UNTUNG JAWA ISLAND, Indonesia—Used diapers, plastic bags, foam mattresses and tons of other garbage wash daily onto the shores of Untung Jawa Island, posing a monumental trash problem. Island leader Eko Suroyo prefers to see it as a trash opportunity.

Untung Jawa—literally "Lucky Java"—lies five miles across the Java Sea from Jakarta, one of the world's biggest cities. Because greater Jakarta can't handle all of its waste, some of its 20 million residents dump their debris into canals that flow through...