Going Against the Flow

Free market and environmental organizations fight government garbage monopolies.

Free market and environmental organizations don't often find themselves on the same side. But they have formed an unlikely alliance, including the Competitive Enterprise Institute, the National Resources Defense Council, Greenpeace, and the Reason Foundation, to oppose congressional efforts to reintroduce "flow control" requiring trash haulers to dispose of their garbage at a government-designated facility.

The Supreme Court ruled in 1993 that such regulations violate the Commerce Clause of the Constitution, which delegates authority over interstate commerce to Congress. Since then, state and local governments have lobbied Congress hard to let them have their favored waste-management "tool" back. They argue that without such authority, many cities and counties risk defaulting on bonds for government-owned facilities or incurring penalties with private companies that have built sites in exchange for a guaranteed flow of garbage. Taxpayers, they say, would end up picking up the tab.

But Jonathan Adler of the Competitive Enterprise Institute says taxpayers are already paying: "They'll pay either transparently through direct taxation, or hidden through higher tipping fees like they are now." Tipping fees--the amounts landfills charge to receive refuse--are 40 percent higher at sites shielded from competition, according to a study by the National Economic Research Associates.

Environmentalists don't like the local trash monopolies because they often use incinerators. "What we discovered was that flow control was designed to support enormous garbage incinerators," says Larry Shapiro of the New York Public Interest Research Group.

These ordinances also inhibit market-based recycling. Recycling diverts waste away from incinerators and landfills, and a county government that directs waste to its incinerator has a vested interest in sending as much trash there as possible.

Even though policy wonks across the ideological spectrum agree that "flow control" is a mistake, the Senate has already passed legislation that would give that power back to the states and local governments. The bill is currently in the House Commerce Committee, where opponents hope they can keep it bottled up.

"The reality is that if this bill gets on the floor, we'll probably lose," says Adler.