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Symposium 2014

Solution for Adventures in Waste and Recycling – Creating Value

The Challenge

Trying to put a value on the global waste market is difficult, but looking at one country can help to give a sense of scale: in India alone, waste is a two billion US dollars industry. The percentage ...

Trying to put a value on the global waste market is difficult, but looking at one country can help to give a sense of scale: in India alone, waste is a two billion US dollars industry. The percentage of waste recycled varies wildly from country to country and from region to region. The ability to recycle waste depends at the very least on political will, municipal financial ability, societal awareness, and the established infrastructure to support those efforts.

Creating a centrally-administered waste management system

It is time for a fundamental shift in how nations address waste. Environmental concerns and the concept of Extended Producer Responsibility (EPR) are ill-equipped to address the waste problem unless we acknowledge that waste represents resource consumption that the world can increasingly ill afford. Clearly, if we stop creating waste and recycle it instead, we solve the environmental problem along the way.

EPR attempts to compel producers to pay attention to the postconsumer life of their products. It requires them to incur costs facilitating recycling, but leaves it to the producers to determine those costs. Consequently, producers with a social conscience will do more than others, but consumers are frequently not willing to pay higher prices for environmental concern. We thus need a way to coordinate financial, logistical and process resources to make recycling not only desirable, but profitable.

One solution to this problem is to design a centrally-administered waste management system. This should include a waste management fee that producers pay in proportion to the quantity and nature of the materials used in their products and packaging. The fee would be based on the average cost of collecting and recycling the ultimate waste resulting from their products. Charging a fee in this way achieves two goals: it provides financial incentives for producers both to minimize the quantity of waste, and to design their products for ease of recycling. The fees are paid to an independent nonprofit organization to fund the collection, sorting and aggregation of waste to feed into the recycling industry. In addition, legislation is required to ensure that all producers pay, thus removing competitive distortions, and to give the administrative organization the power to ensure supply of material to recyclers. A well-designed waste stream management plan will also engineer matters to provide incentives to people and businesses to “do the right thing.” There must be positive financial incentives to reward behavior that either reduces waste or promotes recycling.

The implementation of such a waste management stream with legislated support can also be directed towards goals broader than mere economic efficiency. An example is the waste tyre management plan in South Africa: while the spending related to the plan is under strict independent financial oversight, its performance is less measured in monetary terms than in terms of the government’s socioeconomic objectives of job and small business creation, as well as the overall carbon footprint impact. In addition, the anticipated impact on the recycling industry is immense: the cost of collection and primary sorting is covered by the waste management fees, and the managing organization ensures a reliable supply of raw materials at a stable price, which could be negative (i.e., a gate fee) if the particular waste stream requires it. Perhaps of greatest interest to the recycling industry is that the activities of the administrative organization are entirely noncompetitive to existing recyclers, serving only to improve their profitability and open new business opportunities for them.

Hermann Erdmann, CEO, REDISA NPC, South Africa

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