rethink sustainability
How China is addressing its waste problem
According to the World Economic Forum, China’s municipal solid waste will double that of the US by 2030. It has been trying to grapple with waste management for over two decades now, with varying degrees of success. In 2018, new regulation banned the import of ‘foreign garbage’ from other nations desperate to offload their trash elsewhere. The legislation hit the European Union, which was exporting up to 95% of its recycled plastics to China, particularly hard. The US equally exported nearly 70% of its plastics. Despite the ban on foreign waste however, much of China’s own waste still ends up in landfills, and some of it down rivers into the ocean, according the World Economic Forum.
The country’s revised Solid Waste Law came into official effect in 2020. China has strengthened the supervision and management responsibilities of the government, and introduced a number of initiatives around waste exclusion. It has imposed obligations on waste generators, has focused on enforcement, and also on product stewardship, along with the ban on foreign waste. The country has also introduced a target to reuse 60% of its urban household waste by 2025.
It has also introduced some unique intelligent waste collection solutions to help. In May last year, Beijing became the latest city to enforce a waste classification system, following similar legislation in Shanghai, Shenzhen, and 16 other cities around the country. Beijing has also introduced artificial intelligence (AI) in its waste management system. Facial recognition technology has been deployed in trash bins to encourage people to recycle more. The smart trash can pilot programme, ongoing since 2019, registers all participating residents and takes their pictures. When a resident disposes of garbage, the trash cans automatically scan their faces to identify them. Once the bin itself recognises that the user is a resident, the lid is opened, and the recycled trash is weighed. QR coded garbage bags ensure that the right trash has been dropped into the right bin. Residents are given reward credits for excelling at recycling. The move has been applauded by many.
It is not the only smart solution being implemented for waste management. Elsewhere in the country, a private company is helping trash collection services deal with operational problems such as equipment disuse and the efficiency of equipment maintenance by using data analysis and the Internet of Things to gather data about garbage collection. For data collection, the firm has developed an integrated circuit which attaches to garbage bins to show their locations and inform data centres when they are full. It has also developed a database which compares individual equipment and types of malfunctions, using AI to diagnose faults and offer maintenance support.
Some critics have expressed concern about AI and privacy. Others point out that no amount of AI can help China deal with its waste management woes, unless or until its population of nearly 1.4 billion become more proficient at waste reduction. But many believe the schemes are a step in the right direction.
Zero Waste is About Resource Management
Lombard Odier believes that waste reduction is one of the fundamental tenants of a sustainable, circular economy. Globally, and in China, there is much to be done. China’s solid waste treatment backlog was estimated to be up to 70 billion tonnes in 2019. By 2050, the global annual waste flow will be 3.4 billion tonnes. Waste is growing twice as fast as the population currently. Only 9% of plastics are actually recycled, while 50% of plastics are used just once and then thrown away. In actuality, 85% of the world’s trash can be recovered and resold today in existing markets.
The goal is for no trash to be sent to landfills, incinerators, or the ocean. Countries can achieve this on multiple fronts, notably through waste prevention, product re-design, re-use, and recycling. Extending product lifecycles is one avenue, as is the sustainable sourcing of inputs in production processes, as well as evolving technologies such as additive manufacturing. Another step would be adopt a resource efficiency approach. Resource efficiency saves money for businesses and reduces waste generation. The challenge is to be as efficient as possible with what goes into a product. Currently, the world consumes around 13 tonnes of materials per person per year, and much of this is lost during the production process. Manufacturers and consumers need to shift to ingredients that are renewable instead of finite. Smart, computer-enabled production techniques, 3D printing, and innovative materials will all be part of delivering results in this field, as will generating specific growth opportunities.
As more sectors of the Asian and global economy focus on achieving a zero waste model, particularly for consumer goods, industrials, and utilities, more will be done. China itself has pledged to achieve carbon neutrality by 2060, a bold goal, but a vast challenge, that, if it achieves, could be a turning point for fossil fuel markets and the global energy transition globally, say commentators. Innovative Green Development Program, a Beijing-based climate policy think tank, estimates that if waste regulations are fully implemented across the country, greenhouse emissions will be reduced by 80.82 million tonnes CO2e between 2020 and 2030. This is equal to the emissions from 17.46 million passenger vehicles driven for one year.
For China to succeed, policy implementation will be key. Whether that policy includes country wide smart trash bins or not, remains to be seen.
Important information
This document is issued by Bank Lombard Odier & Co Ltd or an entity of the Group (hereinafter “Lombard Odier”). It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document. This document was not prepared by the Financial Research Department of Lombard Odier.
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