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Recycling and Reuse: Are Financial Incentives Necessary?

Tom Szaky | Friday January 30th, 2009 | 5 Comments

Call me cynical (and you’d be right), but I think that humans as a species have a couple of basic tenancies. We want life to be better and want to do less to make it so. In other words, we want more comfort and convenience at less cost. That is why we live in a consumer based society with disposable products. We also focus almost entirely on short term gain vs. long term gain. There are obviously exceptions to these rules – like our friends the Mennonites – but in general I think this holds true.
So here comes the million dollar question. If the above is true then how do we solve the environmental problem since it is a long term problem (vs. short term) and most of the solutions come at a higher cost and less convenience. Even a simple tasks like recycling takes time and energy (vs. throwing everything in the trash can) and has no immediate reward (only long term). With all this said I do also think that people want to do the right thing. However wanting something is less powerful than doing and the act of doing is governed by the aforementioned rules.
The solution is incentive. A fantastic case study in RecycleBank’s approach to recycling demonstrates this point. Recyclebank simply pays people to recycle. Prior to recyclebank recycling rates in Philly were under 30%, after recycle bank they were above 80%. Amazing.
TerraCycle (my company) runs brigade programs where millions of Americans sign up to collect waste (from Oreo wrappers to Stonyfield yogurt cups). Currently we donate $0.02 to $0.06 per unit of waste collected to the charity of the collectors choice. So here is my question: do we need to be giving out $0.02 to $0.06 per unit of waste? Over 1 million Americans are now sending specific non-recyclable waste to TerraCycle, postage paid, with the contribution to the charity of their choice. What will it take for you to collect your packaging waste and send it to TerraCycle (or another company), rather than sending it to an landfill? Is $0.02 or $0.06 not enough?


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  • http://paperchainsandmelodrama.blogspot.com/ Melibee

    Unfortunately, I think we have moved so far into the “what's in it for me?” mentaility that it really WILL take a financial incentive to get people to re-think you they deal with their waste.
    Also, there seems to be this mindset that “being green” is solely a liberal agenda. There needs to be a shift in thought for people to become more consious of what they are doing to our planet. Maybe it does need to start with a financial reward to do the right thing. I guess it can't hurt.

  • suruchi chopra

    Mr. Szaky, I support your idea of compensation for recycling to individuals because people will be people and generally they won't do an extra effort unless it's in one's habit or one is allowed to make it a habit. In this case, people are made to think twice before throwing recyclable material away because of the benefit attached and philanthropy.

    I come from India and was wondering how can this idea be implemented in a place where there is mass illiteracy and less awareness of the existence of the concept of recycling.

  • http://anotherlunch.blogspot.com/ Melibee

    Unfortunately, I think we have moved so far into the “what's in it for me?” mentaility that it really WILL take a financial incentive to get people to re-think you they deal with their waste.
    Also, there seems to be this mindset that “being green” is solely a liberal agenda. There needs to be a shift in thought for people to become more consious of what they are doing to our planet. Maybe it does need to start with a financial reward to do the right thing. I guess it can't hurt.

  • suruchi chopra

    Mr. Szaky, I support your idea of compensation for recycling to individuals because people will be people and generally they won't do an extra effort unless it's in one's habit or one is allowed to make it a habit. In this case, people are made to think twice before throwing recyclable material away because of the benefit attached and philanthropy.

    I come from India and was wondering how can this idea be implemented in a place where there is mass illiteracy and less awareness of the existence of the concept of recycling.

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  • Guest

    At my organization that educates about 25,000 students annually in one county about waste diversion, we no longer actively promote TerraCycle. We educate on the concept of REDUCE, making the decision to buy what you want in bulk and use reusable containers. We found students were then encouraging their parents to buy the items you collect just so they could collect them.