founder of Washington College’s Compost Team, which works to reduce the campus’s environmental and financial costs associated with its food waste. She is also an active member of the college’s Philosophy Club. Some of her favorite things to do include reading philosophy books, creating art, and debating with her economics professors.