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Economy

Asia's improbable challenge: Turning garbage into gold

Whether it is tattered plastic bags washing up on Bali's beaches, polystyrene lunch boxes littering Chinese streets or discarded candy wrappers along Nepal's Himalayan trekking trails, Asia is facing a growing scourge: mountains of garbage that can no longer simply be swept away.

     Throughout the region, countries are having to confront their heretofore inadequate responses to the challenges of solid waste management. Among the specific problems are nonexistent recycling efforts, overburdened garbage collection and inadequate sanitation services.

     The impact on public health, the harm to the environment and the many downstream costs to economies are enormous. Because these costs are so high, finding a solution will require a concerted effort from businesses, governments and private citizens.

     The scope of Asia's garbage problem was underscored by the widespread confusion caused by vast amounts of plastic debris found floating in the region's oceans during the search for missing Malaysia Airlines Flight MH370 earlier this year. Today, the North Pacific and Indian oceans are ranked as the first- and third-worst by volume of rubbish among the world's oceans, according to California-based research group 5 Gyres.

     In Asia, only about 10% of solid waste ends up in properly engineered and managed landfill sites. By some estimates, China is the world's largest generator of municipal solid waste, producing almost 150 million tons annually.

     A World Bank report estimates that some 3 billion urban residents today generate 1.2 kg per person per day, adding up to 1.3 billion tons of waste per year. By 2025, it is estimated, 4.3 billion urban residents will generate about 1.42 kg per capita per day, or 2.2 billion tons of waste per year. 

     As Asian economies have grown so, too, have their trash problems, with more societies adopting the lifestyles -- and embracing the disposable, packaged goods -- of their consumer-driven counterparts in more developed nations.

One man's trash ...

But this increasingly widespread and seemingly intractable issue could prove a gold mine if Asia's political and business leaders see trash as equal parts challenge and opportunity.  

    To date, the waste market industry remains at an embryonic stage in Asia, but some of the region's savviest businesspeople are beginning to pay attention to the opportunities that near-overflowing landfills can provide. Some have already proven that managing waste and harnessing landfill byproducts, including methane and other gases released by decomposing garbage, offers money-making opportunities.

    Asia's richest man, Li Ka-shing, has demonstrated his faith in waste management. In January 2013, his Hong Kong-based Cheung Kong Infrastructure Holdings paid more than $500 million for EnviroWaste Services, New Zealand's second-largest waste management company. In June of the same year, Li's company acquired Dutch waste treatment company AVR, described as the biggest "waste-to-energy" company in the Netherlands, for $1.3 billion.

     The waste-to-energy business is poised to grow in Asia, particularly if governments and business leaders follow Europe's lead. There, the European Union's stringent targets for the use of renewable energy by 2020 have resulted in trash reduction, with some cities leading the waste-to-energy charge by importing trash to meet thermal energy needs.

     Another waste-to-riches entrepreneur is Hong Kong-based Zhang Yin, one of the richest women in China, according to Forbes. Starting with $3,500 in capital, she built a personal fortune of $1.5 billion.

     Zhang began waste-paper trading in Hong Kong in 1985, moved her business to Los Angeles in 1990 and continued shipping waste paper to mainland China to make the cardboard needed for packaging in China's thriving export industries. Today, her company, Nine Dragons Paper Holdings, is China's largest packaging maker.

     Operating on a smaller scale but with just as much potential impact is Manik Thapar. He started Eco Wise Waste Management in Noida, a township outside Delhi, with seed capital of $120,000, and it has flourished in a country where millions of rag pickers form a poverty-stricken waste-disposal army.

     Eco Wise offers free garbage collection in Noida, which generates nearly 400 tons of daily waste, and Thapar's company now reportedly operates the biggest recycling plant in the Delhi-Noida area.

All together now

But with waste piling up and landfills already overburdened, government, civil society and individual citizens also have a role to play. Education and requirements for recycling and reuse are needed to form a comprehensive solution, as are strong national leaders willing to push local leaders into action. 

     Asia's governments need to move forward by improving and enforcing existing laws. Last year, China lifted a long-ignored ban on the use of disposable foam lunchboxes, choosing to remove rather than enforce a rule dating to a 1999 effort to end the "white pollution" of ubiquitous discarded lunchboxes.

     In contrast, in July of this year, Washington, D.C., Mayor Vincent Gray signed a bill that will ban the use of plastic foam food containers in the U.S. capital as part of a larger environmental cleanup.

    A simple prescription for governments everywhere is to encourage and reward good behavior while punishing bad behavior. This can be done through education campaigns and the provision or facilitation of waste disposal sites and mechanisms. Civil society can be an effective partner in terms of communicating the government's messages and educating people in appropriate waste disposal methods.

     Businesses must also join the effort, and in this area, governments can impose strict penalties for the dumping of industrial waste, a key cause of pollution in numerous Asian rivers, from India's sacred Ganges to the Pasig River that gathers force and trash as it moves through Metro Manila in the Philippines.

     Garbage ultimately is a local issue, and India under the new leadership of Narendra Modi may well prove to be a test case for workable solutions, according to Russell Green, Clayton Fellow at Rice University's Baker Institute and former U.S. financial attache to India.

     "Besides education and the business climate, sanitation infrastructure must be part of India's inclusive growth plan because workers must be healthy enough to hold a regular job, and that is hard for Indians living with woeful sewage systems and nonexistent garbage collection," Green said. "Modi plans a big effort to clean up India's rivers, which inherently links to 'upstream' sanitation issues. To clean the rivers he will have to apply his legendary get-things-done approach to push local governments to improve solid waste and sewage management."

     That "get-things-done approach" could well be the Midas touch that India and the rest of Asia needs to turn garbage into gold. 

     And that would mean not just a cleaner and healthier Asia, but also a more prosperous one.

Curtis S. Chin, a former U.S. ambassador to the Asian Development Bank, is managing director of advisory firm RiverPeak Group. Meera Kumar is a New York-based freelance writer. 

 

 

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