We do love our plastic, and this snippet of career advice, from the film The Graduate, was pretty wise. Indeed, our consumption of it with such rabid enthusiasm has made it a key environmental battleground.

There was a piece in the Guardian last week about how the plastic recycling industry is being ravaged, like many others, by the downturn. It is one of the lesser known stories of the financial crisis, but also a fascinating example of where idealism and ethical consumption meets economics. (Wrap is a good source of info, for example this joint statement from the main bodies concerned with recycling in England). In that respect, making the economics of recycling plastic more resilient and competitive against new raw ('virgin') material, might be as important as changing people's rubbish disposal habits.

On the one hand, there is a clear imperative: recycle more. But once we've collected the used Coke bottles and shopping bags, and piled up the CDs, there is an awful lot of logistical and processing resource required. It is a long chain of trade, transportation and processing. They need more than a quick rinse and there are some brutal economics at play. And that has left our ethical fortunes potentially as vulnerable to the credit crunch as the shops on our high street.

It seems the slump is affecting recycling from at least two directions. Demand has fallen from the consumer side as people are buying less. And from the producer side, the price of virgin material has nosedived, potentially reducing the demand for 'scrap' as the returns from the recycling process diminish. This is partly because the downturn has coincided with huge extra supply capacity for 'virgin' material coming online, the result of producers anticipating big increases in emerging economies' demand (closing the gap of roughly 55kg per capita a year). It is an unfortunate coincidence.

Up until now, much of the world's recyclables have been shipped to China - in 2007, 85% of all EU plastics waste exports were to China. That is largely because it is only very recently that the requisite infrastructure in the UK or Europe to process any of the waste material has emerged. The capacity was not keeping up with the demands on individuals and companies to recycle more of their waste.

That is changing as more local recycling infrastructure emerges. 'Closed Loop' run a service which can turn waste plastic into material suitable to hold food and drink, all in the UK. These innovative technologies and processes are great news. But whilst we might have been conscious of the need to recycle for some time, the recycling industry in the UK as a whole is still relatively young. So it is vulnerable to fluctuations.

Longer term solutions might include greener virgin material, such as those emerging from Brazil's Braskem, using alternatives to oil. But whilst we still all seem to love our plastics as they are, what can the government, supporting agencies and businesses do to ensure resilience against downturns and fluctuations, and to increase the recycling industry's competitiveness against virgin material?

It might seem difficult to encourage people to put more of their empty bottles in their green bins. Reducing packaging demand, and encouraging people to keep recycling, of course plays a huge role. But perhaps such seemingly intransigent behaviour is particularly problematic given the challenge of shifting the economic incentives driving the competition between recycled and virgin material.

(Photo courtesy of nadi0)

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