| SWANA TECHnews e-newsletter
11/1/2005
Did You Know How Much Your Residential
Curbside Recycling Container Is Worth?
Harvey Gershman, President, Gershman,
Brickner & Bratton, Inc.
Since the early 1990s, I have
had the privilege of being a lead instructor for the SWANA
training course "Paying for your Integrated Solid Waste
System". One of the key topics discussed during the course
is the value of the products in MSW. Recyclables value, as
with commodities like pork bellies or sugar, tend to fluctuate
with market supply and demand as well as with the rise and
fall of energy prices.
It is interesting to note
how the value of the residential curbside container has changed
over time, and when one includes the value of container redemption
value, like in California, the value is even greater. To illustrate
this, I asked a GBB staff member, Kristian Ferguson, to look
at this using the 1995, 1998 and recent 2005 update values
data from the Paying Course. The table below presents the
value of the residential curbside recyclable containers as
if sorted and sold in the selected years (for 1995, 1998,
and 2005) from a dual-stream curbside MRF in New Jersey and
a single-stream curbside program in California. For the dual
stream program the value has ranged from over $145 per ton
in 1995 to a low of about $60 per ton in 1998; today it is
about $115 per ton. In California with redemption values included,
the value range jumps up to the $175 high end in 1995 to a
low of $92 per ton in 1998; today at about $139 per ton. Are
you surprised by these values? Does your local government
arrangement for residential recyclables collection and processing
allow your community to benefit from this value or not? Or,
do you pass along the market risk and benefit to your private
service provider, perhaps bundled within a collection and
processing services contract?
When taking market risk, there
will be fluctuations. Because local governments are generally
risk averse, many have chosen not to share in the up and down
of the market prices. Therefore, the market risk is passed
along to your private service provide. If so, what do you
think their pricing is based upon? Answer: Generally, the
lowest market prices that have been experienced in the past
5 to 10 years. Is that where you want to be?
Program sponsors should review
the math for their current arrangement to determine if their
risk is in line with their benefit from market revenue. Or,
are you covering the downside while your processor takes all
the upside? Doing so can provide added incentive and funding
to increase diversion too....more tons and more revenue, not
to mention what additional savings accrue from avoided waste
collection and disposal costs.
How might the extra funds
be used? I'm sure you have a list! Whatever is on your list,
let me suggest some of the funds go back into making sure
public education and enforcement stay vital so that your curbside
programs get stronger and stronger!
CLICK
ON TABLE TO ENLARGE
Harvey Gershman is President
of Gershman, Brickner & Bratton, iNC. and can be reached
by phone at (703) 573-5800, by e-mail at hgershman@gbbinc.com
or on the web at www.gbbinc.com.
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