The Economic Benefits of Recycling in Ontario 02/23/2012
The Economic Benefits of Recycling in Ontario 02/23/2012.
Dec 24, 2015
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The Economic Benefits
of Recycling in Ontario
02/23/2012
Page 2
Introduction
The Existing Blue Box Program
Phase 1 - Municipal Hazardous and Special Waste
Waste Electrical and Electronic Equipment
AECOM was retained in 2009 to carry out study for Ontario Ministry of Environment (MOE) to look at the Economics of Recycling in Ontario.
The focus was on:
Page 3
Introduction (continued)
The terms of reference were spawned by a series of similar studies in the US.
The study was completed but not released.
The material presented here today is extracted from the study with the permission of the MOE.
Since the study was not publically released the comments and observations made today are those of AECOM. They are not attributable to MOE.
Page 4
Time Frames
Three time frames were employed:
2002 – 2006: Historic Context
2007: Benchmark Year
2008 – 2012: Projection Years
A time of Economic
Turmoil
Page 5
Data Sources
Key data sources:
WDO Data Call
Statistics Canada Inter-provincial Input / Output Model
Two surveys – 1) Service Providers, 2) End-users
US Studies – National; Florida, Michigan, California, New York, Pennsylvania , Main, Massachusetts, Delaware
Page 6
Some Terms
Direct Effects
•Initial changes in employment, income and output resulting from production spending in a subject sector
Indirect Effects
•Subsequent changes in employment, income and output in all sectors that support sectors directly affected
Induced Effects•Subsequent changes in employment, income and output in all economic sectors as a result of income spending in direct and indirect sectors
•
Gross Domestic Product (GDP)
•The value of final goods and services created in a particular time period
Full Time Equivalent Job (FTE)
• A ratio of employment associated with a business where 1 FTE represents a on person working at full time hours
Labour Income•The sum of wages and salaries and supplementary income
Gross Output•The total value of sales related to a good or service plus the value of intermediary goods or service used in their production
•
Page 7
Two View Points
Upstream(collection and processing, depot & transfer, promotion & education, administration)
Downstream(re-use and
manufacture)
Page 8
Looking Downstream
Upstream Downstream
1
•Paper Manufacturing
2
•Plastics Manufacturing
3
•Glass Manufacturing
4
•Metal Manufacturing
Iron and Steel Alumina and Aluminum
Page 9
Input / Output
Interprovincial Input Output
Model
Economic Sectors
Sector Multipliers
Economic Outputs
GDP Labour Income FTE Jobs Gross Output
Upstream Program Costs and Revenues
Downstream Commodity Sales
into Sectors
AECOM IO Allocation Model
Page 10
Material Diverted
Between 2002 – 2007 recycled tonnage grew 25%, with almost all of this growth attributable to the Blue Box
Between 2008 to 2012 recycled tonnage was forecast to grow by 9% with most of this growth attributable to the WEEE and MHSW programs.
Page 11
The Backdrop
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
Ontario Population (Actual and Projected)
Actual
Projected
Page 12
Blue Box Tonnes and Finances
2002 2003 2004 2005 2006 2007 -
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Total Glass
Total Plastic
Total Metals
Total Paper
2002 2003 2004 2005 2006 2007
$-
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
Revenues
Costs Administration
Costs Promotion and Education
Costs Depot and Trans-fer
Costs Processing
Costs Collection
Blue Box Tonnes Marketed
Blue Box Costs and Revenues
Page 13
Blue Box - Economic Outputs
GDP $340m Labour Income $170mGross Output $560m
3,430 FTE Jobs
GDP Labour Income
Gross Output
$-
$100,000,000
$200,000,000
$300,000,000
$400,000,000
$500,000,000
$600,000,000
Administration
Promotion and Educa-tion
Depot and Transfer
Processing
Collection
1912.50778349699
56%
1063.79130497798
31%
194.48633980688
6%
63.411229862816
2%
193.749368144646%
Collection Processing
Depot and Transfer Promotion and Education
Administration Total
Page 14
Blue Box – Downstream Flows
Paper Metals Plastic Glass
Ontario 330244 30915 21505 89340
Canada 149841 371 14072 17375
Outside Canada 149289 8163 11191 1223
50,000
150,000
250,000
350,000
450,000
550,000
650,000
To
nn
es
Paper Metals Plastic Glass
End Users
0.3970675623715
0.610433724555756
0.193764967499145
0.825399766532639
Brokers 0.127650649693187
0.173236330451976
0.266057988368115
0.00229761529767089
5.00%
25.00%
45.00%
65.00%
85.00%
% o
f A
ll M
ater
ial
Market Paths
Ontario Capture
Page 15
Blue Box – Downstream Flows
2002 2003 2004 2005 2006 2007 2008 2009
Composite Index 113 114 131 124 111 145 150 66
$10
$30
$50
$70
$90
$110
$130
$150
Composite Price Index for Blue Box Materials (CDN$/Metric Tonne)
$38,810,2
81
$2,537,46
6
$4,981,17
1
$7,138,11
8
$321,858
Paper
Aluminium
Steel
Plastic
Glass
The Recession
2007 Sales in Ontario = $54m
Page 16
Downstream Outputs
Paper Iron and Steel Aluminum Plastics Glass Combined
GDP Total 53166981.0629382 4302592.87643522 1133966.49094307 7145115.53669256 385457.499677528 66134113.4666865
Labour Income Total
29073643.1614647 2341364.73788634 699663.165905306 4292258.79083157 232744.091915142 36639673.948003
Gross Output To-tal
91725953.1751361 9780457.77312101 4099808.2346084 15568964.6489097 747396.827777464 121922580.659553
$10,000,000
$30,000,000
$50,000,000
$70,000,000
$90,000,000
$110,000,000
$130,000,000
Page 17
Downstream Job Outputs
Paper Iron and Steel Aluminum Plastics Glass Combined
FTE Jobs Direct
132.343058556527
9.7132841865071 2.66433950307207
31.2649563886665
1.34214792165873
177.327786556432
FTE Jobs Indirect
181.632115555586
9.66347247273014
3.78082462816894
14.6331416887594
0.646934609720395
210.356488954965
FTE Jobs Induced
274.584407636056
22.1128891911488
6.60792990021677
40.537999691187 2.19813864586524
346.041365064473
50
150
250
350
450
550
650
750
589 42 14 87 4
733
Page 18
MHSW and WEEE- Economic Outputs
GDP $12m Labour Income $ 8mFTE Jobs 160Gross Output $27m
Collection Cost; $1,979,214
Processing Cost; $13,788,890
Collection Cost; $15,773,967
Processing Cost;
$30,968,234
Refurb Sales; $35,245,054 GDP $61m
Labour Income $42mFTE Jobs 835Gross Output $144m
MHSW
WEEE
Page 19
Total Upstream and Downstream All Programs
GDP $714 million $770 million
Labour Income $356 million $387 million
Gross Output $1.2 billion $1.3 billion
Jobs 7,300 7,900
FTE Jobs Di-rect
FTE Jobs In-direct
FTE Jobs In-duced
FTE Jobs To-tal Impact
Combined 2700.03663940502
1527.1796990434
3659.79746711582
7887.01380556424
500
1,500
2,500
3,500
4,500
5,500
6,500
7,500
8,500 Upstream
Upstream & Downstream
Page 20
Program Costs and Revenues
Costs Revenues Costs Revenues2007 2012
$-
$50
$100
$150
$200
$250
$300
$350
$400
Blue Box
MHSW
WEEE
Total
2007 2012 Costs Revenues Costs RevenuesBlue Box $ 252 $ 107 $ 267 $ 101 MHSW $ 9 $ 1 $ 41 $ 4 WEEE $ 47 $ 38 $ 69 $ 55 Total $ 308 $ 146 $ 377 $ 160
Costs and Revenues in $millions
An Issueor
a matter of perspective?
Page 21
Program Outputs
Measure Blue Box
MHSW WEEE Total Recycling
WasteDisposal
Tonnes 902,500 16,340 18,700 937,540 9,375,000
Jobs 4,875 140 1,145 6,160 6,245
Jobs/1000t 5.4 8.7 61.1 6.6 .7
Value Add/t $ 530 $ 850 $ 6,000 $645 $ 49
Page 22
Downstream Outputs – Re-use and Re-manufacture, Equipment Supply
Measure Blue Box Material
WEEEMaterial
EquipmentManufacture
Tonnes 1,092,0001 8,640 902,500
Jobs 755 509 1,154
Jobs/1000t 2.1 59 1.2
Value Add/t $ 188 $5,800 $ 93
1 – includes tonnes obtained beyond subject programs
Page 23
Sector Comparison in the Ontario Economy
Measure Recycling Programs
Waste Disposal
Auto Food Chemical Metal Finance, Insurance, Real Estate
Direct Jobs 2,200 2,900 95,500 57,500 24,600 30,750 474,400
GDP $285 million $386 million $20.6 billion $10.0 billion $7.6 billon $7.6 billion $110.6 billion
% of GDP .05% .07% 3.8% 1.84% 1.41% 1.4% 20.4%
Page 24
The Knowledge Cliff
What we collect and process
Where does it go and how is it used
Page 25
Three Questions on the Economics Front
2. What are the revenue
s?
1. What are the costs?
3. What is the value add?
Page 26
The Value Chain
Assemble material
Process material
Create products
Market material
Sell products into markets
Economic
Environment Social
Page 27
Improving The Value Chain – Can we do Better?
Think Leverage
Think Synergy
Be Innovative
Have a Plan
Create Value
Page 28
• Track material flows to end users and brokers1
• Track location of end users2
• Inventory and profile recycling industries3
• Understand how recycled materials are
used and their importance
4
• Update this report with current information5
• Better understand the WEEE re-use and
refurbishment markets 6• To replicate US studies
there is a need to look at all recycling efforts7
• Set of annual reports needed to show
economic contribution of waste management
8• Need standard reporting
frameworks and reporting models9
• Need to evolve some different business
models10
Going Forward
Page 29
In the end
Why be bothered?
… “because if you don’t know where you are going you might end up someplace else.”
Yogi Berra
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