TRANSCRIPT



                           Public Meeting

                of the Resource Conservation Committee

                  on Solid Waste Product Charge Issue

                  November 18, 1977,  Cincinnati,  Ohio
     This meeting was sponsored by the Resource Conservation Committee,
the Interagency Committee established under the Resource Conservation
and Recovery Act of 1976, and these proceedings (SW-31p) are reproduced
entirely as transcribed by the official  reporter,  with handwritten
corrections by the Office of Solid Waste.
                 U.S.  Environmental  Protection Agency
                                 1978

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An environmental  protection publication (SW-31p)  in the solid waste management series.

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              PUBLIC MEETING

              (2D/^S£~/^ yfi-~T>PN
     RESOURCE eOHVBRDIOH COMMITTEE


    SOLID WASTK PRODUCT  CHARGE ISSUE
         NETHERLAND HILTON HOTEL
            33  WEST 5th  STREET
            CINCINNATI,  OHIO


            NOVEMBER 18,  1977
PROFESSIONAL SECRETARIAL / COURT REPORTING SERVICE
            416 First National Bank Building
          Cincinnati, Ohio 45202 — (513) 421-3383

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SENIOR ADVISORY GROUP
Richard Herpst  -
Steffen Plehn
Lynn Brown
David Arella
John Robinson
Dr. Edwin Clark -
Commerce
E.P.A.
E.P.A.
Resource Conservation Staff
Moderator
C.E.Q.

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                    JOHN ROBINSON:  Good morning.  I'd like
to welcome you all to the second meeting of the Resource
Conservation Committee.  My name\ is John Robinson.  I'll be
moderating this meeting today.
                                    Just a couple announcements
before we get started.  I trust all of you are registered
outside.  If you haven't, please do, so we can keep a good
record of who's attending and so we can get your name on our
mailing list.  I'd also like to call your attention to the
publication on the registration table outside.  They're
basically there for your information so you can pet some
additional information about both the committee  and what
we're doing about resource conversation.  Thirdly, the restroonis
are straight through the back, across the lobby.  Also public
telephones are out there.
                                    As we said in our
presentation, the purpose of this meeting is to find out as
much as we can about your thoughts on this solid waste prodxict
charge issue.   We're basically here to listen.  And I'd like
to reiterate, as we said in our presentation, that we will
be giving full consideration to both oral and any written
comments you might submit.  The record will remain open for
two weeks from yesterday, which would be the 1st of December,
for the submission of any written comments to be included in
the record.
                             JThe Resource Conservation
Commit!feg is an inter-agency committee, which is established

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by Congress for a two year period.  It was established about  a
gaar_ ago 1" October of 1976.  We have about a year left to go.
The purpose of the committee is to study 3 wide variety of
public policies refiar^fnp; n>an,,rr-a f^noqf-opfirn  and to rnake
recommendations to both the Congress and the President
regarding measures we think are advisable.  This is the third
in a series of public meetings in which we expect to address
conservation issues.  We plan to hold additional meetings
throughout next year.  Information on those meetings will be
sent to all of you here today.  If you didn't get an invitation
to the -meeting, again, please be sure to register so we have
your name.
                              I'd like to very briefly introduce
the people we have here from the .Resource Conservation
Committee, Senior A^irtflfflry frniifi  At the far left is Dr.
Edwin Clark, C.E.Q.  Next to him Dick Herpst, Department of
Commerce.  Sext to hit" is Mr. Steffen Plehn, Environmental
Protection Agency.  Lynn Brown is sitting next to Steffen,
also from the Environmental Protection Agency.  And David Arella,
from the Resource Conservation Staff.
                              As I said before, the entire
proceedings of this meeting, both oral and written, will be
published so that the other members of the Committee can
review them and have their staff review them at a later date.
                              Since we don't have a tremendous
number of people here who would like to give formal statements,

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I would like to suggest a slightly different procedure.  We'll
take the formal statements to start off with, then we'll move
into  a. general discussion open ufr- to anyone on the  floor and
see how long that lasts.
                              Without too much else,  I  think
I^robably better stop talkinp, and start listening to  what
you have to say.  Once again, I welcome you and look forward
to your comments.
                              The first speaker we have today,
who has asked to be placed on the program, is Mr. John Tracey
from the American Paper Institute.  Mr. Tracey.
                    JOHN T. TRACEY:  Good morning.   I  am
John Tracey, Senior Vice President of the
CrvrpnT-ai-|on of America in Evana^on^ ITHnM «   My company  is
a member of the American Paper Institute, which is  the
national trade association for the pulp, paper and  paperboard
industry.  Tho twf hnnrirpfi f*rjps of API produce mn-re t-han
ninety percent of all P'^P. • .P"!""" an^ paperboard manufactured
domestically.
                              As Chairman of the Recycled
Paperboard Division of the API, I am speaking today for
the entire recycling segment of the paper industry.  Many ^
of the recyclers are small companies .  Our mill
about fifteen million tons of recycled paper.
                              I appreciate the opportunity
to present to you, as a recycler, our views on the proposed

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*\*
 .solid waste disposal tax — or product^ charge,  as  you call  it.



                               The paper industry jppnnoja



 this tax for a number of reasons -- It is inflationary. it



 is j-acroagive, Htapr-fnytnat-nry and will cause market  dislocations.



 These points were made yesterday at the Washington hearings



 by Mr. Louis F. Laun, President of the American Paper



 Institute, and  the recyclers support the API position.



                               When we review Senator Kart's



 bill, S 1281, and Appendix B of the EPA 4th Report to



 Congress, we are concerned about the concept and also the



 magnitude of this tax.  In the first full year  of  implementation



 after the phase-in and adjustments for inflation -- J_£_Kill



 cost paper pr^^n^^^n whn tin nnf iiflf pnnf-piTHi"r?r



 paper $2.6 billion per year and we would p^ftrmifo



 would add 54 to ^ ^< i n "n tr rhn fruym nf fnrrr  prm-lnrfc,



 because of the effect of the markups.  This tax is just



 so massive that it is going to cut into the growth rate



 of the paper industry.  Anything that danpens this overall



 growth rate will have impact on the recycling segment.



                               The paper industry, and particularly



 the recycling segment.has supported the concept  flf  r<"!r"rr''0








                               For the paper industry,  resource



 recovery means Tf^yfUnp vnnrr fnf"T   Currently,  we are



 recycling on a national basis more than thirty  percent nf tihf



.old ne^ftppppTfi nnrf unrH p-rriirntrirl hn-rfn rHnpnr'f"'* n^-r nf°

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In fact,  iiX-gome areas of th
fifty percent  of these grades.
                                  ofcl --
separgt-o^ at-  f-fra girnrnn nnri T-rpf clrrm frrrm  i — ntinm-'n -art"? .

                               Not all waste  paper  can be
recycled and  that portion in solid vraste that cannot  be
recycled should be incinerated t^n "rpcoveir its fuel  v.aJ-iifi—
to ^ene•ra^p afoam fln^ p^oflfr-i.'-ifY   The paper industry has
for many years  stated that we
of waste paper when it can be done on a sound economic
                               In 1977, the paper  industry
will be taking 17.5 million tons of waste paper and other
waste fibers  from the solid waste stream.  The breakdown on
this is as follows:
                     '"tlmnry rnmiimrrton nt U.I: pjpn-'  Trill IT
           T.H1 1  atn/Mint- «-r. H, ^ tlli llton tOTIK .
                     U.S.  exp_or£g pjf waste paper -  one  and
           a  half million tons.
                                                         \
                     Consumption to make other products -
           a  half million tons.
                     Consumption of other waste fibers  -
           one million tons.    •
                     Totaling 17.5 million tons.
                               This total, we estimate, will
Increase by one  million tons each year over the next three
years.

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                               EPA officials, when discussing
 increased recycling, have fflld we ngprf t-c- j,fir.rpagfi rfiTiYf'1'l"S
. faster.   If the paper industry says that the economics
 are not  sufficiently favorable to «ymao a fflfHtiftT •trirr«»
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average.
                              There  is an "available  supply"
of all grades of waste paper out there, Jhiifc  tt t:akes  time
to Ingreage supply   You have t£ alero the over  f1fteen hundred
paper stock dealers that additional  tonnage  is needed, you
have to get organizations -InfrpreRfrrl in  i-rrndnr'Mnc vnntn
paper drivgs-> you have to >*fgr£-^-hf-j^rihljic to s^w nld
newspapers.  Contract waste haulers  who  dump recyclable
waste paper in landfills or burn waste paper in  incinerators
must be informed when the time is right  to deliver more
waste paper to the mills.
                              It can tak^three  to sixmongje,
and in some cases as long as a year, for  a substantial increase
in supply to develop,and meanwhile,  all  recyclers  are
bidding up the price of the existing  paper being  collected.
After the collection programs turn on new supplies, waste paper
prices tend to stabilize at the lower historic levels.
                              In 1977, we are in a situation
that is a replay of 1974.  For over  twenty years,  there has
been an insulation material on the market made from old
newspapers.  I do not think I have to tell you what the
demand is today for home insulation due to the cost of energy
and the possibility of tax credits.  Well, we again have to
increase collection to meet the demand for recycled waste
paper from paper mills and insulators, too.

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                              Now, I know we will get the paper.
We always have and we are not going to shut down our mills.
We may shut down a day or a week, but we will eventually get
the paper and recycling will increase, and we will decrease
the amount of old newspapers in' solid waste.
                              But the time factor is what
worries me.   How long will it take and the greater worry is
what will it cost?
                              My company operates four
recycling mills and they are rather small mills.  They are
unable to raise the price for paperboard to offset dramatic
increases in the prices for waste paper.  If they become
unprofitable for a long period, we will be forced to shut
them down.  We have shut down one mill in Michigan which
operated two paper machines, one machine in Indiana, and one
machine in our mill in Ohio because they are unprofitable.
                              We simply do not think this
tax will increase recycling to any significant extent --
rather we think there will be a shift of waste paper utilization
from the smaller recycling trills to the large mills who will
want to avoid the tax or a percentage of it.
                              To increase recycling and reduce
solid waste, we think there is a real opportunity to work
with EPA to develop new waste paper collection systems that
will generate waste paper supply on a steady flow basis, at
stable prices and clean from contaminating materials.

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                               We need  a  strong resource recovery
 section in EPA that is adequately funded and  staffed.   My
 company, as well as others, have worVfi'l  vrH-'h  T?PA'R
             to start up n,f«
 Over two hundred cities in the United States have  such
 programs, but few of them are large cities.  We need more
 cities and, specifically, more large cities co] Tpr*"*^ v?^
jicoopapei*B.  As new solid waste processing plants  are  built,
 we need to set up a.priority
 waste prior to its being comingled with other waste.
                               We need to jfrm-l rnrrrnrah  on
 particularly, technology to
 in waste paper such as adhesives, inks, coatings  and
 laminates.   We think EPA can fund such research,  and we  can
 work with you to select the consultants and to write the
 objectives  of this program.
                               We need to develop  a  copnnunica-
               t-Qs^alert the American people_jrr "B1^  that
 effort" ff) fiftpqratS Waste fflpP^ frnm nf'hor or>T i H
jeejfeWng.   In 1977, the API members who recycle waste paper
 will spend $500,000 to ask the American people to recycle
 waste paper and also, to buy products made from recycled waste
 paper.   We are on television, radio, in newspapers and
 magazines to get our message across, but if it is to be
 effective,  ™_ -poo^ a Yflfifly fypandFfl pr~prnn- t-n •fncrrm fbr

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                                                         12
American public On the impor^f"™ nf rprypl ing pore



paper.



                              "r. vnnt f
but we need help on the supply side.  We do not need  the



tax. We want to work with EPA.  We have done so in  the



past and want to continue to do so.  I would like to  suggest



that we schedule a meeting at your offices at Waterside Mall



in Washington where we can start to work in a positive way,



rather than being here opposing a tax which we believe is  a



negative approach to solving the solid waste problem.



                              Mr. Chairman, this completes



my testimony and I think you very much.



                    JOHN ROBINSON:  Any questions?  During



the questions and answers, if I can ask everyone to please



identify themselves.



                              Dr. Edward Clark from the



Council on Environmental Quality.



                    EDWARD CLARK:  As the product charge



proposal is usually considered recycled material, recycled



j-iaper  w^il A ho oiroinpt- from. it.  So it would increase thtL.



prtcp of purchasing paper . and as a result one would  expect



to see the price of recycled paper also increased for the



recycled paper manufacturers.  So we would expect to  see your



product being bought at a higher price.  And I was  interested



in your comments that after the supply of waste paper increases



the cost of paper, the cost of raw material tends to  fall  off.

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                                                         13
This combination  of things would seem to me to put you in a
pretty good  situation.
                     JOHN TRACEY:  On the surface one might
certainly think so.   However,  tiTie fr^tal capfffy ff *'K°
jgfyf 1-tnp pm-tion of the industry is so small comoarpfj tq the
       poT-«--(/-.r. ^f fh," j_nt]1Ta«-ry <-hnt- if ai-vino nf t-frftse lajPgT
       n nnr hnnlnrn mnl r ,T , onrmn-T-ai-gH Pffnri-_«-n n«-«T-f
      ann/i  t,i3ofo  we don't think that the price is going
to fall off at  all.   We think that it will be driven to new
highs, and although  it  may stabilize once the supply is
available, the  distortion here is something that is, in our
opinion, very difficult to track or to forecast.
                               We also are concerned about the
price elasticity  of  our product.  At what point, for example,
does a purchaser  of  a folding carton elect not to use a folding
carton?  At what  point,  if you're packing a razor or an appliance,
do you say paper  is  not  going to be the nedium which I use
to put that product  in the consumer 's hands?  1'Iov, this would
involve all kinds of foreign packaging materials,  it would
involve glass and plastics.    And the impact on  all of these,
we don't feel will be necessarily equal.   But we are concerned
with the fact that there  is  such an overwhelming capacity of the
virgin portion of our industry to draw upon the available,
or hopefully available supply of (inaudible) -- it could very
well distort the  price schedule for some time to come.

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                    EDWIN CLARK:   It  is my  impression that
most of your large virgin mills  are located close to the
supply of virgin materials  in  the  northwest,  and places
like that.  Are most of your plants located near urban
areas?
                    JOHN TRACEY:   Yes.
                    EDWIN CLAPK:   Would you not  have a
comparative advantage over  the virgin mills where they would
have to ship to the markets and  you would have lower trans-
portation costs?
                    JOHN TRACEY:   Well, there's  no question
that JUT"" "*• <"'"° Tpvflc mi Tin jn  i^rln rniintry nrr Inrntrfl
pppr HIP iflj-gp iflf.t-1-npr.ni-im or-?-.e  TIT?I"^P thp waste paper is
available•  But as we have  seen, for  example right now on
newspaper collections, we're pulling  newspaper in to
Hutchinson, Kansas from as  far away as Houston,  Texas,  because
that's where we have to go  to  get  it.
                               And  we  have to believe that with
the product tax that a virgin  craft mill in the  southeast --
there's a number of then; in the  State of Georgia -- we have
a virgin craft mill in Tennessee.  We are currently shipping
from Cleveland, Ohio down there  and also from Detroit and some
cities in Hew Jersey.  You  go  where you have to  go to get it.
And it's true we will have  an  advantage on  the basis of freight,
but we don't have the necessary  economies of scale that they
might have.

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                                                         15
                     EDWIN  CLARK:   The  ability  of  the  recycling
 industry  to be  --  to recycle paper to  expand and  the  extent
to which  (inaudible)  with respect  to larger v^gin material.
 Is  that a problem  in your  industry?
                     JOHN TRACEY:   It has been  a problem.
 Addressing myself  to the first  part of your question  on  the
 ability to expand.   We  have been  attempting to get  some
 recognition within the  tax laws for additional investment
 tax credit for  the recycle industry.   We're hopeful that
 some of the legislation that has  been  recommended and is
 pending will be passed.       "  "~
                              There is an opportunity to
 expand if there is a recognition  of the need and  also the
 future potential growth of the  recycling  industry.   I think
 we  can.
                     EDWIN  CLARK:   How  about pollution control
 laws?
                     JOHN TRACEY:   The  pollution control  laws
 are applying &ft all  of  us  in the  industry, whether  you're
 virgin or recyclers.  It is a very difficult financial time
 for the whole industry  in  this  respect.  Some  thirty  percent
 of  the capital  dollars  in  the whole industry have gone in
 this direction  over  the past ten  years or so.  We are, for
 the most  part,  in  compliance.   The mills that  have  shut down
 from the  recycling segment of our business, which number over

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                                                        16
a hundred in the past seventeen years, have shut down primarily
because they felt they could not afford the expenditure
for compliance with the pollution control.
                              I would say that for the most
part in the recycling portion of the industry the pollution
control bill is behind us.  They are in compliance with the
July '78 requirements.  They will certainly be in compliance
with the water regulations in '83, whatever they will finally
turn out to be.  All of the major recycle mills that I know
of are well on the way to closing up there (inaudible)
discharge systems.  I think it is a very viable industry
today, and I think it will be in the future.
                    EDVJIH CLARK:  Is air pollution a problem?
                    JOHN TRACEY:  Not as serious, but it is
a problem.  We have a particular S 02 problem.
                              My mill in  (inaudible), Ohio,
for example, we have four boilers operating three paper
machines there, and we're operating on coal.   We are going
through a three and a half million dollar expenditure presently
to clean up our/discharge into the air.
                    RICHARD HERPST:  Richard Herpst, Department
of Commerce.  Would you tell me whether API has done any
work with respect to what the product charge issue might
have on trade implications.  For example, yesterday we learned
that we have what is known as (inaudible).  And specifically

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                                                         17
 this  treaty  does  not  permit imported educational printed
 material  to  be taxed.
                    JOHN TRACEY:   I can't really answer that,
 sir.   I have with me  today, Rod Edwards,  who is the Vice
 President of API,  and I will defer that question to him.
                    UOD EDWARDS:   We haven't really made a
thorough study  that you might get all the details.   But in
_™IT- f-raHo -r-oi at-'ir.y^ip with Canada, for instance,  their pulp
 and newsprint  romps tnt-o n^r country duty free_.  And with the
 solid waste  tax and the proposal that 
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                                                        IS
reporter and another copy at the registration desk.
                              Our second speaker today is
Professor Haynes Goddard of the University of Cincinnati.
                    HAYNES GODDARD:  Good morning.   My name
is Haynes Goddard.  I'm an Associate Professor of Economics
at the University of Cincinnati.  I'm here, really, to speak
for myself, but perhaps I should give a little background.
                              My teaching areas at the
University of Cincinnati include Public Econonics,  mainly
Environmental Economics.  My research interest,  principal
research interest, is the economics of solid waste management,
and I've written a book on the subject entitled, "Solid Waste
Matter, Economics and Technology, in Institutions".  It was
published by (inaudible) Publishers in 1975.  I'ffi also an
editor for a journal, "Resource (inaudible) and Conservation".
                              First, I'd like to say I'ir
happy to see there's a serious interest on the part of the
government towards economic incentives for environmental
control.
                              I heard of this meeting only
three days ago, so I haven't had nuch tiffe to prepare my
corments.  I have tried to keep somewhat abreast of the
analysis on the product charpe and I have thought somewhat
about it.  My cotrnents will be general and perhaps I can
clarify sorre of their that may not be too clear.

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                                                            19
                                  I'll  begin by asking a question.
 The question is, what  is  the  solid waste problem which the
 product charge is designed  to correct?   Essentially, it's
 designed to correct t-hp unepnnnmlp  use <^f Tn^^gr-* -*1 " f*-™ *->"•-
 point of view of the  impact  pffl t-ho.  ppviromngnt:.   In particular,
 it's designed i-n-i-oHirt. rV r"~ "J ' '    ' r " '   '  '  "' '
 "flVif filnr1" «"^
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                                                        20
to a number of communities around the country, would be



essentially a function of the quantity of waste discharge



in the surface level.



                              The second element of this



framework would be a litter control mechanism.  This might



include various deposits for returnable and non-returnable



beverage containers, fines for littering with a clear



enforcement mechanise:.



                              The third element would be



a viable smvrpp sppara<--ifvn p-moi-flf)  vrlri r-+i would be made more




viable by the presence of an economic incentive of the user



charge.



                              And lastly, of course, the



resource recovery program.  And all of these are designed



to be put together.



                              I'll discuss some of the



potential merits of this shortly, but I would first lil
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                                                        21
particular it doesn't tell us very much about how to choose



overall  national policy objectives.  Usually, these questions



are much too large for the scope of benefit cost analysis



and much too important.



                              The adoption of national



objectives and the methods of achieving them, even for



fairly straight forward economic questions, is very much



conditioned, or conditioned very heavily, by our values,



and the institutions that we choose to give life and



substance to our values.



                              Two values which are fundamental



to our economic and political system are the followinp:   Each



individual is the best judge of his own welfare,  and



individual preferences should count.  I'll repeat these.



East individual is the best judge of his own velfare, and



individual preferences should count.



                              Now the institutions which we



have adopted in this society to guide our economic and



political life by these values are essentially the followinp:



We have a political democracy that permits choice by



individuals, and we have an economic counterpart which can



be suranied up as the market system where choices can be



exercised, and those who want to consume particular resources



are required to pay the cost incurred for producing those



resources.



                              You should note that I did not

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say free enterprise system or capitalism.  How the meaning of



this is that we have, in fact, in this society adopted



decentralized decision-making institutions.  And that every-



thing else being equal,  these are to be preferred.  Decentralized



decisionmiaking institutions imply that incentive systems



or mechanisms should reflect, in the case of solid waste



management,  local solid waste management for its conditions



and local preferences, and not incentive mechanises that



reflect a national average in no particular place in particular.



Such a situation has much potential, I think, for reducing



consumer and social welfare, or economic welfare, unnecessarily.



                              How, the implications of this



solid waste management,  I think, are the following:  We should



begin first to examine decentralized decision-ciakinp



institutions rather than centralized ones for solving the



solid waste problem.  We should first look at instruments



that permit incentives to reflect local cost conditions,



local income, local preferences.  And such a decentralized



mechanism can be found within the framework that I mentioned



earlier, that is an integrated solid waste management system



operated essentially at the state and local levels.



                              The principal elements of this



system include the economic incentive provided through a user



charge for collection and disposal, effective litter control



mechanisms,  such as garbage container deposits, anti-litter



laws, source separation programs and resource recovery programs.

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                                                         23
All of which are designed to be integrated together.  And as



well, an on-going program which maintains the discard informa-



tion to the discarding public in each of these areas about



the cost implications of their behavior.  Both in terms of



budgetary feed-backs and the external costs.  Thus



decentralization can be preserved, and the local conditions



can be factored into these consumer mechanisms.  Something



that is very difficult to do or impf- ^ble to do in the case



of a national product charge.



                              Now, this proposal is similar



to the product charge in that I believe that the federal



government would have to insist that the local communities



adopt  a  mechanism to induce waste disposal behavior that



is consistant with the social flaws it creats.  But it differs



in that the magnitude or the level of the incentive, the



price,  would vary according to the local cost conditions



and local preferences.



                              There are some problems with



the proposal, however, or with both proposals.  The user



charge aspect of incentive mechanisms for solid waste



management is very much unresearched in comparison to the



product charge.  These two incentive mechanisms are very



likely a substitute for one another in some aspects of solid



waste control, and compliments in others.   I do think that



the product charge should not be made into lav; in isolation.

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The user charge merits more consideration, and the two
concepts should be developed together, but they haven't
been to date.  Otherwise I think the potential growth rate
for getting locked into environmental control mechanisms
and instruments would make the attainment of environmental
quality more expensive, more costly, than is necessary.
And the result of this is that if environmental quality
is made more expensive than the need to be,  the public will
inevitably demand less environmental quality than it could
have in terms of the underlying benefits.  And thus the
public will be worse off.  And, in particular^ I think we will
pass on to our own children a heritage of less environmental
quality than they should have.
                                These conclude my prepared
comments, and I recognize that they've been kind of general
which have been put together under the press of time.  If
you have any questions, I'll be glad to answer them.
                      JOHN ROBINSON:  Any questions?
                      EDWIN CLARK:  I'm puzzled about one
element,  llaybe you can enlighten tne about it with regard
to consumer choice.  You recommend a  (inaudible) council,
or something like that, as part of your program.  And yet
when you look at how consumers have reacted to the choice
between throw-away cans and returnable bottles, they have
chosen the throw-away cans.

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                                                        25
                    HAYNES GODDARD:  In the presence of
deposit revisions?
                    EDWIN CLARK:  Well, in returnable bottles
the beverage is cheaper, and they have preferred to pay
more for the opportunity to use the convenience of cans.
And this would appear to be a strong demonstration of
consumer preference and consumer decision making.
                              On the  >ther hand, when you
do an opinion survey, you find that something like seventy-
three percent of the people prefer beverage container
deposit legislation.
                              I would be interested if you
could explain this discrepancy.
                    HAYNES GODDARD:  Well I suspect -- You
made the comment that -- something about correct consumer
prices on beverages sold in returnable and non-returnable
containers in the absence of a deposit mechanism.  I wouldn't
                                5 n.k>* TT^-^/Vf
say they're correct.  There are oubotqtivc costs and litter
costs that are not being made explicit to the people who
are purchasing the containers.
                              It is true, typically, that
beverages are slightly cheaper in returnable containers,
but it could simply be, I think, that the price differential
between the two is insufficent to outweigh  the convenience
of having a non-returnable container.

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                                                        26
                              As you know,there will always



be a large -- Well there will be a number of people who are



really on the margin of their decision-iraking, and a slight



jiggling 6f the price one way or the other won't make a



change in their behavior.  It may not cause a mass shift



from non-returnable to returnables.



                              So I would say that on the



surface there really isn't an inconsistency between the



two, but rather you have to take a look at the magnitude



of the price differential.



                              I would think, based on the



experiences (inaudible) that I'm not all together up-to-date



on, does suggest that once the price differential is made



somewhat greater, you will have a much greater response,



and you create a much greater demand for the returnable



containers.



                    JOHN ROBINSON:  Any questions?



                    STEFFEN PLEHN:  It's really come to an



informational question.  In those communities in this



country where a user charge system is in place, do you know



what the experience has been in terms of the person with



solid waste,  in an effort to avoid the charge, littering



or dumping, or otherwise discarding his waste so as to



avoid it?



                    HAYNES GODDARD:  In other words, to what



extent does the presence of a user charge give incentive to

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                                                        27
dump Illegally?''
                    STEFFEN PLEHN:  Yes.
                    HAYHES GODDARD:  No-,  I don't know, nor
does anyone else, to the best of my knowledge.  There have been
some relatively superficial studies done on the question,
really, of indirect measures, and are a very poor data
basis, but they do suggest that there would be a slight
increase.  And theoretically you indeed would expect that
there will be some individuals who would say, "I'm going
Co dump it someplace else."
                              But we don't really know, and
it has not been carefully studied, and my own feeling is
that we're probably -- it would be very difficult to find
out on the base of a historical study.
Probably you would have to have an experiment someplace
to see what would happen.
                              But the answer to the question
should be posed in these terms.   Even though one would
expect theoretically that the presence of a local user
charge would give an incentive to some to litter, the
question is, once alternative mechanisms were in place
to both control that litter,  that is,a clear enforcement
mechanism based on fines and perhaps beverage container
deposits, and information and picking up whatever does
get littered, which system represents the lower total
cost system?  It's conceivable that the total cost of local

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                                                        28
solid waste management could indeed be lower under a system
which allows user charges and also expects some increased
littering cost.  But all things considered, the total cost
would be lower.
                              Now this is also within the
context of source separation programs and resource recovery
programs.
                              It's also possible that the
total cost would be higher.  And if that were the case, then
the evidence, I think   -- one would have to conclude from
the evidence that the user charge system is not the best
system to do.  But we don't know this, and I'm reasonably
confident that no one does.  There are some formed opinions,
though.
                    STEFFEN PLEHN:  From the institutional
point of view, would it be your feeling that serious
consideration be given to a federal requirement that states f
more local governments be required to institute the user
charge system?  I'm asking that in the context of your
earlier statements about the free market choices and the
decentralization of decisionrinaking within our society.
                    HAYNES GODDARD:  Well, my major thrust
is to preserve local choice and to have incentive mechanisms
that make solid waste management cost explicit.  And so, in
general, I would say that probably is warranted in major
metropolitan areas, but there has to be room for exceptions.

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                                                        29
                              I don't doubt that there are
many local rural communities where the cost of solid waste
management is sufficiently low, or the external costs are
virtually nonexistant, that the benefits and costs of the
situation would warrant no user charge system.  That is,
they would go on either disposing of it themselves or have
it financed out of the property tax.  The situation is that
local cost conditions may be such that zero price would be
the proper price.  Whereas in many other areas, some
positive price that would reflect the cost of collection
and disposal, would be the proper price.
                              So, if you were to legislate
that all communities were required to have it, you would
be forcing on some communities, I think,*a mechanism which
is really not warranted in terms of benefits and costs.
So the legislation would have to be in such a way to allow
that flexibility, otherwise you're running counter to my
whole thrust.  You're imposing unnecessary requirements
                                                c/e/77£/s*NS
upon communities.  And that's exactly one of my crittalma—
of the product charge in requiring local communities,
such as Missoula, Montana, which is in the middle of
nowhere, which may not have to be subject to a product charge.
There is likely no opportunity that the material they use
would be recycled,because of the (inaudible) involved.   It's
much cheaper for them to landfill it locally.  So you're

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                                                        30
Imposing an unnecessary cost upon them, a cost that reflects
New York City, or Philadelphia, or Boston where waste
management problems are getting serious.  Therefore, you
reduce their wealth unnecessarily.
                    EDWIN CLARK:  Should one presume that
one should write a law that says that the user charge should
reflect actual costs?  But from a political standpoint,
is it appropriate for the federal government to pass a law
dictating   how communities should charge?
                    HAYNES GODDARD:  Well, we do it already.
One part of the water pollution control act requires cost
sharing.
                    EDWIN CLARK:  I don't think that's an
appropriate role.
                    HAYNES GODDARD:  Well, I really couldn't
address that.  I suspect I would quarrSl with the way it's
implemented.  I usually do when it's done through legislation.
But it is a mechanism designed to make at least some of
the costs explicit to local dischargers in that case.  So
the general thrust is appropriate.
                    EDWIN CLARK:  The justification of the
Water Pollution Control Act involves about seventy-five
percent of the facilities, and, therefore, they have an interest
in trying to reduce the discharge.  And in this case, there
is no such justification.  So it seems there would be less
of a justification here.

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                                                        31
                    HAYNES GODDARR:  Well, that's possible.
I really haven't thought, from a political point of view,
what kind of justification might be required.  Certainly
in areas in which a solid waste management problem
                      u~j?
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                                                        32
that the user charge should be referred to the product
charge.  As a matter of fact, I think that the user
charge would also stimulate the resource recovery
program, and it would do more, I think, although I
don't really know, to insure a consistent supply of
separated raw materials.  Particularly if you allow the
household to have its separated waste picked up for nothing,
and the waste that it does not separate be subject to the
user charge.  Or if not (inaudible) sufficient to give an
incentive and also to reflect any underlying cost.
                              One of the problems with the
self-separation programs is that the household has no
incentive to measure against the implicit cost of having
to separate and store separated waste.  Whereas, if he has
an incentive by saving some money, through collection,
having the material picked up for nothing, then he would
be more likely to engage in it.  Kow widely, of course,
depends on the level that is charged.  Some households,
again, will always be in the margin and separate nothing.
Some do it for nothing already.  Others will never do it.
That way you can insure, I think, a steadier supply of
materials.
                              Now, that's essentially the
supply side,and that doesn't create a demand.  So in this
case a product charge might be appropriate to insure there
is a demand for the materials as well.  Although resource

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                                                        33
scarcity, by itself, will also do that.  If one projects ahead
that the scarcity situation may be for variously long
periods and may not require (inaudible).
                    RICHARD HERPST:  You may well know that
the Resource Conservation Committee is addressing the
question of (inaudible).   And in view of your comments
about taking an integrated approach, could you reflect
on whether this committee should be making a decision
with respect to mandatory deposits.
                    HAYNES GODDAM):  Well, they certainly
are related.  And on the surface I haven't thought about
that question very much.   But if things are related I think
you certainly ought to be thinking about them in a
related framework.  That would include  a  product charge
and mandatory deposits on containers.   Because they are
substitute mechanisms for dealing with the solid waste
management program along some dimensions,  and along other
dimensions they would be compliments.   We really need to
determine which is which.  Otherwise,  I think the potential
is very great, as I think has happened with the water
pollution control, that we get ourselves locked into
mechanisms that in the long run prove to be frightfully
expensive, and uneconomic, and frequently don't work in
some cases or they overlook the fact that the communities
don't operate the mechanism,  and so on.  By looking at them
all together and sorting out what follows  what and what

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                                                        34
relates to what seems to be a better approach £n~5n considering
them in isolation.  But it does make the problem trore
complex.
                    JOHN ROBINSON-.  Are there any other
questions?  Thank you.  Are there any others from the
audience that wish to rake a formal statement at this
time?
                              I notice from looking through
the registration cards there are a number of representatives
from state and local governments.  We haven't really
heard much of anything from the state and local governments,
and if any of you have any thoughts on this issue we would
certainly be glad to hear them.  No volunteers?
                    ROD EDWARDS:   Could I make one
addition to Mr. Herpst's question on the international
trade?  I neglected to mention that in addition to the
situation with Canada, we are in  GATT negotiations now
with the objective of lowering tariffs world-wide.
And the product disposal charge on imports of paper could
be construed as an attempt by the United States to add
import duties.  And that might upset those international
trade agreements and the objectives of the CATT
negotiations.  Thank you.  For the record, I'm Rod Edwards
of the American Paper Institute.
                    EDWIN CLARK:  I'm not so sure about
your GATT argument.  It seems to me that under the general

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                                                        35
GATT agreements that a product charge would not be



treated like a tariff or income tax.  I think that it



could be adjusted under the GATT agreements.



                              The question I had is,



bot-h the head of the American Paper Institute and the



person speaking this irorning talked about the distribution



of income tax.  Has the American Paper Institute done any



analysis on how this charge, in fact, would be distributed



across income levels?



                    ROD EDWARDS:  No, I guess we really



haven't done anything that looks at the various income



levels and their consumption of paper.  We do know that



the lower income groups are larger purchasers of packaged



food items, such as rice, pastas and cereals.  That is



the largest part of the percentage of their disposable



income.  So they are the larger buyers of packaging with



regard to their total disposable income.   Therefore, we



say it's regressive because the impact on that wage level



would be greater from a percentage interpretation than it



would be on the higher income people who do not spend that



great percentage on packaged food products.



                    JOHN ROBINSON:   Thank you.  Is there



anyone else that would like to say anything on the subject?



                    EDWIM CLARK:  Regarding the representatives



from state and local governments,  if a product charge were

-------
Introduced it would be generated from a fair amount of



revenues,  and there's the question of what to do with the



revenues.   One of the proposals is to pass them back to



the state and local governments.  And there are various



ways this could f,o.  It could he a block prant to the



states.  It could be a block prant directly back to



municipalities on the basis of solving waste costs.



Or it could be a (inaudible) grant proprar where it is



passed back to the local level for better solid waste



disposal facilities.  Or it could be a state prant prop.ram.



                              I would be very interested



in getting peoples observations on the relative presence



of these alternatives.  If there are representatives from



state and local governments, they must have some thought



on it.



                    JOHN ROBINSON:  Does anyone care



to respond?



                    ROD TOWARDS:    I've always wondered



how the return of revenues frotri the product charge is



going to impact upon individuals of those communities



that have private collections where governrents are not



involved.   Are these individuals poinp, to have to pay



twice.  That is, once when they have their material ilcVod



up, and once in the products they buy?

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                    EDWIN CLARK:  That question  --  there's



been no answer to any of these questions.  That  question



can be answered, like 1 say, in  three ways.  One is,  some



attempt is v.ade to pass it back  in  such  a way  that  it would



compensate the private -- these  people who have  their



waste privately collected, to the extent of passing



it back directly in solid waste  collection costs.



                              The second is if it went



back to the coiranunities it would lower property  taxes,



which would in some way compensate  for not lowering the



solid waste collection costs.



                    WIDENTIFIED SPEAKER:  It  could



lower property taxes, it doesn't mean it would.



                    EDWI7T CLARK:  That's a judgment



I think you have to be fairly careful of.  You have to



be careful of making that judgment.



                    JOHi: ROEIT7SOK-  Would anyone else care



to address that question?  Does  anyone on the  Cor.miittee



have anything further to say?



                    DAVID ARELLA-   I have a follow-up



question for Mr. Goddard.   I think  your point  is well



taken about the need and value of local decision—waking,



and also about the cor.plitner.tary aspects of a  user  charge.



And I fully appreciate the incentive that this puts on



the consumer to be conscious of  his waste.

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                              My follow-up  question  is,

do you feel there is any role or justification  for an

incentive at the manufacturing l€'.vel both to  increase

demands and also to produce waste?

                    KAYNF.S GODDARD:  Well,  since  I'l? not

really intiirate with the lay studies and  I  haven't been

able to follow the concept as carefully as  I  would like ,

I would say there likelv are coirplerpentar ies  to the  two

approaches.  And wy nain concern is, one  is being pursued

(inaudible).  I can envision that the rarket  tvechanisir
                       I W§.fr~/v'.,  T'f -
nay not be sufficentiy int.euLitfe or sensitive to  changes

in local waste management costs or changes  in the incentive

structure on the local level, narticularlv  the  user  charge,

making it explicit to the householder.  It  ray  have  little

impact on packaging configurations that the manufacturer
                              Now, on  the  other  hand,  it

doesn't have to be.  I think we view the cot'isviraer   as

tyoicallv knowing what he is doing, and yet  retrospective

analysis indicate that consuirers make  bad  choices.   In this

case, I think we can po far in that direction by sirr>ply

raintnininp a reasonably accurate  and  continual  flow of

information to consumers , say, once a  rx?nth  when the bill

comes out, or however billing is effectuated.  Txplain to

householders what the cost implications are  if they continue

to buy non-returnable containers,  if they  buy packages that

-------
                                                        39
have four or five levels of packap;in;?, if they buy
containers that are four or five times larger than the
contents.
                              By this sort of mechanism
I suspect that the sensitivity of the market mechanism
can be improved a great deal.   And the advantage of it
is it does still permit choice.
                              Now, if one does a complete
accounting of the benefits and see what we can do, the
benefits and costs of an alternative mechanism, I'm sure
there would be a liir.it to that kind of activity.  And there
still may be a complimentary relationship for which it's
difficult to get consumer preferences translated effectively
back to the manufacturer or the packaging fabricator, and
maybe there would be some reason to have a product charge.
They would have to be phased in together.   Maybe that
makes life more complex, but ny preference is, and, I think,
based on the values that I think characterize  this society,
that's where we should begin.   And then if we find that we
still have a problem,  then we  look for alternative rechanisms
that are more centralized.
                              Of course, they still go
through the political mechanism, but I think it's better
to start on the decentralized mechanism first,  and then if
it doesn't work move towards more centralization.

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                     JO'-"I T>.Or.ItT?0*'-  If there  are  no further




CMCStions,  I'd  lil'e to retrir.d everyone that vritten comnents




vill he  accepted  through the first of December and will




be distributed  tc all  the rorrittee jref-bers.   T.'e  vould




erco-'.rafe  you  to  ploace subrit your written thoughts




or. tMs  Issue.




                               I'e'll retrain around for




a while  after we  turn off the riicrofhor.es.  So if anyone




vould liVe to  talk s little bit rore inforrally atout it,




we'11 be here.



                               Thank you very  much for




coirirp.
                      FEARINC COMCLUDEP

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            STATEMENT










               DY










         JOHN T. TRACEY




      SENIOR VICH  PRESIDENT




PACKAGING CORPORATION  OF  AMERICA
               TOR
  TUB AMERICAN PATER  INSTITUTE
             BEFORE
 RESOURCE CONSERVATION COMMITTEE
                                CincinnaLj,  Ohio




                                Novomhor 1R,  1177

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                                  - 4 -






     We went longer distances for nrw supplies thus increasing




transportation costs, we financed m-w paper stock plants, we




advertised for new collection programs and our cost for waste




paper doubled, and in some cases, tripled in that year compared




to the historical average.




     There is' an "available supply" of all grades of waste paper




out there, but it takes time to increase supply.  You have to




alert the over 1500 paper stock dealers that additional tonnage




is needed, you have to get organizations interested in conducting




waste paper drives, you have to alert the public to save old news-




papers.  Contract waste haulers who dump recyclable waste paper in




landfills or'burn waste paper in incinerators must be informed when




the time is right to deliver more waste paper to the mills.




     It can take three to six months and in some cases as long as




a year for a substantial increase in supply to develop and mean-




while, all recyclers are bidding up the price of the existing paper




being collected.  After the collection programs turn on new supply,




waste paper prices tend to stabilize at the lower historic levels.



     In 1977, we are in a situation that is a replay of 1974.  For




over 20 years, there has been an insulation material on the market




made from old newspapers.  I do not think I have to tell you what




the demand is today for home insulation due to the cost of energy




and the possibility of tax credits.  Well, we afjain have to in-




crease collection to meet the demand for recycled waste paper from




paper mills and insulators, too.

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      I am John T.  Tracey.   I  am Senior Vice President of the Packaging




Corporation of America  (PCA) .   My  company is a member of the




American Paper Institute,  the  national trade association for the




pulp, paper and  paperboard  industry.   The 200 member firms of API




produce more  than  90S of all  puJp,  paper and papcrboard mania factnred




domestically.






     As Chairman of  the Recycled Paperboard Division of the API,




I am speaking today  for the entire  rccyclinq seqmcnt of the paper




industry.  Many of the recyclers are  small  companies.   Our mills




produce about 15 million tons  of recycled paper.






     I appreciate  the opportunity  to  present to you,  as a  recyclor,




our views on  the proposed solid waste disposal tax  — or product




charge, as you call  it.






     The paper industry opposes thi'3  tax for a number of reasons --




it is inflationary,  it is regressive,  discriminatory  and will  cause-




market dislocations.  These points  were  made yesterday at  the




Washington hearings  by Mr. Louis r. Lauri,  President  of the American




Paper Institute, and the recyclers  support  the API position.






     When we  review  Senator Hart's  hill,  S  1781, and  Appendix  Ii  of



the CPA 4th Report to Congress, we  are concerned about the concept




and ajso the magnitude of Lhis  tax.   In  the  first full year of imple-




mentation — after the phase-in and rid ) us t moti ts for  inflation  — it




will cont paper produoi-rn who do no*  use  post-

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consumer waste paper $ 2. (> bi II ion por year  and  we  would  estimate




that this would add $4 to $5 billioi to  the  buyers of  paper pro-




ducts because of the effect of the markups.   This  tax  \s just  so




mass i vc that it is go i ng to cut  into the qrowt h rate of  the paper




industry.  Anything that dampens this overall growth rate will




have i mpnc t on the recycling segment,.




     The paper industry and particularly the  recycling segment




has supported the concept of resource recovery  as  the  best solu-




tion to the solid waste problem.




     For the paper industry, rosource recovery  means recycling




waste paper.  Currently, we are  roeyd ing on  a  national  basis




more than 3urfc of the old newspapers and  used  corrugated  boxes




discarded after use.   In fact, in some areas  of the country we arc-




recovering over 50?, of these grades.  Rccycl ing of waste paper,




separated at the source arid kept clean from contaminants,  is




using waste paper at J ts highest economic value.




     Not all waste paper can be  recycled and  that  portion in




solid waste than cannot be roeye led should  bo incinerated to




recover A t s fuel val vie to ijonoratc steam and  o lect r i c i hy,   The




paper i ruinst ry has for many years nt atod that we encouraged




increased recycling of waste-paper when  it  can  be  done on a sound




economic banis.




     In 1977, the paper industry will be taking 17.S million tons




of wa1^t^ paper and other was t-c fihois from  the  solid waste stream:

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          U,S. 1977 Waste Paper Col lection

          Consumption at U. S. paper mills       14.5 million tons
          U.S. exports of waste paper             1.5 million tons
          Consumption lo make other products       .5 million tons
          Consumption of other waste fibers       1.0 million tons

                                           Total 17.5 million tons

     This total will increase by 1 million tons each year over the

next three years.

     EPA officials when discussing increased recycling have? said

we need to increase recycling faster.  If the paper industry says

that the economics are not sufficiontly favorable to cause a

faster increase EPA says it will force the economics.   This is

one of our primary concerns with the tax.

     As recyclers of waste paper, we are extremely apprehensive

about the impact of this tax on the economics of recycling, and,

therefore, we oppose this tax.

     Solid waste tax proponents expoct increased recycling to take

place at the same time they expect waste paper prices will remain

constant.   We anticipate that large paper companies,  now not usinq

waste paper, will enter the waste p.iper markets causing dramatic

dislocations in the paper industry which will impact  on the many

small recycling companies.   In 1974,  there was an all time high

in the world demand for waste pnper.   To meet this demand, my

company,  as well as al]  companies uiinq waste paper,  worked

feverishly to start-up new collection programs and to increase the

tonnage collected in existing programs.

-------
     Now, I know wo will qot the paper.  We always have and we




arc not going to shut down our mills.  Wo may shut clown a day or




a week, but we will eventually qet the paper and recycling will




increase, and we will decrease the amount of old newspapers in




solid waste.






     But the time factor is what worries me.  How long will it




take and the greater worry is what will it cost?






     My company operates four recycling mills and they are rather




small mills.  They are unable to raise the price for paperboard




to offset dramatic increases in the prices for waste paper.  If




they become unprofitable for a long period, we will be forced to




shut them down.  We have shut down one mill in Michigan which




operated two paper machines, one machine in Indiana, and one machine




in our mill in Ohio because they were unprofitable.






     We simply do not think this tax will increase recycling to




any significant extent — rather we think there will be a shift of



waste paper utilization from the snaller recycling mills to the



large mills who will want to avoid the tax or a percentage of it.






     To increase recycling and reduce solid waste, we think there




is a real opportunity to work with FM A to develop new waste paper




collection systems that will generate waste paper supply on a




steady flow basis, at stable price', and cle n from contaminating




materi als.






     We need a strong resource recovrry section in EPA that is




adequately funded and staffed.  My crmpany, ap well as others,

-------
have worked with EPA's Office of Solid Waste to statt up new




municipal collection programs.  Over 200 cities in  Ihe U.S. have




such programs but few of them are large cities.  We need more




cities and, specifically, more large cities collecting old news-




papers.  As new solid waste processing plants are built, we need




to set up a priority for presorting recyclable waste prior to its



being comingled with other waste.






     We need to fund research on developing new technology for




repulping waste paper and, particularly, technology to remove or




disperse the contaminants in waste paper such as adhesives, inks,




coatings and laminates.  We think EPA can fund such research, and




we can work with you to select the consultants and  to write the




objectives of this program.






     We need to develop a communications program to alert the




American people to make that extra effort to separate waste paper




from other solid waste for recycling.  In 1977, the API members




who recycle waste paper will spend $500,000 to ask  the American




people to recycle waste paper and also, to buy products made from




recycled waste paper.  We are on television, radio, in newspapers




and magazines to get our message across, but if it  is to be effec-




tive, we need a vastly expanded program to inform the American public



on the importance of recycling more waste paper.






     We want to increase recycling,  but we need help on the supply




side.  We do not need the tax.  We want to work with EPA.  We

-------
have done so in the past and wnnt to continue to do so.  J would




like to suggest that we schedule a mooting at your ofliccr. at




Waterside Mall in Washington where we can start to work in a




positive way, rather than being here opposinq n tax which we




believe is a negative approach to solving the solid waste problem

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              DuBOIS TOWER •  CINCINNATI, OHIO 45202 • PHONE: (513) 762-6000

                                          November 23,  1977
    Ms .  Susan B. Mann
    Public Participation Liaison
    Resource Conservation Committee  (WH-563)
    401  M Street SW
    Washington, D.  C. 20460

    Dear MS. Mann;

    I attended your November 18, 19/7,  public meeting on  the Solid Waste
    Product Charge  and was shocked  that there was such poor  attendance
    and  participation.  That spurred  me to write the following.

    I have read your handouts in an  effort to better understand  the
    questions, but  I still have difficulty in addressing  your specific
    questions because they are probably too general for a short  concise
    answer.  Instead I will reflect  on  the proposed Product  Charge and
    how  it would affect DuBois Chemicals,  our products and possibly our
    customers, the  Motels, Hotels and Industrial plants across the
    United States.   I have assumed  that our packaging material would be
    subject to a charge even though  your emphasis is directed toward
    consumer products.

    DuBois Chemicals manufactures cleaners and detergents  to clean dishes,
    glasses and kitchen utensils in  the Institutional trade  and  steel,
    aluminum and finished appliances  in the Industrial trade.  Well over
    600  products are marketed nationally with a sales volume of  over
    $130 million annually.
    ror powaerea  ana  iiquia inauscriai  products,  me pac Ka£
    from 1.7 cents  per pound of product for the paper and  st
    to 4.20 per pound of product for  the plastic containers.
    The choice of  packaging and amount  of  overpack given  each  product is
    dictated by  the  market served and the  characteristics  of  the product
    be ing packaged.   Institutional dishwashers want small  packages of 2
    to 10 pounds not 55 gallon drums, while industrial plants  want 55 gallon
    drums not two  pound paper pouches.   Corrosive liquids  require plastic
    or plastic coated steel containers.
; VISION OF CH9M6D CORPORATION
                                                                    CABLE MISTERDU

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We package with  the  most  economical material we can use consistent
with corrosion resistance,  container failure rates, and container
availability.  As prices  change,  formulas are modified, and  the
used 55 gallon drum  market  fluctuates,  we shift our packaging.

Our packaging is all  in  one  way  -- no return containers.  The  cost
of return, accounting  and cleanout are  too high to justify any kind
of a return program  even  with  our truckload volume customers.
Doubling or tripling  the  cost  of  packaging would still not justify
a return program for  most of our  packaging.   Some drums are  re-used
by recycling through  a drum  reconditioner, not directly by DuBois.

The best disposal for  our used paper and plastic packaging is  through
incineration and heat  recovery.   Metal  drums should be recycled
through steel scrap  programs or  drum reconditioners, as they are
presently.

A Product Charge on  our various  packaging would only increase  its
price to us and  to our customers.   Disposal  cost factored in the new
container cost would not  be  great  enough to  matter when compared with
the other cost factors that  trust  be considered.  The cost of packaging,
currently much higher  than  the projected Product Charges, is not
sufficient to make a  difference  to our  customers. Therefore, I conclude
that the addition of  a Product Charge would  make no difference either.

I see the solid  waste  problem  as  a local problem that must be  handled
on the local basis.   The  cost  of  collection  and disposal varies more
widely than the  cost  of packaging material,  from a high in New York
to zero in rural areas.   Recovery has proven economical in some cities
but not in others because of local conditions and institutions.  I do
not think that a Product  Charge  will effectively attack or change the
local conditions that  determine  waste recovery or disposal methods.

Federal efforts  should address the question of making known  to the
public the institutional  inhibitions we have built into our  culture
that act to inhibit  salvage, reuse or heat recovery of waste.

The Congress is  debating  tax incentives or laws to push more utilities
to coal, perhaps the  same type incentives should be extended to burning
mixed waste by utilities.

In conclusion, we are  opposed  to  the concept of a Product Charge.  The
complications of equitably  applying Product Charges and administering
the program far  outweigh  the benefits.   The Product Charge will be
inflationary for most  consumers.   The Product Charge will probably not

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have the desired effect on  the  critical  factors  that determine
packaging on a national scale,  just  as  it  will  have  no effect
on us or our customers choice of  packaging material.
Thank you.
NEW/lc

CC:  E.
     D.
     J.
        R. Loder
        B. Harper
        E. Donovan
                                     Very  truly yours,

                                     DUBOIS  CHEMICALS
                                     Div.  of Chained  Corporation
                                     Nelson  E.  Wittman
                                     Ass't.  Vice  President
                                     Government Relations
     C. White

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                     Attendees—November  IB,  1977
Albrecht, Oscar
Environmental Protection Agency
Research Center
26 West St. Clair
Cincinnati, Ohio 43950

Belewian, R . E.
Proctor * Gamble
Ivorydale Tech. Center
Cincinnati, Ohio 45217

Boehm, Richard W.
Contiental Can Co. USA
Sharonville, Ohio 45241

Bramble, Gary M.
Mead Corp.
Courthouse Plaza N.E.
Dayton, Ohio 45402

Brown, Alex C.
Solid Waste Comm. of
Environmental Advisory
Council of Cincinnati
2355 Fairview Ave.
Cincinnati, Ohio 45219

Castillo, Leonard
Dow Chemical
2030 Dow Center
Midland, Mich. 48640

Culkin, G. W.
Goodyear Tire & Rubber Co.
1144 E. Market St.
Akron, Ohio 44316

Donovan, James E.
DuBois Chemicals
DuBo i s Towe r
Cincinnati, Ohio 45202

Edwards, J. Rodney
American Paper Institute
260 Madison Avenue
New York, New York 10016

Fatkin, Harry
Polaroid Corp.
Technology Square
Cambridge, Mass. 02139
Hearring, Samuel M.
City of Evansville
Environmental Protection
Agency; Rm. 207; Adm.  Bldg.
Civic Center Complex
Evansville, Ind. 47708

Goddard, Haynes C. Prof.
Dept of Economics
University of Cincinnati
Cincinnati, Ohio 45221

Hildebrandt, Jeff
WLWAAM-Radio
901 Elm Street
Cincinnati, Ohio 45202

Hill, Gregory J.
NEFCO
137 S. Main Street
Akron, Onio 44308

Lapp, W. L.
Mead Cor p.
P. 0. Box 2500
Chillicothe, Ohio 45601

Lucke, William E.
Cincinnati Milacron Inc.
P . 0. Box 9013
Cincinnati, Ohio 45209

Macke, Bobby
League of Women Voters
7305 Drake Road
Cincinnati, Ohio 45243

Myers, R. D.
YMCA of Northern K\.
624 Madison Avenue
Covington, Ky. 40512

Nelson, Helaine Q.
Beverage Management Inc.
1001 Kingsmill Pkwy.
Columbus, Ohio 43216

Reed, Allen M.
General Electric-
Cincinnati Chamber of  Commerc e
Mail Drop A-79
Cincinnati, Ohio 45215

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                              -2-
Schuck, Arthur H.
Superintendent; Div.
of Waste Collection
City of Cincinnati
Cincinnati, Ohio 45268

Smith,  C.  Arden
Proctor & Gamble Co.
301 E.  Sixth Street
Cincinnati, Ohio 45201

Staff,  William A.
Evansville E. P. A.
207 Adm. Bldg., Civic Center
Evansville, In. 47708

Sterling,  Gary D.
U. S. Brewers Assoc.
P. O. Box 29009
Columbus,  Ohio 43229

Taggart, Robert
General Motors
G.M. Tech. Center  (EAS)
Warren, MI. 48084
Theohorous, Lew
Proctor & Gamble
301 E. Sixth Street
Cincinnati, Ohio 45201

Tracey , J. T.
Packaging Corp, of America
1603 Orrington Avenue
Evanston, Illinois 60201

whiting, w. D.
Container Corp. of Amer.
1 First Nat'l Plaza
Cincinnati, Ohio 45202

Wittman, Melson
DuBois Chemical Co.
511 Walnut
Cincinnati, Ohio 45202

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