As Cities Lose Money, Is Recycling Still Worth It?

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When news spread earlier this year that more than 2,000 cities and towns across the country are paying to dispose of their recyclables — rather than being paid for their recyclables — it got people wondering whether recycling makes financial sense.

In just one example, recycling has cost Washington, D.C., more than $1 million in the past year, even though it previously was a profit center. Why the change? The Washington Post reported that a fluctuating global market for plastic and aluminum is one big factor. The other major one is how much it costs to sort through mixed materials, many of which have been contaminated by non-recyclable products.

The problem is widespread. Waste Management Inc.’s revenue from recycling fell $70 million in the first quarter of 2015 alone. “Recycling is in a crisis,” CEO David Steiner told The Wall Street Journal. “It isn’t profitable for us, and we have to react to that by shutting down plants.”

But is that the whole story?

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Improving Recycling Revenue

Municipalities all over the country have run into the same issue as Washington, D.C., after implementing single-stream recycling programs. These allow people to toss all recyclables in the same bin, which ups the rate of recycling. Unfortunately, there’s a downside that comes with the added convenience. While the amount of recyclable materials collected increases, so too does the amount of non-recyclable materials, and it all costs money to sort through.

Montgomery County, Maryland, has stuck with a dual-stream system — households toss cardboard and paper in one bin, bottles and cans in another — and still makes a profit. In fact, the county estimates its recycling revenue will grow even more in 2016. “We have an extremely mature recycling program,” Eileen Kao, who heads the waste reduction and recycling section of the county’s environmental protection department, told The Washington Post. Following this model is just one way municipalities might improve their chances of making money.

More Than the Money

Recycle Bins

Some cities have found that recycling is losing money in recent years — is that a reason to do away with it? Photo by Flickr.com/atramos

Even if recycling is often a losing proposition for cities and towns, does that mean it isn’t worth it? It’s important to remember that municipalities are only one piece of the puzzle — just because they’re struggling doesn’t mean that recycling is dead across the board. Although municipalities manage more than 80 million tons annually, this effort accounts for less than half of the total recycling activity occurring in the United States each year. Plus, the public and private entities involved with municipal recycling are taking proactive steps to address program funding and material quality to offset lower commodity prices, which are cyclical — although down now, they very well may be up again in a few years.

There are, of course, reasons to recycle that go beyond money. Recycling provides an effective and currently irreplaceable means of reducing landfill space and transforming end-of-life products into valuable materials that are used to manufacture new products. Studies show that recycling reduces energy use and air pollutants, including greenhouse gas emissions. The U.S. EPA found that municipal recycling and composting in 2013 reduced carbon dioxide emissions by 186 million tons, comparable to annual emissions from more than 39 million passenger cars.

Reusing existing products is something that humans have done since the beginning of time. As U.S. manufacturing ramped up and became more complex in response to society’s expanding needs, scrap recycling took on even greater importance, says the Institute of Scrap Recycling Industries (ISRI), a nonprofit trade association that represents more than 1,600 companies nationwide that process, broker and industrially consume scrap commodities. The recycling industry adapted not only to market drivers, but also to shifting national priorities in the context of our finite natural resources.

Widespread Economic Benefits

Even though recycling can sometimes lose money, there are very real economic benefits. “The recycling industry provides a source of raw material to other manufacturers that is environmentally friendly compared to virgin material,” says Robin Wiener, president of ISRI. “In doing so, the industry has become a leader in economic output, job creation, resource sustainability, energy savings and global trade.”

The contributions of the scrap recycling industry to the U.S. economy include:

  • Generating nearly $21 billion in export sales to 160 countries
  • Directly and indirectly employing approximately 470,000 workers in 2015
  • Generating more than $105.8 billion annually in economic activity
  • Drawing in more than $11 billion in revenue for federal, state and local governments
  • Lowering energy costs by producing recycled materials that require less energy during the manufacturing process than virgin materials

Those aren’t the numbers of an industry on its way out. “Despite the challenging landscape of today’s global marketplace,” Wiener says, “scrap recycling has proven to be a resilient, job-creating, and economy-driving industry.”

Don’t be discouraged from recycling by reports that it loses money in some cases — the economy and the environment both ultimately benefit.

Feature photo courtesy of Flickr.com/Peter Kaminski

Editor’s Note: Earth911 partners with many industries, manufacturers and organizations to support its Recycling Directory, the largest in the nation, which is provided to consumers at no cost. Institute of Scrap Recycling Industries is one of these partners.

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Haley Shapley

Haley Shapley is based in Seattle, where recycling is just as cool as Macklemore, walking in the rain without an umbrella, and eating locally sourced food. She writes for a wide range of national and regional publications, covering everything from sustainability and health to travel and retail.

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