Episode 613: Trash! : Planet Money There's an economic line that separates recyclables from trash. And that line has been moving a lot lately.

Episode 613: Trash!

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STACEY VANEK SMITH, BYLINE: A little while back, engineers at MIT built these really small electronic tracking devices.

CARLO RATTI: The way it looks is almost like a little tag. Imagine just the one inch by half an inch and very, very thin.

DAVID KESTENBAUM, BYLINE: This is Carlo Ratti, who ran the project. They wanted to track something that is all around us but that is otherwise pretty invisible.

RATTI: Trash. Yes, trash. Garbage.

VANEK SMITH: They did this in Seattle and they asked residents to bring in a piece of trash. And people did.

RATTI: Anything from an old cell phone to fluorescent lights to banana peels.

KESTENBAUM: (Laughter) You put a tracker on a banana peel?

RATTI: Of course.

KESTENBAUM: People brought all kinds of stuff.

RATTI: Somebody came to us with a teddy bear, you know, and she told us that it was a teddy bear she's been having all of her life. But actually now she had to throw it away, her boyfriend was telling her. So - but she wanted to know where the teddy bear would end up, so she came in. We put a little tag on the teddy bear.

KESTENBAUM: I think you throw out the boyfriend, not the teddy bear in that situation, but anyway.

VANEK SMITH: I am a thousand percent with you.

KESTENBAUM: They threw all this stuff out and they watched where it went. A lot of the trash ended up getting recycled. And it made these surprisingly long trips like across the country. Sometimes you could see an item go dot, dot, dot, dot, dot - to a port - dot, dot, dot, dot, dot - out to sea.

RATTI: You know, it was amazing to see how many thousands of miles some things traveled.

VANEK SMITH: I've been looking into the recycling business and it's amazing. A lot of our plastic gets shipped to China, where it gets turned into toothbrushes and carpet and fleece jackets.

KESTENBAUM: Which then gets sold back to us.

VANEK SMITH: And a lot of our shredded documents get sent to Mexico where they're turned into paper towels and tissue papers.

KESTENBAUM: And toilet paper.

VANEK SMITH: I love that our shredded documents get turned into toilet paper.

KESTENBAUM: So some of the stuff this MIT project tracked got recycled, but other stuff got thrown out. Those items didn't go so far, a lot of them ended up on the short trip to a landfill.

What is recyclable and what is trash? Turns out there is an economic line between the two. It's a line that can move around a lot.

VANEK SMITH: One day it's profitable to recycle a bottle, and the next day some global economic number changes and that same bottle is trash. Hello, and welcome to PLANET MONEY. I'm Stacey Vanek Smith.

KESTENBAUM: And I'm David Kestenbaum. That line between trash and recycling is moving around a lot these days for a bunch of totally crazy reasons. It's a really tough time to be a recycler.


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VANEK SMITH: Every Thursday I do what a lot of people probably do. I haul a blue bin of my recycling out to the street to be taken away.

KESTENBAUM: What's in your bin?

VANEK SMITH: Oh, newspapers and yogurt containers and soda bottles. Things like that.

KESTENBAUM: Like New York Daily News and full fat yogurt?

VANEK SMITH: More like Wall Street Journal and the no fat yogurt.

KESTENBAUM: So for this story, you got to see where it actually went.

VANEK SMITH: I followed my yogurt container and Wall Street Journal to see who picks it up, where it goes, and the business behind it. It goes to another part of Brooklyn. So a producer here, Phia Bennin and I, went to check it out. And we had to go under a very shady looking highway overpass and through this abandoned warehouse district area.

It's a cold day. We're walking up to a guard booth. It's kind of intense security. The river is totally frozen. You can see of IKEA.

PHIA BENNIN, BYLINE: Look over there.

VANEK SMITH: Oh my gosh, cranes. Bales of garbage. We're definitely here. This kind of looks like where you would dump a body.

BENNIN: Stacey, what's your plan?


VANEK SMITH: A man comes toward us. He's tall. He has red hair. He sort of looks like he just walked out of an L.L. Bean catalog. His name is Tom Outerbridge.


VANEK SMITH: Hi, are you Tom?


VANEK SMITH: Is this your dog?

OUTERBRIDGE: That is my dog.

KESTENBAUM: Stacey, you love dogs.

VANEK SMITH: It's true. I do have a soft spot.

Tom runs this place and it's one of many operated by a company called Sims Recycling Solutions. And every hour, this one place processes 14,000 pounds of yogurt containers and Pepsi cans and Wall Street Journals. And I found this weirdly exciting.

My garbage comes here - or my recycling, sorry.

OUTERBRIDGE: Yeah, your...

VANEK SMITH: Is that bad to call it garbage?

OUTERBRIDGE: Yeah. Well, we don't call it garbage because we're not really in the garbage business. I mean it's - that people make that mistake all the time.



KESTENBAUM: So awkward.

VANEK SMITH: I know, it was. Tom, you can kind of tell, David, is sort of a quiet guy. He kept turning away from my microphone. And he got into recycling because he wanted to do something to help the environment. But he's the first person to tell me that recycling is a business.

KESTENBAUM: It's actually a huge business. What did you say? It's like hundreds of billions or something.

VANEK SMITH: Yeah, it's $100 billion. Yeah.

KESTENBAUM: So you have to think about this as a business to understand the problems the recycling businesses is having, right. For it to make sense for him to recycle something, he has to be able to make a profit at it. If he can, then that thing is recyclable. If he can't, then its trash. Trash and recycling, those are really economic ideas.

VANEK SMITH: Yeah, I mean, this place, it costs a lot to run. Tom shows me around. He takes me to this enormous machine called the liberator.

KESTENBAUM: 'Cause it liberates the various valuable pieces of recycling?

VANEK SMITH: Exactly. There are just conveyer belts everywhere going in every direction. They're going in and out of these electronic sorting machines. It's sort of like "Willy Wonka And The Chocolate Factory" except for garbage.

KESTENBAUM: Not garbage - recycling.

VANEK SMITH: Oh, right. Yes.

OUTERBRIDGE: So this is just the beginning of the sorting system here. We use magnets to pull out metal. We use the ballistic separators to separate paper and plastic bags from bottles.

VANEK SMITH: Tom tells me what is trash and what's recycling has been changing a lot lately. He shows me this one thing that's right on the border between trash and recyclables - it's plastic bags. There's a conveyor belt right in front of us full of plastic bags. It's just a river of them.

And then we've got like bubble wrap and a Target bag and a Dunkin' Donuts bag.

Plastic bags can be a valuable commodity. Tom could sell them to clients in Asia and they would use them to make toothbrushes and carpet and coffeemakers and things like that. But recently, plastic bags have not been selling very well. Tom can't get a good price for them.

OUTERBRIDGE: Plastic prices - they're off almost 50 percent in the past six months.

VANEK SMITH: Whoa. That's a lot.

OUTERBRIDGE: No, it's huge.

KESTENBAUM: The reason for this, Stacey, I would not have guessed it.

OUTERBRIDGE: In the plastics business, it is primarily I would say due to the drop in oil prices.

KESTENBAUM: Oil. So oil seems like something maybe totally unrelated, but of course, plastic bags are a petroleum product. They're made from oil. So if oil gets cheap, that means it's cheap to make fresh plastic. So if you're in the business of making toothbrushes, it's cheaper to buy freshly made plastic than it is to buy recycled plastic - at least recycled plastic from plastic bags.

VANEK SMITH: Yeah. This is especially true for plastic bags because they need a lot of processing before you can use the plastic in them. They have to be washed, sometimes many times. And they also tend to get stuck in machine gears and gum up the works. So it costs a lot of money to recycle a plastic bag.

KESTENBAUM: The largest recycler in the country, a company called Waste Management, recently gave up on recycling plastic bags altogether. They just couldn't make money on it. Tom in Brooklyn says he is still trying to make it work, but it's tough.

OUTERBRIDGE: This is really sort of the bottom of the barrel in terms of the plastics market. The value of it is relatively low, which means we can't afford to put a lot of time and money into trying to recycle it.

VANEK SMITH: And so then what happens to the plastic bags if you can't sell them?

OUTERBRIDGE: We will certainly - you can get to the point where these are going to the landfill. I mean, these are sort of borderline.

VANEK SMITH: Tom says he's not having any trouble selling higher-quality plastic, things like detergent bottles and soda bottles. But the price for those has dropped in half too.

KESTENBAUM: All right, so that's the misery on the plastic side of things. There's also great unhappiness in this other part of the recycling business that is actually a huge part of the market. It accounts for something like 90 percent of our recycled exports - paper.

VANEK SMITH: Tom takes me to another part of the processing plant. And there are pizza boxes and office paper and cereal boxes here.

OUTERBRIDGE: This is your milk cartons.


OUTERBRIDGE: And milk and juice cartons.

VANEK SMITH: Is this high-quality or low-quality?

OUTERBRIDGE: This is actually very high-quality, surprisingly. You wouldn't know it necessarily. But this we sell to paper mills.

BILL MOORE: We're the Saudi Arabia of recovered paper.

VANEK SMITH: (Laughter). That is Bill Moore. He runs a consulting firm that advises recycling companies. And to understand the paper problem, you need to know one key thing - most of our used paper gets sold to one place, one very big place.

MOORE: China is the 800 pound gorilla when it comes to using recovered paper there. They don't have many trees - softwood trees - so they - all their capacity to make boxes and newspapers, all 100 percent recycled fiber.

VANEK SMITH: In normal times, this is a very happy relationship.

MOORE: The newspaper that you read, if you still read a hard copy newspaper, which most people do.

VANEK SMITH: I do, I do.

MOORE: If you put that in your recycling bin, six weeks later someone in China could read their newspaper on the same fiber.

KESTENBAUM: The problem is that recently China has not been buying as much of our paper. They've been getting a lot of it from Europe instead. And the reason is the most boring thing you can imagine - international currency fluctuations. Basically, the dollar has been getting stronger, the euro has been getting weaker. Which means U.S. recycled paper is more expensive than European recycled paper if you're China looking out there deciding where to buy from.

VANEK SMITH: Tom Outerbridge in Brooklyn told me he's been on the phone a lot lately with clients in China cutting all these deals that he does not want to cut. In good days, a ton of paper sells for about $150. And these days, Tom says, it's selling for less than half that, like $50 or $60 for a ton. And buyers are literally nickeling-and-diming him on this. Like can you sell it for 10 cents less? Can you sell it for five cents less?

OUTERBRIDGE: Five - ten cents can make a difference. You're negotiating around a penny or a half-penny a pound. That's really where you're negotiating.

KESTENBAUM: To make things worse for Tom, China has also recently started recycling a lot of its own trash. So that means they don't need as much American office paper and milk cartons so much anymore. Add all this up and it's a hard time to be recycler.

VANEK SMITH: David Steiner is the CEO of Waste Management. It's the largest recycling company in the country.

DAVID STEINER: I don't think crisis is too strong of a word to say that you're seeing a crisis in the recycling industry throughout the United States.

VANEK SMITH: So you're seeing recycling companies - smaller recycling companies go out of business?

STEINER: Left and right. They really are.

VANEK SMITH: Recycling exports have actually started to drop a little bit - plastic a few percent in the last few months, paper a little less than that. But Steiner thinks this could continue as prices drop and private companies stop being able to make money recycling.

KESTENBAUM: Some states like California have policies that mandate recycling. Steiner says in those cases, the extra costs are going to fall on taxpayers.

VANEK SMITH: But other places are just recycling less stuff. Harrisburg, Pa. and Kansas City have stopped recycling glass. Lots of places have given up on plastic bags. Waste Management is shutting down some of its less profitable plants.

KESTENBAUM: Tom Outerbridge, the guy who recycles your yogurt containers and newspapers says the recycling businesses has always had its good years and it's bad years. This just feels like a particularly bad stretch. His profit margins are getting thinner and thinner. And he doesn't want to send stuff to landfills.

VANEK SMITH: Has that ever happened before?

OUTERBRIDGE: Oh, sure. I mean, that's our worst-case scenario from - environmentally and also for the business.

VANEK SMITH: Tom does not want to give up, not even on plastic bags. He's hired someone called a picker to stand at the plastic bag conveyor belt and pull out contaminants and bad plastic bags so only the good ones get through so he can sell them for a higher price. The hope is that he can use this to move the line a little bit between trash and recycling.

KESTENBAUM: It would be so much easier if the price of oil just went up a bit.

VANEK SMITH: I don't know if that's an easier way, but as you know, Tom has no control over global oil prices.

KESTENBAUM: We'd love to hear what you think. You can send us an email, planetmoney@npr.org. Now that you've finished this podcast, if you're looking for something else, NPR recommends checking out Snap Judgment with Glynn Washington. There's a lot of great stuff, all kinds of crazy stories. You can find it on iTunes under podcast. Our show today was produced by this Nadia Wilson (ph).

VANEK SMITH: I'm Stacey Vanek Smith.

KESTENBAUM: And I'm David Kestenbaum. Thanks for listening.


CAKE: (Singing) At first I was afraid, I was petrified. I kept thinking I could...

KESTENBAUM: Stacey, you want to do the public service announcement?

VANEK SMITH: Oh, yes. You can't recycle bowling balls. Apparently in Brooklyn, a lot of people try. Tom has to pick them out. He keeps them in his office. He has a whole collection of them.


CAKE: (Singing) Oh now go, walk out the door. Just turn around now, you're not welcome anymore. Weren't you the one who tried to break me with desire? Did you think I'd crumble? Did you think I'd lay down and die? Oh not I. I will survive. Yeah as long as I know how to love I know I'll be alive.

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