Suuuper abbreviated economics of recycling: why more and more recycling is actually trashed
Since recycling programs began in the U.S., they have been run as a business. Rather than a charitable activity to protect the earth, recycling programs have made money for towns and cities by selling recycled materials to people who want to make new stuff from them. As with all ventures under capitalism, when market conditions change, the business can go under — and our beloved recycling is no exception.
Historically, it’s been more cost-effective to recycle than trash our stuff where possible — can’t make money on trash sitting in a landfill. But that’s changing, meaning more and more is going to already giant, super gross and hazardous landfills. Read on to learn why.
To understand the market conditions at play with recycling, let’s first look at local economics of it, long story very short and oversimplified:
A person wants to get rid of stuff they don’t want anymore and they think maybe it’s recyclable. They put it on the curb in their bin.
The municipality where the person lives pays a hauler to pick up the recycling and bring it to a recycling processing facility owned by a waste management company. (Sanitation workers/garbagepeople are sometimes municipal employees, but that is being outsourced more and more to waste management companies and recycling is almost always picked up by a third-party. Highly recommend this graphic novel Trashed about being a garbageman.)
The municipality pays a fee to dump its recycling at the facility — called a “tipping fee” in the biz.
The recycling facility sorts and packages the recyclable materials into bales to sell. These facilities and operations require a good chunk of change to build and operate.
Companies around the world that actually do the recycling — breaking down the materials into a form that can be used again — buy the bales, recycle them, and then sell the recycled material to companies who manufacture stuff.
Most agreements between municipalities and waste management companies provide that the municipality gets some amount of the proceeds from the sale of their community’s recyclable materials which helps fund the city/town/village/whatever.
Steps 1-3 of the process described above are the same for trash. Step 4 is the trash goes into a landfill or incinerator which have their own costs to build and operate. That’s the end for trash. Here’s the waste management business plan math for municipalities:
IF cost of collection + hauling + tipping fee from recycling facility - income from sale of recycled materials < cost of collection + hauling + tipping fee from landfill/incinerator
These days, the equation above equals TRASH more frequently. To understand why, let’s look at the global economics of recycling, long story very short and oversimplified:
We used to both make recyclable materials into recycled materials and manufacture stuff with that recycled material here in the U.S.
Then we started outsourcing the manufacturing to other countries, mostly Asian ones, because it was cheaper.
Then those Asian countries, mostly China, said, “hey instead of you making the recycled materials over there and us buying it from you to use over here, how about you send back the shipping containers now empty of the stuff we made for you full of recyclables and we’ll do the recycling for you?” (And save a bunch of money in the process.)
China started buying recyclable materials and paying more for them than companies in the U.S. could pay. Eventually, most of the U.S. companies that processed recyclables went out of business and we sent more and more recyclable materials to China.
In January 2018, China drastically reduced the amount of recyclable materials it will import and the level of contamination in the material it will accept. For a few months, several other South and Southeast Asian countries would accept waste from the U.S. and Western Europe, but they quickly reached capacity and halted most imports. And because most of the U.S. processors went under, there aren’t many options here. Soooo from what I remember of Econ 101, I know that when demand is low and supply is high, prices are looow from whoever is even still willing to buy the material.
So what’s the impact on the local waste management equation again? The “income from sale of recycled materials” is way lower than it used to be. This means recycling and trash programs are basically going head to head on cost. And since recycling is more complex than a landfill or incinerator, recycling is losing more.
Now you may be thinking, “Sarah, you have seriously bummed me out. I don’t want my stuff to go to a landfill. They suck and are gross. I love recycling and it makes me feel like I’m doing my part.” (I love recycling, too — check out this lil’ post about my trip to Casella’s recycling center.) Fear not! There is another way to do your part and make sure your stuff doesn’t go to a landfill: we can use and dispose of less stuff from the get-go. And Cleenland is here to help! It’s gonna be fun!
See you soon!
P.S. As advertised, this is waaay oversimplified and there are a lot more factors at play. I’m always looking to learn more and we can do it together. Look forward to chatting next to the refill station :)