out of its own reserves, if necessary, until the end of the century and beyond. Surveys of the country's mineral resources are far from complete, and there is still the chance that important deposits remain to be discovered. For some commodities, such as manganese, tin, and chromite, the United States must look to foreign sources for future supplies, McKelvey concludes. For others, such as vanadium and tungsten, the ores are there and could be profitably mined with suitable advances in technology and rises in world price. Resources of materials such as iron, molybdenum, copper, lead, zinc, and aluminum are "nearly equivalent to potential demand over the next few decades and the prospects for new discoveries are reasonably good." 1 CHANGE IN AMERICAN LIFESTYLE Improving domestic supply is one major approach to increasing self-sufficiency. Others are recycling and substitution. With each of these strategies the room for maneuver appears to be if anything shrinking as new constraints emerge, such as environmental protection and the rising cost of energy. Increasing production is of course not the only way to achieve a balance, but there is an evident reluctance in government reports to consider the alternative of reducing demand. This gap has been filled by a committee of the National Materials Advisory Board of the National Academy of Sciences. In a report of 1972 entitled Elements of a National Materials Policy the board criticizes the entire existing system for materials decision-making as "so biased in favor of production and consumption that one can hardly overstress the need for temperance and foresight in monitoring and controlling wasteful and nonessential uses." Composed mostly of scientists rather than the economists who provide most of the conventional wisdom on this issue, the academy committee makes some comparatively bold statements about the future of the materials situation. "The American lifestyle, insofar as it depends upon materials, is changing and will continue to change in the near future as the nation pays the deferred social costs of past consumption and inequities in distribution and begins to calculate the costs of depletion, replacement of nonrenewable resources, and environmental restoration and protection." Besides improving domestic supplies and reducing waste, the academy committee recommends that technology should be adapted to depend on widespread and abundant basic commodities such as iron, aluminum, magnesium, and the silicates. Failure to adapt will lead, within decades, to the erosion of the mineral position of the United States, "growing economic colonialism, international frictions, steadily deteriorating balance of trade, and a tarnished global image of the nation." Until a few weeks ago, this kind of prognostication would probably have been dismissed as wild-eyed. But then the experts in these matters were predicting a year ago that the cost of oil would not reach the $4 to $5 a barrel range until 1985; last month it hit $11.65 a barrel. For the immediate future, however, oil seems to be a special case. With 1 V. E. McKelvey, in The Mineral Position of the United States 1975-2000, E. N. Cameron, Ed. (Univ. of Wisconsin Press, Madison, 1973), p. 81. the nonfuel minerals the producers do not have the clout to hold consumers to ransom. Moreover, the U.S. government has a powerful weapon against cartels in the form of a massive, $6 billion stockpile of strategic minerals. In the longer term, however, the nonenergy mineral position of the United States seems certain to weaken. Just how much will depend in large part upon continued technological advances to offset increasing scarcity and other constraints. Yet however well the U.S. looks after itself, the global need is to control per capita consumption of materials while allowing more people to approach the Western standard of living. 4. "Bauxite Unit Sought by Guinea," Washington Post, March 8, 1974, p. A-24: Abidjan, Ivory Coast-Guinean President Ahmed Sekou Toure told representatives of seven leading bauxite exporters yesterday that they must form a pressure group similar to oil producers to expand income from industrial buyers. The meeting in Conakry, the capital of Guinea, began Tuesday. It is attended by delegations from Guinea, Australia, Guyana, Jamaica, Surinam (Dutch Guiana), Yugoslavia and Sierra Leone. Sekou Toure said bauxite producers must process their own mineral to become independent of the big buyers who now process bauxite into aluminum elsewhere. His speech was broadcast by Radio Conakry and monitored here. The Guinean president called for an association similar to the Organization of Petroleum Exporting Countries, and joint action on prices and production. "We are not plotting against any nation," he said, "but it is not fair that others develop with our resources and to our disadvantage." Guinea is thought to hold a third of the world's bauxite reserves. The major producer represented, though, is Australia-which has called for an association of both exporters and importers, and has opposed one-sided price fixing. 5. U.S.E.P.A., "Report to Congress on Resource Recovery" (February 1973), pp. 5-6: Historical data in this aggregated form are not available for all materials. In general, however, for most materials the portion of total consumption of that material derived from waste sources has been declining. Consumption of these waste materials has generally not kept pace with total consumption. Paper waste consumption as a percent of total fiber consumption has declined from a rate of 23.1 percent in 1960 to 17.8 percent in 1969. Iron and steel scrap consumption as a percent of total metallics consumption has declined slightly overall from the 1959-1963 to the 1964– 1968 period, from 50.3 to 49.9 percent. Purchased scrap consumption, representing the recycling of fabrication and obsolete wastes, has been losing ground: in the 1949-1953 period it was 44.9 percent of total scrap; in the 1964-1968 period, 40.0%. Rubber reclaiming is a declining activity both absolutely and in relation to total rubber consumption. In 1968 reclaim consumption was 18% of total rubber consumption, in 1970, 9.5%. The major non-ferrous metals-aluminum, copper, zinc, and leadare reused at a composite rate of around 40% of total consumption and this percentage has remained fairly constant over time. Historical data on other materials are not readily available in aggregate form, but declining recovery is generally the rule. It is reasonable to assume that a secondary material, one that has already been processed, should be a more attractive raw material to industry than a virgin material that must be extracted or harvested and processed. The secondary material is already purified and concentrated; scrap steel, for instance, is nearly 1000 percent steel while the iron ore from which it is made contains high proportions of silicate materials which must be removed. Why, then, the relatively low recycling rate found in the United States today? The low rate is the result of the action of a number of forces, among the following: (1) The delivered price of virgin raw materials to the manufacturer is almost as low in many cases as the cost of secondary materials, and virgin materials are usually qualitatively superior to salvaged materials. Consequently, demand for secondary materials is limited. (2) Natural resources are abundant and manufacturing industries have directed their operations to exploit these. Plants are generally built near the source of virgin materials (e.g., paper plants near pulpwood supplies). Technology to utilize virgin materials has been perfected; due to the adverse economics, similar technology to exploit wastes has not been developed. (3) Natural resources occur in concentrated form while wastes occur in a dispersed manner. Consequently, acquisition of wastes for recycling is costly, and is particularly sensitive to high transportation costs. (4) Virgin materials, even in unprocessed form, tend to be more homogeneous in composition than waste materials and sorting and upgrading of mixed wastes is costly. (5) The advent of synthetic materials made from hydrocarbons, and their combination with natural materials, cause contamination of the latter, limiting their recovery. The synthetics themselves are virtually impossible to sort and recover economically from mixed waste. (6) There are artificial economic barriers which favor virgin material use over secondary material use. For example, depletion allowances, favorable capital gains treatments, and apparently favorable freight rates are available to virgin materials processors but not to secondary materials processors. Also, producers presently do not have to internalize all costs of environmental pollution. 6. "Recycled Material_Incentive Program Scrapped by OMB," Washington Star-News, February 4, 1973, p. A-10: An ambitious plan to give incentives to users of recycled materials and to remove depletion allowances enjoyed by producers of virgin materials has been quietly scrapped by the President's Office of Management and Budget. The plan had arrived at OMB last August in the form of a draft of the Environmental Protection Agency's first annual report to Congress on ways to solve the nation's rapidly-growing solid waste problems. The report has never emerged from OMB. A copy obtained from government sources, notes that the nation's cities will not be able to reverse the declining use of recycled materials unless some federallyinitiated incentive system is established. NO MARKET GUARANTEE Last week, in announcing that EPA's solid waste management budget for next year had been cut from $30 million to $5 million, EPA Administrator William D. Ruckelshaus said it was the result of a decision that solid waste problems can be solved at the local level. "The technology is there," he said. The report sent to OMB notes that even cities that pay the highest costs to dispose of garbage could not use major recycling processes "because no markets can be guaranteed for recovery plant outputs....' "Many cities increasingly are viewing resource recovery as both an environmentally and economically desirable alternative to disposal. Unfortunately, this option is most often not available because demand for materials from wastes is nonexistent or severely limited," the report adds. The report states that "demand pull" for recycled products must be created by incentives and other tax changes. "The most efficient incentive would be one which results in the creation of new demand by industry for secondary materials, such as some form of tax incentive or subsidy payment to users of secondary materials," it adds. It points out that the cheaper market costs of new materials are sometimes the result of government depletion allowances: "For example, due to the 15 percent depletion allowance on iron ore, the ore producer could lower his selling price by 13.5 percent without reducing his profit margin. Publicly controlled freight rates appear to discriminate against the movement of scrap materials." RESTRICTED LEGISLATION The report states that the national rate of recovering waste materials amounts to about 1.5 percent of all solid wastes and is dropping. The nation's annual garbage pile amounts to 4.45 billion tons, according to the report, an annual increase of nearly a billion tons in the last six years. Instead of legislation calling for the incentives requested by EPA, the Nixon administration will soon ask Congress for a much more restricted legislative package calling for a federal program to deal only with toxic wastes and changing some federal procurement policies to encourage recycled products, government sources said. 7. Talbot Page, "Economics of Recycling," Resource Conservation, Resource Recovery, and Solid Waste Disposal, Prepared for the Committee on Public Works, U.S. Senate by the Congressional Research Service, Library of Congress (November 1973), pp. 31-32: FAILURE TO INCLUDE DISPOSAL COSTS One of the most obvious failures of the price system is the failure to include disposal costs in a product's price. In years past when the costs of waste disposal were very much lower, this failure in the price system hardly mattered. In rural 19th century America each farm had its own open dump; the little solid waste which accumulated could be thrown away at virtually zero cost. Now the cost of waste collection and disposal is approaching $30 a ton in New York City. And besides increasing in volume per capita, the waste is becoming more "exotic"modern solid waste contains more cadmium, arsenic, PCB and an increasing number of other substances which can impose further social costs after treatment and "disposal". The price of a cadmium flashlight battery should include not only the sanitation department's cost of collection and incineration but also the cost of health hazard created by the cadmium vapor emitted from the incinerator smokestack. While it hardly mattered a century ago, the failure to include disposal (and post disposal) costs in a product's price has become a serious failure of the price system. Another way of saying the same thing is to say that disposal costs have become a significant fraction of the total cost of many products. As a result there is too much material throughput in the economy and too little recycling. And the composition of products is shifted toward bulkier, heavier, and more toxic materials than would be the case if disposal costs were to be somehow included in product price. As we shall see, this failure in the price system is easier to point out than to rectify. 8. J. Kenneth Klitz, Testimony Before the Subcommittee on Minerals, Materials, and Fuels, Committee on Interior and Insular Affairs, U.S. Senate (Nov. 1, 1973), pp. 351–2: To date, there is no comprehensive computerized materials or mineral inventory system in the Federal Government, and there are no plans to implement one. There are several inventory systems within various agencies, but they are designed to deal with only specific resources such as coal, copper, forest products, and soils. Unfortunately, the data banks now in use (CRIB, MAS, MERIT) are few, highly specialized, generally designed for internal agency use, and not designed to answer major questions about the availability of materials. The problem is not that the United States lacks mineral data, for the 1960's produced a blizzard of data, scattered through the literature and in private and public files. Although enough data are available in various governmental and private files to build a national data base, the data are not in a computerized storage and retrieval form that would enable them to be readily used. In addition, no one has at |