Cities, towns and the recycling companies they contract with are scrambling to figure out how to save a green industry that has lost its main economic driver.

"The model is upside down today. It's broken," said Pete Keller, who is the vice president of recycling and sustainability for Scottsdale-based Republic Services, which is the second largest recycler in the country.

The problem can be traced halfway around the world. China was historically the largest consumer of recycled paper, plastic and metals. But earlier this year, the country imposed new restrictions on the quality of the recycled material it accepts. That created more supply than demand and the result is that the bottom has dropped out of the market for recycled goods, especially paper.

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"A year ago, maybe a ton of mixed paper was trading at about $100 and today it's zero," said Keller.

Cities and towns across the country are re-evaluating their approaches to recycling. Smaller recyclers are likely to go out of business. Companies like Republic, which is a diversified Fortune 300 company, are not in danger of going out of business, but Keller says a couple of things will need to change in order for this part of the business to remain viable.

Republic officials plan to meet with the cities and towns they contract with to go over the idea of new rates. Keller says customers may see their bills rise anywhere from $2 to $4 per month.

But customers themselves have a role to play in keeping this business healthy. They can re-examine the kinds of things they're throwing into their recycle bins.

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"We are anywhere from 25 to 30 percent contamination, so think 'non recyclables.' A lot of that is food. Believe it or not, we get a lot of diapers," said Keller.

All of these contaminants add to the cost of running recycling programs. Bringing the cost down and increasing the amount of "clean" recycled materials could mean the difference between a lasting recycling industry, and one that does not pay for itself and goes away.

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[PDF: What is recyclable in Phoenix?]

"At the end of the day, these are valuable resources. And if we’re not recovering them and turning them back into new products, then that’s going to require virgin natural resources, right? It’s going to require trees. It’s going to require mining. And it would be a real shame if we can’t continue to make these programs viable," said Keller.

To find more information about what should and should not make it into your recycle bin, contact your municipal trash service, or you can click here to see the information Republic Services offers to its customers.

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