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Barbara Tuset asks: What are the economics of recycling and what level of political will would get [companies] to take responsibility?
We don’t expect trash to be profitable. Most people pay a small fee to a government agency or private contractor to haul it away each week.
Recycling seems to be expected to pay its own way. Revenue from selling recycled material, the theory goes, should cover the initial costs of processing it.
That’s proven difficult in practice. Turning discarded materials into profitable products on the open market depends on an entire ecosystem of processors, collectors, shippers and global commodity markets.
Different materials have vastly different economics: Recycled metals are widely profitable. Paper and cardboard have modest margins. Plastics swing the most. All these commodities are subject to the vicissitudes of local and global markets, and profit margins are often thin.
But perhaps we need to change our outlook, argues Matthew Clough, executive director of Plastic Beach, a nonprofit that connects small businesses with commercial recyclers.
“We need to look at this like we did with sewage back in the Middle Ages,” Clough told the Los Angeles Times. “A water treatment plant would not be able to survive if it was just run as a for-profit. Because sewage has no real value to it. And that’s really what we need to look at recycling as.”
Recyclables do have some value, but recycling itself is often a public good: The benefits are often shared diffusely across society rather than captured by private firms or individuals. Using recycled material effectively can mean we consume fewer natural resources while generating less climate pollution and waste than using virgin materials.
What to do about this? Most consumers are limited in how much freedom they have to choose different packaging. They also lack access to the quality information that would be needed to make smart choices.
Recycling labels are often deceptively confusing — like the recycling symbols on many plastics that are effectively unrecyclable — or ask you to follow arcane rules about what can and can’t go into the blue bin.
Seven states have passed extended producer responsibility, or EPR, laws that seek to remedy this impasse. The statutes require companies that sell packaged products to pay fees that fund collection and recycling of that packaging. The fees are higher for packaging that’s hard to recycle or compost in some states, while materials with lower life-cycle impacts can earn a discount. Other laws mandate minimum recycled content for some products, creating reliable end markets. The theory is that when producers are made to pay the true costs — or any of the cost — of disposing of their waste, the market drives the system toward trashing less material and recovering more.
The costs of collecting recycling are not high. For local governments, the effective cost for municipal household recycling services was $3 annually per household in 2011, when markets for recycled commodities were strong, the journal Nature found. When commodity prices fell in later years, the costs surged to around $34 to $42 per household between 2018 and 2020.
We don’t yet know what a full EPR system would cost. But well-designed laws could in theory ensure that recycling systems expand to cover more household waste while also driving down the costs of collecting, recovering and disposing of waste materials. That could deliver significant environmental benefits.
We’re about to find out if that will work.
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