This past April, Waste Management’s CEO, David Steiner, declared that recycling in the United States is in crisis. He’s not alone. The CEOs from four of the country’s largest waste management companies have all recently called for a “dramatic overhaul” of our curb-side recycling system. These bold statements demand our attention and speak to a complex array of factors undermining recycling performance in this country.
Export demand for US supply of recovered materials has weakened as a result of the strong US dollar, and the low price of oil has made it difficult for recovered plastics to compete against virgin resin supply both domestically and abroad. The transition to single stream recycling systems has resulted in higher contamination levels which, coupled with softened demand and lower commodity value, wreaks havoc on recycling system performance and profitability.
With commodity prices falling, profits are taking a hit and the business case for recycling certain materials is eroding quickly. According to Steiner, the by-product will be belt tightening in the form of plant closures and a shift away from collecting low-value materials, like glass, in curb-side recycling programs.
For those of us working in this arena, we’re attuned to other system dynamics that hinder the potential of our country’s recycling system. For one, the ability of haulers to adapt to changing market conditions is stymied by restrictive, multi-year contracts. In addition, the patchwork of local recycling programs creates inconsistency with respect to materials collected and confusion among residents about what is recyclable. It also acts as an impediment to achieving economies of scale. And local governments across the country are increasingly saddled with program and capital costs they simply can’t afford. Low landfill tipping fees that act as a perverse incentive to squander valuable resources don’t help, nor does the propensity of some households to throw just about anything in their recycling bin while many others still do not recycle at all.
If that weren’t enough, we have new types of packaging launched on a near continuous basis that are disruptive to the existing recycling system. This isn’t to say that we should denounce innovation but rather we should recognize the impacts of our actions at the end of the chain and own up to the fact that expecting material recovery facilities (MRF) to take on the full burden of handling these new materials is not sustainable. If MRFs fail, the entire system fails. And then where will we be?
To put it starkly, not only have recycling rates stagnated in the US, we may actually start to go backwards. Already, companies like Coca-Cola have pulled back on their commitments to using recycled feedstock because affordable, suitable quality supply just isn’t there.
This is irrefutable evidence of a system failure. We are missing out on a huge opportunity to reap the benefits of what Accenture coined the “Circular Advantage” — the competitive edge enjoyed by those that act now and act big on making the shift to circular business models, resource recovery being one of them. Our current method for valuating material is a major hindrance to circular thinking. We separate materials into low- and high-value categories but what we should be doing is asking if an end-market exists for this material and if not, how can we keep it in circulation? Collectively, we need to think “out of the box” and use our collective innovation capabilities not just to design new packaging, but to discover new and creative applications for various post-consumer materials. With the right outlet and application, a material that is perceived as low value by today’s conventional standards could in fact be a highly valuable feedstock in the next cycle of product development.
And let’s not forget the environmental impetus for getting our system to scale. Recycling is an important weapon in our fight against climate change and, by reducing the need for virgin resources, helps to preserve natural habitats and biodiversity crucial to planetary and human well-being.
Begging the Question
We’ve gotten really good at defining the problem. But what’s the solution and who is responsible for bringing it about? Is it the packaging industry, the brand-owners, the recycling industry, government, consumers? It’s my belief that the answer is yes — across the board. We are all responsible and in fact, the involvement of all stakeholders is the only way to bring about the game-changing steps needed to truly evolve the material supply and recovery chain.
We don’t lack technologies, best practices or strategies; what we lack is a willingness to assume financial responsibility. Even if the willingness was there among all parties, the reality is that only some have the necessary funds to create meaningful system changes. Consequently, it will require the dedication of substantial private sector investment toward infrastructure development and promotion of recycling nationwide to overcome this problem.
Luckily, some private companies and organizations are stepping up. The Recycling Partnership is a case in point. With brand owners, packaging companies, raw material suppliers, haulers and trade associations all at the table as either funders or associate members, the Partnership exemplifies a shared responsibility approach.
The Partnership’s Executive Director, Keefe Harrison, asked in a recent interview: “How do we work in as many places at once doing similar changes so that we might see an overall, coordinated shift in this highly dependent, loosely connected network [of recycling stakeholders]?” This is the essence of the Partnership’s approach. The idea isn’t to fix one city, but rather to leverage the power of public-private partnership to create change that causes a ripple effect across an entire region. In her words, they’re “out to overhaul the US curb-side recycling system.”
So far, they’ve been successful to a certain extent in leveraging private dollars to unlock public investment. As of October 2014, every dollar of private investment through the Partnership has been matched with six to seven dollars of government (local and state) funding, according to Harrison. The Partnership is paving the way toward the development of an equitable funding strategy that reflects our shared responsibility for doing what is right. But currently, the number of companies in the partnership and the funding contributed is minor relative to what is needed to bring about the system changes needed nationwide. Given the amount of voluntary private sector investment to date relative to the amount of money needed for system improvements, funding policies are likely to be a crucial part of the puzzle in creating effective funding mechanisms, but without private sector support, they are destined to fall short. Industry will need to decide whether it will step up its involvement on a voluntary basis or support funding policy mechanisms. Saying no to both is not an acceptable option.
What Role Will You Play?
We can preach recycling as gospel, but talk won’t get us far. We must confront the role we play and examine it thoroughly. We must take a look in the mirror and ask ourselves: Are we the ostrich with our head in the sand? Are we the observer whose role it is to monitor developments or, more cynically, subvert them? Or are we the advocate, the change leader — the one who is willing to ask the tough questions and make the right moves and encourage our colleagues to do the same.
More of us need to take the long-term view and embrace responsibility through collaborative action. Can that be a tricky proposition in a system that’s predicated on short-termism? Of course. But the question isn’t whether we can afford to take action; it’s whether we can afford not to. It’s become increasingly clear that what really puts our bottom lines in jeopardy in the long run is our continued dependence on scarce virgin resources. So is it time for a course correction? Unequivocally, yes.
Elisabeth Comere is the director of environment and government affairs at Tetra Pak. She joined the company in 2006 as environment manager for Europe, where she helped define and drive Tetra Pak’s environmental strategy and contributed shaping recycling for cartons in Europe. Since 2010, she has been based in the United States, focusing on advancing the Tetra Pak’s commitment to sustainability in the US and Canada and is involved in various industry and customer packaging and sustainability initiatives. Prior to this, she served as a political adviser to a member of the European Parliament in Brussels, Belgium, and headed the environment department of the Food & Drink Industry group in Europe. She is currently a member of the board for the American Institute for Packaging and the Environment (AMERIPEN) and is vice president for Government Affairs for the Carton Council. Comere currently resides in the Chicago area. For further environmental insights from her, visit www.doingwhatsgood.us.