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The Blog


I first learned the word “externalities in my first year of law school, but the concept is well known to everyone.  If you’re doing something that has an unintended effect on others who are not involved in what you’re doing – that’s an externality.

Externalities can be positive or negative.  For example, in order for bees to produce honey they pollinate nearby plants, which is a positive externality benefiting farmers and all living creatures that rely on those plants to survive.  On the other hand, a classic example of a negative externality occurs when a factory produces goods for their own profit while emitting pollution that contaminates surrounding air and water.

Another example of a negative externality is packaging.  When companies sell packaged goods to consumers, consumers (and the municipalities where those consumers live) are left with the responsibility of disposing of the waste.   But if a manufacturing company benefits from the sale of goods, they, and not the consumers, should be held responsible for the externality they created in order to make their profit.  Extended Producer Responsibility (EPR) is a strategy that keeps manufacturers on the hook for the end-life of what they sell.  If companies are the ones responsible for clean up, they have a real incentive to deliver goods sustainably.

In New York State, for example, manufacturers of electronic equipment are required to accept (take back) their own devices free of charge.  (http://www.dec.ny.gov/chemical/66872.html)  Europe has an even more robust system of Extended Producer Responsibility, which accounts for their far higher rates of recycling.

Extended Producer Responsibility is a tremendously important solution that should be creatively implemented all across the United States.  Doing so will encourage companies to design packaging that has a benign or productive end-life and will help reduce the amount of waste accumulating in landfills.

How will we measure one unit of “waste”?

The measurement of waste will be more nuanced than the measurement of carbon.  While carbon is carbon is carbon, not all waste is created equally.

This is because waste comes in a huge variety of different forms.  Plastic waste, paper waste, food waste, landscaping waste, electronic waste, and on and on.

Let’s just start by comparing paper and plastic bags. It takes less energy and water to produce a plastic bag than it does to produce a paper bag. And it takes less energy to transport plastic bags because they are lighter. And yet, paper is readily recyclable and biodegradable, while plastic is full of toxins, isn’t always recycled, takes hundreds of years to decompose, and has been altering our ecosystem in frightening ways.

And so we can’t simply measure waste by asking “how much is there”?  Because avoiding the creation of one pound of paper is not the same, environmentally, as eliminating the creation of one pound of plastic.  For an offsetting scheme to be meaningful and effective, several factors will have to be considered on a sliding scale.  These factors should include, among others:

  1. Mass and Volume
  2. Energy required to create the wasted item
  3. Water required to create the wasted item
  4. Other raw materials required to create the wasted item (with consideration to the energy or water required to extract those raw materials)
  5. Toxicity of the wasted item
  6. Danger to the environment posted by the after-life of the wasted item

Scientists and physicists with a deeper understanding of these dynamics can put together a system for measuring various types of waste by considering all these factors.

We operate as if convenience is more important than preservation, conservation, and the safeguarding of our limited resources.  Where I come from, convenience is a perfectly accepted excuse for creating garbage – even though garbage is a toxic and costly externality that has to be shared and dealt with by everyone.

You’re too lazy to do the dishes?  No big deal, just use plastic alternatives and throw it all out at the end of the night.  None of it will decompose for five hundred years, but that’s not your problem.

Going shopping?  Don’t waste your time and energy bringing a bag!  The store will give you all the bags you need and you can toss them out when you get home.

You spilled water on the floor?  Go grab a huge handful of paper towels to mop it up.  (But wait – since when is water dirty?  Oh well.) Forget the concept of a cloth rag, we wouldn’t want you to deal with the burden of putting it in the laundry.  –

When did we buy into the idea that we don’t have to do our dishes?  That we can throw out as many plastic bags as we want? That we don’t have to wash towels?

It’s a lie.  And we’re all paying for it.

Creating those disposable dishes and bags and paper towels required energy and water and other raw materials and chemicals.  All of which are sent straight to the landfill after a useful life measured in less than an hour’s time.

We humans all have to share this one earth, yet we are taught that it’s perfectly acceptable to act as if there is unlimited space for our waste.

This is a very bad habit.  But bad habits don’t have to be permanent.  We can change.  But change requires new ideas that are unproven and don’t yet have market share.

Waste Offsets  can finance good ideas that will break the bad habit of disposable everything.  Many of these ideas will likely need to be subsidized at first because people will have to catch on and adapt and get used to that new way of doing things.

Waste offsets can finance convenient solutions so that “disposable everything” isn’t the only easy way to go.

Once upon a time I had a relatively outlandish and mostly unrealistic business idea.

My idea evolved out of my long-term frustration with the massive amount of waste created by people in New York City who order food delivery.

First of all, a staggering amount of New Yorkers order delivery.  The busiest among us buy three meals a day, never cooking on their own.  Food delivery comes in plastic containers with plastic forks and knives and spoons, sets of which are usually individually wrapped in plastic, all of which is tucked into a paper bag and carried to customers in at least one or two plastic bags. And all of this waste piles up per person, per meal, sometimes three meals a day multiplied by millions of people who live in New York City.

The amount of garbage is staggering.  New York City spends $2.3 BILLION annually on garbage collection and disposal.  Our trash is sent out of state, by truck and by rail, as far away as Virginia and South Carolina, all at tremendous expense to taxpayers.

But no matter how far away we send our waste, the consequences of our wasteful behaviors are inescapable on this Planet Earth.  And we keep creating more and more trash each day because consumers don’t have any better options.  Anyone in New York City ordering takeout is going to receive a landfill-bound pile of plastic because that’s what the system offers…

I envisioned something better.  An innovative city-wide sponsored initiative, like Citi Bikes… I envisioned a re-usable system where customers would be given sleek, attractive and functional stainless steel containers with stainless steel forks, knives and spoons and canvas bags and fabric linens…  All items would be tagged and tracked for accountability.  The customers would receive their food in these reusable containers, and once they finished eating they would drop them off at receptacles located in all residential and commercial buildings…  A system of trucks would collect used items where they would be washed and sanitized outside the city and then brought back to associated restaurants. Consumers would get rewarded with loyalty points for participating.

But alas, no matter how much I tweaked the math, the price per unit was far too high to compete with cheap plastic disposables.  I couldn’t get the costs down enough to make the numbers work…

In my pursuit of cost savings I kept wishing that I could finance this project with carbon offsets to inject enough extra cash into the scheme to maybe get it off the ground.  But that option wasn’t really available to me because my project didn’t reduce carbon emissions.  My idea would put more trucks on the road and require more energy to clean the containers.  Carbon wasn’t the thing being eliminated by my plan.  But there was still an environmental benefit: a reduction in waste, not a reduction in carbon.

So I asked: Why not finance this project with waste offsets?

The reason I couldn’t do that is because waste offsets don’t exist…

The Case For Waste Offsets…

My plan was probably too far-fetched to work even with subsidies.  But there are other potential projects brewing in the minds of would-be start-ups that are far more cost effective that have the potential to save mountains of waste – projects that can’t get off the ground from the get-go because they’re just slightly too expensive.  But with financial incentives that bring smart and useful ideas to life, we can start to turn the tide on our wasteful habits.

In the 1980’s there was virtually no energy being generated from the sun or the wind or the tides.  Now solar panels and wind farms and tidal energy turbines abound and a growing percentage of our energy needs are being met by these renewable sources.  The carbon market was a crutch that helped get those technologies off the ground in a time when renewable energy couldn’t compete with cheap oil.  The same can happen with waste reduction if we build the models.

In my effort to bring waste offsets into reality I have talked to chief economists at some of the world’s leading environmental agencies, I have met with law school professors and college design professors, I have met with politicians and with current and former UN delegates and I have met with countless entrepreneurs and venture capitalists.

To personalize this journey and garner support, I have decided that going forward I am going to blog about the process of pushing this initiative, recording the steps I take and the people I meet along the way and the advice I receive and the support I gather.

This is the story of waste offsets…

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