Tuesday, January 18, 2005

The cost of green when it's not your green 

SCSU departmental offices buy their paper from a central store run through its print shop. The shop manager sends an email today:
New 100% recycled paper for sale

Badger Envirographic 100, 20# 8.5�x11� 100% recycled 100% Post consumer
100% recycled White Bond Paper at $4.27/rm (500 sheets)

Great White MultiUse 20, 20# 8.5�x11� 50% recycled 30% Post consumer
50% recycled White Bond Paper at $2.73/rm (500 sheets)

So why do we have 100% recycled paper that costs 56% more than paper that is 50% recycled? Obviously the market has already determined that some recycling is optimal -- the Great White is the stock paper we use for everyday printing, and the price beats what I would pay at an OfficeMax or Office Depot. But at some point the marginal benefit of using more recycled paper is less than the marginal cost of using more recycled materials. Ergo the price goes up. (Your principles of micro question: Could it be price discimination for green consumers and the cost of the two types be the same? Or would competition elininate any differential?)

It should be evident that the impetus for this is a desire for "greening" the campus. In order for us to feel good about ourselves, we can say that we use only recycled materials. This would come for my one department (18 faculty) more than $60 for being able to buy a tag that says "we're green," where the green we spend is taxpayer green. If we all used paper on campus at about the same rate, the cost is more than $2500.