Home News NERC Updates Recycling and Reuse Industry Study

NERC Updates Recycling and Reuse Industry Study

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Recycling and reuse contribute $35 billion per year in the five Northeast states.

February 23, 2009

According to a new study released by the Northeast Recycling Council Inc. (NERC), Brattleboro, Vt., recycling and reuse fuel a $35 billion per year industry in the states of Delaware, Maine, Massachusetts, New York and Pennsylvania. The research, which updates NERC’s 2000 Recycling Economic Information (REI) Study, found that more than 11,000 recycling and reuse businesses employ more than 100,000 individuals in the five-state region, and pay in excess of $4.2 billion in wages.


Reuse and recycling businesses also yield significant environmental benefits. Each year, recycling operations in the five states save the amount of energy needed to power almost 2 million households, avoiding 6.4 million tons of greenhouse-gas emissions, the equivalent to taking close to 3 million cars off the road, according to an estimate by NERC.


DSM Environmental Services Inc., Windsor, Vt., and MidAtlantic Solid Waste Consultants, New Market, Md., prepared the study for NERC and the five participating states. The study incorporates several changes to the methodology that was used in the 2000 Recycling Economic Information Study to examine the economic impact of the industry, NERC Executive Director Lynn Rubinstein says.  


“The changes were designed to more accurately estimate the economic contribution of the recycling and reuse industry in the five participant states for the year 2007,” Rubinstein says. “Those changes also make it difficult to compare the studies to one another.”


Some of the changes came in response to industry concerns regarding the methodologies used in the earlier report. For example, Rubinstein says, “the updated study reports economic data for the recycling industry separate from economic data for the establishments that purchase secondary materials from the recycling industry. These establishments were labeled ‘demand side’ activities in the 2000 report and were included in ‘recycling industry’ data. In the new study, the demand-side industries are listed separately as ‘recycling reliant’ industries.”


In addition to this change, the new study allocates recycling economic activity only to the portion of the demand-side consumer’s use of recycled materials. For example, if a pulp mill uses an estimated average of 25 percent recycled fiber, then 25 percent of employment, payroll, and gross receipts is allocated to recycling.


The study update also reports on the indirect and induced economic impacts of the recycling industry on a sector-by-sector basis. However, unlike the 2000 report, the new study does not add the indirect and induced effects to the direct economic impacts to calculate the total contribution of the recycling, recycling reliant and reuse and remanufacturing industries in light of concerns about double counting.


The study divides recycling into 26 categories. Six of the categories represent the supply chain that provides recycled raw materials to manufacturers, including municipal and commercial collection programs, sorting facilities, composting operations, scrap wholesalers, and plastics reclaimers. The study found that businesses that use recycling raw materials do so in lieu of “virgin” products that are often mined and manufactured outside of the region. As a result, these businesses create jobs closer to home and have a smaller environmental footprint than companies that rely on raw material extraction, according to NERC. In the five states, the research showed that there were 7,313 establishments working in this sector. This is 43 percent more workers than mining operations there, paying wages that were approximately 62 percent higher than those offered by mining jobs, according to U.S. Census figures.


The study identified 13 categories for businesses that manufacture new products with recycled materials. Using conservative methods to estimate the amount of manufacturing employment directly attributable to recycling, the study found that approximately 1,000 recycled-product manufacturers employ nearly 55,300 individuals, or around 4 percent of total manufacturing jobs in the five-state region, according to the U.S. Census. Wages from this sector are comparable to those in the overall manufacturing sector, according to U.S. Census figures.


Seven additional categories are devoted to the reuse sector. This sector is comprised of 3,079 businesses that employ 17,765 individuals and have annual gross revenues that exceed $2 billion. “This is an emerging sector—and one with great future potential,” Rubinstein says.


The complete report is available on the NERC Web site at www.nerc.org/documents/recycling_economic_information_study_update_2009.pdf.


Recycling and economic development agencies in Delaware, Maine, Massachusetts, New York and Pennsylvania provided funding for the study.


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