The Economics of Waste

Manufacturers could seek ways to collect and reprocess common waste streams and integrate them into existing supply chains, even offering consumers free return programs for their product waste.
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Many individuals are under the impression that some materials, products and forms of packaging are not recyclable by design or composition. While this is a commonly held belief among many people across the world, it is simply untrue. The real barrier preventing our most common waste streams from being recycled has to do with only one thing: economics.

Waste Is a Human Invention

To fully understand the problems with waste we currently have on this planet, it is first critical to note that waste as we know it is a uniquely human invention. In nature, there is no waste. It is a regenerative system where all outputs inevitably become useful inputs to another component of that system: a fallen tree becomes food for termites or a home to other organisms; a decomposing flower adds nutrients to the surrounding soil; and the remains of a lion's recent hunt become a meal to scavengers.

Human-generated waste, on the other hand, has no helpful functions in nature. And contrary to popular belief, all of this waste can potentially be captured and repurposed in some way. In fact my company, TerraCycle, has been proving for years that nearly every waste stream on the planet can be reused, upcycled or recycled. By working with brands and product companies like Tom's of Maine, Colgate-Palmolive, Entenmann's, and GU Energy Labs (among many others), we are able to create free recycling programs for typically difficult-to-recycle waste streams.

We have developed recycling solutions for waste streams as diverse as writing instruments, snack bags and tape dispensers, to even cigarette butts and dirty diapers. We can upcycle certain forms of packaging into useful consumer products (e.g. a pencil case made from sewn drink pouches) or recycle particular waste streams (e.g. the plastic filter of a cigarette butt) and bring them back to market, offsetting demand for virgin materials. Science is evidently not the limitation that prevents waste from being recycled.

If this is the case, why aren't most of our post-consumer waste streams today widely recycled today?

The Economics of Recycling

In today's recycling infrastructure, recycling will only occur if there is an economic incentive to do so: if collection and processing costs are less than the value of the recycled end-product, recycling makes economic sense. For example, aluminum, steel, paper, and plastics #1 (PET) and #2 (HDPE) can be collected in high volumes, processed at relatively low cost, and then brought back to market for a profit. There are markets for these commodities, and they are often cheaper than virgin alternatives.

Yet for almost every other form of waste today, from snack bags and used toothbrushes to disposable coffee cups and plastic cutlery, collection and processing costs are greater than the value of the recycled end result. Without any economic incentive to recycle, we are forced to dispose of these waste streams as cheaply, and linearly, as possible -- and is nothing cheaper or more linear than throwing garbage into a landfill or burning it in an incinerator.

A variety of other factors can affect the costs of recycling, making it less profitable and less likely to occur. For example, single-stream recycling systems require more separation, which increases processing costs (i.e. less profit margins for recyclers). Contamination also poses a risk when consumers throw typically non-recyclable waste into these mixed streams. If these contaminants are accidentally processed at a Materials Recovery Facility, the quality of the recycled end-product can diminish significantly (i.e. it becomes less valuable on the market).

Solving Waste and Making Recycling Viable

To overcome these economic restrictions to recycling and reduce the volume of waste sent for linear disposal, there are a variety of actions that can be done at the individual, corporate and government levels.

For the individual consumer, this requires changing the way you purchase things and dispose of your waste. When possible, buy unpackaged fresh food and produce instead of prepackaged convenience foods, and forgo disposable products (e.g. plastic cutlery) in favor of durable products that last longer. Recycling properly is also key, which means identifying exactly what materials your municipality does and does not accept for recycling before throwing something into the curbside bin. If an item is not recyclable, upcycle it!

Individual action is not enough to curb the generation of waste and improve our recycling infrastructure. At the corporate level, product companies and brands can adopt better labeling systems like the How2Recycle Label, which informs consumers right on a product how to properly dispose of, compost or recycle each component of the item. Clearer labeling can keep potential contaminants out of the recycling stream, and can ensure widely recyclable materials will actually be recycled.

Manufacturers could seek ways to collect and reprocess common waste streams and integrate them into existing supply chains, even offering consumers free return programs for their product waste. Self-implemented Extended Producer Responsibility ("EPR") programs like this help show that the brand is taking responsibility for its post-consumer waste, all while directly engaging with consumers in a positive way.

Finally, the government could improve our recycling infrastructure by forcibly making producers responsible for waste generated, and by making linear disposal less attractive. If producers were taxed for their product and packaging waste based on the actual costs of collection and processing (e.g. composting, reuse, recycling), manufacturers would have an explicit incentive to create products with more widely recyclable materials, less or no packaging, and to more closely engage with and educate consumers. A mandatory tax on landfilling and waste incineration could also make recycling and circular waste solutions more attractive.

Solutions like these could help us circumvent the common economic barriers preventing most of our waste from being recycled, and could make linear options like landfilling and incineration a thing of the past; but it will require collaboration on all fronts--between individuals, corporations, and government entities--to make these improvements come to fruition.