Recycling industry down in the dumps
Demand for recycled goods is down, causing a billion dollar industry to lose much of its steam. But another byproduct of the recycling industry's downturn is the creation of new opportunities. Sam Eaton reports.
Corridor Recycling in Long Beach, Calif., is storing these materials in hopes of the recycling market coming back, rather than selling them at a loss. (Sam Eaton / Marketplace)
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KAI RYSSDAL: With the economy the way it is frugality's taken on a whole new shine. Recycling, with its deep conservation ethic, is more popular now that it's ever been. But those crushed cans and cardboard boxes don't recycle themselves, you know. They're part of a huge global market that's been built on one thing: a booming economy.
Now recyclers can't give the stuff away. It's gotten so bad that here in California the state Waste Management Board held an emergency session today to figure out what to do. But there could be a a silver -- or shall we say green lining.
From the Marketplace Sustainability Desk, Sam Eaton reports.
SAM EATON: The Port of Long Beach is the nerve center for global recycling. Here, just south of Los Angeles, all the stuff we throw into our recycle bins is loaded into hundreds of thousands of containers every year.
It's all bound for China where old pizza boxes and plastic bottles are given new life as packaging for all the products coming back. But as the economy tanked, so did demand.
Gilbert Dodson runs a recycling export business in Long Beach.
GILBERT DODSON: Everyone got scared, and I mean the orders just absolutely stopped.
As a result, prices for recyclable materials plunged.
DODSON: So all of a sudden the stuff's worthless. Matter of fact, you have to charge a customer to pick it up so you break even. I mean, you can see it's just, it killed the industry. The last two months have been just bedlam.
Dodson now leases warehouse space to store thousands of truck-sized bales of paper and crushed cans until the market recovers.
City governments don't have that choice. As prices rose, many expanded their recycling programs. And with so much material coming in, they're now forced to sell at a loss.
Alex Helou is with the Los Angeles Bureau of Sanitation.
Alex HELOU: Back in 2007 people were talking about recycling being recession-proof. And that really has proved it's not completely accurate.
Helou says unlike many other cities, Los Angeles negotiated a minimum floor price for its recyclables. And it's lucky it did.
HELOU: If we did not structure the contracts we would be probably in the loss of about maybe five million dollars a year.
That doesn't mean L.A. is off the hook. It still costs the city's taxpayers tens of millions of dollars a year to keep all the recycling trucks and sorting operations going.
And that's just one city.
Heidi Sanborn with the California Product Stewardship Council calls local trash removal one of the largest corporate welfare programs of modern times.
HEIDI SANBORN: There's no feedback mechanism to the producers to design anything different than whatever the heck they want that can litter and cause all kinds of environmental problems and public health problems. And they're not feeling any pain for this at all. Local governments are.
And in a time of tight budgets many of those local governments are asking why taxpayers, and not the companies that make all those products, are the ones paying to get rid of them.
L.A. Sanitation's Alex Helou says this is where the financial crisis may be a force for change.
HELOU: This actually gives us an opportunity right now to relook at our whole system as a whole and come up with a solution to address the recycling issues.
One solution would come in the form of state laws requiring manufacturers to cover the cost of disposal. California, Washington and a few other states are considering legislation that would do just that. But some companies have beat them to it.
At a warehouse north of Sacramento, computer maker Hewlett-Packard takes back its old products and grinds them into raw materials for new ones. Last year the company recycled the computer equivalent of twice the weight of the Titanic.
HP's Director of Sustainability, Bonnie Nixon, says that simple change -- taking end-of-life responsibility for what they sell -- has transformed the way HP makes things.
BONNIE NIXON: We design our products to use fewer materials. We make them easier to dissemble and recycle. And we allow for more effective reuse of those materials.
Nixon says HP's recycling operation has yet to turn a profit. But the company plans to stick with it. She says in a world of diminishing resources it's only a matter of time before prices rise again.
In Los Angeles, I'm Sam Eaton for Marketplace.
Comments
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From Spokane, WA, 01/06/2009
WASHINGTON state is not considering having manufacturers pay for recycling electronics. It's already done so. The law went into effect on Jan. 1.
From Fredericksburg, VA, 12/27/2008
The timing of this story was uncanny. Only hours before, I'd mentioned to my wife that the price of goods we buy does not represent their true cost, specifically disposal cost. I wondered if there were a way to make that work. It occurred to me that a model, at least for larger durables, maybe military procurement. Many, if not all, military equipment program plans include complete life cycle costs, including the final phase--disposal.
For years, the jokes about $600 hammers have ridiculed the government, but maybe its because we are so short sighted about costs and value. The HP example gives us something to study further.
From Portland, OR, 12/11/2008
I have an idea that would help to fix this situation. It is to levy a packaging tax at the manufacturer or distribution level. The tax would be structured to be highest for materials that are not recyclable or biodegradable, such as plastic foam. It would likely have two components: one for the type of material used in packaging, and the second for the weight of the packaging material. The money collected would be used to pay for such things as improved curbside recycling and litter pickup. If manufacturers set up programs for return of packaging and waste goods there could be a credit or refund of the tax.
Properly structured, a tax such as this would incentivize manufacturers to standardize on a small number of recyclable materials for packaging. It would do away with the confusing array of plastic compounds dumped on consumers today that they can't easily recycle. It would also spur more efficient packaging and reduce energy use from transporting bulky, heavy packaging. As stated in the interview, it would shift the burden of disposal off of consumers and back onto the manufacturers.
I got this idea from adopting a local street and observing the kinds of litter I picked up. Most of it (no surprise) was packaging material from a local supermarket and some fast-food businesses. I realized that if these materials were taxed it's likely that more creative ways would be found to reduce the volume of litter and the amount of it that couldn't be recycled.
From Burbank CA, CA, 12/11/2008
Great coverage of the relationship between recycling and commodities markets. I'm pleased that you also considered the underlying cause of so much waste ie producers have flooded the public domain with product waste without a plan for clean up. Much of the waste we handle in our recycling program is difficult, costly and toxic. I am the Recycling Coordinator for the City of Burbank and we have adopted a zero waste plan along with a number of other cities. On the top of our list is the Product Stewardship ie pushing responsibility "upstream" to improve products so they are durability, repairablilty, free of toxics, and easily recyclable. Resources can no longer be taken for granted.
I'm the recycling Coordinator for the City of Burbank.
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