The world produces millions of tonnes of waste per day — and that number is growing. When China recently stopped importing waste, waste-exporting countries were forced to reconsider their use of natural resources and reduce the amount of waste they produce. It is thus clear that waste poses an enormous challenge, but at the same time it presents an opportunity for countries and cities to realize ambitions regarding recycling and to tap into the valuable business of waste management.

Our observations

  • In 2010, the world generated at least 3.5 million tonnes of solid waste per day, ten times the amount of a century ago, according to World Bank researchers. If nothing changes, that number will grow to 11 million tonnes by the end of the century.
  • Recycling has become big business across the world. According to the Bureau of International Recycling, nearly 600 million tonnes of recyclables, worth an estimated $200 billion, are traded globally. The waste-to-energy and waste-to-commodity markets are also rapidly growing. The world’s largest waste-to-energy company is the Dutch company AEB.
  • The global waste industry has been thrown into turmoil as China stopped importing almost all categories of plastic and paper in the beginning of 2018. This is part of a government campaign against “foreign garbage”. According to the Ministry of Environmental Protection, restricting such imports will protect the environment and improve public health. Imports of recyclable waste are often dirty, poorly sorted or contaminated with hazardous substances such as lead or mercury.
  • Among the biggest sources of waste worldwide is plastic. The world produces over 300 million tonnes of plastic each year. Since the 1950s, 6.3 billion tonnes have been produced, of which only a small fraction is recycled (9%) and incinerated (12%) and the rest is dumped in landfills or the natural environment.
  • E-waste is electronic waste, discarded electronic or electrical devices and equipment. This kind of waste is rapidly increasing as new innovations and changing consumer behavior are reducing the life span of electronic devices. It is estimated that all e-waste worldwide could be worth €55 billion.
  • According to U.N. data, about one-third of the food produced in the world gets thrown away or otherwise wasted. The U.S. wastes by far the most food.

Connecting the dots

In most parts of the world, growing wealth is associated with an increased output of waste. Furthermore, the composition of waste is changing; wealthier countries produce more packaging (plastics), electronic components (e-waste), and food waste. Simultaneously, many resources that are of strategic importance, are becoming scarcer. As we wrote last week, the resources making up the atomic substrate are fundamental to the entire ‘stack’ of our digital modern world. The scarcity of resources like fresh water, useful sand, lithium, cobalt and rare earth materials will increasingly fuel geopolitical struggles, and benefit those that command large shares of these resources or know how to use them in an efficient way. Indeed, especially when commodity prices are high, it is often cheaper to recycle scrap copper, iron and steel, as well as waste paper and plastic, than to make such materials from scratch.
China’s latest move in its war on pollution is urging other countries to rethink their strategy regarding their production of commodities and the loss of resources that is implicit to large production of waste. Because the U.S. used to ship as much as 27 million metric tons of recycled paper to China every year, it is now bracing for the impact of the waste ban China started on March 1. Furthermore, while Europe is seen by many as an environmental leader, carefully using energy and resources, the truth is that much of its green success has relied on exporting its trash to China.
Different approaches to waste and commodities are taking shape. First is the China approach, the ban on waste. Already, the number of countries banning plastic bags is growing. Africa appears to take the plastic bag problem seriously, as more than 15 African countries have either banned or imposed a a tax on them.

A British tax on plastic shopping bags, introduced in 2015, helped cut their use by 85%. More radically, Taiwan has committed itself to banning plastic items (not only bags, but also single-use plastic bags, straws, and cups) by 2030. Second, another approach taken by China is the strategy of nationalizing commodities. The country has nationalized a number of rare earth mines for environmental and strategic reasons. As they still supply other countries with some of the metals, this move is motivated not only by autarky but also by growth strategy. Similarly, countries with high resource dependency, might increase state involvement in the management of critical resources. Third, countries and cities are setting circular agendas. The Netherlands has set ambitious targets: achieving a transition to a fully circular economy, i.e. one in which 100% of resources are reused by 2050 and the use of the resources is already reduced by 50% by 2030. One of the primary ways to achieve this is through recycling more general waste. But it also entails transitioning towards different and more energy efficient resources, e.g. the protein transition. Furthermore, France has also announced plans for a circular economy, including the goal of using 100% recycled plastic by 2025. And the EU has just set new rules on waste management and recycling. Moreover, cities are gaining circular ambitions. New York and San Francisco now have a goal of “zero waste” and want to achieve this by reducing waste and increasing recycling. However, they still have a long way to go. New York is among the cities generating the most waste (33 million tonnes per year). Countries that are successful in combining the three approaches will be most likely to secure their commodities and resources for the future.  

Implications

  • Waste management will increasingly turn to biotech (by using patented microbes to convert waste into energy) and technological advancements to automate the separation of waste, like AI technology capable of sensing and sorting material rapidly to create bales of recyclables and non-recyclables. Furthermore, just-in-time waste management systems will use sensors to detect when bins are nearly full and help to schedule collection.
  • Successful approaches to recycling are becoming more important and valuable. Companies recycling plastics that can compete with new plastics from oil are already proving profitable.