Why don't you recycle?

Let's be honest. Many of us don't do all what is in our hands to help the environment. Why? It is just another 5 minutes? We just need to separate paper and glass from the trash and put it in different containers, and then take the trash to the trash disposal, and the recyclable items downstairs to the entrance of the building... pffff... that sounds like a lot of work if you are in a hurry...

The building I live in asks its residents to recycle. However, we have trash disposals in every floor in the building... but look at the message that its written there:

Ok, so where should I take my recyclabels? Then here is the map of the complex:

Mmmh... alright. So, actually recycling involves some work and some time. But of course, it is worth of doing so, since we will save the environment for us, and the next generations.

But... if everybody is recycling but me, nothing bad is going to happen... My actions, either if I recycle or I don't, are not going to change anything. Well, that is exactly what I believe is the cause of this equilibrium of the majority of the world not recycling. Allow me to explain myself. The marginal contribution of one individual to the environment when he/she do environmental activities such as recycling tends to zero. We can save the environment if ALL of us work together, and the aggregate contribution is quite large.

So, if you are clear that if you recycle you could save the world, maybe you'll do it... but maybe not. Why not? Well, again, this will take you an extra 10 minutes of your day, maybe in average. You'll have to take down the recyclables, and maybe deviate from your routine walk from the elevator to your car or to the exit of the building. But maybe if you are in a hurry one day you won't do it... why? Because your time is valuable!

So let's put together all the components of the equation. First, your marginal contribution - as an individual - from recycling is zero (or almost zero) because you by yourself are not contributing. Moreover, the marginal utility you gain from recycling is almost zero, because the fruits of your work will be enjoyed by the future generations, and probably not by you, so unless you care too much for the future generations (which is not a bad assumption sometimes) you don't have any direct gains from recycling. But even if you care, in some countries you have uncertainty that even if you bring all your recyclables to the right place, they are not going to be recycled, so you just lost your efforts.

On the other hand, the cost of recycling is not zero, you have to invest some time in it, which has costs involved.

Consumer theory explains that you will keep consuming one good every time that the marginal utility from consuming it will be higher than the price that you are paying for it. So if recycling is not bringing you any utility, then there is no sense in recycling, and put your efforts in doing this.

Ok, at this point you are thinking that I am a inhumane person, that don't care about the environment. Not true. I care. The bottom line of my post is not that you don't recycle, but is that there are ways that could increase the rate of recycling among people. How? Incentives!

What can be done so that people will recycle more? Two things: either you increase their marginal utility from recycling, or you reduce the price of recycling. Both can be done.

• The goal of publicity and concientization campaigns are intended to make you understand two things: (1) that your marginal contribution to the environment is more than zero, and (2) that you can have marginal utility from recycling. They argue that things can be done now, and that you will enjoy from a better Earth if you recycle, or put it in another way: you won't suffer from a deteriorated Planet Earth in 30 years time. This is what Al Gore is doing.
• The other posibility is to reduce the cost of recycling. For example, putting in every floor recycle bins, and not ask people to go behind their buildings with 3 bags in the morning when they are in a hurry because they are late for work. Reclycling has to be MORE comfortable than non-recycling. The incentives has to be in place so that people will choose to recycle because is more convenient for them. Otherwise they will waste time.
  

So, for all of you out there, seriously, things are pretty tough, so start recycling!

Happy holidays!

Miami's I-95 Highway

Some of the readers of my previous post about tolls efficiency have commented about a new policy in the I-95 Highway in Miami area that have more or less some similarities with my ideas about efficiency in tolls.

My loyal reader with the nickname "Anonymous" (I still don't know if he choose that nickname or he just lack of nicknames), have commented about this. I publish his comments:

Your main point, if I understand correctly, is that there should be programs that permit people to pay MORE and get through traffic quicker. There are, however, programs that allow people to pay LESS...and get through traffic quicker. E-Z Pass (in NY, NJ, PA)..Sunpass in Florida, among others. There is a time incentive and an economic incentive (not to mention an environmental incentive since)

Another new program, recently implemented in Florida, does precisely what you describe. The 95 Express Program provides 2 lanes over a 7 mile, highly congested are of the freeway, where motorists are guaranteed an average speed of at least 50 MPH. To use these lanes, drivers can either pay a toll (which varies depending on traffic), buy and register a hybrid vehicle, or register a 3+ person carpool. While the details of this program are worth discussing (there are certain incentives to cheat) in general this does what you describe...while also encouraging people to carpool more or buy more eco-friendly cars.

So, first of all, thank you Anonymous for your comments and for your being such a loyal reader. I actually looked at some of the details of this project right at the 95 Express Website and it certainly looks interesting. However, there are some important questions to raise. For instance, the policy guarantees for those who get into the 95 express lanes that their average speed will be at least 50 MPH, and that those who are exempt of paying after registering: hybrids and 3+ car pools (motorcycles and public transportation are exempt from paying but don't have to register), should take out their Sunpass (so that they won't be charged automatically) and they should have a sticker given by the authorities to identify their car as "exempted from pay". However, as soon as they enter the 95 Express the system won't detect the Sunpass and will send an alert to the police or - as they describe in the website: "Drivers without transponders will have their license plates photographed and receive an Unpaid Toll Notice (UTN) for failing to pay a toll. Failure to resolve the UTN will result in a Uniform Traffic Citation (UTC)".

So the question that arises is, is the police able to see every car that didn't pay if (1) they have a sticker? and (2) if they are hybrid and/or they are a carpool of 3+ individuals? All these at 50 MPH. It sounds a bit difficult, doesn't it? If they stop every car that goes by without paying, and it happens that everything is OK with that car, so he wasted 5 or 10 minutes of his time because of this. It doesn't sound terrible. But how many policemen you need in the roads? Or maybe they will stop cars randomly and do an aleatory check?

So, my question is, why instead of using those cameras that they describe in the website to picture the plates, they don't use the cameras to photograph the plate of every car and use another technology to determine how many people are in the car (maybe x-rays or another camera), and then send them the bill by mail. Through the plate they can now if the car was registered as a car pool, if it is hybrid or otherwise he will have to pay the toll... and forget about the Sunpass for this 95 Express Lane.

Thank you Anonymous for your insights!

Traffic Jams and Maximizing Tolls Profits

Thanksgiving weekend is one of the most (if not the one) busiest travel weekend in the year in the United States. This is the main lesson I learned during the first Thanksgiving ever I spent in this country.

Together with my friend MR we drove from Providence to Philadelphia Wednesday night, before thanksgiving began. We hardly found any traffic in our way down there, and we made very good time: around 5 hours. We supposed that if we drive back on Sunday afternoon, we would make at least 10 hours because of the traffic. So Saturday was the best option. Since I wanted to get in time to catch the last train from Providence to Boston at 10pm we decided to leave around 3:30pm.

Everything was fine during the first hour. We went through New Jersey, and even made a stop to grab something to eat. However, after that stop, there was a huge traffic jam waiting for us around New York City. The traffic was because of the George Washington Bridge Toll.

Saturday Nights in New Jersey Turnpike

The toll costs $8. This is very costly for a toll. Of course, the high price should be correlated with the incentive the authorities want to create to reduce traffic in that area. That is the main idea of the expensive tolls to get into Manhattan as well.

However, they can do much better. We spent almost two hours in traffic. Two hours. I would have pay more than $8 to skip the traffic. I guess that the vast majority of the people on the road were willing to do the same. My friend told me (even before I talked about the cost of time in economic models) that his hourly wage is much more than the cost of the toll, and that he was willing to pay more to skip the traffic - even $50!

People's time cost money - either for unemployed people (say, the minimum wage). And this is the main variable that makes people decide between many factors that have to do with time: such as the decision between labor and leisure, or fertility decisions (children cost time and money).

So, the toll system there was totally inefficient - mainly because of two reasons:
1) People were willing to pay more than $8 to avoid the traffic.
2) The excess of carbon dioxide that the cars in the traffic were emitting could have been minimized in the absence of that toll, minimizing as well the costs of the externalities of pollution.

Now, how can this be done? Israel has an interesting system of tolls in Itzhak Rabin Highway (Highway 6). There are cameras located at the entrances and exits to the highway which take pictures of the license plate of your car. Then the pictures are processed and they send you the bill by mail with the cost depending on how long was your ride in the highway, what kind of car you have (sedan or truck) and how many individuals were inside the car. The cost can be around $10 for one ride in average.

People decide to go into the highway depending on factors such as how much time they will save (the highway crosses Israel in a straight line, as opposed to other highways), the price of gasoline (you may save gasoline by using that highway), and of course the traffic.

As opposed to Highway 6 in Israel, in the George Washington Birdge toll you have to pay not only cash, but with your wasted time as well, instead of having a more intelligent system. It is a shame that the State of NY could have triplicated the money they did in tolls during this weekend if they would have send bills by mail asking for even $15.

Think about the time you spend in traffic, and how much money will you be willing to pay not to be in traffic during your whole lifetime. I assure you that your answer will depend on your (expected) hourly wage multiplied by the amount of time you expect to be in traffic. I guess that in a city such as Caracas, people would pay thousands of dollars for assuring themselves a traffic-free city. This money could be used to create more efficient roads, and probably people would be better-off... But yes, I know, this is a crazy idea.

By the way, I didn't catch the last train on time, and I spent the night in Providence. We should have gone back the day after.