One more depressing data point emerges from the deepening recession. A bad economy, the New York Times reported on Monday, is bad for the economic viability of recycling programs.
Prices are collapsing for all kinds of commodities, so I guess it shouldn't be too surprising that prices are also collapsing for recycled goods. But there is a troubling implication buried inside Matt Richtel and Kate Galbraith's story that is never made explicit. If recycling programs only are profitable during a growing economy, what does that say about the long-term sustainability of growing economies?
The scrap market in general is closely tied to economic conditions because demand for some recyclables tracks closely with markets for new products. Cardboard, for instance, turns into the boxes that package electronics, rubber goes to shoe soles, and metal is made into auto parts.
So the plastic, cardboard and newspapers that you leave out on your curb become valuable only when society is already consuming so much plastic, cardboard and newspapers that the leftover scraps become useful. Which could be one way of saying that only when society over-consumes does garbage become a tradable commodity.
Perhaps that's an overly pessimistic take on the story. But one reason why there was huge demand for scrap metal and certain kinds of paper in recent years was China's hunger for, well, everything. But most people who have taken a close look at China's economy have concluded that the environmental impact of Chinese growth has been devastating, both for China and the world. I find it a bit challenging that out-of-control ecologically destructive economic growth in China is the reason why recycling programs in the United States operated in the black.