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Recycling Matters

by Elaine Schwartz    •    Aug 21, 2011    •    267 Views

Coca-Cola has a recycling problem. Last year, it had hoped to process 100 million pounds of recycled PET (bottle grade) plastic in its Spartanburg, S.C. plant and is not even close. Here is why:

Less supply of recycled plastic:

  • It is tough to get enough PET plastic because many of us do not recycle plastic bottles. Maybe bottle deposit programs would make a difference. However, Coke and Pepsi say that paying 5 to 10 cents for a returned bottle is inefficient, pricey and unfairly targets them.
  • Coke and Pepsi prefer using municipal recycled plastic. Mixed with other plastics, though, the plastic from curbside programs tends to be less than bottle grade.

 

More demand for recycled plastic:

  • Increased demand from China for used plastic in clothing and furniture manufacturing is nudging the price upward. As a result, “virgin PET” is cheaper.

 

The Economic Lesson

Is it ethical for a profit-seeking business to be ethical? Believing that profits are the responsibility of the business firm, Milton Friedman (1912-2006) said that it is not appropriate for corporate management to pursue social responsibility. Agreeing, former Harvard president and Secretary of the Treasury Lawrence Summers cited Fannie Mae and Freddie Mac to display the cataclysmic results of combining doing good with seeking profits.

In this economix blog, Harvard economist Edward Glaeser discusses the debate surrounding corporate responsbility. Reminding us that it need not be “black and white,” he encourages us to ponder different levels of corporate social responsibility

An Economic Question: Implying that we cannot put a price on environmental responsibility, a a U.S. senator from Maine, Edmund Muskie, once said, “Can we afford clean water? Can we afford rivers and lakes…which continue to make life possible…?…These questions answer themselves.” Your opinion?

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