The Institute for Local Self-Reliance (ILSR), Washington, has released a report urging municipalities to retain control of their own residential material recovery facilities (MRFs) as a means of keeping solid waste consolidators from controlling waste and recycling hauling prices.
In a “Facts to Act On” report released earlier this month, three ILSR co-authors claim solid waste market consolidation in states such as Ohio, Pennsylvania and Virginia have helped waste companies raise tipping fees from 40 percent to 138 percent in recent years.
“Fortunately, recycling is one key to breaking the pending monopolization of the waste industry,” say the ILSR authors. They cite actions taken by the city of San Jose, Calif., as an example of a community using its recycling programs and willingness to build its own landfill as leverage to keep landfill tipping fees and waste collection costs in check.
The ILSR urges elected officials and recycling activists to re-examine the arguments for and against government ownership of MRFs. “This means reframing the MRF ownership debate from one of private versus public to that of consolidator controlled versus locally controlled, or—put another way—monopoly ownership versus diversified ownership.”
The group defines “local control” as having one of several formats, including public agency ownership of the MRF; facility ownership by smaller, independent recycling companies; or ownership by non-profit “mission-driven” organizations.
In many regions, the report acknowledges, the monopoly conditions described do not exist. But the authors suspect that control by one or two major solid waste consolidators in regional markets could be lurking in the future, and they fear collusion on pricing would result.
“Today, markets are still generally competitive,” the report states. “The end game is normally considered to arise when one or two consolidators control or ‘lock down’ all the landfills in a local market and cooperate on pricing. Until the lockdown is total, a small hauler [who] has access to even one last remaining public or uncontrolled landfill can still be competitive.”
The ILSR report can be downloaded from the organization’s Web site at http://www.ilsr.org/recycling/ftao_42_consolidation.pdf.