Friday, July 25, 2014

Money is green

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When I was a kid I collected aluminum cans from my neighbors, crushed them, and took them to a local scrapyard where I sold them for $0.40 per pound. I can still remember being all sticky after crushing all those soda and beer cans. Profits motivated me to recycle at an early age, but I had no idea that I was participating in such a massive, global industry:

In 2012, the seven thousand or so businesses that constitute the U.S. scrap recycling industry were responsible for transforming 135 million metric tons of recyclable waste into raw materials that could be made into new stuff. That's 135 million tons of iron ore, copper ore, nickel, paper, plastic, and glass that didn't have to be dug out of the ground or cut out of a forest. (44) . . . 
The global scrap industry . . . created a multibillion-dollar sustainable business model that stands as one of globalization's great, green successes. (85) . . . 
In 2012 Americans exported almost 22.3 million tons--or roughly 40.5 percent--of the used paper and cardboard they harvested. Of that, the majority went to China in shipping containers that otherwise would have crossed the Pacific Ocean carrying nothing more than air. It was joined by millions of tons of recycled metal and plastic, all of which went--like that paper--on what amounted to the unused portion of a round-trip ticket from China to the United States, paid for by American consumers eager for Chinese-made goods. One way or another, the boat is going back to China, and the fuel to send it there is going to be burned, whether or not the ticket is paid for. So anybody--or anything--hopping on that boat is getting what amounts to a carbon-neutral boat ride to China. . . . Of course, the same cannot be said of the weekend recycler who drives the recycling down to the local county dropoff, burning gas all the way. (87)

This is from Adam Minter's Junkyard Planet (2013), a really fun read (discussed more by Adam Ozimek here; Ozimek is how I heard about the book). It is a story about the global scrap industry, which is truly massive and serves as a reminder that markets are reasonably good at using resources efficiently, including natural resources. We all know the caveats about issues with the commons, which Minter discusses in some detail (and Ozimek mentions some of those in the context of this book).

One of the key insights from the book is that the things you probably think of when you hear the word "recycle"--the little blue bins and your selfless efforts to see that they make it to the recycling plant--are tiny compared with the massive profit-making enterprise that accounts for the bulk of recycling activity. Good intentions don't get us nearly as far as profit motives. When Minter asks a guy who runs a Christmas tree-recycling business why people get into this business, the reply is "People wanted to make money. That's all." The result, broadly speaking, is that "by the time a load of Chinese trash arrives at a landfill, very little that's reusable or recyclable is left in it" (27). And you can probably get rich if you can come up with a way to refine and sell the remaining stuff that is currently not considered to be reusable or recyclable.

The scrap industry isn't just about recycling; it also has mechanisms for reusing. Minter describes the industry (mostly Chinese) that buys broken or unused electric motors, fixes them, and resells them, and mentions this interesting idea: "The motors that used to drive U.S. [manufacturing] industry are being exported to China, refurbished, and used to drive Chinese industry" (111). There are similar markets for computer equipment, cars (of course), and lots of other stuff.

This book is a really good read. It has made me think more about entrepreneurship, how the movement of shipping containers is complicated by trade imbalances, development, and even my latest hobby, specificity. I'm not quite finished, so I may have more to say about it later.

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