Adam Minter

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Adam Minter

The Diplomat’s Justin McDonnell recently spoke to Minter about the behemoth that is the global recycling industry and the surprisingly symbiotic relationship between China and the U.S.

Adam Minter
Adam Minter

Junkyard Planet: Travels in the Billion-Dollar Trash Trade

Credit: Bloomsbury Publishing

Adam Minter is an American writer and Shanghai correspondent for Bloomberg World View. He has covered the global recycling industry for more than a decade. His first book,  Junkyard Planet: Travels in the Billion-Dollar Trash Trade is an “insider’s account of the hidden world of globalized recycling, from the U.S. to China and points in between.”

Your new book is called Junkyard Planet. Can you explain to our readers the premise of your book?

The global waste, recycling, and refurbishment industry is the hidden, multi-billion dollar backstory to the familiar globalization tale told by Tom Friedman and other popularizers of the modern economy. China, the premier globalized manufacturer in those tales, is the premier globalized recycler in mine. Indeed, for thirty years the Chinese industrial machine has been fueled, in part, by raw materials imported as recyclables from the U.S., Europe, Japan and other developing countries. In Guangdong Province, for example, well over half of the copper used in products ranging from power cords to decorative roofing was originally imported and then extracted from scrap metal. Cut off China’s access to that metal and you sever a hidden but critically important artery that keeps global commerce beating. No scrap, no iPhones.

Nonetheless, it’s a difficult story to tell, in part because most people come to the global recycling industry with preconceived ideas about waste “dumping,” exploitation of labor and pollution. But the simple fact is that no rational person will load a shipping container with garbage in Indiana, say, and ship it off to China. On an economic basis, it just wouldn’t make sense: after all, the U.S. has some of the cheapest landfilling and incineration rates in the world. Rather, the only reason anybody would ship unwanted waste of any kind to China or elsewhere is because somebody else knows how to make money from it, and is willing pay the shipping costs to do so.

How does China play a central role in America’s garbage exports?

To be clear: the U.S. doesn’t export garbage to China. With some of the cheapest landfill prices in the world, that wouldn’t make any economic sense whatsoever. Rather, what the U.S. exports to China are recyclables that aren’t being recycled at home. Currently, the U.S. exports around 40 percent of the recyclable materials that it generates. This includes vast amounts of newsprint and cardboard, metals, and plastics. The primary reason that this material goes overseas is that the United States simply generates more recyclable waste than it can manufacture into new products. Despite the ongoing decline of American manufacturing, this is an old story: the U.S. has been exporting scrap to the world dating back to the early 20th century.

Today, scrap recyclables are the biggest volume export from the U.S. to China. In short, the U.S. has a lot of recyclables it doesn’t need, and China needs recyclables. It’s the perfect match between supplier and customers.

Yet this isn’t just a story of supply and demand; it’s also a story about shipping. Currently, China exports much more in the way of goods to the U.S. than the U.S. returns to China. As a result, American ports are filled with empty containers awaiting cargoes to ship back to China so that the containers can then be shipped back to the U.S.. As a result, it’s possible to ship a 40-foot container of scrap from Los Angeles to China for around $300. Meanwhile, it’ll cost eight times that amount to ship the same container by rail or truck from Los Angeles to Chicago. That’s a huge differential which creates an incentive for China to import American recyclables. It’s worth noting, too, that a similar dynamic exists between Europe and China, and any other developed country that has a trade imbalance with the Chinese.

Where else are we seeing this take place?

Rapidly developing countries tend to be scrap importers for the simple reason that “mining” scrap metal or paper for raw materials is much cheaper than digging mines or clear-cutting forests. Thus, on a much smaller-scale, we see countries across developing Asia – many of which are following the Chinese development model – turning into net scrap importers. At the same time, developing countries in South America and Africa, few of which have matched developing Asia’s growth rates (or its manufacturing base), remain scrap exporters – often to Asia.

The wildcard in all of this is India. Certainly it has the population and potential to become a scrap importing rival to China. But the slow growth of its manufacturing sector, as well as difficult import/export environment, has it lagging well behind where it should be.

During the research process for your book, what are some of the products you came across that people have been able to create from trash?

Again, I haven’t seen anything made from trash per se, but I have seen lots and lots of products made from recyclable materials. It’s not just the “made from 10% post-consumer waste greeting card” that’s a recyclable product anymore. Rather, it’s everything from the engine block in your car (made from recycled aluminum), to the carpet upon which you walk (made from recycled water bottles), to the books that you read (made from recycled boxes) that are made from recyclable materials. Most people don’t realize it, but it’s getting harder and harder not to find at least some recyclable content in any kind of complex product – whether it’s a car, phone, or even the drum set in your kids’ bedroom.

Why are we seeing these business ventures in the developing world but not anywhere in the West?

Actually, the recycling business is thriving in the West. The American automobile industry, for example, buys vast amounts of recycled aluminum for use in cars – and that aluminum is collected and recycled in the United States. American papermakers rely on old newspapers and cardboard to make new paper. Nonetheless, as I noted earlier, Americans generate scrap recyclables far in excess of what they can use, and they’ve been doing so for more than a century. What happens, generally, is that recyclables requiring the most effort to turn into raw materials tend to flow overseas, and the less labor intensive materials remain at home. For that to change, American manufacturing – and European manufacturing – will need to enjoy a resurgence that requires the use of those currently unwanted raw materials. It’s not a recycling or environmental problem; it’s a manufacturing problem.

What do you hope readers will take away from Junkyard Planet?

The most important takeaway is that the recycling industry is much more than a niche green industry responsible for a few feel-good products. Rather, it’s a global behemoth that’s been around since the dawn of the Industrial Revolution, and its role in the global economy – and everyone’s life – is only growing. Arguably, if you include the millions of individuals across the developing world who self-employ as scrap peddlers, the scrap industry is the world’s second largest employer, after agriculture. Meanwhile, a spring 2013 Bank of America-Merril Lynch report estimated that the global recycling industry is a $1 trillion industry (that’s double the estimate in my book), and could double within the next decade. In other words: anyone who claims to know something about globalization, but doesn’t know something about the recycling industry, really doesn’t know globalization.