Recycled economics

Defra statistics from 06/07 reveal that Yorkshire and the Humber's "recovery rate", a measure of the efficiency of the local governments' recycling abilities [1], is only 37.1%, the second-worst in the country and well below the top rated region, which is the West Midlands at 58.4%. I don't profess to know how these figures work exactly, and in particular, I don't know that this figure represents anything remotely like a financial figure, but it must approach this as the activity of recovery is economically-productive [2]. However, I do know enough economics to be able to point out that both Yorkshire and the Humber and the West Midlands are missing a trick. The relevant principle is called "absolute advantage".

If the waste is worth carrying from my door to a central facility in York in order to be recycled, as we are so often assured it is, then an improvement in the recovery rate can make it worth carrying further. An improvement of 20 percentage points, if recycling is already an economically-viable and profitable activity [3] and provided it is sufficiently profitable, would make it worth shipping the waste from Yorkshire and the Humber to the West Midlands—for the payment of a certain consideration by the receiving councils. If this sum lies between the value of the 37% we can extract and the 58% that they can extract, then we make an enhanced profit on the waste, and they make a profit, too.

Of course, my analysis could fall flat on its face in two ways. Firstly, the absolute advantage could turn out to mask a comparative advantage which runs the other way. It's unlikely, but possible. Secondly, this argument would fail spectactularly if recycling isn't sufficiently economically-viable to make it worth shipping recyclable waste. But if it were so marginal an activity, one wonders why we would bother with it in the first place [4].

[1] The Defra article describes the "recovery rate" thus:

areas that recycle the most are not necessarily those that recover the most value from their waste. Recovery includes recycling, composting, incineration with energy recovery and Refuse Derived Fuel manufacture.

[2] And my long-standing objection, as a suffering council-tax payer, is that we don't see a penny of this vaunted benefit returned to us, the suppliers of this economically-valuable resource.
[3] On the other hand, one does wonder why, if this is true, the private sector hasn't taken the opportunity already. The rag-and-bone man used to be a common sight, after all.
[4] This isn't simply a laissez-faire capitalist objection to "not making a profit". Any profit from recycling derives from the fact that it is more efficient (in terms of energy and resources as well as labour and capital) to produce certain factors by recycling old ones than to mine or farm new. If recycling isn't profitable then it must be less efficient, and consequently worse for the environment, than producing new. And if recycling is worse for the environment…