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Americans love recycling. It is one of the few ways that citizens believe their individual everyday actions help protect the environment. More than 120 million Americans now recycle more than one quarter of the total U.S.  municipal discards.

But, at the same time that citizens take pride in their community recycling programs, the federal government is wasting billions of dollars every year on programs that directly undermine those efforts. This report shows that recycling competes with virgin materials and waste disposal industries on an uneven playing field. Well-financed and politically influential virgin materials industries receive significant tax breaks and other subsidies. This wastes taxpayer money while encouraging environmental depletion, pollution, lost job opportunities, and trashing of recyclable resources. Meanwhile, resource-efficient recycling and reuse businesses, which tend to be smaller, communitybased and run by entrepreneurs, struggle against subsidized competitors.

Favoritism to virgin materials industries originated in the 1800s with federal and state subsidies intended to develop the West, and to spur the transition of the nation from an agrarian to an industrialized society. Many of these subsidies still exist and more have been added. However, the society that these subsidies were intended to develop no longer exists, transformed in part because of the early influence of such policies.

Subsidies for resource extraction have their twin in subsidies for waste disposal facilities. Both are integral parts of a linear production model which involves extracting raw materials, making them into products, then discarding them “out of sight, out of mind” in landfills and incinerators. The waste disposal industry, in fact, competes directly with reuse and recycling businesses for the supply of discarded resources. Moreover, burying, burning or otherwise destroying discarded material simply fuels more resource extraction to make more products.

The 15 subsidies targeted in this report will pour an average of $2.6 billion every year into direct subsidies for resource extractive and waste disposal industries, or more than $13 billion over five years.1 This is real money to real people who pay taxes. Moreover, while the dollar level may seem relatively small, that kind of preferential economic treatment is immensely significant when compared to its potential impact on the much smaller recycling and reuse industries. For example, in the late 1990s, the value of all postconsumer recyclable materials furnished to recycling manufacturers, including non-ferrous metals, has ranged from $16-19 billion per year.2 Subsidies to the raw materials industries that are worth 15% of the recycling industry’s feedstock costs are clearly influential.