Who Will Pay America’s $1.5 Billion Recycling Bill?

Why Are Cities Picking Up the Tab on Corporate America’s Waste?

Story by Sarah Laskow

Illustrations by Tim Pacific

Published on

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There’s a big, bad hole in the ozone.
Save the rainforest!
Reuse, Reduce, Recycle

Of these basic environmental mantras, it was the three Rs — Reuse, Reduce, Recycle — that were indelibly printed in my brain at Girl Scout camp, by a performer who wore a star-spangled blue dress with green-and-white-striped sleeves and went by “Auntie Litter.” (It only took me about two decades to get that pun.) Together, cross-legged on the wooden floor, we chanted: Re-use. Re-duce. Re-cycle. Re-use. Re-duce. Re-cycle.

It’s a powerful idea. Unlike saving the rainforest or fixing the hole in the ozone, recycling is an act of environmental good that most Americans can perform now, at home, this very day. But for all the ongoing attempts at indoctrination, 35 years after what’s often cited as the first mandatory municipal recycling law was passed, in Woodbury, New Jersey, we are not doing very well in our recycling practice.

From 1985 to 1995, the percentage of municipal solid waste that was recycled grew quickly, from about 16 percent to about 25 percent. If we’d kept that up, we would be closing in on recycling half of our trash by now. But that pace started to slow, and 20 years later, according to the Environmental Protection Agency, the recycling rate still hovers just under 35 percent.

In that time, though, the case for collecting recyclable materials has become stronger than ever. Replace virgin materials with recycled ones, says Darby Hoover, of the Natural Resources Defense Council, and “You save energy. You save water. You use less toxic chemicals. You create less air pollution and water pollution. You create jobs. It’s ecologically, across the board, a gain.”

Right now, it’s cities that are on the hook for fulfilling — or failing to fulfill — that promise. In the U.S., big decisions about waste happen on the state level, but the work and the cost of dealing with the detritus of our consumptive habits fall on local governments — on counties, townships and cities that, with limited budgets, rarely prioritize recycling over core programs like roads or policing.

Cities started picking up garbage because it attracted rats and spread disease; the benefits of picking up recyclables are less visceral. And while early advocates argued that recycling would pay its own way — that “trash is cash” — cities often end up losing money on these programs.

(AP Photo/Tony Dejak)

A small group of environmental advocates, though, has been pushing hard for a different model, one already popular in Europe. This model of “extended producer responsibility,” or EPR, would shift the costs of recycling from municipal governments onto producers — the companies that make the products we buy. Packaging, after all — the paper, plastic and metal that contains our food and drinks, lotions and hair gels, toys and technology — makes up almost a third of municipal solid waste in this country.

“What we get from producer responsibility legislation is the changing dynamic to where the manufacturers don’t get to offload this piece of the puzzle to municipalities,” says Sheila Dormody, Providence’s first sustainability director and a supporter of a statewide EPR policy for Rhode Island.

In 2010, at the request of state governments and environmental advocates, the EPA convened a dialogue on how to pay for recycling. The dialogue brought together the people responsible for making and selling packaging — huge retailers and consumer goods producers including Walmart, Coca-Cola and Procter & Gamble — with state governments, city officials and NGOs.

“It was the first time we were having a conversation with the brand owners about how the system was working and what we could do about it, with financing as the center of the discussion,” says Scott Mouw, the recycling section chief of North Carolina’s Department of Environment and Natural Resources. “That was, I think, the beginning.”

Even before the meetings started, though, some of the industry participants were pushing back against its exclusive focus on recycling — and the dialogue’s implication that governments shouldn’t be the only ones responsible for financing it in the long term. The costs involved in recycling are substantial: As the final report pointed out, in the two decades from 1990 to 2011, the increase in containers and packaging showing up in the waste stream had cost governments $1.56 billion to deal with.

The meeting was “super tense,” Mouw recalls.

“The manufacturers didn’t want to talk about EPR,” says Scott Cassel, founder of the Product Stewardship Institute, one of the groups that asked for the EPA meeting. “That’s all the governments wanted to talk about, and the manufacturers only wanted to talk about voluntary programs.”

With EPR, recycling becomes a part of the price of consumer goods — you pay to dispose of a product when you buy it.

In 2014, some of the same companies that were part of EPA’s dialogue funded two new, unprecedented initiatives, which provide, in one case, more than $1 million in grants and, in the other, $100 million in low- or zero-interest loans to cities looking to improve their recycling programs. This is the first time private companies have coordinated their efforts to invest in cities’ recycling infrastructure at this scale. But product stewardship advocates say that’s not nearly enough — that companies should be footing the bill for the whole system.

Who Is Responsible for Our Trash?

Not so long ago, the trash that cities dealt with was simpler. But corporate America has done wonders with metals, chemicals and plastics, sold those wonders to us, and convinced us to quickly discard them. In just the last 15 years, the volume of packaging that ends up in the waste stream has grown by millions of tons.

The promise of recycling is that these materials are not worthless. Gather them together, and they can be resurrected — live a second life, and then a third, a fourth and, for some materials, onto infinity. Recycled aluminum is essentially identical to newly extracted aluminum, which costs so much that recycling makes economic sense. For most products, though, the economic case for recycling is less clear.

“If you were to go out and buy a box of Cheerios today at Walmart, you’d pay $2.50 a box. You’re buying that box, and you’re eating the Cheerios and getting that value. Hopefully everyone upstream has made a profit,” says North Carolina’s Mouw. “When the box is empty, you’re looking at a material that’s probably worth less than a penny. They have a value stream that supports distribution. But the value stream is different backwards. There’s not an inherent value in that box.”

Recycling glass, for instance, is simple on a technical level, but difficult to profit from. Picture the piles of glass bottles that collect behind restaurants and bars. That glass, Mouw says, is worth something like “negative $300 a ton.” That doesn’t mean it should be thrown away. But if it’s to be recycled, “someone has to pay for the reverse distribution process to happen.”

Producers have worked hard to ensure that someone is not them. In the 1970s, the environmental movement, waxing in power, began pressuring companies to reduce the amount of future-waste they were selling or to take responsibility for it. In response, some industry groups started backing a select group of recycling campaigns — the ones that put the burden of doing the work on either volunteer groups or city governments — as Samantha MacBride, a former deputy director for recycling in New York City, recounts in her book Recycling Reconsidered. (MacBride is currently an assistant professor at CUNY’s Baruch College.)

In the ’70s, consumer goods companies pushed these campaigns with “the explicit intent” of heading off more restrictive legislation, MacBride writes; in the ’80s, some container and paper companies began supporting curbside recycling “to keep the costs of negative externalities squarely on the public.” Industry representatives were often quite explicit about this position. In a 1993 article about recycling, for instance, a representative of the American Plastics Council told the New York Times, “If I buy a product, I’m the polluter … I should be responsible for the disposal of the package.”

Two decades later, though, companies that make packaged consumer goods still don’t want to be financially responsible for recycling. But they need the end product: the plastic or paper with the tri-arrow twist that symbolizes green. Many have pledged to use more recycled content in their packaging: This plays well with eco-minded customers and also makes business sense. “We know that our feedstock to make the bottles is a finite resource. We know that feedstock has increased in cost significantly over the last couple of decades,” says Jeffrey Meyers, who manages sustainable packaging at Coca-Cola. “So the company is thinking about alternative supplies and materials.”

For companies to depend on recyclables, cities need to be producing a steady, high-quality stream of not-so-raw materials. In the past, Coca-Cola and companies like it have funded piecemeal efforts to increase recycling — giving a grant to a town for the purchase of roll carts, or another to start a program to put recycling bins out in theaters or stadiums. But more recently they worked to coordinate their efforts.

“There have been several of these public-private initiatives,” says Keefe Harrison, who’s worked in the recycling industry for decades and became executive director of the Curbside Value Partnership in 2014. After the 2010 EPA dialogue, for instance, Alcoa, the largest producer of aluminum in America, convened its own meeting and associated initiative —“the Action to Accelerate Recycling.” “That one had a lot of interest, but they couldn’t get people to put money on the table,” says Harrison. “It’s always really difficult.”

In 2014, though, two industry-funded initiatives — the Recycling Partnership, which is run by Harrison’s organization, and the Closed Loop Fund, backed first by Walmart — actually came together.

Coca-Cola is backing both. (It’s the only company to do so.) “Coke’s clearly trying to evaluate the options that are out there, including EPR. We want to be active participants and discuss what EPR could look like. But it’s still early,” says Meyers. “For now our focus is going to be on other programs, like the Closed Loop Fund and the Recycling [Partnership].”

And if those programs succeed in boosting recycling rates, it’ll give companies a stronger argument that a mandatory program like EPR won’t be necessary.

One Piece of the Puzzle

The Recycling Partnership grew out of a push by the Southeast Recycling Development Council (SERDC), an industry-backed group, to identify key ways that robust recycling programs worked, with the aim of fixing up floundering ones. The places in America that do best at recycling are exactly the ones you’d imagine. California’s long been a leader; Northeast and Mid-Atlantic states, where land is more scarce and landfilling more expensive, tend to have higher recycling rates.

“You see relatively weaker programs in the Southeast,” says Karen Bandhauer, the Curbside Value Partnership’s project director. But there’s actually a strong regional demand there for recycled material — a potential market for cities’ waste. During the SERDC project, which both Harrison and Bandhauer worked on as consultants, they’d put together a list of cities that could be grant candidates — about 20 altogether. They called those cities and said, essentially, give us your wish list. If you could radically change your recycling program, what would it look like?

Most wanted basic upgrades: new trucks, roll carts to replace bins. And, often, they needed a lot of money to make that happen. The Recycling Partnership had told the cities to match the private dollars on offer with as large a public contribution as possible. Still, “we got back relatively large asks,” says Bandhauer. “It was in the multimillions for some of them, an order of magnitude larger than what we were looking to put in.”

“No one wants to pay for recycling.”

The aim of the partnership is not to fund recycling programs — it’s to use a small amount of private money to convince cities to put up much larger amounts of public money, seven to eight times as much as they’re getting from the private sector. Harrison has raised $1.2 million from corporate partners including Alcoa, Coca-Cola, Sonoco and the American Chemistry Council, and the program’s first three grantees — Columbia, South Carolina, Florence, Alabama, and Richmond, Virginia — announced last fall, are each getting around $300,000 of that money.

“We have to recognize there’s a cost involved, and government has taken the brunt of the cost,” says Harrison. “That’s not necessarily bad.”

Columbia, for instance, plans on using the money from the Recycling Partnership to buy carts. Even as neighboring counties switched over to using 96-gallon roll carts for recycling, Columbia, the state’s capital and largest city, has been stuck with 18-gallon bins, the kind that’s awkward to haul down to the end of the driveway.

“I get calls every day,” says Samantha Yager, the city’s recycling coordinator. “When am I getting my roll cart? When am I getting my roll cart?”

Carts, though, are expensive: They cost a city about $45 to $50 each, Harrison says. When you’re buying them for tens of thousands of households, the cost adds up quickly. Cities with carts usually end up spending less per ton on recycling and can save money overall. But switching all of Columbia over, Yager’s department estimates, will take $2 million. Even with the grant from the Recycling Partnership, the city doesn’t have that money to spend; the city’s hoping to partner with a regional or local recycling business to cover the rest of the costs.

“The financial challenge is still there, but having this grant we’re able to start this program right now,” she says. “It’s been the catalyst to change our program.”

That $300,000 catalyst is a significant chunk of financing — last fiscal year, the city’s working budget for recycling was $1.1 million. The Recycling Partnership hopes that its investment will set off an even greater reaction around the region. The theory, essentially, is that cities respond to peer pressure. Columbia wants to be seen as a leader, a modern city, with up-to-date amenities; it needs carts partially because its neighbors have them. The grants serve as demonstration projects, a model for other municipalities to copy, even without extra funding.

The Closed Loop Fund, although it’s a separate effort, with separate funders, and a different strategy, has a similar goal. The fund grew out of a Walmart-run meeting in 2013, and the “aspirational goal” Walmart says, is to divert valuable raw materials from the landfill — and to help retailers and consumers goods manufacturers secure access to more recycled materials. To this end, the Closed Loop Fund is offering loans to cities at extremely favorable terms — some zero interest — and looking to invest in projects like upgrades to carts or materials recovery facilities. (“MRFs,” pronounced to rhyme with “surfs,” are where recyclables are sorted and baled.) Cities are supposed to repay the loans, over about five years, with the money they save.

“EPR is one lever that can be pulled to influence suppliers’, manufacturers’ and municipalities’ approach to recycling,” a Walmart spokesperson told me. But, the company says, the issue is “more systemic” and one approach is not enough to solve. “This is why the Closed Loop Fund loans can provide financial support to a range of projects that help increase recovery,” the Walmart spokesperson said.

The private companies involved in this project (which include not just Walmart, but PepsiCo, Coca-Cola, Procter & Gamble and Unilever) are investing significantly more money — $100 million in total — than the Recycling Partnership has raised.

“What we hope is that when we invest in different types of projects and show they can be successful, that cities do those projects on their own without waiting for our financing,” says Ron Gonen, the project’s director, who, previously, ran New York City’s recycling program.

But even these loans support a variety of projects. Gonen says that they are not going to solve the recycling program problem in the country. They’re one piece of the puzzle.

“I think the first thing is, you have to go to companies and say: Are you willing to come to the table with a solution? If they say yes, then great. If they say no, or just put something for show, then there’s a need for regulation,” he says. “In the case of the companies in the Closed Loop Fund, they’ve stepped up.”

EPR advocates are not so impressed, though, with these voluntary efforts.

“They feel like programs that are designed as perception management — let’s throw some money at this, we want to show policymakers that we’re doing something,” says Matt Prindiville, the associate director of Upstream, a Maine-based nonprofit that’s part of a loose coalition of product stewardship organizations. On his side, Prindiville says, “We don’t want to wait around and see what the grant program or what the loan can do. $100 million is not that much money when you’re talking about billions across the counties to run these recycling programs.”

What his group wants, Prindiville says, is for companies to commit to green design and to reducing the waste they create. To fund pollution mitigation. And to support policies like EPR.

The Life Cycle of Stuff

“Extended producer responsibility” was first proposed at the end of the 1980s by Thomas Lindhqvist, a Swedish environmental policy researcher. The idea was to decrease the environmental impact of consumer products “by making the manufacturer of the product responsible for the entire life cycle of the product and especially for the take-back, recycling and final disposal of the products,” Lindhqvist later wrote.

The goal of EPR isn’t to stick companies with the bill for waste disposal out of anti-corporate spite; it’s to shift the work of dealing with disposable products from governments, who can’t do much to change them for the better, to companies, which can. “Stuff that has no value at the end of its life or that’s toxic — those are design problems,” says Upstream’s Prindiville. “You can’t fix those problems by having local governments say, ‘Hey, how do we deal with these things?’ You have to go to the source and get them to be responsible in designing products with sustainable materials.”

“What we get from producer responsibility legislation is the changing dynamic to where the manufacturers don’t get to offload this piece of the puzzle to municipalities.”

In the United States, there are already dozens of EPR laws in 34 states. They often cover products that are difficult to recycle, like mattresses, paint and mercury thermometers — it’s how most states deal with used-up electronics. In Europe, most countries have EPR laws governing packaging too. Fifteen EU countries require that producers finance all costs of collecting and recycling packaging, a 2012 report from the environmental group As You Sow found; In 10 countries, governments and producers split the costs. In Belgium, which is considered to have one of the more successful EPR programs, 5,900 companies are part of a producer responsibility organization that deals with household packaging; those companies spend about 75 million Euros (about $85 million U.S.) on the program. Belgium’s overall packaging recycling rate is 78 percent.

That’s a very good result: France recycles 56 percent of packaging. Germany clocks in at 70 percent, the Netherlands at 75. Denmark recycles 84 percent of its packaging. In comparison, the U.S. recycles around 48 percent of its packaging.

A few states have started considering the idea of packaging EPR, and around 2011, EPR advocates decided that Rhode Island would be a good place to concentrate their efforts. There are only 38 municipalities, which would limit the variation in local waste management policies. The whole state has only one MRF. It also only has one landfill, and that landfill is running out of space.

Right now, the state’s tipping fees — the amount that waste haulers pay to dump waste into the landfill — are set for municipalities, by statute, at $32 per ton. (For comparison, tipping fees are around $57 in Connecticut and $70 in Maine.)

“That’s a criminally low rate if you want people to throw less stuff way. It still blows my mind,” says Jamie Rhodes, who until last fall was the director of the Rhode Island chapter of Clean Water Action. In about 25 years, when the landfill is forced to close, that all changes. “We’re going to be paying to ship waste out of state or build a $400 million trash-burning incinerator of some sort. These options are not pleasant,” he says.

(AP Photo/Elaine Thompson)

Even starting a conversation about packaging EPR, though, was a fight. A state commission first proposed in the House ended up being run by the Senate. Rhodes heard from allies that some industry groups had quietly pushed House leadership to kill it. Meanwhile, an ally in the House, Rep. Donna Walsh (D-RI) introduced a barebones EPR packaging bill and started organizing a hearing around it. The advocacy community worked with Walsh to draft a more comprehensive piece of legislation that would define the scope of what they wanted: a workable EPR system for paper and packaging that they could swap in for the placeholder bill. No one who opposed the bill showed up to the hearing — but it still died. The legislation that the advocates had worked so hard to draft was never even made public.

Throughout, the EPR advocates felt industry pushing back. They worried that the Grocery Manufacturers Association — members include ConAgra, General Mills and Procter & Gamble — was working against them behind the scenes. Dunkin’ Brands wrote to the Senate commission, for instance, that the company had looked for a “viable alternative” to Styrofoam cups — something recyclable, affordable, more environmentally friendly — but that none existed. The Toy Industry Association and the American Forest and Paper Association both reported lobbying against Rep. Walsh’s bill. The advocates didn’t feel they were getting much support from the League of Cities and Towns either.

“Change in general is difficult for a lot of municipalities,” says Melissa Walsh Innes, the deputy director of Recycling Reinvented, one of the groups pushing for the Rhode Island EPR bill. “Because this is such a change in the financing, it can make people who don’t understand all the details question, how will this impact the city? How will this impact my job? Will we not need as many workers? One of the core pieces that my organization is planning on doing in 2015 is finding out: What do you need to support this?”

In November, Donna Walsh lost her seat in the State House to an Independent, Blake Filippi.

The loss doesn’t mean the issue is dead though. At least not in Providence and other cities. One of Recycling Reinvented’s big goals is to work with mayors around the country to find what it will take for them to back packaging EPR.

Dormody, Providence’s sustainability director, testified in support of EPR before the packaging commission. (She also, not coincidentally, headed up CWA before Rhodes.) Cities shouldn’t be stuck dealing with whatever producers throw at them, she argued.

“I don’t think trash is core to our purpose as a city,” she says. “We need to make sure the trash is collected, and recycling is collected, and our residents are served. That’s what I see as our primary role.”

No matter what the outcome of these efforts, though, the same people will be paying for recycling: all of us. Right now, recycling is bundled into the cost of living in a particular place — we pay for recycling when we pay municipal taxes. With EPR, recycling becomes a part of the price of consumer goods — you pay to dispose of a product when you buy it. The question, really, is who we should pay to help us use less, period. If we don’t pay for that now, we’ll pay later — as raw materials become more dear, as consumer goods become more expensive, or as greenhouse gases we could have saved leak into the atmosphere and heat the planet up. No one wants to pay for recycling. But in the scheme of prices we’ll pay later, it’s relatively cheap.

Our features are made possible with generous support from The Ford Foundation.

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Sarah Laskow is a reporter and editor in New York who writes about the environment, energy, cities, food and much more.

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Tim Pacific is an award-winning graphic design student entering his senior year at Rutgers University in Camden. In addition to his schoolwork, Tim is an active freelance illustrator. His work can be seen in AIGA Philadelphia’s SPACE, which features a recently completed series of hand-lettered postcards. Among his design philosophies, Tim believes strongly that concept comes first and you should absolutely judge a book by its cover design.

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