The future of recycling

Recycling in general and metal recycling in particular, many believe, enjoy a very bright future. As resource depletion, environmental concerns, and o ther factors drive primary production costs up, the relative importance of recycling in supplying the material needs of society will grow. This optimi stic view, however, may paint an overly rosy and misleading picture. A large portion of secondary metal production is based on the recycling of new scrap, which is constrained far more by the available supply of new scr ap than by metal prices or recycling costs. Secondary production from old s crap is more sensitive to costs and prices, and so would benefit from a ris e in metal prices. History, however, indicates that the cost-reducing effec ts of new technology have over the past century more than offset the cost-i ncreasing effects of depletion, causing real metal prices to fall. In recen t decades, this decline in prices has continued despite government policies that are increasingly forcing firms to cover their environmental costs. While this favorable trend may not continue forever, it does suggest that s econdary producers will have to pursue aggressively new technologies and ot her innovations that reduce their costs as fast or faster than primary prod ucers if they hope to expand their future share of total metal production. (C) 1999 Elsevier Science Ltd. All rights reserved.