Have you ever wondered what happens to all
those newspapers, cans, and cardboard boxes you so diligently recycle? In many cases, it could just be thrown in
the trash along with everything else. In today’s video, we’re going to cover
what some are calling “the end of recycling as we know it”. While that might sound extreme, you’ll soon
realize just how close this $100 billion dollar industry is to collapse. This video is brought to you by Audible. Do you know the difference between what we
recycle and what we throw away? It’s not the materials or composition of
the product. It’s money. If a product can be cleaned and sorted and
sold, it’s deemed recyclable. But what happens to recyclable materials when
no one’s buying it? This is a question countries all over the
world are asking now. To understand where we are now, we have to
first look at what the world of recycling used to look like 15 years ago. In the early 2000s, the Western world is just
starting to come on board with recycling, with people diligently sorting their trash
into different components. After all the TV ads it felt almost criminal
to even toss paper into your trash bin. Now, that trash got collected into Material
Recovery Facilities, where it got sorted, processed, and bundled to be sold to buyers
all over the world. You can probably guess who the biggest buyer
was: China. It was buying recycling materials for its
growing manufacturing base, which was rapidly manifesting its dream of becoming the largest
manufacturing economy in the world. Ever since China was granted entry into the
World Trade Organization in 2001, the vast volume of trade it experienced created an
interesting incentive. China was exporting goods, and empty Chinese
shipping containers were filling up across the docks of the world. Now, rather than send them back empty, it
made sense to send back recycling in those containers back to China. The supply of empty containers was so great
that it was actually cheaper to send recycling from Los Angeles to China than to nearby Arizona. The nature of the Chinese economy made this
arrangement very lucrative. China lacks its own softwood lumber industry,
for example, so they rely heavily on importing recycled paper to fill their paper needs. The newspaper you read and recycle today could
be sold to China, printed, and read by a Chinese person 6 weeks later. Of course, along with paper, China accepted
a slew of other recycled materials like plastic and iron, which they could sort for much cheaper
due to low labour costs. Thus, with China providing a quick and easy
solution for the world’s recycling, the West never felt the need to build recycling
plants in significant numbers. In the case of plastic, for example, China
was accepting 70% of the world’s plastic waste. In 2016, just the US alone was sending over
700,000 tons of plastic to China. But that very same year, a Chinese director
released a documentary called Plastic China. It depicted the life of a young girl living
in a plastic recycling plant, revealing the ugly reality of the Chinese recycling industry. It was received very well overseas and soon
made its way illegally onto the Chinese internet. Beijing quickly banned the film, but the damage
had already been done. The Communist Party now had to repair its
public image, with Xi Jinping pledging to take a stand against these practices. In 2017, they announced to the WTO that they
would be halting the import of waste and 4 different recyclable products, including cotton,
waste paper, and plastics. Now, by this time China had developed a strong
middle class that could generate enough internal waste to recycle without needing to buy and
sort the waste of the world. They called it Operation National Sword, essentially
a movement to develop better internal recycling plants and to care for their own country first,
improving both their environment and public perception. The shock was instantaneous. Almost overnight, the entire plastic and paper
recycling industry was brought to a crippling halt. At its height, MRFs could sell baled plastic
at $300/ton, but with Chinese demand gone the price dropped to less than $40 a ton in
just a few months. China introduced strict regulations on what
they would import, mostly to do with how ‘clean’ the recycling was. They would not accept low-grade waste, and
there are actually rumors that they will stop all imports by 2020. Overnight, a cleaning industry popped up places
like Thailand and Malaysia where they would clean the recyclable materials before passing
it on to China and many millionaires have emerged from these countries as a result of
this entrepreneurial boom. Unfortunately, it wasn’t enough. The Western world just doesn’t have the
infrastructure to handle its own recycling without the aid of China. Up until now it was easier to toss yogurt
lids, wire hangers and newspapers all in the same bin and to leave the sorting to the Chinese
factory workers. Now, the Western world has to come up with
new solutions to handle its recycling in the wake of Operation National Sword. Now, this is a huge market: in the hundreds
of billions of dollars globally, so in the absence of China there’s a big incentive
for other developing countries to step in. Just economics, however, won’t solve this
problem. The easiest answer is that we need to consume
less and countries like Canada are already implementing policies to combat excessive
waste by imposing bans on single-use plastics like plastic bags and straws. This has naturally incentivised manufacturers
to design better packaging that promotes less waste. Thai and Vietnamese grocery stores, for example,
are testing out wrapping materials in banana leaves rather than plastics for a more sustainable
approach. Luckily for the West, better recycling technologies
are being developed. New recycling plants are popping up in countries
like Sweden and the Netherlands that use high-tech optical sorters that are much more efficient
than human labor. Ultimately, even if we believe that new businesses
will emerge to solve the recycling crisis in the West, it’s still better to minimize
the amount of plastic and paper we use and one of the ways you can do that is by starting
to use Audible. Listening to audiobooks is a great way for
you to expand your knowledge and to learn about stories like the ones we cover here
on Business Casual. If you’re curious about the dramatic rise
of China’s manufacturing you should definitely listen to ‘Poorly Made in China’, a fascinating
behind-the-scenes look at the sometimes questionable methods the Chinese used to get ahead. You can listen to it and many other audiobooks
if you start your Audible membership now, when Audible have a special offer for you. Up until the end of July, Amazon Prime members
can get their first three months of Audible for just $4.95 a month, saving a total of
$30. That’s a 66% discount if you register using
the link in the description or text ‘businesscasual’ to 500500. In any case, I hope you enjoyed this video
and I’d like to thank you for watching it. If you wanna see teasers for my future videos
you should follow me on Instagram. You can expect my next video in two weeks,
and until then: stay smart.