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The Economic Crisis is an Environmental Crisis: Trash Has Crashed

Trash has crashed.  So said the New York Times in December, observing the swift decline in value for recycled paperstock, plastics, and metals over the final two months of 2008.  During that time, mixed paper fell from $105 to $25 per ton.  The Times reported that tin, trading earlier in the year at $327 per ton, sold at the end of the year for $5 per ton.  Even materials with more reliable markets, such as steel and aluminum, saw steep declines in their value as autumn advanced into winter. 

Recycling contractors, finding little demand for their collected materials, now face the troubling dilemma of either letting stocks pile up in their yards or carting them off to landfills – the very sort of disposal recycling was supposed to reduce.  How could this happen?

It has happened before.  The dramatic collapse in the secondary metals and paperstock markets resemble the damage done to these markets in the past.  From February to November of 1873, the price of scrap iron fell from $60 to $35 per ton, causing stocks that would have otherwise been sold for use in making ships, rails and industrial machinery to instead rust in scrapyards for months. 

A more ominous precedent for our present situation is the Great Depression. The intense industrialization in the United States in the half century after the Civil War led to the creation of thousands of small businesses that specialized in collecting old iron, copper, lead, cotton, linen, paperstock, and other materials discarded by consumers or industry.  They sold their collections to manufacturers who returned the disposed materials to industrial production.  Scrap materials such as iron from disused rails and machinery cost steelmakers far less than having to mine and transport virgin ore to foundries.  As production techniques allowed the use of more scrap materials, demand grew.  Military needs spurred demand further, and Scientific American reported that by 1917, the annual trade in scrap iron in the United States exceeded one billion dollars. 

The Great Depression ended that growth.  After the crash of 1929, the scrap iron market in the United States was decimated over a four-year period.  In 1929, the Census of Business enumerated thirty-nine brokers with $47,697,000 in annual sales.  For the year 1933, it enumerated eleven brokers with $4,373,000 in annual sales.  Demand was wiped out by the worldwide economic downturn, and once again, scrapyards piled high with unwanted materials.   The market would be slow to recover, not truly thriving until the rest of the economy grew during World War II and the postwar expansion. 

History, then, shows we have seen similar crashes in the value of recyclables reflecting broader economic crises.  It also tells us that the context for the current crash is different than what Americans experienced in 1873 or 1929.  The market for scrap recycling commodities differs in two important respects from the markets in those years.  One, the shift of manufacturing industries outside of the United States’ borders means the value of these commodities now depends on foreign sources of demand.  Over the past two years, Chinese demand for copper sent the value of that commodity so high that American cities were plagued with copper wire and pipe thefts throughout 2007, including traffic signals and agricultural machinery being stripped of wires.  A reporter that year interviewed me for a story inspired by the theft of her own copper downspouts.  (Last autumn, the value of copper plummeted, and with it, associated thefts.  At least one consequence of the economic downturn is not completely negative.)

Two, the associations involved with recycling as an environmental ethic since the 1960s have led to new practices and regulations in the collection and sale of secondary commodities.  The Chicago Resource Center, for example, takes the revenue generated from its drop-off recycling centers and uses it to deliver produce to local social service agencies.   The crash now threatens the delivery of produce and organic baked goods to many of Chicago’s neediest residents.

Beyond that immediate economic consequence, the notion that recycling is a good, even moral activity that reduces solid waste disposal is a mainstream value in our society. Public recycling programs for environmental reasons grew popular as a response to concerns about the proliferation of garbage in American landfills in the last third of the twentieth century.  By the mid-1990s, over one thousand communities had established curbside collections of recyclables.  These programs had successfully diverted materials from landfills; the U.S. Environmental Protection Agency estimated that between 1970 and 1990, recovery of municipal solid waste as a percentage of total municipal solid waste generated jumped from 6.6 percent to 16.2 percent.  Our current crisis threatens the valuable work recycling programs do to reduce solid waste disposal.  That goal was not on the minds of scrap dealers eighty years ago; their work was to find value in materials others had thrown away.

Today, recycling, and the way we feel about recycling, is different.  The Times story observed one of the consequences of the current downturn was a letter-writing campaign from the students in a second-grade class in South Charleston, West Virginia to their mayor and governor urging that their school’s recycling program not be discontinued.  Their teacher, Rachel Fisk, was quoted in the Times as saying “They were telling them, ‘We really don’t care what you say about the economy. If you don’t recycle, our planet will be dirty.’ ” 

The students’ pleas were heeded, the program survived.  A similar dynamic took place seven years ago when New York City suspended collection of plastics and glass because its contract with Waste Management cost the city too much money.  Public outcry led the city to investigate alternatives, and ultimately the city entered into an agreement with the Hugo Neu Corporation (a scrap dealer operating in New Jersey since 1947) that allowed glass and plastics collections to resume under a more attractive contract.  The reason the city searched for an alternative was the public’s embrace of recycling’s environmental importance.  Since 2004, New Yorkers have been secure in knowing that when they put their glass and plastic out on the curb, along with their metal cans and papers, that the materials will be collected and put to use making new consumer goods.

Our current crisis serves as a reminder, however, that recycling does not simply occur when we place our cans, bottles, and papers on the curb.  The act of placing metals, glass, plastic, cardboard, and newspaper in bins on our curbs is but one step of a process of returning these materials to industrial production in factories ranging from a few miles away, or, as is increasingly the case, an ocean away.  These materials are commodities in a trade as old as the Industrial Revolution, commodities that appreciate and depreciate in value with the fortunes of the industries that demand them.  That was true in 1873, true in 1929, and it remains true as we begin 2009.  The crash in trash is grim news for both the state of the economy and our ability to successfully recycle.