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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.

  • DuPont buys $75 million worth of recycled products a year, and plans to increase that to $125 million by 1995.
  • McDonald’s bought $250 million in recycled products in 1993; has doubled its original goals, bought more than $900 million worth in four years. Packaging how averages 45% recycled content, compared with 17% in 1990.
  • Juice producer Veryfine Products, Inc, of Westford, Masschussetts, averages 50% post-consumer content in all its packaging–and saved more than $1 million in avoided landfill costs in 1993.
  • Colin & Aikman Floorcoverings, of Dalton Georgia, has perfected a new process to recycle 100% of its reclaimed floorcovering products into a variety of products, and is developing new floorcovering with 70% recycled content.

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?

  • Make “buying recycled” company policy. Set a goal, develop procurement standards, and decide whether or not you’re willing to pay a premium for recycled content, if necessary. (Note that recycled-content products become increasingly price competitive as the market grows.)
  • Track your results, to provide feedback to purchasing staff, management and shareholders. American Airlines reprogrammed its purchasing mainframe computer system to track pre- and post-consumer recycled content–and did this after already doubling the volume of recycled-content products purchased since 1991.
  • Contact the Buy Recycled Business Alliance for additional information (202-625-6406).

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

  • How will you incorporate “design for recyclability” into your product development process?
  • What new recycled-content feedstocks will you need, to meet consumer preferences?
  • What will be the impact of the recycling economy on extractive industries like timber and mining? How will they have to adapt?

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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