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The glass, lumber, wood pulp, and paper manufacturers all deal directly in commonly recycled materials. However, old rubber tires may be collected and recycled by independent tire dealers for a profit.

Many economists favor a moderate level of government intervention to provide recycling services. Economists of this mindset probably view product disposal as an externality of production and subsequently argue government is most capable of alleviating such a dilemma.

 

However, comparing the market cost of recyclable material with the cost of new raw materials ignores economic externalities—the costs that are currently not counted by the market. Creating a new piece of plastic, for instance, may cause more pollution and be less sustainable than recycling a similar piece of plastic, but these factors will not be counted in market cost. A life cycle assessment can be used to determine the levels of externalities and decide whether the recycling may be worthwhile despite unfavorable market costs. Alternatively, legal means (such as a carbon tax) can be used to bring externalities into the market, so that the market cost of the material becomes close to the true cost.

Container deposit legislation involves offering a refund for the return of certain containers, typically glass, plastic, and metal. When a product in such a container is purchased, a small surcharge is added to the price. This surcharge can be reclaimed by the consumer if the container is returned to a collection point. These programs have been very successful, often resulting in an 80 percent recycling rate. Despite such good results, the shift in collection costs from local government to industry and consumers has created strong opposition to the creation of such programs in some areas.

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