This video was made possible by Hover. Professionalize your web presence with a custom
email address for 10% off at hover.com/Wendover. This is the two-page document that changed
the world. Itâs whatâs referred to as a âNotification
to the World Trade Organization Committee on Technical Barriers to Tradeââa type
of document that, to anyone in the know, is thoroughly mundane. In fact, every few hours, another such notification
enters the WTO systemâeach signifying that yet another country wants to make yet another
change to its rules regarding the import or export of goods or services. This particular notification, though, submitted
on July 18th, 2017, managed to send the entire global recycling industry into a tailspin,
or possibly even⌠a death spiral. Put simply, this document broke the worldâs
recycling system. But hereâs how it worked before this document:
letâs say a woman in Littleton, Colorado has yogurt for breakfast. The yogurt is packaged in a thin polypropylene
plastic container and so, once finished, she disposes of it into her recycling bin. This is then picked up by a recycling truck
a few days later, and brought here to the local recycling companyâs materials recovery
facility. There, this yogurt container, along with all
the rest of the single-stream recycling picked up that day, is dumped out and placed into
the semi-automated sorting system. Some products are simple to isolateâmost
metals, for example, can be picked up by magnets, while paper and cardboard can be easily sorted
by density, as theyâre typically lighter than other recyclables. Glass, plastics, and non-magnetic metals are
a little more difficult to sort, but each looks quite distinct so optical scanners operate
blowers or other diversion tools that are able to sort these out. With a few more steps, the facility is more-or-less
left with just plastic, but thatâs where things get difficult. Plastic come in all sorts of shapes, sizes,
and types, and different shapes, sizes, or types of plastic are recycled in different
ways. Optical sensors start out by at least accomplishing
a high-level sort, though. For example, in many US states, plastic bottles
are sold with a 5 or 10 cent deposit, meaning that recycling companies put a lot of effort
into recovering those from the mix as they can be sold for, at least relative to other
plastics, a lot. They also put a lot of work into recovering
certain plastic types, such as high density polyethylene, as this both sells for more
and is easier to sort out of the mix since itâs typically used to make larger items
like plastic crates, shampoo bottles, and other products where sturdiness matters. The polyethylene and other higher-value plastics
are quite accurately sorted and then melted down into bulk raw plastic which is re-sold
to manufacturers. Certain other plastics, though, have a negative
valueâthey canât be sold and, in fact, it would take so much work to turn them into
usable raw material that recycling companies would have to pay someone to take it off their
hands. Typically falling into this category are smaller
items like bottle caps, plastic bags, and other scraps below three inches or eight centimeters
in width that just canât be easily sorted by automated systems. These are then aggregated together and, at
best, used to generate energy through incineration or, at worst, are just sent to a landfill. So, to summarize, thereâs high value-plastic
thatâs recovered immediately, negative-value plastic that is either incinerated or sent
to a landfill, but then thereâs a third category in between those two, and thatâs
where things get interesting. Anything that isnât small and unrecoverable
or large and valuable is typically mixed together and formed into big bales of unsorted, medium-size,
medium-value plastic that effectively have a neutral value on the free market. The raw materials in these bales, known as
MRF Residuals, is not quite valuable enough to pay for the sorting process they would
need for recycling, which leads to their neutral value, at least in the US. After it takes its trip through the Materials
Recovery Facility, that yogurt container from Littleton, Colorado would, if properly sorted,
end up in one of these MRF Residuals Bales. These are then loaded into the back of a semi-truck
driven 1,000 miles to the Port of Long Beach, California. There, the bales are officially exported from
the US, loaded into a shipping container, and placed on an enormous, yet empty, Hong
Kong bound cargo ship. Now, with this knowledge, some might ask a
question: how on earth did we end up with this system, theoretically designed to reduce
our impact on the world, where our waste is shipped across the world? To that, thereâs actually a surprisingly
specific answer. Decades ago, in 1969, the first national Conference
on Packaging Waste convened, and in that room were a number of plastics-industry executives. Throughout the event, they heard municipal
leaders from around the country express their concern about just how permanent plastic was. Back then, the material was becoming cheaper
and cheaper, and was quickly gaining prominence in the packaging world, but this mounting
concern among municipal leaders itself led to mounting concern among plastics executives. They came to believe that this plastic hesitancy
would quickly became an existential threat for the industryâs growth, so plastics knew
they needed a solution. They needed a way to make plastic sustainable. The problem: there wasnât one. So, backup option: rather than creating a
real solution, they willfully and knowingly created and propagated a system that didnât
work, but looked like a solutionârecycling. From a technical standpoint, you can sort,
melt down, and reuse plastic, thereby reducing its impact on the world, but thatâs not
why it doesnât work. From a social perspective, people do often
do their part and, at least somewhat, separate their trash from recycling, but thatâs also
not why it doesnât work. Why recycling doesnât work is because, overall,
itâs not profitable. Itâs very simple: oil is cheap, at least
now, and when oil is cheap, making new plastic is cheap. Meanwhile, sorting, transporting, and melting
down existing plastic is expensive. In 2017, virgin PET plastic cost about 54
cents per pound, while recycled PET cost about 63 cents per pound, and was lower quality
than the alternative. Therefore, demand for recycled PET was low,
so waste management companies couldnât turn a profit turning used PET into raw, recycled
PET at scale. When companies canât make a profit recycling,
it doesnât happenâor at least not at the rates needed to make the plastics industry
sustainable. For the plastics industry, though, all they
needed was the perception of sustainability and, even though a big chunk of what went
into a recycling bin ended up not recycled, consumers and municipal leaders were happy
because they believed that the plastic they consumed was guilt-free. Thatâs how that yogurt container tossed
in Littleton, Colorado ended up on a boat to Hong Kong. Now, the rule just mentioned is still validâplastic
is only recycled when itâs profitableâbut for a brief moment in time, it was, all thanks
to a trifecta of economic conditions in China. First, shipping was incredibly cheap. Western nations like the US have long had
a significant trade deficit with Chinaâessentially, America buys far more from China than China
does from America. That means that cargo ships from greater China
travel to the US almost completely full, but then return with plenty of extra capacity,
meaning shipping rates to China are far lower than shipping rates from China. Thanks to that, you could get one of those
MRF Residual Bales across the Pacific for next to nothing. In addition to this, since the 1980s, China
has been riding its way through an unprecedented phase of economic growth. This was so dramatic that the countryâs
industries quite literally could not find enough raw materials, including plastic, to
fulfill their demand. Therefore, with constrained supply and high
demand, even recycled plastic prices went up, giving the recyclers in the country more
room to cover costs. In addition, especially in more rural areas,
wages were low in China. Those MRF Residual Bales are composed of those
difficult-to-sort plastics, but humans can sort just about anything profitably, as long
as their wages are low enough. So, all in all, considering shipping to China
was effectively free, and raw material prices were higher, and wages were low, the equation
just happened to work out so that in the late 90âs, 2000âs, and early 2010âs, sorting
and recycling MRF Residual Bales in China was just ever so slightly profitable. Thatâs why, upon arrival into Hong Kong,
the plastic yogurt container disposed of in Littleton, along with everything else in these
bales, is immediately transferred onto a smaller barge and reexported out of Hong Kong for
a short journey across the Pearl River Delta to the Guangdong Province, in mainland China. Then, after an 8,000 mile, 13,000 kilometer
journey to the other side of the world, it ends up at its final destination: the Wellpine
Plastic Industrial Company just outside Guangzhou. There, the bales are unloaded, spread out,
and low-wage workers manually sift through the contents, eventually finding that yogurt
container, and putting it in a pile along with the rest of the polypropylene plastics. From there, the polypropylenes are melted
down, purified, and reformed into pellets which then, eventually, are sold in bulk to
another manufacturer, somewhere else in China, for a very, very slight profit. Now, this whole system of taking effectively
valueless MRF Residual Bales and shipping them across the world to a place where they
did have a very slight positive value worked. It wasnât elegant, it wasnât clean, but
it worked, and thatâs how, for a few decades, the western worldâs recycling system functioned. The most valuable stuff was sorted and sold
domestically, the valueless stuff was exported to where it had value in China, and the stuff
with a negative value was sent to the landfill or incinerated. But then came that documentâthe notification
to the World Trade Organization Committee on Technical Barriers to Trade. All this said was that China would, starting
at the end of 2017, ban the import of 24 products covered under these HS codesâthe numerical
classifications used to simplify international trade. These particular five, though, were the ones
that created the big problem for the plastics industry. They translate to âWaste, Parings And Scrap,
Of Polymers of Ethylene,â â Of Polymers Of Styrene,â âOf Polymers Of Vinyl Chloride,â
âOf Polyethylene Glycol Terephthalate,â and âOther Waste, Pairings And Scrap, Of
Plastics.â Effectively, by banning these five HS codes,
they banned the import of almost all plastic waste. As a result, the countryâs 2018 plastic
import volume dropped 99.1% compared to 2017âthis massive, global industry quite literally ended
overnight. Now, while the true reasoning behind any Chinese
government decision is always elusive, at least according to the document, it was that
the import of these products was creating a serious environmental and public health
problem. This is likely true. As MRF Residual Bales are, by their very nature,
unsorted, they often included hazardous materials that could seriously harm those sorting them,
and this went on to cost the government since the government runs much of the countryâs
healthcare system. In addition, the sorting facilities in China
would often illegally dump the portion of the plastics that even they couldnât profitably
recover, creating an environmental problem that the government had to pay to clean up. Therefore, while the private companies that
actually sorted and processed these MRF Residual Bales turned a slight profit, China, as a
nation, was losing money by processing the worldâs trash. So, essentially, even though it looked like
plastic recycling was profitable, once the externalities were priced in, it once again
became clear that plastic recycling was not, in fact, a viable system. Thatâs why China issued this document, thatâs
why they banned plastic waste import, and thatâs why the worldâs recycling system
broke. Nowadays, when a woman in Littleton, Colorado
throws her yogurt container into the recycling bin, the journey that ensues is often far,
far shorter. First, as before, itâs picked up by a truck,
brought to a Materials Recovery Facility, sorted down, and packed into one of those
MRF Residuals Bales, but after, there are now three main options. The first is that itâs exported, as before,
but not to China. In response to the import ban, Malaysia tripled
their plastic import volume between 2017 and 2018, becoming the largest processor in the
world, and some other nearby low-wage countries ramped up as well. Eventually, though, these countries will undoubtably
realize what China didâprocessing MRF Residual Bales may be profitable to a company, but
not a country. The amount of health and environmental issues
it creates in the long-run costs more than the industry makes. Even despite the alternate plastic export
options, the USâ export volume, which includes more than just MRF residual bales, still dropped
by a third between 2017 and 2018. There was just no-one who would take these
bales, even for free, since with the removal of China from the market, very few companies
could turn a profit processing them, even outside the US. The global value of one of these bales went
from slightly positive to clearly negative and, remember: recycling only works when itâs
profitable. Therefore, with far fewer buyers, MRF Residual
Bales piled up and up until eventually, the waste processors gave up and put them into
the same category as bottle caps, scraps, and those other small, unrecoverable, unprofitable
pieces of plastic. Now, when you put something into one of those
big, blue bins that are supposed to lead to a second-life for your waste, it ends up,
more often that not, in the incinerator or landfill. Plastic recycling, with the exception of those
few, highest value items, is now definitively broken. But hereâs the thing: it was always broken. Plastic recycling, with limited exception,
never generated more money than it cost, and so it was never economically sustainable. The China system was just a blip, thanks to
a unique set of economic circumstances, and a government that didnât yet recognize the
cost of the industryâs externalities. That puts the plastics industry back where
it was in 1969âpeople are starting to realize that there is no way to make plastic sustainable. There are some half-solutionsâsome scientists
are working to develop an enzyme that can eat plastic in a matter of days and others
are trying using chemical processes to break it down into its raw componentsâbut the
recycling problem is not a technical one. Actually performing the process of taking
whatâs disposed of by consumers, sorting it, and melting it down into new raw materials
is easy. Whatâs not is the economics. The recycling problem is an economic one,
and you can only solve economic issues with economics. The true solution is simple: either the cost
of recycling has to come down, or the price of raw recycled plastic has to go up. Whatâs going to fix recycling is when it
generates more money than it costs, but making that happen will take quite a lot. If enough consumers, for example, buy products
that use recycled plastic, rather than a direct alternative that uses the virgin variant,
market forces will work out in a way that, eventually, once critical mass is attained,
what companies lose from customers choosing more sustainable alternatives is more than
what they lose from paying to swap to more expensive, lower quality recycled plastic. Plastics recycling, as a system, was never
created to make the world a better place. Rather, it was created by the plastics industry
to plug a hole in their system, it was created to propagate a false belief that consumption
could be sustainable, so the only way to stop plastic from overwhelming our oceans, polluting
our land, and making the world a worse place to live in is to shut the system, the entire
system, down. So, I get a lot of emailsâfrom potential
sponsors, companies that want my business, and other professionals. I can tell you from personal experience that
the biggest red flag for me in cold-call emails is when the address ends in Gmail, iCloud,
Yahoo, or another generic providerâs domainâanyone could create that email in few seconds, so
I have no idea if the person is who they say they are. Simply put: if you donât have a professional-looking
email address, people wonât think youâre professional. Whether youâre running a small business,
going through school, or doing anything else where you have to send and receive emails,
customizing yours with your own domain extension is the way to go, and Hover makes it incredibly
easy. First, you just search and find a custom domain,
and they help you get a super-unique one thanks to their over 400 extensions, then you take
that domain, which you could also use for your website, and add an email account to
it. You could quite literally have a new, professional
email in about two minutes, and I can personally attest to how easy Hover makes it since theyâre
what I've used for all my business emails for years. Making it even easier, Hover is offering Wendover
viewers 10% off their first purchase by going to hover.com/Wendover and, with their already
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also, the comments are great. Many people openly calling out the US/UK narratives on the topic
Fuck yeah, Wendover productions always coming through with quality content. I think the guy has a special eye out for China, since he is quite obsessed with infrastructure, logistics and transport (especially planes lol), if you are an engineer that likes any of those things, you can certainly gawk your eyes out in a place like China đ