How The Unprofitability Of Recycling Affects Everyone

Recycling is not profitable anymore and that's creating a problem not only for companies engaged in that business, but for consumers as well.

David Steiner, Waste Management, Inc. WM CEO, was on CNBC Thursday to explain the economics behind recycling and how recycling can make a comeback.

Making Recycling Profitable

"We are not asking for a handout. We are not asking to subsidize recycling other than when you have situations like you have today, where it becomes unprofitable to recycle," Steiner said. "And we all know what happens when it becomes unprofitable: people don't invest, and we generally invest $100–$200 million a year in recycling assets. The last two years we haven't invested any. And so, we have got to get to a situation where anyone that recycles, not just Waste Management, that anyone can do it."

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He continued, "So, when you look at the last EPA (U.S. Environmental Protection Agency) report, what you saw was recycling actually went down in the United States from about 35 percent to about 33 percent. There's a new report coming out this year. I expect to see it go down once again.

"So, I think as a country we need to make a decision, right? We need to say, ‘Do we need to recycle?’ and if we can, let's make it viable for the long term rather than seeing these various fluctuations that we see."

Sharing Costs

On whether the company has plans to drop recycling entirely out of its portfolio, Steiner said, "It revolves around the customer and the customer still wants recycling and nowhere in this country do you have a customer that says, ‘We don't want to recycle.’

"We just need to work out— okay, if you want to recycle now, how are we going to share the costs of recycling?" Steiner concluded.