Closing the Loop on Global Recycling

Finding a Global Solution to the Patchwork of Recycling

The ~$40 trillion global consumer economy is incredibly diverse and shaped by significant political and cultural differences. However there is one belief consumers in all regions and sectors of the global economy seem to share — recycling is good. Whether it’s a shop owner in Brazil putting out recycling bins for her customers, a homemaker in Europe sorting cans, bottles, and paper into colored bins, or a local elected official in the U.S. touting the benefits of a new curbside collection program, economic decision-makers get a sense of satisfaction in recycling, feeling they are making a difference and passing on a better world to the next generation.

While the principle of resource conservation is undoubtedly good, recycling systems currently implemented across the globe vary widely in terms of basic structure, incentives, and scope. Many recycling systems are publicly run, others are completely outsourced to private parties, while still others use a hybrid public/private approach. Recycling systems also vary widely in terms of basic effectiveness. Despite the good feelings consumers get tossing items into the right color-coded bin, many of these items are not truly recycled — they are simply collected, and ultimately end up in landfills, being incinerated, or worse yet, littered. This is because the cost of recycling materials is often not competitive with virgin materials, which are typically cheaper and also offer better performance characteristics.

Recycling systems have always grappled questions around profitability and ownership: What products should get recycled? Which governmental authority should mandate it? How much are consumers willing to subsidize it? However, one recent seismic policy change has thrown global recycling systems into chaos: China’s decision to effectively ban the importation of half of the world’s scrap plastic, paper, and metal. This drastic policy change has made recycled (i.e., scrap) materials in North America and Europe incredibly cheap — now instead of getting paid for their recycled material, many municipalities have to pay to haul away what is essentially garbage.

Recycling systems are not harmonized at the global, national, or even regional level, but rather are hyper-local — resulting in a patchwork of public, private, and hybrid systems. That said, with global consumers, corporates, and governments demanding higher environmental standards, some solutions are emerging. In this report we examine the relative pros and cons of recycling solutions including container deposit schemes, ‘pay as you throw’, and recycled content pledges, and think about what it will take to finally ‘close the loop’.