Do slips in the cost of pollutants threaten environmental targets?

It’s generally felt (and I would be surprised if it was not true) that recycling paper is more efficient than sending it to landfill, burning it or leaving it all over the tube.

A story in today’s Guardian caught my eye. It said that a reduction in international prices for waste paper is threatening the government’s recycling targets. The story is based on an unusually interesting press release (pdf) from the Confederation of Paper Industries. The press release says:

The UK relies on global export markets to take well over 50% of the recovered paper it collects with Far East markets taking over 75% of the export total … without these markets UK merchants are left with little option other than to store the material they have paid significant amounts for or sell at loss making prices … With no obvious signs of Far East buyers returning to the market soon there is a serious possibility that storage of [paper] may end up being a very high risk strategy with huge costs to those requiring storage, including the tax payers through Local Authorities.

Well, there are always winners and losers when commodity prices move. But is this actually an environmental issue?

Paper waste prices are collapsing because people worldwide are using less recycled paper. This is due to lower demand in an economic downturn – not a reduction in eco-consumerism (recycled paper is cheaper). Globally, if there is less demand for paper then we don’t need to recycle as much to meet energy and waste targets. And if the UK situation continues, the market should support new domestic processing plant (if recycling is indeed an efficient process).

Similarly, the European carbon price has slipped significantly over recent months and many forecast it will continue to go down. This will kill the business case for some emission reduction investments, but because the consumption baseline is shrinking overall emissions will not increase. The lower carbon price just delays capex to a time when the economy and emissions start to grow again.


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