Have you ever wondered what happens to all those newspapers, cans, and cardboard boxes
you so diligently recycle?
In many cases, it could just be thrown in the trash along with everything else.
In today’s video, we’re going to cover what some are calling “the end of recycling
as we know it”.
While that might sound extreme, you’ll soon realize just how close this $100 billion dollar
industry is to collapse.
This video is brought to you by Audible.
Do you know the difference between what we recycle and what we throw away?
It’s not the materials or composition of the product.
It’s money.
If a product can be cleaned and sorted and sold, it’s deemed recyclable.
But what happens to recyclable materials when no one’s buying it?
This is a question countries all over the world are asking now.
To understand where we are now, we have to first look at what the world of recycling
used to look like 15 years ago.
In the early 2000s, the Western world is just starting to come on board with recycling,
with people diligently sorting their trash into different components.
After all the TV ads it felt almost criminal to even toss paper into your trash bin.
Now, that trash got collected into Material Recovery Facilities, where it got sorted,
processed, and bundled to be sold to buyers all over the world.
You can probably guess who the biggest buyer was: China.
It was buying recycling materials for its growing manufacturing base, which was rapidly
manifesting its dream of becoming the largest manufacturing economy in the world.
Ever since China was granted entry into the World Trade Organization in 2001, the vast
volume of trade it experienced created an interesting incentive.
China was exporting goods, and empty Chinese shipping containers were filling up across
the docks of the world.
Now, rather than send them back empty, it made sense to send back recycling in those
containers back to China.
The supply of empty containers was so great that it was actually cheaper to send recycling
from Los Angeles to China than to nearby Arizona.
The nature of the Chinese economy made this arrangement very lucrative.
China lacks its own softwood lumber industry, for example, so they rely heavily on importing
recycled paper to fill their paper needs.
The newspaper you read and recycle today could be sold to China, printed, and read by a Chinese
person 6 weeks later.
Of course, along with paper, China accepted a slew of other recycled materials like plastic
and iron, which they could sort for much cheaper due to low labour costs.
Thus, with China providing a quick and easy solution for the world’s recycling, the
West never felt the need to build recycling plants in significant numbers.
In the case of plastic, for example, China was accepting 70% of the world’s plastic
waste.
In 2016, just the US alone was sending over 700,000 tons of plastic to China.
But that very same year, a Chinese director released a documentary called Plastic China.
It depicted the life of a young girl living in a plastic recycling plant, revealing the
ugly reality of the Chinese recycling industry.
It was received very well overseas and soon made its way illegally onto the Chinese internet.
Beijing quickly banned the film, but the damage had already been done.
The Communist Party now had to repair its public image, with Xi Jinping pledging to
take a stand against these practices.
In 2017, they announced to the WTO that they would be halting the import of waste and 4
different recyclable products, including cotton, waste paper, and plastics.
Now, by this time China had developed a strong middle class that could generate enough internal
waste to recycle without needing to buy and sort the waste of the world.
They called it Operation National Sword, essentially a movement to develop better internal recycling
plants and to care for their own country first, improving both their environment and public
perception.
The shock was instantaneous.
Almost overnight, the entire plastic and paper recycling industry was brought to a crippling
halt.
At its height, MRFs could sell baled plastic at $300/ton, but with Chinese demand gone
the price dropped to less than $40 a ton in just a few months.
China introduced strict regulations on what they would import, mostly to do with how ‘clean’
the recycling was.
They would not accept low-grade waste, and there are actually rumors that they will stop
all imports by 2020.
Overnight, a cleaning industry popped up places like Thailand and Malaysia where they would
clean the recyclable materials before passing it on to China and many millionaires have
emerged from these countries as a result of this entrepreneurial boom.
Unfortunately, it wasn’t enough.
The Western world just doesn’t have the infrastructure to handle its own recycling
without the aid of China.
Up until now it was easier to toss yogurt lids, wire hangers and newspapers all in the
same bin and to leave the sorting to the Chinese factory workers.
Now, the Western world has to come up with new solutions to handle its recycling in the
wake of Operation National Sword.
Now, this is a huge market: in the hundreds of billions of dollars globally, so in the
absence of China there’s a big incentive for other developing countries to step in.
Just economics, however, won’t solve this problem.
The easiest answer is that we need to consume less and countries like Canada are already
implementing policies to combat excessive waste by imposing bans on single-use plastics
like plastic bags and straws.
This has naturally incentivised manufacturers to design better packaging that promotes less
waste.
Thai and Vietnamese grocery stores, for example, are testing out wrapping materials in banana
leaves rather than plastics for a more sustainable approach.
Luckily for the West, better recycling technologies are being developed.
New recycling plants are popping up in countries like Sweden and the Netherlands that use high-tech
optical sorters that are much more efficient than human labor.
Ultimately, even if we believe that new businesses will emerge to solve the recycling crisis
in the West, it’s still better to minimize the amount of plastic and paper we use and
one of the ways you can do that is by starting to use Audible.
Listening to audiobooks is a great way for you to expand your knowledge and to learn
about stories like the ones we cover here on Business Casual.
If you’re curious about the dramatic rise of China’s manufacturing you should definitely
listen to ‘Poorly Made in China’, a fascinating behind-the-scenes look at the sometimes questionable
methods the Chinese used to get ahead.
You can listen to it and many other audiobooks if you start your Audible membership now,
when Audible have a special offer for you.
Up until the end of July, Amazon Prime members can get their first three months of Audible
for just $4.95 a month, saving a total of $30.
That’s a 66% discount if you register using the link in the description or text ‘businesscasual’
to 500500.
In any case, I hope you enjoyed this video and I’d like to thank you for watching it.
If you wanna see teasers for my future videos you should follow me on Instagram.
You can expect my next video in two weeks, and until then: stay smart.