Tuesday 2 October 2012

Yet another politician misunderstands role of exports

Via @letsrecycle I see that Mary Creagh is, like her colleague Gavin Shuker, claiming that 'exporting waste is exporting jobs'.

As I argued previously here, this view is completely back to front. Recyclers benefit from exporting waste as it enables them to gain a higher price for their material than domestic reprocessors are able to pay. By exploiting overseas markets they are able to keep costs down for waste producers (households and businesses). These waste producers, in turn, are then able to maximise their contribution to UK growth and jobs.

As ESA argued in their recent briefing on the benefits of exports to recycling markets, we currently collect far more material for recycling than domestic reprocessing capacity is able to absorb. Until that situation changes there is little point trying to claim that this material should be kept in the country.

Creagh is essentially calling for a form of protectionism. Economists have known for centuries that this harms consumers more than it helps producers and leads to lower living standards for all. But politicians still haven't caught on, or at least pretend not to. It is a sorry state of affairs.

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