ng costs of energy production by conventional means may stimulate ater use of solid waste as an energy source. EXISTING FEDERAL POLICIES AND THEIR EFFECT ON VIRGIN AND Eight rate policies There is evidence to indicate that the current freight rates for some recycled materials are high relative to rates for competing virgin materials (rail rates for scrap iron, glass cullet and reclaimed rubber and ocean rates for wastepaper). Rates for these recycled materials exceed transport costs by a higher percentage than the rates for virgin materials. While it is difficult to predict the degree to which a rate incre would result in lower levels of recycling, there is evidence to indicate that freight rates represent a significant fraction of the cost of using many recycled materials (scrap iron, wastepaper, glass cullet and scrap rubber). It is recommended that the transportation regulatory agencies, in consultation with EPA, conduct a study of rate setting practices for all recycled materials shipped by rail and ocean carriers, to deter mine the extent to which discrimination exists against recycled materials. It is recommended that in all future proceedings in which rates for recycled materials are adjusted, a specific finding be required that such rates do not discriminate against recycled materials. Federal procurement policies Although the Federal Government is the single largest consumer of many products, Federal procurements generally represent a small fraction of national material markets. Therefore the direct market creation effects of a program of Federal procurement of recycled products would probably be small. However, since Federal procure. ment specifications are widely circulated and duplicated by State and local governments and some industries such a program is desirable to provide national leadership in this area. It is recommended that EPA in conjunction with the Federal supply agencies develop guidelines for the inclusion of recycled materials to the maximum extent practicable in products purchased by the Federal Government. Taxation policies Various provisions of the Federal tax code (percentage depletion allowance, capital gains treatment and foreign tax credits) provide benefits to the virgin material production sectors which are not available to the recycled material sectors (these benefits are estimated at over $200 million annually for virgin minerals and timber). It is difficult to estimate the quantitative impact of these tax provisions on material use. However, they do provide opportunity for expansion and investment in the virgin materials sector. To the degree that these benefits reduce virgin material prices, they could result in over-consumption of virgin resources and act to inhibit use of recycled materials. In light to current national goals to conserve energy and materi resources, it is recommended that consideration be given to reeval ation of these tax provisions. RECOVERY OF RESOURCES FROM POST-CONSUMER SOLID WASTE Municipal waste recovery is emerging as an economic alternative t traditional forms of solid waste processing, especially in areas wher disposal costs are high and adequate markets exist for recovered commodities. As energy, and material costs and disposal costs continue to rise, the economics of resource recovery will become even attractive. more There are a number of technical systems available today for the recovery of material and energy from solid waste. In the 1975-76 time frame, several additional technical options will be in full scale demonstration operation and will widen the available technical choices and range of products that could be obtained from waste. Energy recovery-especially the use of shredded waste as a utility fuel-appears to be an economical near-term recovery option. Energy recovery is usually accompanied by metals and glass recovery as well. Paper recovery through separation at the source and separate collection of wastepaper grades such as old newspapers and corrugated is an economically feasible form of resource recovery and is being practiced in many communities today. Technological systems for extraction of fiber from mixed municipal refuse are under development. There are several markets for steel cans that can be separated magnetically from mixed municipal waste, including the steel industry, copper precipitation industry and the detinning industry. Detinning of steel cans results in a high grade steel scrap and also recovers another valuable resource-tin. Aluminum contamination of steel can scrap increases the costs of detinning. The major barriers to aluminum and glass recycling are related to the economic extraction of these materials from mixed municipal waste. Once extracted there appears to be sufficient demand to facilitate significant increases in recycling of these materials. Technology is under development for aluminum and glass recovery but has not proven to be economically feasible to date. While systems for separation of plastics from mixed municipal waste for recycling are not available, plastics could be recovered as energy. However, combustion of the PVC plastic fractions could result in increased costs and potential air and water pollution problems. A number of States and communities are pursuing implementation of recovery systems. More than six States are actively planning programs to promote waste recycling; three of these States have or will soon have funding programs to support community facility construction, and two additional States are known to be considering some type of statewide resource recovery activity. A number of municipalities are moving forward with plans to install systems, some with State support, some with their own financing, some relying on private system developer financing to be paid back in the form of service charges. Eighteen cities have been identified as actively pursuing establish ment of a resource recovery facility in that either construction has legun, a design contract has been awarded or the city is firmly comitted to proceed. At least twenty additional cities are known to be inestigating major recovery facilities in a more preliminary manner. More than 70 cities operate separate collection systems for newspapers, up from a handful two years ago. Capital markets appear to be capable of supplying funds needed. for municipal resource recovery expenditures. However, some methods of obtaining financing are not well understood or used on a widescale by municipal authorities. In addition to the traditional general obligation bonds, other sources of financing include revenue bonds, bank loans, leasing, industrial revenue bonds, public authority financing and State grants. While recovery system implementation is proceeding, some institutional and marketing problems exist that will impede or slow down developments. Federal technical assistance and technology transfer to aid the implementation of recovery systems is being provided. In addition, an applied research, development and demonstration activity at the Federal level is being undertaken to improve current systems, to upgrade products from recovery plants, and to assess the environmental consequences of recovery systems. Studies indicate that fiscal incentives to stimulate the demand for recycled materials are not necessary at this time. For many recycled materials demand is currently high, prices are up and supply shortages have occurred. In the long term, the historic problem of inadequate demand for recycled materials may return and demand incentive may be desirable. There are considerable uncertainties in this volatile market area and the demand situation should be carefully analyzed and monitored in the future. PRODUCT CONTROLS FOR SOURCE REDUCTION AND RESOURCE RECOVERY The theoretical justification for product controls for resource recovery or source reduction purposes is based on the supposed failure of private market decisions to evolve socially optimal product designs including consideration of factors such as product durability, repairability, ease of material recovery or waste disposal costs. Little or no economic analysis exists on the subject of social efficiency of product design, however, general observation of product design from a resource conservation, waste disposal or recovery perspective provides evidence of the need for further study of product control possibilities. Possible product controls for source reduction could include regulation of product lifetime, reusability, product consumption level and material or energy intensivity. Control mechanisms include taxes or charges, deposits, bans or design regulation. Possible product controls for resource recovery could include regulation of recyclability and recycled material content. While there could be resource conservation and environmental benefits from various product control approaches, these measures could also have negative impacts on the market system and result in economic dislocations. At the present time there is insufficient infor mation to evaluate the necessity or desirability of product control measures. It is recommended that EPA continue to study and evaluate product controls in an attempt to identify measures that would lead to increased overall efficiency of resource utilization, pollution control and waste management. Several studies in this direction are currently underway. STUDIES OF RESOURCE RECOVERY AND SOURCE REDUCTION OF SPECIAL Obsolete automobiles Strategies for dealing with abandoned automobiles involve preventing abandonment and arranging for the collection and shipment of derelict vehicles to scrap processors. There have been innovative measures (deposits, bounties, registration certification, etc.) that have been suggested to implement these options or have been attempted in particular situations. None have been widely tried on a large scale. Continued recycling of obsolete automobiles depends, in part, upon continued high prices of steel scrap. Changes in automobile design (e.g., lighter automobiles, substitution of plastics and aluminum for steel) and changes in steelmaking technology could also reduce the price for auto scrap and impede recycling. Packaging wastes Packaging wastes represent the single largest product class in the municipal waste stream (34% by weight) and the consumption of packaging material is growing at an accelerated rate (on a per capita basis packaging material consumption was 412 lbs. in 1958 and 621 lbs. in 1971, a growth rate of 51% per capita in thirteen years). This trend has led to increased consumption of virgin materials, and energy (with attendant adverse environmental effects) and an increased rate of generation of solid wastes. There are three technical approaches that have been identified to reduce packaging material consumption and wastes: (1) utilizing larger containers, (2) eliminating over-packaging of particular products, and (3) using reusable containers. Several regulatory and fiscal measures are being evaluated for packaging control including (1) a tax on packaging weight, (2) a tax on packaging weight with a rebate for the use of recycled materials, and (3) a unit tax on rigid containers. The environmental and economic impacts of these measures for packaging waste reduction are being evaluated through ongoing EPA studies. Beverage containers Preliminary EPA analyses indicate that the reuse of refillable bottles results in lower levels of energy consumption, atmospheric emissions, water-borne wastes and solid wastes as compared to other existing beverage container systems (e.g. "throw away" bottles, aluminium. bi-metallic and steel cans). Three beverage container control mechanisms have been studied (a $0.05 mandatory deposit, a ban on non-refillable bottles and a $.005 tax for generating revenues for litter control). The results indicate. that the ban or deposit would probably result in a reduction in litter and a reduction in material and energy consumption. However, this would probably be accompanied by a decline in beverage and container sales, and economic dislocation and unemployment. While a tax could generate significant funds for litter clean-up there would be little effect on waste generation or resource consumption and little effect on the beverage or container industries. Rubber tires Motor vehicle tires are relatively difficult to dispose of by conventional solid waste landfill or incinerator systems. Therefore many tires are disposed of inadequately, or are accumulated and piled on open ground. The existing markets for recycling and reuse of old tires are the retreading industry, the rubber reclaiming industry and tire splitting industry. The latter two markets are small relative to the quantity of tires discarded and the retreading market has been declining in recent years. Further evaluation of the technical and economic feasibility of tire. processing alternatives is necessary as well as analysis of possible mechanisms (regulations, incentives, demonstrations, technical assistance, etc.) to implement these options. E. U.S.E.P.A., "Salvage Markets for Materials in Solid Wastes" (1972), pp. 89-95: In this chapter we shall outline some of the key issues and problems that need to be considered in the framing of legislation or policy to bring about a proportionally higher rate of secondary materials consumption. In general, we favor a "global" or "systems" approach to recycling policy in which all pertinent aspects of recycling are given a fair hearing. Thus we do not see recycling solely as a materials conservation activity or only as a solution to solid waste management problems but broadly under the rubric of "resource conservation," with "resource" understood to include both tangible and intangible values. Today roughly 25 percent of paper, metals, glass, textiles, and rubber are recycled through the market (Table 58), around 48 million tons of materials that need not be handled as solid waste. If other materials are also included, such as plastics, wood, ashes, stone, brick, and the like, the recycled proportion is much lower, of course, but we have no reliable estimates of the quantities of these latter materials involved. Why can't we recycle a larger proportion of our waste and thus unburden our waste management systems? The reason is that demand for scrap materials is limited. These commodities compete with virgin natural resources whose use and processing have become rationalized and institutionalized in large part because in earlier decades wastes were not available in sufficient quantities to satisfy demand for materials while virgin materials were abundantly available. Scrap recovery techniques in the broad sense of acquisition, upgrading, processing, and distribution-have not changed significantly in the 20th century. In the meantime, the mining or harvesting, purification, upgrading. |