Trash talk: the socio-economics of material recovery

This post is about one of my lifelong fascinations, the gold mine we each create on a daily basis: trash. 

News coverage by NBC 5 Chicago (https://www.nbcchicago.com/investigations/What-You-Recycle-Can-Impact-What-Becomes-New-Products-492558181.html) has prompted me to reflect on a trip I took a little over a year ago to Waste Management's South Side Chicago recycling facility. I expected an engineering marvel, but instead left with a mind-expanding lesson in economics and social stratification.

My friends know me as the one who always rescues furniture left out on the street, and who took home recyclables from the cafe where I worked as a teenager – commercial recycling was too expensive for small businesses, though residential recycling was free (thanks for sharing your precious curbside real estate with me, mom and dad!). 

Across the globe, recycling companies face difficult challenges to remain financially viable. Impossible margin pressures, commodity price volatilities, and strict international standards have put the material recovery industry at risk. Contamination in single stream recycling is one of the biggest challenges for continuity of the industry.

Recycling contamination intensifies operational challenges and cost pressures by increasing machine downtime and occupational hazards. However, even worse, contamination never gets completely removed, so the end buyer of recycled materials receive poor input for their manufacturing. This is what forced China, the world’s largest recycled commodity buyer, entirely out of the market due to quality concerns (in their defence, the U.S. was essentially sending China and other Asian countries them dressed-up garbage, through an actual practice called "bail-dressing"). China no longer buys any recycled goods from outside its borders.

Material processing has always been expensive. Waste management companies earn significantly higher margins through their landfill divisions, so inefficient and insufficiently scaled recycling operations, combined with record low demand (due to the world's biggest buyer exiting the market as noted above), will lead to cannibalized profits and, thereby, a non-existent business case. If contamination rates don’t drop, recycling companies will eventually need to displace their higher operating costs onto their clients – which are most often governments and municipalities. These clients will be unlikely able to absorb higher fees.

The U.S. recycling industry will eventually be pushed to consolidate by (1) eliminating the intake of the most expensive to process, or the cheapest to re-sell materials, (2) switching away from single stream processing, which would likely reduce overall consumer participation, or (3) closing down all together and, instead, disposing through landfill or incineration. All of these alternatives would dramatically increase greenhouse gas emissions and make healthy circular economic models nearly impossible to reach. 

WM's South Side Chicago MRF receives its raw recyclables with some of the highest contamination rates in the industry. If you don't know much about Chicago's South Side, for background, it is an almost exclusively black community and it has some of the highest poverty and crime rates in the entire country. Two hours north, in WM's Chicago North Side MRF, they receive recycling with some of the company's lowest contamination rates. This region of Chicago is known for being predominantly white and affluent. This facility has a designated education center for children and the community, while the South Side facility admitted we were their first ever visitors. Chicago's North Side community has more than enough financial and mental budget to mobilize for sustainability, while people in the South Side are in a constant state of struggle.

This stark difference demonstrates that environmental challenges are not just environmental. For us to solve our global sustainability challenges, we need to consider all pieces of the puzzle and this starts with ensuring that all people are able to contribute. When people are confined to poverty and are the victims of a system that has institutionally oppressed their contribution to society, how can we expect them to participate in solving environmental challenges. We can and must do better.

If you ask me where the intersection between social well-being, sustainability and economics is, you could start by looking in the trash...