Letter From Delhi

The Economics of Trash

The streets of India's major cities look dirty, piles of waste rot in the corners of buildings, and plastic bottles crunch underfoot. But the grit hides an informal waste collection system so effective that, despite an increase in the sale of disposable, non-organic consumer goods in India in recent years, the trash that ends up in the hands of municipal garbage facilities is over 50 percent organic -- that is, mostly food waste. In 2009, food scraps made up only 21 percent of non-recycled waste in the United States. India's ubiquitous trash-pickers may seem to some an unfortunate byproduct of Western-style consumption, but where others see garbage many Indians see opportunity. In an informal glass market in Bangalore, I was offered three rupees for a green glass bottle. By selling three bottles, I could have earned enough for a local bus ride.

The country's informal recycling sector, however, can only generate so much profit. It is constrained by its lack of capital and long-term investment. The country must work to upgrade and formalize the industry in order to both meet growing domestic needs and capture a greater share of the profit in the international secondary resource market.

The trash industry is worth about $410 billion worldwide per year. The scraps it yields are valuable in the production of consumer goods, as construction materials, or to provide a hedge in case primary resources, such as steel, become more expensive or harder to procure. In fact, in 2007 and 2008, the market for used scrap metal and paper mirrored and then predicted the market for raw material. Many of these secondary resources, such as used paper, are regularly and legally collected in developed countries and shipped overseas. Products Americans buy could very well be packaged in materials made from newspapers they discarded. Electronic waste, which contains bits of copper and gold, is also extremely valuable, especially in India, which is the world's largest consumer of gold.

In 2004, the country reaped around $1.5 billion from scavenged domestic electronic waste -- including circuit boards, motherboards, and computer chips -- and recently recorded over 330,000 metric tons of domestic electronic waste produced annually. Meanwhile, China currently processes the bulk of globally traded electronic waste, and India's recorded imports of it stand at around 50,000 metric tons. However, given the informal nature of the garbage exchange, the real number is likely much higher.

Of course, processing all that waste is a dirty business, and it can also be dangerous. A visit to one off-the-books processing facility left me feeling a bit ill. It could have been the sun or the harrowing trip to the remote facility -- or it could have been the unfiltered smoke billowing from the smelting oven and the green sludge that seemed to cover everything. Nevertheless, the facility's manager proudly walked me around the grounds, encouraging me to take pictures along the way. Many of the women grinding blocks of soda on stone to prepare the circuit board wash, which removes solder flux residue and contaminants from the boards, wore gloves and masks. But those who were actually washing the circuit boards -- a much more dangerous task because of the direct exposure to heavy metals such as mercury -- were not at all protected.

Beyond humanitarian motivations to end such working conditions, there are economic reasons to do so; healthy workers work better and longer. Parents who live to see the latter two-thirds of their life do not leave orphans that the state, relatives, or the streets, must take care of. Yet it is difficult for informal businesses to make long-term investments in worker health. Before such businesses can be expected to maintain safety and pollution standards, they must be welcomed into the fold of official, regulated business.
 
To be sure, Delhi would like to rein in the recycling industry and has already made moves to do so. In May 2011, the Ministry of Environment and Forests developed a new set of electronic-waste laws that would bar the use of certain toxins during production, expand electronics producers' responsibilities -- companies such as Dell would be held responsible for recycling any of their products used in India, for example -- and set up state approved procedures for processing. The rules also create a bureaucratic framework for the recognition of recycler associations and cooperatives, but they do not go far enough toward supporting or investing in the development of such groups.

For their part, informal recyclers should want to enter the mainstream, too. If they entered the fold of organized trade and processing -- paying taxes, upgrading their equipment, and creating opportunities for investment -- they could apply for international health and safety certifications and gain access to the regulated domestic market. The larger and stronger the regulated market grows, the stronger that incentive would be. A visit to E-Parisaraa, India's first government authorized e-recycler, showed me how basic some of those safety measures would be. Providing workers with gloves, masks, and simple tools like wrenches and chisels and keeping fire extinguishers handy (as you would in any work space) are just a few of the easy changes that can be made. Others, of course, would be more difficult. Providing isolated chambers and machines for the dissembling of phosphorous screens would be expensive, yet would be necessary to improve worker health. On the most rudimentary level, however, formal recyclers face a stickier challenge: convincing workers to use the safety equipment they provide.