New Bottom Line Volume 3.19 – The Recycling Economy: Just the Tip of the Iceberg

October 4, 1994

This column has frequently observed that our economy and industrial processes parallel the functioning of natural ecosystems.

Our “recycling economy” in many ways parallels the “detritivore economy” in natural systems. Detritivore is the fancy name for decomposers–the myriad organisms that consume dead plant and animal matter, break it down into constituent parts that become food for another organism. Nature operates in an endless cycle of “no-waste;” one organism’s waste is another organism’s food. The detritivores keep that cycle cycling.

The detritivore economy is invisible to most of us, yet it represents more than half of the living biomass. The living plants and animals that we see are just the tip of the iceberg. Most of the action takes place behind the scenes.

That suggests that–as we learn to model our economic and industrial systems on the three and a half billion years of R&D represented by natural systems (or as our economic and industrial systems adjust to the realities of the physical and biological world)–our recycling economy will grow substantially in coming years.

(By the “recycling economy” I mean not just the act of recycling and collection–the part that gets the most attention from consumers, media and Wall Street–but the “back end”: the remanufacturing of recycled materials into “recycled-content” products. As the recycling advocates have been telling us for a long time, “if you’re not buying recycled, you’re not recycling.”)

This is significant for businesses in widely diverse industries, in both environmental and economic terms. Several examples are highlited in the recently released 1994 report of Buy Recycled Business Alliance, a joint effort of the National Recycling Coalition and 800 large and small companies.

According to The Recycling Magnet the recycling rate for major home appliances has risen from 32% to 62% since 1990, and old cars are being recycled at a 94% rate, recycling enough steel to produce nearly 12 million new cars annually. More than 90% of construction & demolition waste in Chicago and Atlanta is now recycled, according to Neil Seldman of the Institute for Local Self-Reliance. All this recycling only happens if there’s a market for the recycled materials–and increasingly, there is.

Why are all these companies buying recycled? For the usual combination of reasons: to save money, to meet consumer expectations, to do the right thing.

Buying recycled has been difficult in the past. Product availability was limited, prices were often high. But in a process that feeds itself, greater demand has fueled greater supply and reduced relative prices, which have in turned fueled greater demand. This trend will be accelerated by the recent Executive Order mandating 20 percent “post-consumer waste” in US government paper purchases in 1995, rising to 30 percent in five years; many state and local jurisdictions have similar purchasing mandates.

What can your company do?

Beyond purchasing policies, think about strategic opportunities and implications that the Recycling Economy presents to your business and others. For example:

One possible bump in the road, however, is the GATT–the Global Agreement on Tariffs and Trade–facing US Congressional consideration as I write. Critics charge that GATT restrictions (like those of its sister, NAFTA) could knock out national and local environmental standards as “restraints of trade.” Supporters assure us that couldn’t happen (though one doubts that any of them have actually _read_ the 26,000 page document, and though Congress cut the environmental funding that was supposed to go along with NAFTA by 40%). It remains to be seen whether GATT has a crippling effect on this emerging economic sector, and the jobs and environmental benefit it represents.

(c) 1994 Gil Friend. All rights reserved.

New Bottom Line is published periodically by Natural Logic, offering decision support software and strategic consulting that help companies and communities prosper by embedding the laws of nature at the heart of enterprise.

Gil Friend, systems ecologist and business strategist, is President and CEO of Natural Logic, Inc.

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