- The Importance of Diversion Program Planning and Implementation
- Disposal Decline
- Alternative Measures
California’s 2009 per resident disposal rate was 4.5 pounds/resident/day, a drop from 5.1 pounds/resident/day in 2008. Total disposal in 2009 was 31.1 million tons, a drop of 4.4 million tons from 2008. While ongoing waste diversion efforts contributed to these declines, several additional factors including large drops in personal income and consumption, construction activity, and employment suggest the recession is the primary driver of these decreases in overall disposal and per capita disposal rates.
In 2009, 99 percent of California’s 31.1 million tons of disposal were landfilled in California and approximately 1 percent was exported to landfills out of state. An additional 0.8 million tons were transformed at three permitted waste-to energy plants in California, but the transformed amount is not included in the per capita disposal rate estimate because of provisions in the law that allow limited diversion credit for transformation.
Comparing 2009 to 2008, population increased 1.2 percent (408,695) and disposal decreased 12.4 percent (4.4 million tons). Comparing 2009 to 2005, when California disposal peaked at 42.5 million tons, population increased 4.4 percent (1,615,756) and disposal decreased 27 percent (11.3 million tons).
As the economy went into recession, construction of residential and commercial structures plummeted, the income of wage and salary workers declined, and fewer new and replacement items were purchased. The result was a decrease in solid waste generated by construction and demolition (C&D) activities, generated by the commercial sector (manufacturing, sales, and service activities), and generated by Californians in their homes. The market prices for many materials dropped due to the economic conditions, while the supply of some materials increased as some Californians recycled more to offset other lost income. Local government budgets have also been negatively impacted by the recession. When many services provided by local government are being cut (even emergency services in some cases), maintaining or expanding diversion programs can be challenging for local elected officials.
In the future, we expect the California economy will rebound and solid waste generation will likely increase as people find work, build more, produce more and buy more. When that occurs the statewide per resident disposal rate will likely increase, particularly if CalRecycle’s stakeholders in local government and the solid waste industry reduce/eliminate important diversion programs or fail to plan for the increased flows of materials.
The Importance of Diversion Program Planning and Implementation
Initially when the economy recovers, disposal amounts will likely rise (perhaps approaching pre-recession levels), if jurisdictions do not have adequate diversion programs in place. To CalRecycle, this will be a flag that diversion programs at all levels need to be maintained and in some cases reinvigorated, to achieve and sustain reductions in both overall and per capita disposal and ensure that jurisdictions continue to meet AB 939’s disposal reduction goals. Encouraging actual reductions in disposal rather than just mathematical calculations showing greater diversion rates was one major reason CalRecycle supported the switch to the per capita disposal measurement system (Chapter 343, Statutes of 2008 [Wiggins, SB 1016]), and these will be key considerations when CalRecycle conducts its regular, formal reviews of jurisdiction program implementation.
As the economy rebounds, businesses will produce more, consumers will consume more, and more materials will be generated from residential and commercial construction. Although jurisdictions are facing severe budgetary problems, now is the time to plan for, and prepare to implement, diversion programs to handle these materials. If these increased flows of materials are not planned for, they may end up in landfills rather than being recycled back into the economy. CalRecycle will continue to support innovative and substantial diversion efforts such as mandatory commercial recycling, improved green building standards and the universal adoption of C&D ordinances. These programs divert materials and reduce disposal.
Finally, whether the per resident disposal rate is higher or lower in future years, it is important to remember that these numeric estimates are just one set of indicators to consider when assessing statewide, or local government, disposal reduction progress. More revealing and lasting indicators are the number and effectiveness of local government diversion programs, the quality and extent of the diversion facility infrastructure in California, and the robustness of markets for recyclables and recycled-content products. All of these factors will be considered in CalRecycle’s next review of jurisdictions.
Diversion program implementation has undoubtedly contributed to the 27 percent decrease in disposal since 2005. However, the recession that began in 2007 was probably the dominant driver for the change, as suggested by the significant drops in personal income and consumption, construction activity and employment.
Personal Income and Consumption
Due to the recession, Californians earned less money in 2009 and had even less left over after housing and transportation expenses. As a result, they purchased less and consequently disposed of less.
As the number of employed workers and total hours worked decreased, household income also declined. However, expenditures for goods resulting in landfilled waste diminished at a faster rate than income reductions. This is due largely to the relatively large fixed proportion of income spent on rent or mortgage payments, as well as an increasing proportion spent on fuel costs.
The National Bureau of Economic Research uses several indicators to determine whether the economy is in recession. One measure is real (inflation-adjusted) personal income less transfer payments (i.e., social security and unemployment insurance payments). This measure shows an unprecedented decline in consumption spending from a peak in mid-2007. Consumption spending in early 2010 is equivalent to 2005-06. However, real per capital personal consumption expenditure is more revealing: first-quarter 2010 is very near first-quarter 2000. In 2000, this annualized amount was $29,189; by 2008 it rose to $31,860, and in the first quarter of 2010 the number declined to $29,157.
The largest portion of personal consumption expenditure is rent and mortgage payments, roughly one-third of the total. While rent and mortgage payment expenditures experienced a small decline, purchases of all other goods and services have declined disproportionately. Additionally, increasing fuel costs also have required an increasing proportion of income, as transportation fuel prices have doubled since 2003. Together these economic factors have resulted in a greater decline in disposal of existing household items and packaging of new household items.
Coinciding with the decline in disposable income, California has experienced a similar decline in home and apartment construction. This dramatic decrease in construction drove disposal amounts from construction and demolition activities down.
In 2008, about 16 percent of landfill disposal was from construction materials. From 1990 to 2007, California saw about 140,000 new housing units constructed annually. In 2009, the total was about 36,000, or 27 percent of the historic average. The drop in construction of commercial buildings lagged that of housing building, due to greater time-lags in the interval between obtaining funding and permits, and completion of projects.
It is likely that construction will increase somewhat in 2011, although some housing economists estimate that the existing over-supply of affordable housing will continue to slow new construction for several more years. The slowdowns in housing construction, and a corresponding oversupply in commercial real estate, suggest that construction and demolition debris disposal will continue to be much smaller than in the first half of the decade. Spending in recent months indicates perhaps a new level of sustained construction spending. Although construction and demolition debris in recent years has accounted for approximately one-fifth of disposal, this drop in construction activity since 2006 could account for a significant portion of the decline in overall disposal experienced in the last four years.
Between 2006 and 2009, employment dropped a total of 6.4 percent despite an overall 3.2 percent increase in population during this period. This decrease in employment means less solid waste created by Californians in the course of manufacturing goods, selling products or providing services.
In the longer-term future, disposal in California may increase more slowly, as the population growth slows. The annual growth rate of more than 2 percent experienced in the 1990s has already declined to about 1.2 percent, and is expected to decline to less than 1 percent annual growth in the next decade.
California’s disposal has been dropping dramatically from 2006 to 2009. The significant declines in the economic indicators discussed above suggest that the economy has been largely responsible for these declines in disposal. Additionally, during this period the recession has also taken a toll on markets for recycled materials and the funding available to local governments to aggressively pursue diversion efforts. On the other hand, the recovery rates for some materials may have increased as people have attempted to supplement their incomes through recycling. Because of the complex interactions among economics, human behavior, and materials management, determining the relative impacts on disposal from the economy and diversion efforts is impossible. However, one thing remains clear: as the economy improves, effective diversion programs will be essential to keeping disposal down and recovering valuable materials before they are buried or burned.
The per resident disposal rate is now the standard measure of progress for local jurisdictions. Prior to 2007, staff calculated diversion rates annually for each jurisdiction and for the state. Under the new system, staff no longer calculates diversion rates but a somewhat similar number (a “diversion rate equivalent”) can be derived based on the per capita disposal rates. Using the per resident disposal indicator, California’s “diversion rate equivalent” was 65 percent in 2009. Using the per employee disposal rate (an alternative indicator allowed in statute), produces an estimated 2009 statewide “diversion rate equivalent” of 62 percent. This employment-based indicator is more sensitive to changes in the economy and thus shows a lower diversion rate than the rate derived from population.
The “diversion rate equivalents” appear to be attractive and easy indicators, but they should not be emphasized. While shown on the same graph above, the historical diversion rates and the per capita derived “diversion rate equivalents” are not strictly comparable. They are calculated differently and each has its own sets of assumptions, caveats and challenges. In addition, CalRecycle has never measured diversion, so any diversion rate has just been a mathematical estimate. Through our stakeholders and the disposal reporting system, CalRecycle gets reliable information about the amounts and origins of materials disposed within California and by California jurisdictions. The per capita disposal rates are simple measures that utilize the best data we have.
For more information contact: Local Assistance & Market Development, LAMD@calrecycle.ca.gov