When we think of everyday conventions that individuals can do to help protect the environment, recycling most often comes to mind. It is a decades-long practice where people have embraced the concept that we must reuse materials in order to conserve our non-renewable resources. The U.S. has been gradually shifting away from the traditional “Cradle-to-Grave”mindset towards the more environmentally-friendly “Cradle-to-Cradle” mindset, with recycling becoming a fairly standard custom. In the modern day, recycling is a much more sophisticated and widespread process than it used to be; done primarily by local governments and private waste management companies as a public service. It has become an integral part of everyday life for most cities, and people are treating it more as a civic duty rather than a voluntary activity.
But what exactly makes recycling economically viable? More specifically, how does the recycling business-model remain cost-effective? By definition, recycling is “the process of converting waste materials into reusable materials.” Most products and waste that we use/produce every day can be recycled. Banana and orange peels can be converted into nutrient-rich soil via composting, and scrap metals can be melted together into liquid to be later molded for new products. These methods remain viable if the recycled products that are sold on the market generate enough revenue to outweigh the costs of the recycling process (i.e. operations, labor, etc.). Like most services in a free-market economy, recycling always comes at monetary cost, and this cost can fluctuate greatly due to certain economic conditions.
THE RECYCLING MARKET
The recycling business not only has countless environmental benefits, but can also be very profitable. It is an estimated $100 billion venture world-wide. But this figure depends majorly on certain market factors, especially in the case of electronic waste. E-waste, as it is known, encompasses any waste product that runs on electricity (i.e. laptops, TVs, stereos, etc.). These products contain various commodities, which include assorted metals, plastics, and other petroleum-based materials. Due to this, the current market for recycling e-waste materials has much correlation with the price of oil.
The way this market works is fairly straightforward. First off, companies that make electronic products must buy their materials from certain commodity vendors. In a free-market system, these companies will typically have the incentive to buy the cheapest commodities possible in order to maximize their profits. That being said, if oil is cheap, then manufacturing new metals and plastics also becomes cheap, which incentivizes companies to buy those new commodities over recycled ones. Recycled commodities only have value if oil prices are high because then the cost of making new materials becomes too expensive. While the price of new electronic products generally remains the same, costs for making the products will shift between the recycling vendors and the manufacturing vendors as oil prices fluctuate.
HIGH AND LOW VALUE E-WASTE
Among electronic waste products there are certain items that are higher in value, and ones that are lower in value. High-value items typically include laptops, monitors, smart phones, tablets, flat screen TVs, and generally any electronics that have good re-sell value. Low-value items, also known as Universal Waste Electronic Devices (UWED), are ones that are more susceptible to losing worth when oil prices drop because they are difficult to re-sell as commodities. These types of items typically include keyboards, CRT TVs, cords, printers, microwaves, scanners, routers, and in general MOST electronic items that are disposed of.
The problem with these low-value items is not that they can’t be recycled, but rather that they become too expensive to recycle from an economic standpoint when oil prices are low. This is true with most waste that we throw away as almost everything that we buy in the U.S. is made (to some degree) with petroleum-based materials or processes. As quoted by Stacey Vanek Smith of NPR; “There is a word for a recyclable that is no longer profitable – it’s called trash.”
At GreenCitizen our mission is to divert all e-waste from overseas landfills to local responsible recycling vendors. This means that we try to accept all e-waste that comes through our doors in order to ensure that we are achieving our company goals. With that being said, it has come at a major cost in recent months. As you have probably noticed, oil prices have dropped significantly in the last year (around 50%). Due to this, UWED items have lost much of their commodity value because it is now cheaper for companies to purchase newly manufactured metals and plastics over recycled ones.
Before, GreenCitizen used to get paid 20 to 30 cents/pound for UWED materials by our recycling vendors, and now we are being charged 50 cents/pound. With our current business model of accepting all UWED items for free, recycling continues to become too expensive for us to operate productively. We are not able to cover these costs completely from the revenues we receive from high-value items. That being said, part of our mission at GreenCitizen is to educate the public about the true cost of recycling, which we hope this article has shed some light on.
We all have a civic duty to ensure that our waste is being processed responsibly, and not just being dumped in developing countries. That means that we must take on the total life-cycle costs of the products that we create and dispose of, because in the end its only fair that we do so.
Category: Blog, E-waste, Electronic Recycling, Electronic Recyclying, GreenCitizen, Recycle, Recycling, San Francisco Tags: electronics recycling, ewaste recycling, GreenCitizen, Mike Kloha, why does is cost to recycling