This California city asked where its recycling went. The answer wasn’t pretty.

But investigators still struggle to track suspicious shipments, said Ioana Cotutiu, a project coordinator with the United Nations Office on Drugs and Crime who works on the trade in illegal waste.

“Very often there are a lot of intermediaries and we’re losing track of the waste,” she said in a webinar this year. “Once it reaches the destination country, we don’t know what happens after.”

The global recycling trade dates back at least 30 years, enabling rich countries like the U.S. to keep the cost of recycling lower for consumers by outsourcing some of it to developing countries.

In recent years the global plastic trade has shrunk amid new controls by rich and developing countries alike. U.S. plastic waste exports to Asia fell to 330 million pounds in 2021, according to government data, half their 2017 level.

But even these reduced volumes, environmental groups charge, can overwhelm developing countries that lack the facilities to manage them. Asia is a key danger zone: According to a World Bank estimate, only about 9% of waste in the East Asia and Pacific region gets recycled.

The balance goes to landfills and incinerators or into nature, with local and global consequences. 

“Some in Laos see the imported waste as an opportunity,” said Serge Doussant, head of Green Vientiane, an advocacy group in the Laotian capital. “But Laos doesn’t have the necessary factories to treat the amount of plastic waste coming from wealthy countries.” 

At one informal dump site in Vientiane, discarded water bottles, shredded plastic bags and shards of styrofoam were strewn across a 50-foot stretch of the bank of the Mekong River.

According to the World Bank, this is one of 149 known informal dump sites in Laos. Such sites can leach plastics into the 2,500-mile Mekong and — as it travels downriver through several other countries — into the sea. Research suggests countries in Southeast Asia rank among the top global sources of ocean plastic.

That issue came into focus in 2017, when China, which had long absorbed about half of plastic scrap traded worldwide, effectively banned all imports.

Imports to Southeast Asia surged the following year: more than tripling in Malaysia, doubling in Vietnam and growing nearly tenfold in Thailand, according to a report last year by the Global Initiative Against Transnational Organized Crime.

The reception was mixed. In China’s exit, business and political elites in other countries saw opportunities to establish a new “green” industry in plastics recycling.

But environmental campaigners have also documented disastrous side effects: mountains of abandoned trash set aflame, dozens of bootleg recycling operations, and evidence of toxins in local soil and food.

Pursuing transparency — and hitting a wall

The headlines out of Southeast Asia stirred consciences in Palo Alto.

Concerned residents asked the city to require their trash hauler, GreenWaste, to annually report how and where their recycling was handled.

The city agreed, and GreenWaste complied. But as GreenWaste’s reports show, it could not establish full traceability.

A key reason, Palo Alto officials said, is that GreenWaste conducts some recycling through middlemen called brokers.

Brokers do not recycle goods, but instead buy and sell them like commodities. Industry participants say they play an important role in linking waste collectors, like GreenWaste, with recycling factories around the world.

But when GreenWaste asked its brokers to specify where and with whom they did business, they balked.

Revealing those relationships would show competitors his company’s cost structure “and how to compete against us,” said William Winchester, chief operations officer for Los Angeles-based Berg Mill, one of the companies that buys materials from GreenWaste.

“I understand their desire for transparency. But let me frame it differently. Should KFC reveal their original chicken recipe? Should Ben & Jerry’s tell us the secret sauce of how they make their ice cream?” he said. “It’s not a cover-up. It’s about protecting our relationships and how we get things done.”

Reshoring recycling

Palo Alto officials said they’ve taken two lessons from this saga.

First, they want to recycle more in the U.S. In May, city staff asked to divert some of Palo Alto’s waste streams to facilities in Louisiana and Southern California. The move would bump the city’s domestic recycling rate to about 60%, they said.

If made permanent, staff said, the change could increase the average citizen’s recycling bill by about $33 a year.

The second lesson, City Manager Ed Shikada said, is that Palo Alto can’t transform the global recycling system alone.

In March the city began talks with other interested California cities to discuss possible reforms at the local or state levels.

The group includes San Jose, the largest city in the San Francisco Bay Area, and about a dozen other Northern California municipalities.

Shikada said they might seek to expand recycling capacity in California, for instance, or ask lawmakers to impose new transparency requirements on companies that export recyclable goods.

Winchester, of Berg Mill, said he attended a recent meeting but came away disappointed.

He said it felt like a missed opportunity to finally grapple with the “big societal questions” — the trade-offs — that come with recycling.

One question he thinks about: Shouldn’t developing countries get to decide, for themselves, how to balance environmental goals with economic gains — as China and the U.S. once did?

“If we want to say no waste gets exported, and it all has to get done here, not a bad concept, it’s just going to raise the cost a lot,” he said. “It goes back to what do we want as citizens? What do we really care about that we’re really ready to participate in with our money and time?”

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