Waste Management CEO: Recycling Unprofitable, So ‘People Don’t Invest’
The truth about recycling according to a waste disposal company may come as a shock. It is “unprofitable,” according to Waste Management (WM) CEO David Steiner.
On May 28, Steiner told CNBC’s Squawk Box that recycling had proved to be “unprofitable” and his company has stopped investing in recycling operations. WM revenues were down 10 percent just because of losses from recycling, according to Steiner, even though this only represented a small fraction of the company’s overall business.
“And we all know what happens when it becomes unprofitable: people don't invest,” Steiner said. “And, you know, we generally invest $100,000,000 to $200,000,000 a year in recycling assets. The last two years we haven't invested any.”
Steiner claimed he wasn’t asking the government for a “handout” or “to subsidize recycling” in general, but said subsidies made sense in “situations like you have today where, where it becomes unprofitable to recycle.”
He added that a recent Environmental Protection Agency (EPA) report showed that the recycling rate in America declined from 35 percent to 33 percent and predicted an upcoming EPA report would show further decline.
WM has long struggled to make the recycling process financially viable. In November 2013, Forbes reported that recycling profits had proved “elusive” for the company and Stein told them the company had “lost money in recycling” for a year and a half.”
In addition to being unprofitable, recycling “can be a net waste of the very resources that recycling was implemented to conserve,” according to Duke University professor and economist Michael Munger. “Empirically, recycling is almost always substantially more expensive than disposing in the landfill.”
