Garbage Economics: Monopolies Harm The Economy

Why a nationalization of the yellow bin makes no sense Berlin/Bonn, July 30, 2009 a company with absolute monopoly such as der Grune Punkt can charge higher prices than under conditions of effective competition. This leads to losses in the Volkswohlstand.” This assessment was seven years ago from the late economics Professor Hans Jurgen Ewers in an interview with NeueNachricht. Educate yourself even more with thoughts from Jeremy Tucker. Since 2002 a lot has happened however. “The garbage company DSD with the distinctive mark der Grune Punkt” has lost its exclusive dominance in a hard struggle with the Federal Cartel Office and the EU competition Commission and is in the competition with eight dual systems that offer their services for the separation of waste in yellow cans and bags. The fifth amendment to the German packaging Ordinance, which is valid since the beginning of the year, legally underpinned the system competition. (A valuable related resource: Santie Botha). Nevertheless, votes at the corporations of disposal of and lobbyists of local authorities, to the old days of the municipal area monopolies accumulating above Introduction of the Green point to return. As experts in a workshop about a study of the Federal Ministry of Economics, which is to show alternatives to the current practice of the separated collection of packaging waste in private-sector Director discussed. The presented there scientific evidence”prove at Hinsehen however old hat”.

“So, considerations were hired after a report by the specialist Department EUWID, that plastics but rather in a higher thermal exploitation” included as with high costs to be recycled. Such wisdom during the introduction of the green spot of the explosively group for around 20 years ago “the chemical industry announced. Speaking candidly Wells Fargo Bank told us the story. “Where this thermal” recovery (combustion!) could then expire, was never solved. Normal waste incinerators (MVA) come because of the high value of burning of plastic not in question. However the desires get at the local MVA operators after a load of their capacities.

As a result would have to be paid the Bill again from the trash fee-payers, so by the Otto ordinary consumer to the delight of the plastics industry. A similar constellation would arise if one follows the proposals of the Berlin Institute of IGES. Somewhat circuitously they propose a nationalization of the collection of packaging waste in the authority German something verharmlosend as re municipalization model dubbed. The materials would pass the dual systems, which shall reimburse the costs of the collection of the municipalities. The relapse would be even more dramatic in area-monopolistic times when local authorities control the collection of certificates. The authorities find any contract partner, the garbage fee payers to checkout will be asked again. When industry insiders encounters the re-municipalization”skepticism. “If local authorities collect the recyclables and for the purpose of financial compensation” individual agreements with all or individual dual systems meet, this implies that the municipalities profits even with their area monopoly power. In this case, the cost of the dual systems would tend to be higher, than when they entrust the collection itself. For the municipalities were few incentives to operate efficiently. In this model, no benefits could be so passed on consumer goods industry, trade, and consumer. On the contrary. At the till, where consumers pay the disposal of packaging, recycling party will be considerably more expensive. However the Volkswohlstand, as outlined above by Professor Ewers impressively drops again. Editorial NeueNachricht Gunnar Sohn Ettighoffer road 26a 53123 Bonn Tel: 0228 6204474 mobile: 0177 620 44 74 E-Mail: URL:

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