SW30P
TRANSCRIPT
Public Meeting
of the Resource Conservation Committee
on Solid Waste Product Charge Issue
November 17, 1977, Washington, D. C.
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 (SWSOp) 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-30p) in the solid waste mangement series.
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1 PUBLIC MEETING
2 OF THE RESOURCE CONSERVATION COMMITTEE
SOLID WASTE PRODUCT CHARGE ISSUE
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GSA Building
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Washington, D. C.
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November 17, 1977
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APPEARANCES:
HARRY BUTLER
Chairperson of Senior Advisory Group
BARBARA BLUM
Deputy Administrator, EPA
LOUIS LAUN
President, American Paper Institute
JAMES S. EVANS
Senior Vice-President, Media General,Inc.
Garden State Paper Co.
ROGER McCLURE
Sierra Club
JOSEPH LUPTON
Private Citizen
WILLIAM W. SADD
President
Glass Packaging Institute
STEVEN BURKES
National League of Cities/
U.S. Conference of Mayors
JUDD H. ALEXANDER
Senior Vice-President
American Can Company
PHILIP H. TAFT
Tire Retreading Institute
PROFESSOR RICHARD POSNER
DR. WILLIAM LANDES
University of Chicago Law School
National Soft Drink Association
MAR& SULLIVAN
National Wildlife Federation
JAMES W. SHIELDS
Chairman of the Board, Judd's Inc.
Printing Industries of America
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MITCHELL
Glass Packaging Institute
JACK L. COOPER,
Director Environmental Affairs
National Canners Association
NEAL POTTER
Chairperson NACO S.W.
Subcommittee Montgomery County Councilman
National Association of Counties
ST. CLAIR TWEEDIE
Director Public Affairs
Paperboard Packaging Council
THOMAS WHITE
City Councilman, Greenbalt
Private Citizen
USURY KING
President
U. S. Brewers Association
RICHARD RIDDELL
U. S. Brewers Association
A. BLAKEMAN EARLY
Environmental Action
MORRIS HERSHON
President
National Barrel and Drum Association
CHARLES FELIX
Director
Environmental, Health and Public Affairs
Single Service Institute
DR. ANTHONY YHZER
Assc. Professor of Economics, G.W.O.
Public Interest Economic Foundation
MARCHANT WENTWORTH
Research Director
Solid Waste Project
Environmental Action Foundation
MCKENNON
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LAWRENCE NORTON
DR. EDWIN CLARK
C.E.Q.
SEYMOUR FIEKOWSKY
Treasury
JOHN FLANAGAN
Commerce
JAMES TOZZI
O.M.B.
RICHARD KOLSKY
C.E.A.
RICHARD J. HERBST
Commerce
LYNN BROWN
E.P.A.
ERIC TODER
Treasury
FRED SMITH
MRS. CHEMOGRAPH
RCRA
FRED STEDT
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CONTENTS
STATEMENT OF:
Barbara Blum
Louis Laun
Roger McClure
Joseph Lupton
Professor Landes
Steven Burkes
Judd Alexander
Philip Taft
Thomas Mitchell
Mark Sullivan
.lames W. Shields
Jack Cooper
Heal Potter
Morris Hershon
Henry King
Richard Riddell
St. Clair Tweedie
A. Blakeman Early
Charles Felix
Anthony Yezer
Thomas White
Marchant Wentworth
Russell McKennon
Lawrence ,\'orton
rred SteJt
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CHAIRMAN BUTLER: Good morning, welcome all of
you.
This session is being held by the Federal K,
Ktsource Conservation Committee. This will be the first of
three meetings, that will be held on Solid Waste Disposal
Charges.
1 am Uarry Butler of the Office of Solid Waste
and I will be your moderator today.
Just a few admjiii.-trative points, .- fora we start.
There are registration forms at the front desk. I hope that
all of you filled them out on your way in. If you didn't
please do so during our lunch break. This serves two
purposes. First it gives us an opportunity to have a
complete record of who is here,and second, it allows us to
be able to send you a copy of the proceedings, which we will
do.
There are also a series of publications at the
front desk. I hope you all availed yourself to those
publications.
We intend to include any written comments you
might submit in the proceedings. We should receive those by
November 28th. That's the Deadline for receipt of
written comments to be included in the proceedings of this
meeting.
There are public telephones oucside at both
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1 entrances, far entrances, the east and west entrances of the
2 building.
3 There are restrooms at each of the main entrances
4 opposite the main entrance there you will find two very
5 large doors leading down corridors. If you go through those
6 doors the restrooms are right inside. Please observe that
7 there is no smoking in this auditorium at any time.
8 We will have a lunch break. As you will notice
9 on your program, the first page says from 12:30 to 1:00.
10 The lunch break will be from 12:30 to 1:30.
11 I am really not sure about outside of this
12 building, both in terms of weather and in terms of service
13 but there is a cafeteria in the building. You reach the
14 cafeteria by going down to this end, out the exit door
15 here to your right, to the far end of the building, and down
16 the elevator to the basement.
17 It gives me a great amount of pleasure, ladies
18 and gentlemen, to introduce to you Miss Barbara Blum.
19 She is the Deputy Adrabistrator of the Environmental
20 Protection Agency, and is the chairperson of the Senior
21 Advisory Group of the Resource Conservation Committee.
22 MISS BLUM: Welcome to the meeting today. We
23 are glad to see such a good turn out. As we said on the
24 invitation the purpose of this meeting is for us to find
25 out as much as we possibly can about your thinking and to
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learn as much as we possibly can about your thintjtnq
We are going to listen as carefully as possible
to your suggestions and we are going to take them into
account.
I would like to reiterate that we are going to
be giving full consideration to both the oral and the
written comments and the record is going to remain open for
the next two weeks so that if you don't have a chance today
to submit any additional comments that you might want to
submit, or if you don't have your written testimony
ready, you have two weeks in which to get it in.
The Resource Conservation Committee, as you
) HTTP Y~
probably know,is an Biaefegy agency committee. It was
established by Congress for a two-year period. That
period ends in the Fall of 1978.
The purpose of the Resource Conservation Committee
is to study a very wide variety of public policies relating
to resource conservation and the end result is to bring
recommendations to Congress, and to the President of the
United States.
This is the second in a series of meetings that
we have held regarding various conservation issues. We
plan to hold additional meetings throughout the next, year,
and those meetings are going to regard various policy issues
relating to resource conservation. Information on those
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meetings will be sent to everybody who received an
invitation for this meeting.
Mow, if you didn't get an invitation to this
meeting, and you want information or. additional meetings,
if you just leave your name and address at the desk, we
promise you that you shall receive thtra for the i.ext
r ^eting.
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I would like to very briefly «r introduce the
members of the various departments and agencies that are
here today, and the others will be coming and going
throughout the day.
On r,iy right is Jim Tozzi, from the Office of
Management and Budget. On my immediate left is John
Flanagan from the Department of Commerce. At the end of
the table is Rick Kolsky frora the Council of Economic
Advisors.
The composition of the group is going to change,
probably, throughout the day, from time to time, and more
people will be coining. However, as I said before, the
entire proceedings of this meeting, both oral and written
are going to be published and reviewed by the Committee and
their staffs.
This is about all we have to say now, because our
purpose of being here is to hear you and we are looking
forward to it. Thank you.
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1 CHAIRMAN BUTLERi He want to insure that everybody
2 has an opportunity to speak. I hope we will have plenty
3 of time. If you can please summarize your remarks. He
4 will take your full statement at the registration table,
S and that will be part of the public record.
6 If any of you wish to speak and your name is not
7 on the agenda, please give your name to the people at the
8 registration desk, and we will put you on the schedule
9 as soon as we possible can.
10 When you speak, please come to the podium on the
11 right. As you notice^ we are recording what is being said.
12 Please, each time you speak, give your name and the
13 organization you represent.
14 Our first speaker this morning is Mr. Louis
15 Laun, the President of the American Paper Institute.
16 MR. LA UN: Good morning, ladies and gentlemen
1? of the Committee. I am Louis Laun, President of the
18 American Paper Institute. I am accompanied by Rod Edwards
19 of our organization and distinguished man who is our
20 Director of Environmental Affairs.
21 I am here on behalf of our member firms who make
22 about 90% of the pulp and paper manufactured in this
23 country. I have a prepared statement and I will give you
24 a sanforized version of that particular observation.
25 We employ about: VOO.OOOieaHtf people in all of the
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BPtjg 1 50 States and we have a unique industry, very unique.
2 Unique in the fact that we are a large basic industry that
3 can conpete in world markets on a free trade basis; and
4 we are very unique in the fact that our resource base is
5 forever renewable.
6 I have great sympathy for the job you all have
7 in front of you. I spent four years as Deputy Administrator
8 of the Small Business Administration and we were taking up
9 a lot of policy questions that I think were a great deal
10 simpler than the ones in your assignments here today. I
11 hope we could help you.
12 I believe the opportunity to present our industry's
13 views are one aspect of these, the prospect of a solid
14 waste disposal tax, or product charge as it is sometimes
15 called.
16 The paper industry recognizes that solid vaste
17 is a. national problem and we are mindful that we are part
18 of that problem insofar as the paper chat we produce, to
19 meet Americas needs end up, most of it in the solid waste
20 stream.
21 This Committee should be aware of the fact that.
22 this industry is already making major contributions to
23 alleviate the problem. It's not generally known, maybe
24 our publicity isn't up to enough here on this, but we have
25 reached the point where over half of the fiber we use to
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make paper in this country comes from waste material such
as waste paper, rags, wood wastes, and the unusable
portion left over from lumber manufacture. Additionally,
the industry has spent billions to make sure that its
pollutants or manufacturing wastes are handled in a way
so as not to impact that solid waste stream at all.
As I indicatedjthe problem is a real problem.
It's a problem for which thert is no quick, easy, or
chief solution. It's a problem that's only going to be
dealt with effectively with the best efforts of the state,
local and Federal Government and industry are forthcoming.
I am here today to tell this Committee primarily
that the American paper industry is ready to work with you
and others who are addressing this problem and people in
tha business community who are earnestly seeking ways to
solve the solid waste problem. I don't come to you with
any pat answer on how to do all this.
We do believe we can come a lot closer
to developing anjjf'answer, i f we work together on it
rather than setting up separate armed caraps to fling arrows
at each other. We feel that American industry always
has lee! the way in innovative technologically-advanced
approaches to the problem.
The allied problems that are there create a
situation that deserve the best intentions of industrial
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1 expertise and we submit that the best answers to this
2 problem are likely to be found with the brains and efforts
3 of the industries whose products contribute most to that
4 solid waste stream.
5 As I have stated, we are here to help.
6 You really have three problems in front of you
7 as we see it. They are all intertwined. The first two are
8 the localized and very obvious growing municipal solid waste
9 and litter problems. The third is a national problem,
10 the conservation of JJational Resources and .Resources is
11 in the title of your Committee.
12 Any solution that you devise, we believe must
13 have a positive effect in all three of these areas and
14 should have as few as possible adverse side effects.
15 The American paper industry believes that the proposed
16 solid waste tax will fail to accomplish these objectives,
17 because we believe that it will not assure a solution
18 to the growing solid waste problem, the litter problem,
19 and we don't think it will result in an improvement of our
20 resource base.
21 In addition to not solving the three major
22 problems in front of us,we also see adverse side effects,
23 that itwmld also be an inflationary and regressive tax with
24 a i.fcgative impact on employment and income.
25 we fetl that it would unfairly penalize selected
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1 industries and I am here because, of course, paper and paps
2 board we feel are impacted by this. But most importantly
3 it would inhibit an opportunity to which we have before us
4 to solve the litter and solid waste problem in a constructiv<
5 way that in addition to conserving the nations resources
g can assist in the solution of the energy problem.
7 And let me deal briefly with each of these. Vie
g present methods of dealing with solid waste in urban
9 and suburban areas, the basic obstacles of growing lack of
10 land to use as landfill sites. Many rural areas have less
11 severe problems. It seems to us that any sensible
12 solution to the problem would have to incorporate a means
13 other than landfill for dealing with urban solid waste.
14 Neither the product charge or any other kind of tax is
15 going to create available land where there is no laud.
16 We believe that a product charge levied against
17 our paper industry while having numerous adverse effects
18 on that industry and the consumers would not have a
19 significant effect on the total volunt of products reaching
20 the solid waste stream and would not lead to effective
21 solid waste management.
22 A solid waste tax for example, aimed at reducing
23 packaging could be counter productive because in many
24 cases that would actually increase the solid waste problem
25 and I have an appendix to this,that has some examples,
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1 particularly in the food area whether millions of tons
2 of solid waste are kept from the municipal streams by
3 modest amounts of packaging. The proposed tax we don't think
4 addresses the litter problem at all. A cost increase
5 on the original purchase doesn't discourage people from
6 throwing away articles that are no longer of use to them.
7 The paper industry also believes that this Committee should
8 carefully study resource recovery.
9 We believe that it must be the key element in
10 any solution to the problem. We don't see the suitable
11 landfill sites easing nor do we see the total volume of
12 waste decreasing under any proposed approach. You don't
13 actually decrease it. What must be done,we believe,is
14 to recover and recycle the energy and materials that are
15 die components of that solid waste stream.
16 We know the technology exists to do this, and we
17 believe there should be national acceptance of the
18 concept.
19 The solid waste tax, while exerting modest
20 upward pressure on recycling would really do nothing to
21 stimulate the other parts of resource recovery. So,
22 therefore, we believe that the cost of solid waste
23 disposal tax would far outweigh the benefits.
24 First of all, again, we feel the feax is
25 inflationary. Your report shows a modest amount of
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1 inflation. We think it would be higher than that. The
2 proposed tax in the first full year of full implementation
3 with the inflationary pressures we think are coining along
4 the line would cost the paper industry 2.6 billion dollars.
5 That cost would be part of the paper cost structure so
6 that in addition to its adverse effect on paper profit-
7 ability throughout the years, paper,because it is in so
8 many products ends up as the part of the cost structure
9 of millions of things, and we think that our 2.6 million
10 impact would be more like 4 to 5 billion dollars on the
11 consumer by the rime they actually go into the store and
12 buy something.
13 However, although the .total affect upon our
14 industry and the consumer publicy''here, is major^the
15 effect on any individual purchase is very small.
16 The fractions of the penny that would be added
17 to the individual purchasing decisions as packages are both
18 one by one would be unlikely to affect the consumers
19 purchasing pattern enough to make any downward impact on
20 total solid waste except possibly in the case of newspapers.
21 The tax would be regressive^)_we feel, the studies
22 show that low-income families have a higher proportion of
23 packaged goods in their garbage disposals than do the rich
24 people.
25 We feel it would caQise a distorting rise in the
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1 cost of newspapers, magazines and books. By increasing
2 the cost of all paper,broadcast media would enjoy an
3 unwarranted benefit over print media.
4 It would mean two to three cents a day to the
5 average newspaper published in the country.
6 A fully implemented solid waste disposal tax
7 would add^30 and as years go by, even 545 to $50 a ton
8 when in&Uonary effects are taken into account, with the
9 cost of newsprint. Any newsprint that accounts for
10 nearly two-thirds of the consumption in this area, because
11 a customs barrior would go up applying it to them.
12 In addition to the problem which imports the pro-
13 posed product charge would be likely to create a serious
14 distortion in international trade on the export side as
15 well.
16 our industry' a exports amount to 2.6 bi llion
17 dolfars a year at present. The indirect export in the
18 form of packaged goods add another 4 billion dollars to
19 that figure. Since we understand that the proposed tax
20 on these primary products would be rebated to us this could
21 create distortion in the normal flow of exports causing
22 serious international complications and might even be in
23 violation of our agreement within the framework of the generajl
24 agreement on tariff and trade gap not to subsidize exports.
25 The tax we feel would be discriminatory, ^fi
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It would tax paper in all forms, while other materials
would only be taxed when they are used in packaging. And
looking over the list of products we find that many
components of the solid wast^stream escape taxation corapletel
in this, and we hope that you aren't ^ickiiKj us out for
administrative simplicity, rather than the justice of who
should pay at this point.
Paper products are only 30 per cent of the weight
of the solid waste stream, yet, the current proposals would
ass_ss us vith about 75 per cejyc of the cost.
In addition to that, double taxation would take
place on commercial-industrial steel packaging, which
'V / A/c-'-TV
includes most corrugated boxes. Mintay per ctnt
of this is disposed of by private haulers,and is already
part of the consumer cost.
The tax could create market dislocations. Since
it would be imposed on a weight basis, it would favor
lighter materials. This could cause a shift away from
paper which is made from renewable resources to products
which raquire non-renewable resources.
In addition to that I am wearing my old, small
business hat, this is of concern. The tax would have a
serious impact on the economic viability of small recycling
mills. To avoid the tax the larger mills are going to
intergrate backwards into that solid waste stream and going
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to use more post-consumer waste. They are likely to
pay higher prices for it, and until a full-fledge
collection system is working for an indeterminate amount
of time, this is going to mean that small recycling mills
are going to have to pay higher prices. Some of the mills
are oily marginally profitable, at that time, and this could
cause the demise of many of these firms.
Large mills would also reduce their purchase
of wood ships^from small lumber and plywood producers.
Since the larger mills would depend more on recycled paper
as a tax-avoidance method they would have less of a reason
to use wood chips, and wood waste which are part of the
raw material for paper. The paper industry contribution
to the nature's growth would be seriously impeded by thii
tax.
This basic industry has the potential for
creating a more competitive industrial base for the U. S.,
and as we see more and more industries in trouble here,
internationally, we hope that we will be spared going
through that wringer. We feel this tax will weaken this
industry.
The contribution of packaging to efficient
distribution and reduced cost to the consumer is not only
ignored in this legislation, but actually M«akeM6( and
long range investment and employment .opportunities in the
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industries ate clouded by the uneven and uncertain impacts
of the legislation. As previously stated, the paper
industry is already deeply committed to resource recovery.
We have in addition to that^ the American Paper.
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Institute and its members maintain several7eMiB«Minade fro>
recycled materials. This is a beautiful operation
that we do to promote the recycled paper and we also work
very hard to expand volunteer and comnerical programs,
to pick up waste paper for recycling.
Our booklet is a typical thing that we put out
in that area. We have cooperated with E.P.A., as you know,
on these programs, and we are now up to a national recovery
rate of 30 per cant with over 200 citizens having old news-
paper programs. More are needed and we would like to
work with you on that.
In addition to the fact thatthis great portion
comes from recovery waste, the remainder of the fiber,
and paper comes not from depletable resources or
minerals, but from trees, a renewable resource deriving its
growth from the sun and rain.
To help make the resource forever renewable, our
industry plants hundreds of trees every year. In 1976,
700,000,000 trees ware planted across the country by
industry,and mother nature has planted millions more. We
are planting more than we are harvesting for wood products
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or paper manufacturing. We are deeply concerned t'ith
energy conservation.
We burn and recycle our wood waste to provide
over 40 per cent of the energy vie use. This experience
convinces us that the nations waste, litter, resource and
energy problens must be solved and there's got to be a
better way to do it than this tax.
Many of us in industry have been working for
years to support the National Center* for Pesource Recovery.
This is a non-profit corir.ittee chaired by Edwin n. Dodd of
Owens, Illinois. Its President is Dr. Rocco Fetror.e, who
ran the launching operations that put us on the rvoon. It
has A wide crosG section of people fron business, labor
and the acader.-ic community. Through their efforts, on
entrepreneurial and technical input of the nation, it is
now in existence, in operation around the country.
We feel that these pioneers offer a potentiWL.
for actually alleviating the problems of solid waste disposal
while at the same time I air, improving the capability to
recover and to reuse valuable components of solid waste.
If you -just take the solid waste of two-thirds of the
nation that lives in the nore urbanized sector alone, we
feftl that they contain inportant resources that are now
being lost forever.
Resource recovery could recover each year six
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million tons of glass, a half million tons of aluminum,
The energy equivalent of 220 million barrels of oil, and
that is about what is coming through the Alaska pipeline,
at that point. It's worth about three billion dollars
on the open market, the oil that could be recovered by
resource recovery, and also many additional tons of waste
paper can be recovered by properly mining solid waste
stream and by recyclable paper l«fore it gets co-Mingled
with the garbage.
^X C^
We in -tl*«r paper are joining -ear—inter-industry
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Coramittee^rganized under Fd Dodd*s leadership. This
Committee will address the subject of how this know-how
could be further developed or expanded so that hopefully
all areas that want this sort of thing in the country could
solve their solid waste and landfill problems, reduce
litter, and recover valuable resources and energy.
Both as members of such a Committee and as an
industry, paper would welcor.e the opportunity to work with
our Committee, with the Environmental Protection
your C
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Admini
Administration, with the new Department of Energy, and with
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anyone else you Flight suggest to . expSbre the problem
in more detail.
On a national scalejresource recovery is an
awesome challenge, and we understand that, but the paper
industry believes that it's a. challenge that must he
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explored in Ue^th. It could also, as a side industry
create a new industry and reduce unemployment,and at the
same time reduce by 90 per cent the impact that we are
putting on the nations landfill.
In conclusion, Madame Chairman, I appreciate that
you have the responsibility of recommending a course of
action to the President.
Often when making a decision, after all the pros
and cons ar« in front of you, a few key points seen to tc
of overriding importance, and I think we have autju a
situation here.
With the high probability of an increased burden
in new energy taxes, social security taxes and an already
sx'iraling cost of living,does it really make any sense to
levy still another tax which is both inflationary and
regressive and which will further burden the econonty, injure
small recyclers and affect the ability of competing in a
world market?
Mould the Administration want to take the risk
for a questionable minimal benefit of increasing
the recycling and in the process still not provide any
real solution to the solid waste problem?
In closing, let me pose one more question. Wouldn1
thebest way for us to solve this whole thing before EPA
and the other concerned Government agencies to join hands
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1 v;ith those industries whose products impact the solid waste
2 stream and work together to create a true and lasting
3 solution?
4 We stand ready to help. Thank you very much.
5 MISS BLUM: Mr. Laun, I have one rfuestion. At
6 the present tin.e there are only 16 resource recovery plants
7 in operation. Can you tell n>e what a resource recovery
8 program, — do you have any idea what it might cost, any
9 figures on that, and in what tine frame do you feel it
10 would bo economically feasible?
11 MR. LAUN: we started to look at this situation
12 and we felt that if you were to take the areay I was talking
13 about/whether the two-thirds of the country, which is urban
14 whether it's aore easy to run resource recovery, it's very
plant
15 hard to run a complete resource» recovery/*ray out
16 in the fara lands. We had felt, based upon some studies
17 that it would be somewhere between three and four billion
18 dollars, would he the total cost of putting together plants
19 that could do the resource recovery for about half the
20 two—thirds of the American population.
21 MISS BLUM: Thank you.
22 Do you have any questions?
23 MR. TO2ZI: Yes, sir,
24 "r. Laun, your assessment of the concept of the
25 product charge,you stated,that in your viev.,it didn't help
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the solid waste problem and didn't help the litter problem,
it didn't help several other problems and had additional
adverse impacts. It sort of reminds rae of sope of the
budget proposals I read at times, tut I did want to ask you,
if,from your statement,! gathered that the industry feels
there roust be some action, soiae commitment made to address
the solid waste problem.
MR. LAUHs That is absolutely correct. We think
this is an incorrect way to do it. We realize that we are
a part of the problem, and we would like very much to work
with Government to effect a solution, but we think this
would do it in a bad way.
MR. TOZ2I: So there is some coraoent with respect
to a problem as to a means to that end?
MR. LflUN: Yes, sir.
HR. TOZZI: One further question, if we had the
resource conservation or recycling approach, where would the
to
funds come from th"e build those centers?
MR. LAUN: That is the type of thing that we are
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bonds. That is part of the thing we like to talk with you
about.
MR. TOZZI: When is that study to be complete?
MR. LAUN: It looks as though it will be another
two months before we are going to be completely ready, tut
Ed Dodd's Committee is going to really try to address this
time table within the end of this Ponth.
MR. TOZZIs Are they also going to address the
to get the solid waste to the centers?
MR. LAUN: Yes, any system that we have would
have to have with it a very major public relations program
addressed, one,to the communities to make sure that they
cooperatfl. He believe that people will,to a degree of
source separation that they are not now doing, if they
realize that the materials that they put out on the curb
1 s going to be mined for the benefit of the conarunity.
Vie think that people won't throw things away
as much if they realize that there is a value to the things
they are throwing away, if they think it will return money
to the community, yes,
MR. KOLSKYs I ara enlightened by your proposal
and I find that I guess a product charge would, in fact,
provide an incentive for more than a normal incentive, which
I guess you are implying, telling the community what's good
for them, this provides them with an actual check or material
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1 incentive to go ahead and send it to the resource recovery
2 plant, that's one comment I had.
3 MR. LADN: Well, we think that the product charge
4 as such,doesn't do that,because as we understand what you
5 are going to do with the product charge is to rebate that
6 to the communities on a par-capita basis or something like
7 that, and we feel actually that if another community if.
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8 going to get a per-capita amount aend baclc to it with
9 no strings on it, just based on the number of people it
10 has, it's not going to nave any incentive other than running
11 out of land for changing its wasteful destructive policies
12 in handling solid waste.
13 MR. KOLSKY: Yes, but the producers such as
14 American Paper Institute will have incentive because of
15 the recycling rebate that they would get for using recycling
I6 materials, so therefore, they would be willing to pay
17 a price for the recycled material,which means they would le
18 able to provide an incentive for people to send this to
19 resource recovery.
20 MR. LflUN: Well, yes and no. I think we feel
21 that there would probably be more waste paper used so
22 there would be less waste wood used so you have got a
23 trade-off there. You have got now, I an not sure of the
24 latest figure, but the last was 136 trillion tons of solid
25 waste, which has got to be up to 140 to 150 billion tons by
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now. So any of these things, if you effect it by five or
six million tons, you are not making a heck of a dent.
All you are doing is keeping up with one year of increase
in it. So we don't think those things are fundamental
solutions at all.
We find with oil prices sky rocketing there is
incentive for us to use wood waste for energy.
MR. KOLSKY: But right now there is no incentive
to put something into recovery whereas the product charge
puts an incentive into that.
MR. LAUD: I don't see where it does.
MR. KOLSKY: But the present system provides
actually no incentive regardless of how small it nay te.
MR. LACK: I see that there is an incentive
for additional recycling of waste paper, I will agree on
that, but as an incentive for resource recovery, we don't
see it.
MR. KOLSKY: Well, if the resource recovery plant
separates the higher, and receives a price and you are
willing to pay a higher price for paper that is recycled,
then there is some extra incentive to that to separate
out the paper.
MR. LAUS: There is, and I think we said in
that there would be a modest increase in the amount of
recycled paper as a result of this, but we felt there would
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1 be a decrease in the arount of wood recycled.
2 HP. KOLSKY: I have heard numerous comments,
3 you are not the first one to mention it to me that this
4 program is inflationary and in a naive sense, yes, I will
5 agree that probably, alinost assuredly will raise paper
6 prices. However, I have trouble as a social decision
7 maker, let us say, where a program which would decrease the
8 cost to consumers, the total cost of paper and of their
9 solid waste management problem, in other words, they are
10 getting the Game amount of benefits for a lower co«;t.
11 I do not see that program as inflationary.
12 In other words, if you are decreasing your solid waste
13 management costs by more than you are increasing the
14 total cost of the paper products, and packaging products
15 than this program in a sodal sense is not inflationary.
16 MR. LAUN: Well, your own publication indicates
17 that there is an inflationary impact. You indicated that
18 it would be .2 percent in the consumers index. Ke think
19 that understates it quite a lot, because that is what it
20 would be at the current level. Ey the tine you qet that
21 up to the inflationary part, and get the add-ons, remember
22 when we sell paper to a newspaper the newspaper has to pass
23 that on.
24 When paper that is wrapped for refrigeration adds
25 on, so that's going to add more like six-tenths or seven-tenths
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1 newsprint would uo up;and the reports that I hear ray that
2 newspapers is one area where there has Leen a lot of
3 recycled material used, and if that's the case, in fact, I
4 would imagine that the cost of recycled paper nt likely
5 will not go up.
6 MR. LAIW: No. newspapers are recycled, hut nevs-
7 payers use a very small airour.t of recycled material. You
8 have got to look at that.
9 MR. KOLSKY: Thank you.
10 PIPS ELUt!: Than); you very riuch.
11 MR. LAUNt You are rest welcotoe.
12 }'ISS ELUf°: I v-ould liko to introduce Pr. rvan
13 Clarke from the Council of Environmental Tquality, who ju"3t
14 joined us.
15 CHAIEMAN CUTLER: Our next speaker is ;;r. Robert
16 Mcciure.
17 JIR. MCCLURE: Mewbero of the Panel, vy nairie is
18 Roger HcClure, and I am speaking for the nationwide
19 organization of 175,000 nre,il.ers. I an a vnluntcer niefber of
20 the clut and an attorney in private practice.
21 You have your list of questions handy, and I
22 thought I would go through this most expediticusly ly -juct
23 answering those.
24 How, on the first one, the Sierra CluH •suvports
25 a conservation Ct>Eirflittec recoror.endation of solid waste
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1 product charge on rigid containers, flexible packaging, and
2 paper products. The Club's response are that such a charge
3 will add the environmental and other social cost of waste
4 packaging which adds to the cost of the product. Also,
5 the product charge should be designed to discourage
6 unnecessary packaging.
7 E.P.A.'s fourth report to Congress on resource
8 recovery and waste production documents the increasing
9 level of trash we as Ariericans are producing,and increasing
10 difficulties of finding a •wa^ place to put ib. Also, we
11 are beginning to realize that our supplies of oil, aluininuir,
12 iron ore and wood have linits.
13 To maintain our standard of living wo must learn
14 to use or resources ir.ore wisely1, to maintain the beauty of
15 this country we must learn to abuse the land less with our
16 trash.
17 Two, the fundamental problem that we are facing
18 in the trash problem is that the Government picks up isost
19 of the trash in this country and as a result, society ac
20 a whole bears the cost of waste disposal. The products whicl
21 cause most of the trash clc not have to pay for the damage
22 they do, because the Government is the trash collector, and
23 probably will continue to be the trash collector in most
24 c oramunities, the Government must adoot a program to correct
25 the imbalance, causing the economic system by putting the
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bP:jg i cost of the disposal on society, generally. Product charqe
is the most direct approach to making the products which
Generate r.vost of the trash, reflect in their prices the
cost of disposal.
7,s riGK'.Lers of the Federal Covernracnt you are
certainly aware of the concerns of citizens against
riore Covernrent regulation* One of the advantages of the
product charge system is that it relics on the free enterpris
syster.t and not rovernnent regulation for its effectiveness.
Other Covernncnt proqraris are designed to ;^ndle
the air pollution probler.s caused by burning of tra^h and
the water pollution problems caused ly gar>age dumps t>at
we politely call sanitary landfills„
The private sector cannot voluntarily add the
cost of dispoal to its product price. Thus, the rovernnent
nust 3tep in and provide a product charge systen1 which
insures that all of the true costs of a product are
re flee ted in its c oa ts.
:Jow, as I understand the research and tne work
that h- s been done in recycling centers so far, one of the
Cunuaijental nroMems we are facing is the design of incentive
to insure that there is a constant demand for recycled
r.aterial.
If XT-r^in»rVaterial£; are cheaper, clue to a defect
in the pricinn of products then you vonId expect that
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\ the consumer will buy products which reflect thi
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i still has to 90 through the solid waste strear- and the
2 product which is racl'ayGd with recycled paper is. still a
3 product that has paper that will have to go through the
4 trash systcr.
5 I can sympathize with people who are involved 2 n
enforcerer.t program*, in solid waste. Uhilc in law school
I worked with the Pollution Strike Force of the Ohio
Attorney Ceneral. I understand tomorrow you will be in
Cincinnati. whi^le I was there we had a profcIcn1 with the
10 Cincinnati landfill. This private dump was operated in
11 violation of nearly all local, state, and federal rules on
12 landfills, and actually this is apparently pretty typical
13 of landfills throughout the country. And we thought if
14 we wanted to we could qo down and shut this thimj down, hut
15 we kept asking ourselves uhere will the trash 70 if we shut
16 dcvn this large landfill,and one of the things we worried
17 fbout was when citizens would send it to us,and how vould we
18 insure, if we didn't shut down this landfall, would make
19 sure that he would operate it economically.
20 OLviouslv he was going to have to raise his
21 prices. Did this ir,ean that v/e would have to interfer^v-ith
22 contractual rrlotions between the local municipalities and
23 the landfill operator*
24 How would we face the citizens who were going to
scream and yoll aKout increasing the cost of land disposal?
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These arc fundamental proklen"? ,and I haven't
2
yet seen a solution to these pro!" lercs that enforcement
3 officials face.
I think the solution is to find some way to
5 reduce the material that is going into these landfills. I
think the product charge is a. good p] ace to start. The
7 reason for this is, we must attack the proMeia at its source
° by discouragina people through higher prices on products
that enter the waste strear; from putting such a hurden on
0 municipal waste.
Now, as far as question three goes, rr.y other
j n
answers will he shorter, I will get through quicker.
There should he a nationwide product charge
4 system which would prohibit states and cities from adopting
lesser or larger charges.
Companies which sell consumer products do not
confine their markets to state boundaries. If the
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1Q
a product, the Government should adcl an equal amount to
2ft
u all com.petitorn. State product charges would inevitably
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disadvantage some lousinesses.
22 Pour: Product charge legislation can work
together with container deposit legislation. The most
24 thorough approach to the solid waste probler. is to adopt
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both. However, a viable alternative is to not have a product
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charge cover those itens covered by a federal container
deposit.
The social impact of these charges would !:e that
we would hope that they would encourage every American
to waste less. There are economic problems. It would
hopefully encourage manufacturers using packaging to use
less and to use more recycled material. This would
discourage our waste of limited raw materials on excessive
packaging.
The job lost in extractive industries and
packaging industries could be off—set by job increases in
the recycling industries.
Now, we just had some testimony from the paper
industry and certainly the newspaper problem is very
difficult in that this would add costs to the cost of
newspaper, but the problem is that our newspapers are a
large part of the municipal waste stream, and they are not
now as a product, or service paying their full cost. They
must bear their full cost. There should be no compensation
for economic losses due to the product charge legislation.
Products which end up as municipal trash have been getting
a free ride to the dump,just because now they are going to
pay for their ride to the dump doesn't raean they should be
compensated for it.
The positive economic consequences of product
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charge legislation will be to discourage frivolous
waste. We have all faced packages that we found alr-.ost
impossible to get open after going through the third or
fourth layer. The economic systprr. through product charge
could discourage this kind of practice. Present trends
show that world population is increasing and will be likely
to increase. Present trends also show a diminishing
number of resources to take care of those populations.
The future will be in those countries which learn
to use their resources most wisely. At the present tiire
this country's economic future is clouded because/S we
generate more trash per person than any other country. We
h*ve got to learn to use our resources more efficiently.
3ix: Product charges should be designed to
discourage functionless packaging and wasteful consumer
products.
Now, what am I saying, am I sayinq Poger I-'cClure of
Sierra Club is going to make lists of all the functionlesfi
packages and this is going to be the word of sone rovernment
agencies? No* I am saying that by using a product charge
and putting the cost on these packages the consumer can
decide. The consumer will vote with his pocketlook, and
that's the basic way this economic system is supposed to be
run, and that's one of the benefits of the product charge.
The products covered by such a charge should be
those which constituted the bulk of irunicipal trash. As
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^ I understand it, containers and packaging make up 41.5
2 per cent and newspapers, books, and magazines make up
Q 9.8 per cent of the post—consumer solid waste in 1975,
. according to the fourth report of E.P,?,.
g A large part of the consumers and packagings are
„ also paper. For these reasons it is best to start with
_ Senator Hart's approach and to put a charge on rigid
„ containers, flexible packaging and other paper products with
g the possible exception of building construction industrial
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grades of paper.
u Seven: additional research is needed to deterrane
.„ when a special product charge should be made on jicn-degradahl
13 packaging such as plastic. Discarded plastic packagings
j. will be a cost to the next generation: of Americans, but
ig it does notyteturally degrade. We have to consider when
lg these future costs should become a part of the plastic
j7 which is disposed in the environment. Paper degrades
ig rather quickly. Therefore, it's not necessarily fair to
jg have the sane charge for paper which does not have the
2Q same environmental cost as for plastic. This is an area
_.. which deserves futher research.
„ Now, the key elements of any proposed legislation,
„„ we feel, should be. A) a standard. nationwide product
charge on rigid containers, flexible packaging and paper.
„„ gaced on product charge over a five-year period to
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minimize econonaic dislocations, a reduction in the charge
based upon the amount of recycled material used up to some
figure such as two-thirds,and the role of the Federal
Government would be*to administer the collection of the
charges,which will be placed on the industries and to
administer a grant program to state and local Governments,
to environmental projects with an eniphasis on municipal
solid waste programs.
The price design of the grant program is something
which needs further discussion. I personally feel there
should be some flexibility so that ot^er programs not directly
related to solid waste nay also receive these grants.
But I am suggesting a kind of garbage trust fund that would
be generated by these product charges.
E.P.A. seems to be considering a $26 per ton
charge. This seems to be reasonable. Further study may
show when this is an adequate incentive to perform what you
are trying to do. It may have to be adjusted in the future
to account for inflation and cost of solid wante disposal,
and you may want to have a higher charge for products,
which cause raore problems, such as plastic.
The charge should be levied at the raw material
stage to ease the burden of Government Administration and
place the cost of products at its sources.
Now, the paper industry spokesman had a few
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1 points I would briefly like to address wyself to, and that is,
2 first, he said that he doubted that this procjran. would have
3 much effect on discouraging people from purchasing these
4 products, xell, as I understand it acne of theinitial
5 studies of E.P.A. referred to in the fourth report shov,
5 that there would be a substantial affect.
7 Second of all, the E.P.A. and other people have
§ engaged in various technical projects such as the rranklin
g Ohio project to see if there is sortie way that we can solve
10 the problems of resource recovery, and we nay >e aVle to
11 solve all these technical problems,and I hope that there
12 will be a joint task force, between paper, other commercial
13 interests in the novernment to solve these prbblems, tut
14 just because you have separated out the trash doesn't mean
15 that people are going to want to buy it.
16 The probler. we have is not necessarily technical,
17 but economic. We have to establish our econoraic incentives,
18 to insure that there is a viable and steady market for
19 recycled materials, and that is, as I sec it, the nost
2o fundamental problem.
2i We can probably solve the technical problems :or
22 have separation systems such as being tried in Massachusetts
23 where you separate the stuff before it gets in the trash or
24 solve some of the technical separation problems at the
25 separation plarxt.
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Now, there is a question atout cost of living,
other taxes. Society already pays for the cost of land
disposal, either through real estate taxes or other taxes.
It also pays for the cost of inadequate, unsanitar
landfills v.'hich cause environnental damages.
What this product charge system will do, will be
to shift back to the private sector some of the costs
the Government has heen bearing and hopefully as sho*«n in
some of the F.P.A. studies, such a product charge will
actually reduce overall costs in the future, because people
will waste less, and will irake more efficient use of our
product resources, thank you.
MISS LLUM: Any questions?
MP. TOZZI: In support of the product charges you
list a lot of favorable attributes it would generate in
terms of putting more of the cost of waste disposal on the
perpetrator of that. You also stated that it would reduce
Government expenditures for solid waste and obviously
that gets our interest also. However, fron your point of
view, what is the most significat environmental impact
associated with the charge?
MR. MCCLURE: The problem we have is nationwide.
We have those landfills throughout the country. As I
understand the normal statistics, most of them never come
close to tr.eeting the standards that we would like them to
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adhere to .In sanitary landfill operations.
The problems of these landfills are that we have
so r.uich trash coming at the landfill operations that they
have great difficulty in bearing the cost of disposing of
them.
We are running out of land in soioe cro-ir.uiit.ies.
There are issues in some communities, vhere are we doing
to put the next landfill, and son>e people say I don't want
it near mine. Well, somebody has to have it near their
house, because we just have to find places to put this stuff;
and there is so much of it that we protably won't solve
without incredible enforcement actions v
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fcPtjg I t*R. TOZZIi So that in the view of the Sierra
2 Club, from an environmental standpoint, if I understand what
3 you are saying, there is this excess generation of nolid
4 waste that current institutions address to whatever vo
5 do with them, doesn't address properly, and if, I an? asking
6 you if the range of alternatives before us to solve that
7 problera, the one you addressed as a regulatory process
8 aimed at this —
9 MR. fKXLUPL: I don't think it will work.
10 MR. TOZZI: Put if you take that, and the resource
H recovery approach, and their approach, I take it it's your
12 position given those three alternatives of an increased
13 regulatory approach or, two,more emphasis on recycling
14 systems or, three, this change in market structure that the
15 Sierra Club feels that this would be the n>ost effective
16 waY to address that excess problem?
17 MR. MCCLURE: It's the rest effective way to
18 solve the long term problem. That doesn't mean that
19 the day after we adopt the product charge we should stop
•i^
20 our enforcement of water/equality standards that are
21 violated as a result of these dumps throughout the country
22 or allow people to burn trash.
23 MR. FLANA<"Af<: Kr. McClure, could you perhaps
24 coaaaent on how you think these revenues or the tax on the
25 products should te redistributed back for use, and then how
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nuch latitude should be given to the use of tht-se funds
assurainq it's a State or^JKocal level?
NR. MCCLURE: These funds should go into, as I
said, a special garbage trust fund or something, solid
waste trust fund which then would be granted to the State
through a grant program.
The grants program would have certain requirements
on it that they would have to be for environmental probleras,
principally the municipal solid waste disposal program,
because that is what you are generating, that is the kind
of imbalance created by Government intervention in the
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you are trying to address, and you would have to
put strings on it so you would make sure that the
municipalities and states are using the funds properly.
MR. FLAHACASi ThanK you.
MISS BLUM: Thank you very much.
I would like to point out in case there is any
Kiisunderr-tending that this is not an environmental
protection agency Committee. This is an inter-agency
Committee whose -memtership is composed of all the agencies
you see represented here today. Me o^bsrr chair the Committee
CHAIRMAN BUTLEB: Our next speaker is Sr. Joseph
Lupton.
MR. LUPTON: Good morning ladies and gentlemen,
Jladame Chairman. I don't know if you have a copy of my
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prepared statement or not. Iwould li).'e to ir.ention that I
will revise portions of it, and add to it when I get bacV
to Atlanta from what I have heard today.
I am a member of Georgia Tech Engineering Station.
I came as a private citizen because I bought ray ovn airplane
ticket, they didn't pay niy wayup here. But I am also a
past member of the Citizens Solid Waste Task Force in
Dekalb County ,Ceorgia, which is outside of Atlanta.
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to do away with the citizens Task Force* they felt they had
no further problem with solid waste, but a group of citizens
who just had a landfill put in that area spent in excess
of $10,000 fighting the putting of that landfill through
the Courts and it went to the State Supreme Court in Georgia.
That's one example of how people will fight today, about
having a landfill.
I would like to refer to paragraph one, which is
on the right-hand side of that blue folder. I don't know
whether you have it in front of you or not, but you
mention there that financing for solid waste disposal
is one, and you indicated that you felt it was done through
private taxes and local taxes.
There is Revenue sharing money being spent.
Macon, Georgia bought several garbage trucks with Revenue
Sharing Funds, and the head or that department told me that,
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therefore, they v;ere ab]e to shew a much lover coi't fcr
solid v;aste disposal to their citizens and their tax hase
was changed Ijecau^G tUey used those Revenue Sharinc; Tunds.
In OekalL County, and there is also a list in back,
akr
just bought a tire gjrfedder which vill be put in place, shortly,
both froii Federal funds, and I just learned this norninq
that each passenacr tire has five callons of oil in it.
t:ow, DekalL County is
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1 siruply not affect this in ray opinion, one iota. The
2 reason is we don't have any technology to do anything with
3 it.
4 '.,"e collected cans at my home in Tucker, for six
5 months, tin cans; we couldn't find a place to put them.
g Ke finally found out it would cost us nore in gasoline
7 to drive thirty niles to the other side of Atlanta to give
Q their, to a scrap dealer who really didn't want them, but he voujld
g take it. It would cost us rore in gasoline than we would
10 get Lack from the cans. So there is no place to do it.
11 The political leadership in Dekal! and the
12 political leadership in Atlanta feel that the puMic are
13 not yet ready for source separation, are not yet ready
14 for anything but putting it all in with one big can and
15 letting the tooth fairy come along and take it away.
16 We have not yet had enough pressure put upon us
17 to meet the realities of the day. As to question 1, I
18 am going to use the same technique that the previous
19 speaker used, except for special cases,such as ^tate parks
20 and local areas where taxes might be used to pay for the
21 picking up of tin cans that are spread around the park,
fl_
22 and drink cans, I cannot everrWision any positive benefits
23 from a users tax or from a tax placed on products,at this
24 point in time.
25 As to Question 2, state and local Governments
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should be urged to promote recycling and the reuse of roateria
Lut not the concept of a product charge. By the withholding
of Federal funds I feel state and local Governments will be
encouraged to move toward resource recovery in a meaningful
way.
Appendix 2 is a list of southern cities which I
personally surveyed on a national science foundation grant.
•&• -Z -^
That does show the resource recovery because I couldn * t
find it. It was so poor that we didn't put it in the final
report. It was in my report that went in, but it wac
chopped, because it was nothing. Most of these citifcs
recycle a little paper and that's it. It's quite a list
of cities back there.
Now, given the value of reuseable naterials is
highest when it's in the hands of the end users.
Given ninimum energy requirements are needed if
the materials are kept separated..
And given that minimum pollution of land, ground
water and air occurs when the recycling of material is
used.
A long term solution is source separation and
recycling of nost of the solid waste stream. I think from
Government figures that I have seen ranges as high as
80 to 95 per cent.
At the present time we lack, out in the sticks, the
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leadership, the desire and the technology to do successful
source separation.
I would also state that proposals that I have been
a party in preparing for different Government agencies have
also fallen on deaf ears. We wanted to study what the
problems are in getting source separation started. The
head of the engineering experiment station whftn I approached
him about the solid waste program, just the paper and tin
cans, he said, don't bug me. I didn't hug him. We don't
have one. We throw away hundreds of pounds of paper per
day simply because a man doesn't want to be bugged.
The desire for change will corae when soaring
costs and lack of landfills force a change. If product
C-Aa./?7&S
• ofrontpeo were placed on consumer products today tins money
would simply be used to maintain the status quo, because
there is no way to get the products out.
Beverage containers are a special case of the
overall picftpre and I have included a letter froin the
President of the Coca Cola Bottling Company in Atlanta,
that has some interesting comments that you can read.
As to question 4, the social aspects for the
Atlanta area would be about the same as any other large
city; no impact for the rich and just something else
for the rest of us to endure.
As to question 6, at the present tine and forseeabl
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future, the environmental impact would te negative, because
in the south at least landfill would remain as the final
end pointjfor solid waste.
I said in response to question 7, that no
additional research is needed at this time or desired, and
I address that to the question of the day, the product
charge. I would say that we do need additional research
in developing low technology procedures for handling our
solid waste. Our first speaker from the paper industry,
I would like to ask him, was this high technology source
separation, Mr. Laun?
MISS ELUMs I don't believe he is here.
MR. LUPTON: noes anybody here happen to know what
he had in nind?
(No response)
MR. LUPTON: That's a very important question. New
Orleans spent millions and the value of the product they
got out of that New Orleans plant in nil. There is
literature available and I hope to send it alonq to you
that will show dollar by dollar a decline in the value of
material as it goes through more and more and more steps in
the handling of solid waste.
So we are really,truly interested in qetting
serious. We need to change our basic methods by which we
dispose of solid waste.
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I did not include a great deal of other continents
that I might make if we were talking about the broad
general problem. I think in ny comments to vou later I will
expand upon what we are talking about. I think that the
Governnent research programs that I have seen from the
Corrmercey^laily, have been heavily weighed toward high
technology approaches to the system and this may, in your
view, be the way to go, I don't know, but there are a lot
of us out in the sticks that don't feel that's the way
to go, but so far we are not getting any support from up
here.
High technology resource recovery systeias are the
most wasteful energy systems going. They provide nothing.
Now, in the Appendix that you have, just for a
Hv
siedder in January of 1975, they list it as lights (nUd power,
$2,645.44, $3,931 for contractual services, and maintenance
i*Jcts
was $1,209. And all that went to do was grind up solid
waste to make it useless and put it into the ground to
comply, I might add, with the present Government regulations.
Now, the people who are looking after the water
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quality don't even have an active functioning gaaterwnatograph
st/)Re- , '
They don't have a ga^*«»jnatograph mass spectrometer.
In other words, sanitary landfills as we see them at the
present timej the Government is simply saying, well, let's
make like we are doing something when ve are really not
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Thank you.
KISS BLUtl! Thank you very r.'.uch.
E*'ay I ask you one question, in your opinion, how
could state and local Oovernraent fund the resource recovery?
You said you felt it should not le imposed upon state and
local Government.
KR.LUPTON: Well, Federal funding, at the present
time, is being used to stay with the old ways. So by with-
drawing federal funds they are going to have to find new
v.'ays.
HISS BLUM: All right. Any other questions?
Thank you very much.
MR. LOPTON; I wanted to ask Vr. I.aun, in your
comments about resource recovery were you talking about
high technology or low technology?
MR. LADN: There are so darnfJany technologies,
j
I don't think you can use two words, one high, and one low.
V»e have get Don Alexander, who is going to 1-e coming before
yoUxtalk, in a little while, and I think he might be a
better person to answer that than I, but we think there
are several different kinds of techniques available, all
of which have the potential for solving this thing. You
can't turn them all on with a button immediately, but we
think they can be done.
f'R. LVJPTON! Thank you,sir.
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MISS LLUMs Thank you very much.
CHAIRMAN BUTLFR: Our next speaker is Mr. William
Sadd, President of the Glass Packaging Institute.
MISS BLUM: Kay I ask that in order that ve he
able to got through the program today that people keep their
remarks as brief as possible. You can Rake them part of
the record and they will be read.
MR. SADD: Kiss Blum, with your permission, due
to the time, I would like to yield my time slot, if I inay,
to Professors Posner and Landes, who have to catch a
plane this morning.
MISS BLUM: Very well, you would like to testify
later?
MR. SADDi Yes, later.
PROFESSOR LANDES: f!y naaie is William Landes,
I ar professor of economics at the "niversity of Chicago
Law School, and I would like to attempt to summarize very
briefly the first part of our lonqer statement that was
submitted to the Committee.
We, that is myself and Professor Posner submitted
a statement to the Committee at its October 1977 meeting
with regard to mandatory deposit legislation and our state-
ment to dpi will focus on both mandatory deposit end product
charge legislation.
This double" focus is adopted not only because the
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Coi.aaittee has requested that witnesses consider the
relationship between both types of legislation, hut more
ir-iportantly Y-ecause most proponents of Federal intervention
in this area regard mandatory deposits and product charges
as ~ rather than substances.
We shall discuss the case for a 5.5 cent tax
on beverage containers consisting of a five cent tax on
beverage containers in the form of a deposit that is
refundable to the consumer, in fact, he returns the container
and a half cent excise tax on all beverage containers as
proposed in the Hart Bill.
Our written comments are in two parts. Part One
analyzes mandatory deposit? and part two analyzes product
charges.
Now, since you have heard our discussion before
on mandatory deposits, and since the main focus of the
Committee is on product charges, I will just keep my comments
on mandatory deposits, and keep then to just a few minutes
We argued earlier that consumers preferences for
non-returnahles as manifested in the ranid growth, the share
of non—returnables in recent years is due to fundamental
economic forces, mainly the growing value of the consumer's
time with respect to save alternative uses of this tine,
and increasing value of earnings and in addition, due to
the relative labor intensity of returnables which, over-
time, as wages have risen,has increased the relative
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1 cost of returnables relctive to non-returnables and
2 induced a substitution for non-returnaMes.
3 This analysis suggests that the growing preference
4 for non-returnables on the part of consumers has the same
e,
5 presumptive legitimacy as a consumer preference for any
g other product, and this being so, attacks on non-returnables
7 when it's a refundable tax as in a mandatory deposit
a proposal or an excise tax as in the product charge proposals,
g these taxes cannot escape scrutiny on the grounds that
JQ they are simply designed to nudtje the consumer away from an
jj activity which he engages in, t«cause he is irrational or
12 has been brairCwashed or something to that effect. So
13 the size of the tax is obviously an important consideration
14 in appraising its desirability.
15 In our written statement we presented gome
16 calculations on what the size of the tax would he from a
17 n&ndatory deposit law in which you v^re imposing a five
18 cant mandatory deposit on all containers. He u^ed
-fas.
19 assumptions which were considered reasonable bvxCouncil of
2o Economic Advisory* in a letter he sent to us,and our
2i estimate was that a mandatory deposit legislation had
22 it been In effect in 1976 would have imposed on the
23 American consumer a tax of approximately 1.4 hillion dollars.
24 Were the taxes comprised of two components, one the cost
25 of return on the part of people who, prior to the Mandatory
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JK-
deposits legislation, were not returning Jeverage containers
and now in response to the legislation, were returning
beverage containers and part of the taxes coifprised on
the higher price,- that individuals have to pay for
beverages, that is the five cent tax given that they do not
return the beverage in question.
Now, the question to an economist is,are there
any off-setting benefits from such a tax, and we have,
to this date, never seen an attempt to quantify them using
e,
the -iVjpirical nethod& of contemporary economics.
The main benefit of such a tax would appear to he in the
area of litter reduction, and whether a five per cent
deposit law would reduce the social cost of litter l-y an
amount deenefl sufficient to off-set the 1.4 billion
tax is an unanswerable question in our view on the Vasis of
existing studies.
;iow, I have some additional ooints on mandatory
deyo:;it legislation, but since the i?ain focus is on product
charges I will switch to Professor Posner, who will
discuss the product charge.
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PROFESSOR POSNER: Our analysis of product char-
ges is focused on the basis for such charges stated in EPA's
fourth report, a basis which we find inadequate, and I will
make just a few points, what seen to us to be the cardinal
deficiencies in EPA 's analysis.
First, from an economic standpoint, this tax is
supposedly justified by an externality , a social cause
which producers and consumers fail to take into account.
It is not at all clear that there is a genuine
externality. In fact, a Mr. McClure speaking for the Sierra
Club a little while ago attributes the solid waste problem
to Government mismanagement, to the fact that garbage collec-
tion services do not price garbage collection to the house-
hold at its true social cost.
If that is the problem, it is not an externality,
it is a failure of Government which can be correctd by a
variety of means focussing on the garbage collection and
disposal process. One possiblity would be to make garbage
collection a private activity where the entrepreneurs would
necessarily charge prices to the household that covered
their full costs. Another possibility would be to reform
the pricing of municipal garbage service so that that pric-
ing priced on the household ,'/\the full social cost of its
activity. If, somehow, Government has thought not amenable
to these reforms, then we wonder why the EPA should be
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confident in the ability of Government by a new program, a
2
new regulatory program to correct tiiis problem.
3
If Government fails at one level , why should it
4
succeed at another? We are disturbed by a generalism which
5
takes the form that Government having interferred in the
6
market inappropriately, we should have more Government inter-
7
vention to correct the bad effects of the first intervention.
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Now, second, there is no basis that we know of
for thinking that a tax on the producer of products which
enter the solid waste stream is the more efficient method
of dealing with whatever problem exists than, say, placing
a tax on the household. There is nothing in economics which
leads one to prefer the tax on the producer. It is an empir-
ical question whether the more effective economizers are
producers or are households. This issue is not adequately
analyzed in the fourth report. Furthermore, there is abso-
lutely no basis in anything we have seen for a federal tax
designed to internalize any externalities in the garbage
collection and disposal process. If there are these extern-
alities, they are almost entirely externalities confined
within the borders of *Jrirs state where the trash and garbage
is produced.
Why. then, is not the appropriate solution of a
producer tax 1-5 optimal for the states to impose it? It's
no answer, as Mr. McClure suggested that there is some over-
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Ik3 i riding interest in having uniform taxes. No one suggests
that we should have a uniform nationalization tax in order
to reduce the inconvenience on industry of complying with
SO different state tax laws. The cost of garbage collection
5 and disposal is not uniform across the United States. They
are higher in some areas than others , and there is absolutely
no reason for thinking that a uniform tax nationwide is the
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effective way to go.
Finally, this fourth report of LPA embraces two
incompatible ends to justify the tax. One is the regulatory
purpose of getting people to change their consumption deci-
sions. The other is a revenue raising purpose to generate
revenues by means of this half-cent container or one and a
half -cent a pound tax.
/ >•> I-' i~ • Vf rt r/j"^- f
They are oncompass-ib-te- in the sense that the more
effective the tax is in changing people's behavior and
inducing them to substitute nontaxed products, most of these
contain very broad exemptions, then the tax will not
raise revenue but to the extent that consumers and producers
do not adjust, and the tax simply becomes a higher cost of
doing business, the tax will be successful in generating
revenues, but its regulatory purposes will not be achieved.
Now, in the framework of that analysis, we then
±P
want to say a word as we did in our first submission of this
Committee, but neglected to in the current one about the
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soft drink industries Jlfill which is a form of product charge.
As we pointed out in our first statement, we do
not regard this suggested solution as ideal from an economic
standpoint and consider it attractive only in comparison
with the alternatives of mandatory deposits or the type of
product charge discussed in the fourth report, and embodied
in the Hart Bill.
The soft drink proposal is to have a very small
tax, five hundreds of one percent on virtually all products"
a tax that would expire after ten years and in the course
of this ten years would raise an estimated $2,300,000,000
in revenues which would be earmarked for recycling and litter
collection activities.
The reason we consider this Kill to be more attrac
tive than something like a Hart Bill or the/Ambitious Deduct
Charge program that you are considering is, first , that it's
too small a tax to have serious allocative effects, serious
effects on people's products and consumption decisions, allo-
cative effects which,in our present state of ignorance about
the dimensions of the solid waste program and appropriate
methods of solution, cannot be considered socially desirable
effects.
Second, it is a broadly based tax. It's not
riddled with the kind of arbitrary exemptions that appear to
mar the Hart Bill.
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59
Thirdly, the revenues collected by the tax would
be used to address a problem which is why it's perceived to
be a serious problem although we are by no means convinced,
I do not myself agreee with Mr. Laun, for example, that
there is a solid waste problem in the sense that far reaching
solutions should be considered necessary at this time.
Finally, it has the great virtue of being a tem-
porary tax which will spare us being saddled forever with
new forms of ^federal regulation adopted on the basis of flimsy
grounds and insufficient study.
avid
Well, Mr. Landes^ 1 will be happy to answer ques-
tions if you have any.
MR. TOZZI: Professor Landes, one question, did
I understand your testimony to come out this way; one, you
are not sure there is a solid waste problem. Two, given
the nature of the problem, you are not sure the Government
should do anything, and three, if the Government is going
to do something, you would prefer, however, define a product
charge approach over a mandatory deposit approach?
PROFESSOR POSNER: I wouldn't put it quite that
way. I would say if there is a problem, the solution is at
the local level, the state and local level. It is a state
and local problem. If the City of Cincinnati has a problem
with an overstuffed dump, that is a problem for the state
of Ohio, not for the Federal Government.
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1 If the momentum behind some sort of national
2 legislation is irresistible, we then suggest to you that
3 this industry proposal is the least harmful of the alterna-
4 tives on the table.
5 MR. TOZZI: Which is a product charge orientation?
6 PROFESSOR POSNER: A modest product charge, yes.
7 MR. TOZZI: Thank you.
8 MR. KOLSKY: Your discussion of the problems
9 with public intervention to cure public intervention is
1" fairly convincing . I have a couple of problems , however.
11 One is, right now, we usually have the standard patterns of
12 municipal garbage collection, therefore, the question arises
whether this was sort of an unfortunate intervention of the
14 public sector, was it just a mistake, and, therefore, I ask
15 the question of the feasibility of private collection, and
16 also, if it's feasible, how one goes about making a move
17 toward private collection?
18 PROFESSOR POSNER: Well, there is extensive pri-
19 vate collection in the United States. We have been attempt-
20 ing and have not yet succeeded in obtaining comprehensive
21 data on the extent of private collection.
22 One of the problems that complicates research in
23 j this area is that a lot of collection is private , but not
24 in a sense relevant to this discussion. That is^often a
25 municipalityAwill have competitive bidding for a contract
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to collect the municipality's waste, but the payment is from
taxes rather than charges on household. What we regard as
genuine private garbage collection is a contract between
the garbage collector and a household. There is some of
this in the United States, how much we don't know.
I can think of no reason why garbage collection
should be a municipal function. It is not a natural monopoly
any more than the delivery of milk or newspapers is a natural
monopoly.
Now, why it has become a public function, how
deeply seated are the political forces that have made it
public, these are questions to which we don't know the
answer.
One possibility is not to privatize municipal
garbage collection, but simply to alternate the nature of
the pricing system used by the municipality. There is no
u>Ay
reason whore the municipality should support its garbage
collections out of general revenues. If it uses some sort
of tax or assessing method rather than direct contracting
with households, why can't it make the tax or assessment
adhere to the social costs of the quantity and mix of garbage
that the household produces.
There are regulations, certainly in which Chicago,
requiring a certain amount of separations like newspapers
and other forns of trash, but why this has not gone further,
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why this has become regarded as a federal problem even though
the relevant conditions vary among thousands of different
communities, that is a mystery to us.
MR. KOLSKY: But, I have some concern that the
reason that you need federal legislation is somewhat equiva-
lent to a free write-up problem. The individual state,
as far as being the first one to adopt a product charge pro-
posal, would suffer losses because industries would not want
to locate there. They would rather locate in an adjacent
state and ship products into the state. So, in other.words,
nobody wants to be first, second, or third. Everybody would
want other states to adopt the policy. We may need some
sort of federal regulation.
PROFESSOR POSNER: There is also an equal and
opposite problem of states which are heavy inporting states
Xinay wish to impose regulations which protect their consumers
at the expense of industry in other states. To the extent,
however, here that the garbage is an output of households,
I don't know why a state would be competitively disadvantaged
if it tried to vary the charge among households so that it
reflected more accurately the social costs of household ways.
MR. KOLSKY: If the answer is to private collect!
or the correct pricing of the disposal, then in a national
issue, it is not very --
PROFESSOR POSNER: Well, I think to the extent
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that the wastes you are worried about are industrial wastes,
2
rather than household, there is a problem as in pollution
3
problems generally with the state, leaving it purely to state
4
control. Insofar as it is a household problem, then it
5
seems to me there is no problem. I don't know why a state
should worry about losing householders who are unwilling to
pay the cost to the state of the garbage they generate any-
o
more than the state would be unwilling to lose consumers who
Q
refuse to pay their other taxes.
10
MR. KOLSKY: In the absense of any way of mandat-
11
ing some sort of correct pricing the household waste, what
12
would be your -- let us say, given the uncertainties of being
13
able to do that, what would be your proposal for eliminating
14
the problem which does exist, possibly only because of the
15
Government intervention?
16
PROFESSOR POSNER: I guess I'in a little unclear
17
about your premise. Is the problem a computation one or --
18
MR. KOLSKY: Well, maybe the state or the local
19
government may say that it is infinitely costly to them to
20
try and assess just how much cost each household is imposing
21
on the solid waste plant over the actual cost of monitoring
22
the system may be so large that it doesn't pay for them
23
to do it.
24
PROFESSOR POSNER: It is possible that in a cora-
25
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would want to impose some sort of control o)P producers if
it turned out that it was just impossible for the price sys-
tem to handle these problems of household separation, but
this isn't any basis for that factual premise. It hasn't
been tried.
I, myself, find it hard to believe that if the
city of Cincinnati is stinking up because of this landfill,
that there is not a pricing system for garbage collection in
Cincinnati and from local business in Cincinnati that will
not rectify this problem. But, I can conceive of the pos-
sibility that the only way it could be taken care of was to
alter the way products are produced. That is certainly a
theoretical possibility. OUr criticisms are not based on
our having confident final solution^to these problems as in
believing that we are talking about taxes as a form of manda-
tory products of several billion dollars a year and accompany
ing regulatory administrative structure being suggessred,
it seems to us on the basis of very casual investigation
of the relevant facts.
MR. TOZZI: Thank you.
CHAIRMAN BUTLER: Before introducing our next
\ Oudieivae
speaker, I have one announcement. Mr. Ulerick, in the office
A
you are asked to call your office in Indianapolis. We have
the number here at this desk.
Our next speaker will be Mr. Steven Burkes
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representing^National League of Cities/U. S. Conference of
Mayors.
MR. BURKES: Good morning. My name is Steven
Burkes with the National League of Cities/ U. S. Conference
of Mayors, and I would like to thank the Resource Conserva-
tion Committee for the opportunity to appear this morning.
I can be brief. The national municipal policy adopted by
NLC's annual business meeting last year calls for the initia-
si
tion of a system-Jo'disposal charges with recycling credits.
Let me expand on this general policy statement
a bit. As a rule, the cost of municipal solid waste services
are distributed to all taxpayers in the community, and in
many cases , either through increased property taxes or through
regularly levied user charge.
The inequitability and inefficiency of such a
system is made evident by two facts. One, consumers are
disproportionalV charged for services rendered, and two,
producers lack encouragement to initiate resource conserva-
tion or waste reduction practices. A system of disposal
charges with recycling credits would address both of these
problems.
Under such a system as envisioned by NLC the
virgin material content of a product would be charged, second-
ary materials would not. Solid waste services would then be
priced in direct proportion to a product's contribution to
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the solid waste streaS?. This would not only provide incentive
to producers to use recycled materials, it would also encour-
age consumers to purchase less expensive low-waste products.
Until such time as a product system incorporating
these elements could be initiated and the associated costs ,
administrative methods adopted, the National League of Cities
in support of the initiation of limited and temporary tax
incentive at the national and state level to encourage the
recycling of solid waste materials.
Under any product charge system adopted, the
National League of Cities and Conference of Mayors encourages
the federal Government to transfer the resulting revenues
directly to local governments. There are two general methods
in which this could be accomplished and a general revenue
sharing no-strings attached basis , or as a payment earmarked
for local solid waste management. We are now in the process
through our various committees, acting committees of local
officials of exploring both of these options in greater
detail, and we will be glad to submit a more detailed state-
ment of our position on these issues to you in the near
future.
In closing, solid waste management problems faced
„ •protfK
by the cities today can only be solved by an agVessive 'p*eb*-
±«B of source reduction, volume resource, resource recovery,
and ultimate disposal, all of which must be compassiblc with
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Ikl3 * environmental, social, and economic consideration. To be a
viable component of this program, a system of solid waste
product charges must also meet the sane considerations.
Thank you very much.
MS. BLUM: Mr. Burkes, you represent the National
League of Cities and U. S. Conference of Mayors. You repre-
sent, in other words, local government?
MR. BURKES: Yes.
MS. BLUM: Do you feel as do some of the other
people who testified that the solid waste problem is a state
and local problem that can be addressed best at a state and
local level, or do you feel that there should be some federal
involvement?
MR. BURKES: Well, I think particularly in the
area of resource recovery, but also in terms of dealing with
the rising cost of solid waste disposal, many local govern-
ments simply lack the resources because of their restrictions
in raising revenue locally to address these questions, and,
therefore, some outside help is needed.
Our experience in many areas has been that state
solid waste management agencies have not been as responsive
to the kinds of needs that cities have as the federal govern-
ment has been. We have had some trouble as well with EPA
and with federal involvement in this area.
?
But, the important thing is that resources be
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provided to meet the particular kinds of needs that cities
have in this area, and that they be allocated to cities in
a way that provide the flexibility needed to meet local
problems on a specific kind of basis.
I would say in this case that the product disposal
charge offers a real opportunity for localities to get that
kind of a revenue. We do not have at this point a position
from either organization on the specific alternatives that
the Committee is considering as to how those monies should
be allocated, whether they ought to be earmarked, whether
they ought to be done through some sort of no-strings-revenue
sharing kind of system.
We will be taking a position on that in the near
future. We are quite interested in the prospects of this
or on the other mechanisms to meet the rise of waste disposal
costs.
MS. BLUM: Thank you.
MR. KOLSKY: I have a very similar question, and
-p/,'/--i'/-/^ ,„•>
it also concerns testimony that j»«ee«
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1 municipal governments because they would no longer be forced
2 to absorb the cost of municipal solid waste disposal?
3 MR. BURKES: Well, I think this kind of product
4 disposal system has to be done on at least a state basis if
5 not a federal basis because of the problems of sort of com-
6 peting jurisdictions, local jurisdictions and, therefore,
7 I would say that in terms of a product disposal charge sys-
8 tern, you are going to need to either operate at a minimum
9 at the state level but preferably at a federal level if it is
10 done at all. In terms of the ability of the private sector
11 to handle these problems, there are various ways in which
12 the private sector could do this, either by way of franchises
13 which are allocated to one or several firms, private firms
14 within the city, or sort of an open market situation where
15 any firm deals directly with the individual.
16 I think they have found in a recent study con-
17 ducted at Columbia University that_>in general, the cost of
18 private collection franchise operations is lower than it is
19 publicly. However, in fairness to the public sector on the
20 public side, or the cities where the collection is done pub-
21 licly, there are a number of complicated factors which make
22 that study that was done at Columbia, I think, a more --
23 well, their findings should be looked at carefully in terms
24 of the specific situations.
25 MR. KOLSKY: Would the private collection also
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solve the financing problem that the city municipal govern-
ments would face?
MR. BURKES: Well, certainly by switching over
to the private sector, some degree of cost would be taken
out of the public side, but again, the ouality of services
and some of the potential dangers of a private system would
also have to be looked at.
I think there is evidence that the private sector
has become a monopoly situation in certain cities , and that
there are dangers that you are able to avoid if you stay
with a public system.
MR. HERBST: Mr. Burkes, Dick Herbst, Department
of Commerce. I believe earlier you alluded to the product
charge. Is it fair to say that you are concerned more about
the revenue to the states as opposed to the design of the
system of the product cJSJslrge?
MR. BURKES: Well, I am concerned about the reve-
nue to the cities, and if it goes to the states, we are not
sure how much we are going to pet from them, so I would
say ideally, we would like to have a direct payback to muni-
cipalities either by way of earmarked funds for solid waste
management, or by way of general funds.
MR. HERBST: The problem behind that is with the
product charge designing the system, I believe you mentioned
the fact you might propose a tax on virgin material, for
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example, and when I address this and think about it, not
2
all virgin material goes in to the municipal waste stream,
3
and I start to run in to questions of how you set the tax
4
up, where you impose it, and I believe you addressed one
5
at the tailend which is namely a source of revenue which goes
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to the state, which I can agree with you, this is your con-
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corn. But, my problem is one of equitability, where it's
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imposed, why, at what level, and what are we after, and have
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you conducted any analysis which can show me something where
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it's very equitable, how you administer it?
MR. BURKES: As an organization, we have taken
12
the position I described in my opening statement, which is,
13
that we like the idea generally. At the time this statement
14
was made, or the position was taken, there had not been
nearly the backup research that has been done since.
16
Our policy committees have not had a chance in
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the last several months since this became available to look
18
carefully at the alternatives. As I say, we are going to
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get these committees focussing on some of the specifics that
20
are now available, and we will be able to, I think, address
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this in more of a specific way.
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MR. HERBST: Thank you very much.
oo
MS. BLUM: Thank you, Mr. Burkes.
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MR. BURKES: Thank you.
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CHAIRMAN BUTLER: Our next speaker this morning
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is Mr. Judd Alexander, Senior Vice-Presidcnt of the American
Can Company.
MR. ALEXANDER: Thank you, and good morning. My
name is Judd Alexander. I'm the Senior Vice-President of
5
American Can Company, and I'm here to testify on behalf of
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ray company. I must say I'm also an officer or director of
five major trade associations in cans, packages , and paper
8
goods, and I'm a recognized authority in the role of pack-
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aging and solid waste.
10
My company manufactures paper, plastic, flexible
packaging, folding cartons and cans. We are also a major
recycler. We have one recycled paper mill, 17 plants that
**&Zcycle metal. We are the second largest recycler of alumi-
num in the United States and tin plated steel in the United
States, and the recovery systew to the city of Milwaukee
is designed to recover 90 percent of the waste in the city
recovering fuel, metals, glass and paper fiber.
In fact, the program is designed to save 75,000
tons of coal for the municipal utility and the energy ratio
there -*» we get back six BTU's for every BTU spent in opera-
tion, a very attractive ratio.
As a company, we are not opposed to the principal
of internalizing the cost of solid waste, but we are unable
to come up with a system that does this in a manner that
we would consider equitable and fair. In fact, the proposal
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in the fourth report to Congress by EPA, we consider to be
2
particularly discriminatory, progressive, disruptive, and
3
inflationary, and I'd like to touch on several of those point
4
The EPA writers of that report talk about the
5
inequities of the current funding 0± waste disposal systems,
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and yet, they appear to be prepared to substitute administra-
tive expediency and wind up with a whole other set of
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inequities. That represents 40 percent of the waste, not
9
100 percent.
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The packages were selected not because it was
fair, but because it was easy. I would like to address a
12
bit, if I might, the regressive natures of this product.
13
I would like to name for you a few products in common use,
14
canned vegetables, soup, TV dinners, pot pies, beer, soft
15 ,
drinks, kraft dinner,/Spaghettios .
16
Now, the common factor of all those packages is
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that there major market, by our own market research, is
18
lower middle income section of our country -- the working
19
people. That is where the tax falls most heavily. Remember
20
in the case of canned products, the tax rate is more than
21
three times as great as it is on other package products.
22
Every one of those packaged products dominates in the low
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income sector.
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A study done by Arthur D. Lillte done some years
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ago called "Packaging Perspective" identified 50 percent of
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the packaging done as food packaging. That percentage is
much higher for low income people than it is for high income
people. We find that to be very regressive and very discrimi-
natory.
There is another couple of factors of double charge
that bother me. The Franklin Study done for the EPA has
shown that 39 percent of their garbage of the municipal
garbage is commercial garbage, not residential, and that 90
percent of the commercial garbage is picked up by private
haulers. On the other hand, of the residential garbage, SO
percent of the communities in the United States continues ,
2S percent of the people already have internalized their
solid waste cost because they use private haulers to pick
up the garbage.
I have lived in seven cities. In five of these,
I always did pay for my own solid waste so that a national
charge tends to double charge that significant segment of
the population. Another factor that bothers me, if you use
a national average cost that means the average cost and sub-
stantial number of people, the rural portion is paying more
for their waste to help subsidize their brothers in the more
expensive areas. This is the criticism of the federal pro-
gram as opposed to state and local programs. It can be esti-
mated the cost of collecting and disposing the waste in New
York City might be five times as much as it is in my hometown
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of Owatonna, Minnesota. The cities have special problems.
I'm not opposed to considering their support, but I wonder if
a regressive special tax should be the source of a move
of funds from rural to urban areas.
Solid waste is not the only problem in our society
The estimates from the EPA are the expenditures to collect
and dispose of waste of about four billion dollars a year,
an impressive figure. But, by coincidence, that same figure
applies to the national loss in shipping damage-four billion
dollars a year substantially reduced by packaging. Who
knows what it would be without packaging?
The national loss for pilferage -- four billion
dollars. Packaging helps prevent pilferage loss. Spoiling,
we don't know what the figure is. The estimate from the
UN is that in a country like the United States is that the
loss of food spoilage is 20 percent of the food produced,
which is far better than a lot of the other countries where
50 percent of the food produced never reaches the human
mouth.
And, finally, there is the question of time,
products such as processed packaged foods, frozen foods,
and fast food restaurants have helped pay a role in reducing
the time spent by American homemakers in meal preparation
by two-thirds in just one generation. I would like to ask
the Committee to consider what is the price of tine, what
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is the value of family enrichment? What is the value of elim
nation from drudgery? Is it worth a few pennies of solid
waste, and I do mean a few pennies? If a citizen were to
go to a McDonalds hamburger stand and order a Big Mack in
its foam box and a large malt with a straw, and a cup and
a cover, and one of those large jumbo napkins, he could do
that ten times before he would consume ten ounces and ten
ounces of waste can be directed and disposed of in your own
figure for one penny. It is a very ineffective6 public ser-
vice. Another example that comes to mind is, many products,
peas, corn, frozen orange juice, come primarily packaged.
The price of the packaged product is about half the price of
the fresh product in the city, even in the summer. Of course
in the winter, there is no comparison at all.
The solid waste left behind by a ten-ounce package
of frozen peas or a can of peas is about one-eighth the
amount of solid waste that would be left if you brought the
product in and chucked and hulled it there. The same thing
is true of corn and frozen orange juice. This makes me won-
der if it's a solid waste tax or a material management tax.
My company's tax would approach $100 million.
Tax employed directly on the products we make, and since
that tax exceeds the profits/we make on those products
manufactured, I think we would have little choice but to
pass it through^, but remember this is tax being applied at
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the bottom of the chain. You have heard about the profit
multiplier effect. We make paper* we sell it to a package
maker,' ha sells it to a package filler, to a retailer to a
wholesaler. Would it still be $30 a ton when it reached
the consuner? There is another difficult problem in this
process. We, in this industry, sell most of our products
in high bulk by the carload, by the 10,100 weight, by the
case. You can take $30 a ton and wind it down to an even
penny, but when it reaches the consumer, it does so in a
tiny fraction. Most packages that you find in your own fact-
ory, most of them weigh a tax or one.
An ounce or two and that figures out to one-tenth
of a cent. How do you charge through to the consumer one-
tenth of a cent? My fear is that it would be charged as
one penny, and this might raise two pennies in government
funds and increase the price to the consumer by four to five
billion dollars.
The objective seems to be rather limited. In the
fourth report to Congress from the EPA is to reduce the amount
of garbage. The target figure is 2.477 million tons, that
is a reduction of 1.8 percent. This means a city, for example
that is due to run out of landfill in five years because
of this onerous tax will be able to have the landfill extended
for five years and one month.
I also took that figure. I tried another exercise.
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I took the 2-1/2 million tons and multiplied that to 60 per-
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cent that is residential waste, and I divided it by the 21S
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million people in the country and multiplied it again by
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$30 a ton and this tax is designed to make a saving in resi-
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dential waste of 14 pounds per person, 21 cents per year for
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each city even in this country. That seems to be a limited
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objective that hardly justifies a tax of this proportion
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and complexity.
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I do compliment the authors of the fourth report
10
to Congress and their comments on cans and bottles recognizin
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and metal , and I think it was fair to have these all taxed at
the same level recognizing their competition. I was disap-
pointed that the same wisdom did not apply to other cartons ,
cans competing with frozen food, for example, going back to
my example of peas , the tax on canned peas would be five
times higher than the tax on frozen peas.
The other example is that most paper is about
double the weight of most plastic with which its directly
competitive, and the tax on paper would be about double the
tax on plastic. My company makes both. We believe they are
both effective packaging, we think there already is a coia-
plex marketing system that sorts that out and assorts the
best use. There is another example in the administrative
expediency of putting the same tax on all ridged containers.
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Twelve tablet tin for aspirin, tax—half a cent. Five-gallon
jar of cleaning fluid, can of pinto beans, tax--half a cent.
I just don't think one of the objectives is social manage-
ment, it's going exactly the wrong way. It's not recognizing
at all the necessities of life for the large majority of
American cans.
A couple of questions have been raised concerning
the boast that recycling would get because of this tax.
My concern here, and we are a recycler, is that you tend to
drive up the price of a recycled product which is available
in efficient quantity, you drive up the price to meet the
price level. Within the last few months, the EPA, another
organization of our government has promoted heavily a tax to
use recycled newspapers as a sense of insulation. They
have encouraged many small plants of this. In the last three
months, the price of old newspapers has risen by $30 a ton.
I'm intrigued by this because that means that the tax. has
already been written off by another action of the same
government, and both the virgin product and the recycled
product would cost $30 a ton more, and the bearer of this
burden would be the American consumer.
Another thing that bothers me on a continual
basis is the studies of the EPA often deal with price, but
they seldom consider cost, the hidden cost that falls some-
where. We have all found working with pollution that it real
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doesn't go away. Our settling ponds and particulate piles
and sludges can prove that we only change its shape. One
of the frequently expressed examples is the concept of using
returnable cans to the store on a deposit system. A recent
study once again done by Franklin .Associates has suggested
that after a deposit system on a nationwide basis, the
mix of packages that would remain would be relatively indeter-
minate, but in the case of cans, they say there may be slightly
more cans or slightly less, but no real dramatic change.
1 will tell you that there are 48 billion cans
produced in the United States , and I think we all know the
profits made by our food distributors are very small, one
percent net profit is the average. But, to achieve that
and pay the rent, the taxes, the overhead, the insurance,
most retailers have an average gross profit of 17.10 percent
and by chance, the overhead is 17.4 percent. 17.4 percent
times the value of 48 billion cans, we will say that the
gross profit made by our American distributors for canned
beverages is $2.2 billion.
Now, on a return system, there is a double ham-
mering factor. As the cans come in filled, now they come in
in cases and cleaned and checked out by six-packs. Suddenly,
you are asking the same store to bring then back one at a
time, dirty, disorganized with a much greater demand on
space, potential for pilferage, potential for misrings, and
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all the backroom confusion and trying to sort these packages
in the backroom. I think it's fair to suggest that the real
cost on handling the cans would well be around $2 billion,
but that does not necessarily fall upon the product that
causes the cost in our retail system, it can go anywhere.
It can be on the meat, potatoes, salt, lettuce, or hair spray
I think cost as well as prices should be considered, and
we should be searching for those hidden costs and the dele-
terious effect on the economic health of our country.
One other product, we are talking about a. $30 a
ton tax. I think you have to consider the package function
value, and the EPA is inclined to look at the package value.
I'll use a simple example, toothpaste tubes. We sell then
by the thousands, but the price really figures out to $2 a
pound, that's $4,000 a ton. The tubes then go to somebody
like Proctor and Gamble, and they spend $670 per ton of tubes
to pack this product and send it off to the supermarket, and
$160 a ton to market that product. The social functional
value of that product at this tine is about $5,000, and I
don't think a $30 a ton charge, which is six-tenths of one
percent is going to persuade the use of those tubes. It's
not going to suggest the toothpaste be sold by the handful
instead of the tube.
The resource recovery system in which we are
involved as an investor is done for several reasons. We hope
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some day to make money on it. Our objective is not part of
2
it. We consider it part of our social obligation. We are
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a major maker of garbage and want to help solve the problem.
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But, we have learned enough in our Milwaukee experience to
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know that resource recovery is one answer. It's not the
cheapest answer, not now, but over a period of tine with
the rising value af values^ of recovered materials, we think
it can be a very sound business. It has another advantage.
It! inflation resistance compared to landfill and others.
We believe that the encouragement of resource recovery is a
very valuable alternative for cities beset with solid waste
problems. Using the figures for resource recovery, they
estimated the cost of building resource recovery centers to
handle half of our population, the urban half would be $3.8
billion.
Now, let me just take that down. If you started
today, you couldn't build centers to handle half the waste
in less than ten years, so let me take my $3.8 billion, divide
by ten, divide by my 215 million people, and the cost of a
viable resource recovery system to serve the urban half of
this nation would cost $1.70 per person per year for each of
ten years. With that suggestion, I'm saying that the tax
money proposed to be gained by this bill is too much. We
don't begin to need all that kind of money, but we do need
to move towards viable solutions. We do think that the best
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solution for raising that money is general revenue. It's
the easiest well-established system. We don't have to lay
on another whole tax system or tax system with all its regres
sive characteristics.
If there is no other solution but resource taxes,
we tried to examine some of the characteristics that we felt fat
disposal taxes in some perspective. First, if disposal
charges were to occur, they must have a single purpose.
They must be limited in time and rate. If the federal govern
nent plays any role at all, it's only to be a source of fund-
ing capital to solve the problem, not simply to delay it
because it is a solid waste tax. The only fair way is to
put it on all products, not a selected 40 percent, paper
and packaging.
I also think it would be far more effective to
put the tax on value because value recognizes the competitive
nature and in place investments and jobs already committed
to the mix. Any tax must be put as close to the consumer
as possible because of that buildup that we talked about
when you started back at the mill and, I guess, when I get
done with all this, my answer appears to be that the most
effective way to fund that is at local taxes may-be, with
some short-term government help on funding, or loan guaran-
tees, to advance the cause of resource recovery.
I thank you very much, and I would be pleased
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1 to answer any questions.
2 MR.TOZZI: Dr. Alexander, you stated that my com-
3 pany is not opposed to the charge, however, we are opposed
4 to development of a disposal charge tax systen, and a method
5 for the disburseaent of the collected funds, which is not
'?
6 discriminatory, disruptive, regressive, and inflationary.
7 I infer from that that it was not that American
8 Can would be in support of the tax.
9 MR. ALEXANDER: I think so. I say that with some
10 concern, though, because I worked on this program for seven
11 years, and I spent my lifetime in packaging, and I was
12 one of the conceptual developers of the Milwaukee program,
13 and I can't come up with one.
14 MR. TOZZ: Well, let me ask you one --
15 MR. ALEXANDER: And, apparently, neither can the
16 EPA.
17 MR. TOZZI: Let me ask you the question that the
18 representatives of National Soft Drink Association stated.
19 They stated that given their concerns, that they don't think
20 any governnent intervention is necessary. However, if they
21 had to live with something to address this problem or approach
22 some degree of it, they would prefer the imposition of a
23 product charge; however, moderate over a mandatory deposit
24 approach?
25 MR. ALEXANDER: Well, I think anyone in the
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beverage business would feel that way,but I'm not sure people
who don't make beverages would feel that way. It's complex.
MR. TOZZI: This says your company manufactures
paper, packaging, cans, packages and a variety of others,
although there is the terra "The American Can Company." You
all have more than 57 varieties like Heinz.
So, I'm just wondering that given that wide range
of import, you are not necessarily associated with just the
soft drink institute; what would be American's position given
those alternatives?
MR. ALEXANDER: I spoke for American Cany'manage-
ment, and our 47 employees, in a way, 125,000 stockholders,
customers -- the American consumer. It's a very, very
difficult question. My own belief is that the imposition of
mandatory deposits that forces the garbage back into the
supermarkets is insane, and there is a hidden cost that falls
on all Americans.
Very few believe that. Most of them perceive
they will bring it back, and won't cost anything.
MR.TOZZI: But, do you think your product charge i:
more insane than insane or slightly less?
MR. ALEXANDER: I would say the product charge on
beverage containers is slightly less than <*ane.
MR.TOZZI: Thank you, sir.
MS. BLUM: Thank you very much.
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CHAIRMAN BUTLER: Our next speaker this morning
is Mr. Philip H. Taft from the Tire Retreading Institute.
MR. TAFT: My name is Philip Taft. I'm the
Director of the Tire Retreading Institute which is a division
of the National Tire Dealers and Retreaders Association.
Our Association represents better than 4,000 independent
tire dealers in this country, 40 percent of whom are engaged
in recycling automotive and truck tires through retreading.
Each year, the tire retreading industry recycles
more than 45 million tires, and in the process, saves approxi
mately 400 million gallons of oil equivalent. The tire
retreading industry is a recycling industry. The more our
business improves, the more material that is recycled.
The growth of the retreading industry has been
limited principally by the availability of tires of retread-
ing quality. Our association clearly is interested in all
policy options which will promote on economically and admini-
stratively viable basis, the flow of quality secondary mater-
ials that are vital to operation.
Tires are often overlooked as a significant com-
ponent of the waste stream, yet each year, our country dis-
cards about 200 million tires. These tires,composed almost
wholly of crude oil products, represent a tremendous energy,
as well as environmental and materials investment.
This investment can be reclaimed through retreadin
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While a number of tire recycling methods exist, none come
close to matching retreading in reclaiming energy and materials
and minimum influence on the environment.
Retreading utilizes the best method of recycling
which is direct reuse. In retreading, the tire casing, which
represents between 60 and 75 percent of the average tire,
is directly reused. Each time a retreaded tire is used
instead of one made of virgin materials, about five gallons
of crude oil equivalent is saved in the case of a passenger
tire, and about 20 gallons is saved in the case of a truck
tire. And, concurrently, all the environmental pollutants
entailed in the manufacture of a virgin tire casing have
eliminated in the retreading case.
For many years , the private sector has maintained
a tire recycling system based on supply and demand. Let us
furnish the tire retreading industry with waste tires. This
system has worked well. At the present time, however, a
double-edged problem of, A) shortages of supplies of retread-
able tires , and B) the costly accumulation of nonretreadable
waste tires is limiting treading efforts.
In our system, retreaders buy large lots of waste
tires from which they must cull the retreadables. Only a
fraction of the waste tires can meet the retreading stand-
ards , which means that retreaders accumulate large tires
of unretreadable tires for which they must find markets or
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Ik34 spend money to dispose of provided disposal sites are avail-
able.
Presently, few markets exist for these reject
tires which in reality have economic value. This situation
could change drastically, however, with the devejoproent of
resource recovery systems reclaiming energy and/or consti-
tuent materials from tires and other waste products. Without
such systems available for utilizing waste tires, however,
retreaders are increasingly faced with a costly storage,
transportation, and disposal problem of unretreadable tires.
This forms a significant barrier to the uninhibite
barrier of waste tires in for possible use for retreading.
Clearly, a coordinated waste tire management system which
would assure the retreader would have first crack at dis-
carded tires, and concurrently would develop the market for
unretreadable tires, would resolve the problem.
It is not clear, however, whether a national sys-
tem of mandatory product charges would aid such a plan.
He have looked at a number of product charge
scenarios, and the two main approaches seem to be, A) a. tax
on the tires, B) a deposit on the tires.
It is important to note that in line with clari-
fication of product charge concepts made by EPA spokesper-
sons in recent public gatherings, we understand that such
concepts applied to products only made with substantially
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virgin materials and, hence, would not apply to retreaded
tires.
Let's take a look at the tax angle here. A tax
on the^proximately 150 Billion new replacement tires sold
annually in the United States on the order of, say, $1 a
tire would cost users about 5150 million each year. This
figure does not include a product charge which might be
levied on new charges on brand new vehicles.
Now, how would this money be used? Presumably,
it would be used to enhance the most favorable method of
tire recycling which is retreading as well as to solve the
waste tire disposal problem.
To do this, it is necessary to solve the problem
outlined above, that of increasing the flow of waste tires
to retreaders by developing markets for the retreaders mas-
sive rejects. But, we already have in place, government
mechanisms for market development. Section 5,003 of RCRA,
for instance, charges the Department of Commerce with market
development tasks, vigorous implementation of this section
of RCRA could well make a significant accomplishment in the
area for far less than the $150 Billion charge which may
have been assessed.
Let's take a look at the deposit system. This
system might provide incentives for consumers to return
more used tires to dealers in better condition, but dealers
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cannot make on-the-spot accurate determination of the
retreadability of tires, hence, the conditions of retread-
ability for the return of a deposit would have limited mean-
ing. Full refunding of the tire deposit would, in addition,
mean that no economic incentive would exist for the tire
dealer to make extra effort to get the better casings back
into the retreading systems. Partial refunding would prob-
ably prove unsuitable to the consumer diminishing his or
her incentive to return tires in good condition.
Now, we are interested in the concept of chronic
charges and their potential in promoting recycling. We do
not believe that sufficient data is available to determine
o_i
whether product charge jar provided to new tires would ulti-
mately aid our supply problems, or whether they would simply
add to the prices of the tires and cause consumer confusion
and mean unnecessary paper work for tire dealers and retread-
ers .
In addition, it's very important for the Committee
t
to realize that most tire retreading operations are small
with very limited staff capabilities. Any paper work or
bureaucratic requirements that might come their way because
of a product charge could prove significant burdence in their
operations. A product charge might be beneficial for cer-
tain local situations where waste tire supply factors is
warranted. Such a charge would probably be in the form of
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collection fee which is, in effect, for various materials
and localities across the nation.
The Tire Retreading Institute representing the
men and women who recycle millions of tires annually, and
hope to recycle more in the future, is currently exploring
a number of ways to increase the supply of retreadable tires.
We are optimistic that through improved waste
planning programs and vigorous consumer participation in
privately sponsored programs to return waste tires to
retreaders requires no .federal regulation such as a product
charge to become meaningful.
Now, we do recognize that waste management prob-
lems might exist in a local jurisdiction where it might be
necessary to apply the concept of the polluter, but if that
concept should be applied, it should be applied by the local
or possibly state level, not the_federal government.
And, a final comment. Like others, we are willing
and interested in sitting down with the Committee to explore
in proper detail, the product charge approach.
Thank you very much.
MR. HERBST: Mr. Taft, your statement on the
resource recovery act, since this does spell out some of
the recoveries under the Department of Commerce, I think
WOM.'AJ?
if I can respond on what ye«r saying is that the federal
government already has in place laws which should consist
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in our economy and our country in examining some of the
2 approaches taken to recover the materials, and before we
3 proceed with this , we should first address the laws that
4 we have existing and see how they are progressing before
5 we immediately start to progress on another approach.
6 Maybe I'm taking it too far. In other words,
7 we have one law which is trying to address this question of
8 resource recovery, and you are saying this issue would be
9 counterproductive to your efforts in this area of recycling
10 tires?
II MR. TAFT: No, no, this was just one of many
12 steps .
13 MR. HERBST: But, in 5,003, you think it was of
14 great assistance in implementing your program to recover
IS tires and recycle them.
16 MR. TAFT: Yes, it will. I would say we are not
17 going to wait. I think the private sector is going to be
13 moving far ahead .
13 MR. TOZZI: I think that's a good strategy in
20 general .
21 CHAIRMAN BUTLER: Thank you. I would like to
22 remind all speakers to leave two copies of their remarks if
23 they could. One to the registrations desk, and one to the
24 reporter .
25 Our next speaker this morning is Mr. Thomas Mitche
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with the Glass Packaging Institute.
MR. MITCHELL: I'm Thomas Mitchell of the Glass
Packaging Institute. We represent the glass container
institute. I'm going to ask that Mr. Sadd's written remarks
be inserted in the record, and I will make very few points
and be done.
As set forth in the fourth report to Congress ,
•
we have a number of reservations about the product charge
proposal that raises more questions than it answers, obviousl
an awful lot of work has to be done. Two points I would like
to highlight though. One was mentioned by Mr. Alexander,
and that is there is no apparent allowance made for the value
of packaging that would include the cost of doing without
packaging, what kind of trade office would you have. A
credit for products and produce save from spoilage and
breakage and theft. We are also concerned that we may end
up trading one externality if we all agree there is one.
We may end up trading one for another and that would come
in the distribution of any revenues raised.
I am very much concerned that revenues would be
diverted to purposes other than taking care of solid waste,
litter, and that we would just wind up with additional costs
on our products.
The glass container industry, though, would prob-
ably be supportive of a product proposal, product charge
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proposal that had these elements as a minimum. We think
it ought to be low enough so that it wouldn't disrupt the
market place. That would obviously come in conflict with
those who think you ought to influence consumer decisions.
The second point is , it should be broad-based
on virtually all items in/solid waste stream. When I say
virtually to avoid the diamond ring exceptions and a few
other ludicrous exceptions that are always brought up.
I would most certainly include newspapers and
magazines.
Thirdly, it must preempt deposit legislation,
whether it does that explicitly at the federal level, or
wnether it does it defacto in the way the funds are distri-
buted to the states, it would have to preempt deposit legis-
lation.
Four, revenues must be used only for resource
recovery and for 44-tt*e control and not for other purposes.
Those are all the remarks I have this morning.
Are there any questions?
MS. BLUM: Thank you very much, Mr. Mitchell.
CHAIRMAN BUTLER: Our next speaker is Mr. Mark
Sullivan of the National Wildlife Federation. /
s." lid
, MR. SULLIVAN: I'm Mark Sullivan, sofa waste
]>rodTJCT. We have affiliates in all 50 states, Guam, Puerto
Rico, and the Virgin Islands, and some 3. million members
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and supporters. The National Wildlife Federation has been
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1 consumer pays the cost when the item is purchased. It
2 further provides a ready so"rce of capital to assist local
3 governments in developing adequate solid waste management
4 systems.
5 The NWF believes this is not only equitable, but
6 also logical. Also enclosed in this is a copy of articles
7 which appeared in the NWF conservation news entitled
8 "The Disposal Charge^" .Jmir evaluation of the solid waste
9 concept in detail. I would, however, like to summarize and
10 emphasize some key points addressing some of the specific
11 questions posed by the RCC.
12 First, we do not view the product charge as an
13 alternative to mandatory deposit legislation on a state,
14 federal or local level. On the contrary, we view these two
15 concepts of complimentary elements of a balanced solid waste
16 strategy. -,/7/=>S/A-,.
' ' /
17 Second, we see no problem with faciiTg the charge
18 in over a period of years^in ten percent increments over a
19 decade is a fair one. The National Wildlife Federation
20 believes the charge should be indexed on an average. We advo
21 cate a levy per ton on paper and packaging materials , and
22 we support a per container concept for ridged containers.
23 The most equitable and effective is at the reduc-
24 tion source and not later at the wholesale retail level.
25 i This further evidences the availability of federal as opposed
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to state or local action on this issue.
Fifth, the NWF beleieves that the funds accumu-
lated should be provided to local governments earmarked
specifically for solid waste management purposes. We would
recommend an allocation formula, however, which would be
sensitive to circumstances of individual communities as oppose
to a strict ridged per capita formula.
The NWF believes that the structuring of the
charge levy for recovered materials is an essential element
of this concept. We think this will result in an improved
situation nationwide. The NWF believes that the solid waste
product charge would result in recovered materials in manu-
facturing. However, we do not feel that it would result
in significant reductions in waste generation'. This is why
we feel that the charge must be part of a comprehensive
national strategy that includes efforts at waste reduction,
but provides for the facilitation recycling and the proper
disposal of wastes which cannot be eliminated.
In conclusion, the National Wildlife Federation
urges the RCC to endorse solid waste product charge legisla-
tion, but we must reiterate that the charge is not the com-
plete answer to our solid waste issue. It will be an excel-
lent addition to a balanced national strategy and provide a
financial boost that is essential if rigorous ends to solid
waste pollution is to be met.
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1 I will be glad to answer any questions. j
2 MR. TOZZI: Mr. Sullivan, did I understand you :
3 to state that it is the position of the National Wildlife
4 Federation that the imposition of product charges would not
5 decrease solid waste generation?
6 MR. SULLIVAN: I wouldn't say it's our position,
7 it's our view that we don't see it as resulting in a great
8 deal of waste reduction, no.
9 MR. TOZZI: Then, is it apt to infer that one of
10 the benefits that you see,or the organization sees in this
11 proposal is to increase the revenues for solid waste handling
12 at the local level?
13 MR. SULLIVAN: Definitely, we would say that,
14 yes.
15 MR. TOZZI: Then, is it also correct to conclude
16 then that really vhat we are addressing is the appropriate
17 mechanism to increase the amount of revenues available at
18 the local level whether that be through ^federal , state, or
!9 local taxes, and I was wondering why, in your view, you felt
20 federal taxation was local or state taxes?
21 MR. SULLIVAN: Well, as I said in the statement,
22 our view is that we feel this is more equitable because the
23 actual cause of the solid waste management pollution is the
24 I fact that these products are produced in the first placej
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B Peap/iff ari(j tjje production actually is where the actual pollution
Pad 2 _ begins, therefore, we feel that it's best to make the people
at the very front end pay as opposed to -- it's more equit-
able than society as a whole paying for it. Again, we have
this problem of individual choice.
If you are going in to the consumer market place
and you want to be conservation minded, do you have a choice
in many instances? Do you have the option to buy something
that is less packaged? However, if you are a taxpayer on
the local level paying for solid waste management collection
and disposal no matter how conservative you are in your
packaging practices, you have to pay for everybody elses
practices.
So, we view it as more equitable to push it farthe
up on the scale so that the actual producers foot their
part of the bill because this is part of the cost of these
items.
MS. BLUM: Thank you. Mr. Robert Gariano has
indicated that he will not speak today, but submit a written
statement.
Our next speaker is Mr. James Shields, Chairman
of the Board of Judd's Incorporated representing the Printing
Industries of America.
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MR. SHIELDS: My name is James W. Shields, and I
am appearing in the capacity of Vice Chairman of the
Government Affairs Committee of the Printing Industry of
America. I am also Chairman of the Board of Judd's, Inc.,
a commercial printing company located in Washington, D.C. I
am accompanied by John F. Grant, Director of Government Affairs
for Printing Industries of America sitting behind me.
The Printing Industries of America, Inc., is a
national federation of regional, state, and city trade
associations, representing approximately eight thousand
member commercial printing companies throughout the United
States. PIA is the world's largest granhics communications
association, and in the ninety-plus years sinro its founda-
tion, has been a leader in the rapid technological growth of
this industry, which comprises what is commonIv known as
"American Printing."
The Federal Register of November 8, 1977, set forth
a number of questions dealing with a solid waste product
charge. The question is so vast and the time so short that
we cannot hope to answer all the questions put forth. In
fact, the premisp underlying the theory of a solid waste
product cnarge begs the question in that it treats certain
items as unreclaimable wastes rather than resources which
significant segments of our society can use and are using
in an economically productive fashion.
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When one looks at the products under consideration,
one sees a major distinction between those innusterated in
Table I (Paper Products) and those in Table II (Non-Paper
Products). Paper products are a renewable resource. Not
only may they initially produced without significant effects
on the environment, but also when their intended use is
satisfied, they may be utilized in an environmentally aound
manner.
Let me illustrate. Of all the products set for
in both the tables, only paper products are biodegradable
and nay be utilized as a source of fuel. Private industry
is realizing this to a great extent. Forward thinking local
governments, in some instances, are now using what has
heretofore been considered waste as an energy-producing fuel
to provide other products and services. In my own industry,
the printing industry, we have estimated that approximately
20 percent of the paper entering a printing plant is bundled
baled ana sold as recyclable scrap paper to be remade into
paper, chip board and even insulating material. The figure
af 20 percent for the industry is considered a minimum and
often is higher depending on the product or process involved
It is significant to note that in its fourth report
to the Congress on resource recovery and waste* reduction,
the Environmental Protection Agency recognized that while
paper non-durable goods and packaging constituted a
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significant portion of solid waste, they also constituted as
a class the highest percentage of all waste recycled.
Let us make some assumptions about the solid waste
product charge as set forth in the notice of the hearings.
Let us assume that the charge will be $30/ton and that it is
to b« levied on the producer, that is, the paper company,
and that the funds realized from this charge will be passed
on to local communities to assist them in solid waste
management. The imposition of such a charge would have a
telling effect on our industry and the general ceo&oniy as
well. Do not think for a minute that you are merely taxing
cereal boxes and candy wrappers. You will be raising the
cost of printed products to the major users of that product.
As an example, the United States government, through the
Government Printing Office and other federal agnecies,
annually produces approximately $1 billion worth of printed
material. School districts and local governments likewise
are major consumers of paper and printed material. If one
were to exempt materials not likely to be disposed, such as
library books, county land records ana the myriad of
documents stored i>y the National Archives, what administra-
tive nightmares would such a system generate.
The question of a credit tor recycling is an
intriguing one. We understand that the leading position
under consideration is to provide to the producer of the raw
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jv4 1 material a credit comparable to the amount of recycled
2 material contained in the product. At the present time,
3 some paper manufacturers are using approximately 20 percent
4 of recycled material in the production of some printing
5 papers. A credit of this type would mean that the paper
6 producer pays and passes on to his customer a charge of $24.
7 Fine papers, on the other hand, which do not contain recycled
8 materials would bear the full $30 charge. If the point of
9 this proposal is to reduce packaging and waste, it is curious
10 to note that the very material that is most likely to become
11 packaging material would bear a lower charge than that which
12 is most likely not to enter the solid waste disposal stream
13 to any significant degree. Because of the strength, color
14 and handling characteristics, it is most likely to be used
IS as low quality packaging material.
16 We in theprinting industry, who look upon paper as
17 our major raw material, have experienced significant increase:
13 in the price of that raw material in recent years. Simple
19 economic demands have caused our customers not to oraer more
20 packaging material than is absolutely necessary.
21 Because of these economic considerations spurred
22 by the rising cost of paper, our industry association, the
23 Printing Industries of America, through its emnoonent section
24 the Graphic Communications Computer Association, initiated
25 within the last year a nationwide program called Mar on Waste
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jv5 * The purpose of this program is to increase efficient material
handling and usage. Its effect has been to decrease the
amount of paper that a printer used to produce a finished
product. It decreases the absolute need for paper and like-
wise decreases scrap, both recyclable and non-recyclable. We
in the industry are impressed with its dramatic results and
look upon it as an example of what industry can do in
attempting to solve a problem that affects us all.
To return to the problem of a credit for recycling,
again some consideration must be given to the use of the
product manufactured by the user of the raw material. Fine
printing papers are used in the manufacture of books which
are unlikely to enter the solid waste disposal stream to
any significant degree and are also used for the printing of
throw-away advertising brochures which are likely to enter
the disposal stream. Are these two uses to be given no
different consideration for a recycling credit? Again, if
the credit has already been taken by the manufacturer of
paper, what incentive is there for the printer to sell his
scrap to be recycled rather than dumping it into the municipa
system? A large printing firm in the Northeast has reported
that in the period of January to August of this year their
total waste constituted 23.09 percent of material entering
the plant. Only 1.89 percent of the total material entered
the municipal system, whereas 21,10 percent was sold for
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recycling. Similarly, a medium size company in the Washingto
D.C., area has reported that in the year ending September
1977, its recyclable scrap was six times its waste nroduct.
Rather than $30/ton, perhaps consideration should t>e given
to charging printers a charge based on the actual percentage
of material entering the disposal system and not that which
is being recycled.
I wish to advance one other point. When one conside
the imposition of a product charge upon new material, what
is to be done with printed material that is produced abroad
upon oaper which is also manufactured abroad. The easy
answer would seem to be to impose the tax upon the importer.
Yet, under the Florence Agreement to which the United States
is a signatory, the United States is precluded from imposing
a tax on educational material. This means that educational
material produced in this country will bear the product
charge while that produced abroad will not. This is com-
pounded by the fact that after 1981 the creators of educa-
tional and other printed material will be able to secure a
United States copyright on material produced anywhere in the
world. These two factors will contribute to making United
States produced goods significantly non-competitive in both
domestic and world markets.
Let us look further do»m the line. If the funds
realized from such a charge are to be passed through the
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federal government to local governments, how will these funds
be utilized? They night well be utilized to raise the
salaries of garbage collectors rather than spurring needed
initiatives in the management of solid waste. The hearing
notice remarks that present local government efforts to
manage solid waste disposal are inefficient and inequitable.
Since those who deposit solid waste material are presently
paying through taxes or user fees for its disposal, how much
better it would be to correct these alleged inefficiencies
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and inequities: The proposal of levying a $30/ton charge on
paper would have the effect of having these users pay twice —
first, through higher costs and secondly, through presently
existing taxes and user charges.
In a study prepared by the Urban Data Service of
the International City Management Association published in
August of 1977 and based on a survey conducted in the fall
of 1976 by the National Association of Counties Research
Foundation, it was shown that 54.5 percent of the counties
reporting were using general revenue sharing funds for solid
waste disposal programs, and we have quoted in our written
report. It is quite technical, and I would like to skip it
because it is percentages and numbers, but we analyze the fact
that many counties are using successfully but not near enough
that are using waste management to generate power and other
services and products.
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jv8 1 From the above figures it can be shown that 52.2
2 percent of the reporting counties recognized that there is
3 a market for resource recovery products. Only 11.6 percent
4 mentioned state or federal incentives for entering in such
5 a program. And of that figure, 44.4 percent cited financial
6 assistance as the leading incentive while 33.3 percent chose
7 planning assistance. Of those counties that cited a need
8 for various types of resource recovery assistance, 40.1
9 percent chose technical assistance. If efforts were made
10 to correct the alleged inefficiencies and incraities in the
11 present funding procedure, and full utilization of nresently
12 available federal funds was accomplished, it appears that
13 the greatest need of local governments is to receive techni-
14 cal assistance so that economically viable methods of solid
15 waste recovery may be implemented. Let us concentrate our
16 efforts where the need is greatest, at the local government
*^ level. EPA should be acting as a clearinghouse for informa-
1" tion which can be used by local governments in their planninc
19 efforts. Consideration might be given to a program whereby
20 EPA would assist governments on this endeavor. If these
21 local governments failed to take advantage of this assistance
22 their citizens would suffer the loss of the federal tax
23 deductibility of that portion of real estate taxes paid by
24 local citizens for waste disposal. In this manner, control
25 would remain in localities and local governments would have
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jv9 1 the incentive that would be provided by their own citizens
2 losing preferred tax consideration.
3 The proposal before you is indeed a far reaching
4 one and one that cannot be treated in a perfunctory or off-
5 handed manner. It requires detailed, nrolonged study of its
6 impact both environmentally and economically. The printing
7 industry would be most happy to assist the "esonrce
8 Conservation Committee in its examination of this question.
9 I thank you for the opportunity of appearing before
10 you. I will try to answer any questions. Do you have any?
11 MR. TO7.ZI: Mr. Shields, when we speak of oroduct
12 disposable charges — the range in bills and options
13 available — let me aak you,if a product system were fonnu-
14 lated where there were credits given both for the recycling
15 nature of the material and the biodegradability, of course,
16 we could argue in a lot of respects.
17 Even when it does enter the waste stream, it may
18 have less of a long-term deleterious environmental impact.
19 If credits were made along that line and given the data that
20 you have stated in yourtestimony ftfWg^ that the main ingre-
21 dient of your industry as you print on paper; and if a
22 product disposal charge system applied to all commodities in
23 the waste stream, would not such a system improve the relatiM
24 competitive advantage of naper over other materials that
25 don't meet those criteria?
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jvlO 1 MR. SHIELDS: I don't know how I could answer that
question from any real fact. My basic feeling is that we
really don't compete. Certainly some paper is used and a
lot of paper is used — well, a railk carton comes to mind.
It could be a glass bottle, but by and lar
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jvll i testiraony about the great concern that certain proposals pick
2 out certain commodities, and I auess I wantAask if it imolies
3 across the board. You make credits for recycling and
4 biodegradability and things of that nature. I am not sure
5 that certain things would not have a competitive advantage,
6 and I don't mean unfairly.
7 MR. SHIELDS: '-Jell, our point in the printing
8 industry,and I think it's probably fair, I don't know all
9 the facts but I think basically the percentage of material
10 in the paper that is manufactured that reaches the solid
11 waste and we know it's a large amount, but our noint is that
12 through better technical assistance and so forth, the nPA
*3 and an awful lot of that could be used as fuel — could be
14 other than finding its way into the solidn/asfe srt-€ciiv\.
15 The easiest thing to do is throw tt into a trash can
16 but it can be separated and used for recycling. This is
17 true of many other products that are in the table too, and
18 this is our primary >->oint.
19 rw. HERBST: I wanted to pick up on one statement.
20 Do you have any data with respect to the amount of educational
21 material that is coning into the country and exactly how —
22 MR. SHIELDS: I don't have it with me. I an sure
23 there is some available. All I can tell you frankly, from my
24 own experience, is that the amount of foreign competition
25 i that we are facing in the printing industry, is increasing
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jv!2 1 substantially. I don't have any data that I can live you
2 now, but —
3 MR. HERBST- The point is clear that the tax would
4 not aoply on the educational material being poured into this
5 country.
6 MR. SHIELDS- Correct, it could not be.
7 CHAIRMAN BUTLFR• Thank you, sir.
8 MS. BLUM: Thank you, very much.
9 CHAIRMAN BUTLER: We will take our lunch break now.
10 I would like to shorten the lunch break just a little bit —
11 if we could come back and convene at 1-15 sharp. Again, the
12 cafeteria is down the corridor to your right.
13 (whereupon, at 12:25 p.m. the hearing was recessed,
14 to reconvene at 1:15 p.m.)
15 APTKRNOONSRS^ION
16 1:15 p.m.
17 CHAIRMAN BUTLER: Ladies and gentlemen, if we
18 could get started again. If you would please, those of you
19 who are speaking, please submit your written testimony both
20 to the personnel at the registration desk and also please to
21 the reporter.
22 I would also like to clarify something I said
23 earlier. The oral transcript, only the oral presentations
24 made today, will be mailed out to the registrants. Your
25 written testimony will go to the Resource Conservation
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jv!3 1 Committee Members, but it will not he mailed out to all the
registrants.
One other point, the entire record both written and
spoken testimony will be available at the RPA if anyone
wishes to cone see it. Just for your information, our last
public meeting the record was something like this thick so
it's a little bit too much to mail.
We have two new faces at the table this afternoon
to present to you: Miss Lynn Brown, she is the assistant to
Hiss Blun, and Mr. Eric 1fod0T of the Department of Treasury.
Our first sneaker this afternoon is Mr. Jack Cooper,
Director of Environmental Affairs, National Cnnners Association.
MR. COOPFR: My name is Jack Cooper. I am the
Director of Environmental Affairs for the National Canners
Association which is a non-profit trade association with
approximately 500 member companies that pack about 85%. of the
total U. S. production of canned foods for human consumption.
The members of our association are interested in the
Solid Waste Product Charge Issue because enactment of such
a program would result in increased costs to the consuming
public for processed foods. While we have no established
Tkdotfc
position on the Solid Waste/\Charge Issue, we do have some
general comments to make and some questions that we feel
must be addressed by the Resource Conservation Committee as
it proceeds in developing its recommendations to the
President.
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jv!4 1 In our view, there are several factors which must
2 be considered by the Committee when assessing the need for
3 "internalizing" the collection and disposal costs of food
4 packaging materials. Some of these are:
5 1. The Effect of the "Charge" on the Economy. In
6 Table 3-6 of Appendix B of EPA's Fourth Report to Congress
7 on Resource Recovery and Waste Reduction, it is noted that
g the price of canned food would increase 4.2* if a product
9 charge similar to that contained in Senator Hart's bill,
10 S. 1281, was enacted. This increase for canned foods nearly
H equals the average pre-tax return on sales for the canning
12 industry from 1961 through 1973 which was 4.4%. It is thus
13 apparent that the tax could not be absorbed by the industry
14 and must be passed on to the consumer.
15 It is a fact that many fresh foods are unavailable
16 to the consumer during non-growing seasons. Commodities
17 such as peas, sweet corn, peaches, and oears, are desired
18 components of most persons' diets during the winter season.
19 The Committee must, we believe,address the question of
20 whether it is a desirable social goal to artificially
21 increase the price of such commodities to the consumer througl
22 the imposition of this tax. This additional burden would
23 likely fall heaviest on low income groups least able to
24 afford the increased cost.
25 2. The value to the consumer of the intrinsic
qualities of the various processed and packaged food products
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The intrinsic values of canned foods to the consumer
must not be ignored. Canned foods can be stored for long
periods of time without additional inputs of energy or
significant nutrient losses. This intrinsic value to
consumers is not realized with most other types of food
products, fresh or processed. Another intrinsic value of
packaging is protection of food products from rodents, insects
and microorganisms which are in constant competition with man
for available food supplies.
The convenience factor is also intrinsic in processed
foods and it does have a social value, which must be consider
along with the social value of the product disposal charge
concept. More and more, consumers are relying on food
products which require less preparation and cooking time.
Processed foods, properly packaged in convenient quantities
meet that demand. Working married women particularly depend
on convenience foods to minimize meal preparation time.
In order to achieve reduction in the amounts of
packaging materials utilized in protecting most processed
food products, there would have to be a decrease in the number
of smaller containers produced. To do this would discriminate
against consumers who wish to purchase smaller containers.
In view of the fact that the average family size in the Unite<
States is decreasing, the demand for smaller containers is
increasing.
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jv!6 1 Attached to my statement is an article from yester-
day's Wall Street Journal which clearly points out this
trend and discusses its implications to food processors. The
article states that this trend has "... prompted food
processors to repackage their goods in one-serving sizes."
It seems unreasonable to us to expect a one or two-
person household to purchase the same size container that
would be suitable for a larger household of four or more
persons. It also seems unfair to tax a single family
purchaser one-half cent per serving and a four-person family
one eighth-cent per serving, as would be the case under the
Hart bill.
3. The value to the consumer of not having _the
collection and disposal cost included in the purchase price.
Whether or not a tax is imposed in the future on packaging
materials, households will still require the services of
solid waste management collection services to pick UD and
dispose of discarded materials. Particularly, food wastes
generated daily must be picked up and disposed of, preferably
bi-weekly, in order to prevent odor, rodent and insect
problems from occurring. Further, solid waste management
collection and disposal systems will be required for other
products not covered by the disposal charge. Examples includi
yard wastes, worn-out clothes, and other unwanted household
debris such as broken furniture, small appliances, and busted
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jv!7 I toys, as well as discarded Christmas trees in December. We
2 must ask the question "What is wrong with allowing the
3 consuner to soread the cost of the pick up and disnosal of
4 the above-mentioned items with the cost of disoosing of
5 packaging wastes?
8 4. It is possible that the imposition of such a
7 tax could result in an increase in the amount of solid _waste
8 to be handled rather than a decrease. If, because of the
9 tax, there was a dramatic shift away from processed foods to
10 fresh foods, there would be a significant increase in the
IV amount of household wastes generated. For example, if there
12 was a shift away from frozen orange juice concentrate to
'3 fresh oranges, the orange raeels would either go down the
14 garbage disposal or wind up in the solid wa>5te stream. This
15 would be extremely unfortunate because at the present time
16 about 97% of the residuals from citrus processing operations
17 are utilized for animal feed. The same is true for many
^ other foods such as corn and potatoes. If there was a
"* dramatic shift in the consumption of processed foms of these
20 foods to fresh forms, the peelings and husks would be
21 handled by the consumer as a waste; but 94 and 90?,,. respect-
22 ively, of these residuals are currently utilized by
23 processors for animal feed. Much of these wastes would
24 nrobably go into the hone garbage disposal, thus transferring
25 the solid waste problem fron the food processing nlant to
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jv!7 I the rounicioal sewage plant resulting in increased sludge
2 loads, the disposal of which is an important community oroblen
3 today. We do not believe that shifting the solid waste
1 orohlen from the food nrocessing plant to the home and then
5 to the municipal solid waste contractor or the municipal
6 sewerage agency is a proper social goal.
1 5. The consumer may not decide to purchase "low
8 solid _waste_ Yjyiu«Ll_j^pj3ucts_. Throughout the discussion of
9 the rationale for the product charge concept and throughout
10 Appendix B of the Fourth Report to Congress, the word "might"
11 is extensively used. It is apparent that no one knows how
12 many consumers would decide to purchase "low solid waste
13 value" products and forego some of the intrinsic values they
14 have come to exnect from orocessed foods. If few made such
15 purchases, possibly the greatest result and impact of the
16 tax vould be an increase in the cost of food to the corsuriing
n public.
18 in conclusion, since our association currently has
19 no official position on the solid waste product issue, we
20 cannot offer specific answers to the fourteen questions
21 proposed in the announcement of the public hearings. However,
22 we do recommend that the committee seriously consider the
23 issues we have raised before making its recommendations to
24 the President and the Congress.
25 I appreciate this onportunity to present some of our
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jvlB 1 industry's concerns regarding the Solid Waste Product Charge
Issue.
CHAIRMAN BUTLPR: Thank you, Mr. Cooper.
MR. TOZZI: Mr. Cooper, maybe you can just elaborate
on that question that you asked on Page 4. It says we must
ask the question, "What is wrong with allowing the consumer
to spread the cost of pick up and disposal of the above-
mentioned item?" I think it's a good question. What is
your answer?
MR. COOPER: I don't think there is anything wrong
with it. It is being done right now.
MR. TOZZI: And we could conclude from that that
if a status quo is alright, then there would be no change.
That would lead me to conclude that your position would be
to keep the status quo, I mean nationally.
MR. COOPER: Jim, we don't have a position. I am
just raising issues that we think the Committee should
address before it makes its recommendations to the President
and the Congress, and this is one of them that we don't
think has been thoroughly analyzed in the report to Congress
or in the questions and discussion oapers that was sent out.
MR. TO7ZI: Would you also be looking at meeting
that condition. I think the performance of the product
disposal charge would say that your condition is met also
because it is spreading it among a lot of consumers, but thos>
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jv!9 1 consumers that benefit from the waste generation of narticula
2 products, are those that pay.
3 Are people in your deliberations, when you come up
4 with your position, going to address and give the Committee
5 analyses that would suggest or possibly suggest the relative
6 merits of maintaining the status quo on this issue versus
7 the benefits achieved hy the —
8 MR. COOPER: All I can say is that we will take this
9 question into consideration on our deliberations, but I can't
10 say what answer will come forth.
11 MR.TOZZI: But you would give us both sides of the
12 issue in your analysis of that?
W MR. COOPER: We would attempt to.
14 CHAIRMAN BUTLER: Before introducing our next speake
15 first I mispronounced the name of the gentleman to my left.
16 He is Mr. Eric Toder, T-O-D-E-P, with the Department of
1' Treasury. In my openings remarks, I mentioned that the
1® deadline for submission of written comments was FJovember 28.
IS That is incorrect. The deadline is two T-oeks from today,
20 which is December the first.
21 Our next speaker is Mr. Neal Potter. He is the
22 Chairperson of the National Association of Solid Waste
23 Subcommittee and is a Councilman from .Montgomery County,
24 Maryland. He is here to represent the National Association
25 of Counties.
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jv20 1 MR. POTTER: Mr. Moderator and Members of the
2 Conunittee, I am Neal Potter, member of the Montgomery County
3 Council, Maryland and prior to my election to the Council,
4 I was practicing economist in the fields of Public Finance
5 and Natural Resources for about 25 years, so this is a
6 subject of considerable interest to me oersonally as well as
7 to our County Council and the National Association of Countie^.
8 WACO has not yet developed an official position on
9 solid waste product charges, hut looks on the idea with much
10 interest and considerable favor. In my own county of
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11 Montgomery, in Maryland, our interest is very strong, and
12 we have moved a little way in this direction by levying a tax
13 on malt beverage and soft drink containers.
14 The complexities of making such levies on the local
15 level are considerable; and it seems clear to us that if there
16 is to be a more general effort to reach these products, it is
17 essential that the levy be made at the national level. Indeed
"8 if the system is to be reasonably tight, and to avoid discrimi
19 nation, there will be a need for import levies (and exoort
20 credits) as well.
21 Conceptually, the charge could most fairly and
22 logically be levied on all solid raw materials except fuels,
23 since solid waste is their ultimate destiny, unless they
21 become museum pieces.
25 Recycled materials may appear to be an exception, but!
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they are not, unless they are recycled forever. However, sincp
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jv21 1 recycled materials add nothing to the waste stream until they
2 cease to be recycled, there is a logical case for exempting
3 such materials from the charge.
4 However, modifications in such a simple and logical
5 system will no doubt be required to deal with the problem of
6 public acceptance. Every new idea has difficulties with
7 public perceptions and understanding, and in this case the
8 understanding is likely to be readiest for materials which
9 become waste within a matter o^ days or months rather than
10 years, and which constitute major parts of the waste disposal
problem. Thus I would accept the idea that the charge be
12 limited at least at the outset to paper products and container
and wrapper materials. There is however an extremely strong
case for adding plastics and rubber to this list. These
15 materials are generally manufactured from energy raw materials
and present some of the most difficult waste disposal
problems.
The EPA staff memoranda seem to indicate a consider-
able difficulty over the question of where the charge should
20 be levied, and how credits for recycling should be adreinis-
21 tered. It appears to me that these need not be problems
22 representing great complications. If paper and plastics are
23 taxed regardless of their end product destination, a large
24 portion of the problem can be dealt with very simply, by
25 taxing virgin materials when and where produced, which is
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jv22 i generally rather few noints. Tn the case of glass and metal
for containers, which have nany destinations, the charge can
sinply be levied on virgin materials utilised by nanufac--
turers in producinn such conmodities. There is no need to
provide special credits for recydi ed materials, since the
tax on virgin materials will automatically give recycled
materials an extra advantage.
To improve the nublic image of the charge, T think
it is desirable to transfer the revenues to local governments
or other agencies involved in disposal of the subject wastes.
This connects an inevitably unpopular tax with the problem
it is designed to help with. If the revenues were put into
13 the general fund, or dispensed as general revenue-sharing
14 funds, the objectives of the tax might be lost siqht of, and
15 the costs which refuse disposal imposes would not serve as
16 the logical basis for the levy. Tn addition, revenues put
17 in the federal general fund tend to relieve income taxes,
18 while the costs of refuse disposal generally fall on the
payers of property taxes. Since property taxes create a
20 much more serious problem for taxpayers than do income taxes
21 in a great many cases, the tax relief function of the levy
22 distribution would be much less if the funds were placed in
23 the general fund .
24 A formula for distribution should,! think ,be as
25 simple as possible, because federal paperwork requirements
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jv23 1 are quite onerous, and can add little to the eciuity of
2 distributing funds on a per capita or perhaps somewhat better
3 per-ton-of-refuse-disposed basis for allocation.
4 At this point I would like to note that the dollar
5 amounts in the discussion paners which were prepared are far
6 less than our costs of refuse disposal. Our landfill costs,
7 between the high cost of land and the sizeable cost of
8 environmental protection such as buffering from adjacent
9 land uses, cover material, top soil cover and landscaping,
10 long-terra ground water nrotection and monitoring, etc. are
11 over S15 per ton. Total costs including collection and
12 disposal, are about $75 per ton. These are more than double
'3 the costs in your memoranda, and though they appear high, I
14 suspect that current experience in urban areas is generally
15 closer to Montgomery County's experience than to the staff
1s figures based on older data and perhaps more rural experience
17 I would recommend additional research to get latest figures,
18 with careful attention to urban costs, where most of the
19 disposal must occur, and to the costs where adequate environ-
20 mental standards are being met, as they must be in the future
21 in all areas. In addition, it is necessary, if legislation
22 is to designate the charges to be made over a five or ten
23 year phase-in period, that allowance be raade in the charges
24 imposed for inflation which can be expected in that period,
25 and for the increased costs which will have to be borne when
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jv24 1 environmental standards are proraerly met.
2 A word as to alternative methods of imposing a
•1 charge on disposable materials. The principal alternative
4 I appears to be to levy on disposal, as for example making a
5 ! charge on landfills and/or incinerators. Charges of this
6 sort only add to costs which already are becoming very
7 j heavy, and unless refunded would add to the property tax
8 burden of local governments. A charae levied at the house-
9 hold level, as for example so much per can or 100 oounds of
10 refuse disposed, is too complex to be administered, since it
11 requires separate weighing of collections at each household
12 each week or each day that collection is made and that's the
'3 only way to hit people doing the collection and disposal.
14 Moreover a charge heavy enough to discourage production of
15 disposable materials will add a substantial incentive, when
1s added to the real costs already being paid, to roadside
tf dumping and increased use of garbage grinders thus adding to
18 sewage problems, and will encourage home incineration and
19 other unacceptable methods of disposal.
20 Therefore, I think it has to be at the production
21 level. I would suggest, in view of the remarks of the
22 previous speaker, that we do need additional research on the
23 actual cost and impacts on industry. I cannot believe that
24 the cost on canned goods, for example, could be more than
25 half a percent of the final price on canned goods• and some
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jv25 1 research needs to be done to determine what the impacts realfly
2 are likely to be in view of neWtral and careful research.
3 Finally as to the need for compensation for
4 affected industries. A five or ten-year phase-in for such
5 a charge makes hardships and readjustment problems minimal,
6 and therewith the case for compensation would be weak. If
7 any compensation is thought necessary, it nust be provided
8 in such a way as to accelerate changeover to new methods of
9 production or new industries which do not create the problem
10 which the charge is intended to diminish. Any lasting
11 support of a business which is "hurt" by the charge would
12 merely offset the impact of the charge, and might in additio
13 develop into another wasteful and expensive federal program.
14 I will be glad to answer any questions.
15 MR. HERBST: Mr. Potter, Herbst of the Department o
16 Commerce. What do you perceive the objective of this tax to
17 be — you talk about the problem?
18 MR. POTTER: Yes, from our standpoint, I guess the
19 county would be most interested in reducino the waste stream
20 We have acute problems of finding adequate and chemical
21 landfill sites. Over the past two years, we spent ?2 1/4
22 million on a landfill site, which is ultimately disapproved
23 by the state, so we are now desperately searching for an
24 alternate acceptable site all over the county with, of cours<
25 I all the outcry from the citizens and with the present site
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mounting to the peak of the tillable capacity sometifie in
the spring.
So, anything to reduce the flow would be most
welcome to us. We are hoping to go to a recycling system,
but technology is not quite right and we have to find land-
fills until that occurs. Of course*, we will need a landfill
for the unrecyclable materials ever) then.
MR. HERBST: I guess maybe I started at the end of
the question, but do you see this as really a federal—
you said you would like to see the taxes from a federal level
but isn't this really a local problem?
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jv26 1 MR. POTTER: We have no way of turning it off unless
it's turned off at the source. Tt is sort of like when you
have got a broken oipe, in order to try to wrap it up with
ta&se,that is the kind of problem we are faced with at the
local level. Somebody has to go baoV to the source and
slow down the production of this immense stream. I would
hope also we could get some help at least in this experimen-
tal period for more effort on the recovery and recycling
systems because that can help us all to handle the outpouring
when it occurs and whether it occurs.
MR. HERBST: I agree with you there on the latter.
The other problem I have is you also pursued your local
taxes at the same time.
MR. POTTER: Just for containers. It is a small
part of the stream — I think about 7 percent.
MR. HERBST: But the other problem I have is when
I look at the cost for suburban area as opposed to a rural
area. Early today people were talking about free riders
and I am concerned about whether it is equitable to look at
it from the federal level with respect to cost of disposal
and how these charges are passed back to the local
communities.
Specifically, what you are referring to — the cost
of disposal in urban areas is higher than the rural areas.
So, the land costs are essentially higher.
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jv27 ^ MP. POTTHR• To a snail degree, I don't nind if you
use a weighted average oir something like that. Most of the
disposal has to be done at the urban level. Vhat is where
most of the people live noxr, and T just ask that due consid-
eration bs given to that fact and to adequate environmental
protection. Sometimes, that is orettv difficult in the
rural area as well as the urban.
MR. HKRBPT' Thank you, very much.
CHAIRMAT-? BUTLER- For those o" you who were not here
with us this morning. Dr. Fdwin Clark from the Counsel of
"nvironmental Ouality has joined iis. Mr. St. Clair Tweedie
has graciously agreed to swap times with Mr. Morris nershon,
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jv28 1 Wo have been conserving natural resources and energy
2 all these years, and we have been doing it by the use of the
3 18 gage 55 gallon drum, which has been a standard of the
4 industry for 25 or 35 years for such Indus tries as petroleum,
5 chemicals, adhesives, naints, printing inks, and so forth.
6 A study made hy economists from the University of
7 Illinois, which I will submit withing the course of the next
8 ten days with a prepared statement, proves that with the
9 l"-gage drum being the only drum used — if it were the only
10 drum used for liquid products and it was for many years —
11 this country conserves one million tons of steel annually.
12 In effect, this means about two and a half million tons of
13 iron ore, coal, and kindred products as well as millions of
14 gallons of oil, billions of cubic feet of natural aas, etc.
15 This conservation industry of ours, however, has
16 been effected in the last 10 or 15 years by a lighter gage
17 drum. The steel drum manufacturers in an effort to reduce
18 the competitive advantage of the reconditioned drum against
19 the new drum, came out with a lighter gage drum some 10 or
20 15 years ago, which has a shorter life.
21 The 18-gage drum has'an average life of about eight
22 trips; 2018, the lighter gage drum has an average life of
23 two or three trips. So that each time a 2018 drum is
24 manufactured, this company loses seven bruins for each druri
25 so manufactured. If you multiply seven drums by perhaps ten
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jv29 1 million of that type being today manufactured, you have 70
2 million drum trios which are lost to this country.
3 Since that time in order to further increase their
4 production of new drums and attempt further to decrease
5 our reconditioning of used drums, they have come out this
6 year with an even lighter qage drum — an all 20-gage drum,
7 which has no life at all after the initial trip. If it has
8 an additional trip, it may be one additional one. So, we
9 are faced today with a situation whereby this conservation
10 industry — the industry, which saves natural resources and
11 energy — is threatened with extinction in the not-so-distant
12 futxire if the manufacturers keep lightening their gage of
13 steel in order to put us out of business.
14 Of course, if we didn't exist, obviously, there
15 would only be new drums. If used cars didn't exist, you
16 would have to buy a new car. If there were only new drums
17 and there were no reconditioners of used drums in the last
18 ten years, this country would have 400 or 500 million empty
19 used drums littering the landscape.
20 As Senator Randolph once said on the floor of the
21 Senate, just imagine in a six-pack of 55 gallon throwaway
22 drums. We not only recondition drums, but we aid irameasurabl
23 in the recycling of the steel in drums because were it not
24 for us in the main, these drums would not get to a scrap
25 yard. Scrap concerns cannot afford to go out and pick up
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empty drums. For years they would not go out and pick up
used cars because it was not economically feasible, and it is
far less economically feasible to pick up used empty drums.
/the
The only way that they get to scrap yard is because
we, after trying to recondition them in their last trip and
finding that they are not any longer reconditional, we bring
them after cleaning to the scrap yard. The scrap concerns
will not take them uncleaned on account of scrap contamina-
tion, possible danger of explosion when they are crushed,
and so we serve a dual function.
We conserve the steel in the use of drum, and we are
the recycling agent in getting that drum to the scrap yard
eventually. And so my purpose in being here is to tell this
Committee that this industry needs help and needs it now.
I do not believe that the product charge, which you are
contemplating for many products is as applicable in our
industry as it might be in many consumer industries.
This is an industrial product and in order to induce
the chemicals industry, for example to buy an 13-gage drum,
whether or not they put it on a returnable basis rather than
by a 2018-gage drum, which is a dollar and a quarter cheaper,
or a 20-gage drum, which is perha;>s two dollars cheaper. In
order to give them any inducement, you must give them an
incentive rather than a product charge at the other end.
I submitted sometime ago to the House, Ways and
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jv31 I Means Committee in the discussion of a tax bill in 1975, I
2 believe, a suggestion for a tax incentive or disincentive.
3 I nrefer and I understand for many members of Congress that
4 they prefer a tax incentive for the purchase, when chie, of a
5 new drum, which is reusable as many times as possible, and
6 thus conserves as much natural resources and steal and
7 energy as possible.
8 I think this might be a better course of action in
9 the case of an industrial product, such as a drum, rather tha:
10 the case of a toothpaste container where you might be
11 considering a product charge because there is no basis for
12 a return of an emoty toothpaste container.
13 I urge you to qive serious consideration to having
14 the Congress or the President take early steos to see to it
15 that this conservation industry, this eneray savings
16 industry, can continue doing the job it has been doing for
17 some 50 years. I will be glad to within the next ten days
18 or two weeks,at the outset,submit various statements before
19 Congress and other agencies as well as the energy study that
20 I have discussed a few moments ago.
21 If you have any questions, I will be glad to answer
22 them.
23 MR. CLARK: Uow much do you pay a firm when you pick
24 up an old drum?
25 M^. POTTER: That depends upon quantity, quality.
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type. That depends upon many factors. We can pay a low
price of two or three dollars. A high price, I understand,
that one of the oil companies paid the United States Govern-
ment in an auction recently some six and a half dollars for
a used 18-gage drum.
MR. CLARK: Some firms are buying chemicals in drums
to save a dollar and a quarter.
MR. HERSHON: No, I am sorry. The chemical filler
is buying that drum to save 4 dollar and a quarter.
MR. CLARK: And the firms don't say they want the
heavy drums.
MR. HERSHON- No, because when you are dealing with
a five-gallon product, there is little thought given to a
savings of perhaps a dollar and a quarter. The oil industry,
on the other hand, remains on the IR-gage drum in the main
on a returnable basis because they find that the economists ar
in their favor and that the ultimate purchasers save four,
five to ten cents per gallon in the filling of drums.
MR. CLARK: I understand the oil companies are making
money too.
MR. HERSHON: I think so.
MR. CLARK: I have no further questions.
MR. BROWN: Thank you, very much.
MR. HERSHON: Thank you.
CHAIRMAN BUTLER: Our next speaker is Mr. Thomas Whitb
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jv33 i the City Councilman from Greenbelt, Maryland. Is Mr. White
2 in th.j audience?
3 (No response)
4 CMATKW-J BOTLER: In that cast?, our next sneaker is
5 from the United states Brewers Association. Mr. Henry King,
6 the President of the Brewers and Mr. Richard Riddell.
7 MR. Kiw;: Thank you, Mr. Chairman. Hood afternoon,
8 ladies and gentlemen. I think you are all familiar with the
9 positions of the U. S. Brewers Association, so I won't take
10 up any considerable time this afternoon. Suffice it to say
^f
11 that the U. S. Brewers is an dssociation^brewinq manufacturers
12 accounting for about 90 oerccnt of the volume produced in this
13 country.
14 I am here speaking on behalf of the entire rnember-
15 ship with the exception of one Brewer, who dissents from the
16 position of the Association and that is the Coors Brewing
17 Company. As a matter of fact, you might be interested in a
18 little dialogue I had with Mr. Coors.
19 A little over IT) years ago, the Association was
20 founded by some German-speaking American citizen fron New
21 York, who formed a tr=de association and caite to Washington
22 and asked for an excise tax. That was the beginning of the
23 Federal Excise Tax on alcoholic beverages.
2/t j It has been suggested by members of my industry that
25 j that was our first mistake. Mr. Toors has suggested that this
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afternoon my appearances is our second. In any event, I am
here on behalf of the overwhelming majority of the Brewers
to recommend to this Committee favorable consideration of
a users charge on those materials that contribute to the
municinal solid waste as generated by household use • that
such funds be allocated back to the state on a formula ---
either a per caoita formula or on a percentage of waste
generated — that these funds be used primarily for the
funding of resource recovery systems including research and
development into imnroved technology.
Now, we recognize very readily that the state of
the • ',, •"' " »,t"at the moment is such that there is considerabL
work yet to be done, hut we certainly are encouraged. We
think that the evidences are that resource recovery can be
an available effective method for not only managing solid
waste but conserving energy and assisting in resource conserv.
tion or source reduction.
The brewing industry is prepared to pay what is a
fair share of that total burden baring in mind that all these
taxes or all these charges ultimately are borne by the
consumer. We think such charges should be leveled at the
manufacturing level. For example, many of our brewers are
self-manufacturers; others buy directly from other suppliers.
We don't think that creates any great problem.
We have not yet sufficiently developed our own
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jv35 1 research in this area to suggest a formulation. We would
2 not, under any circumstances, suggest formulations for other
3 industries other than ourselves. But just to give you an
4 example that if a one million tax were olaced on brewing
5 beverage containers, it would generate $44 million a year
6 at the present rate.
7 One observation 5>y a spokesman for the National
8 Canner's Association, who opposed a user's charge and indi-
9 cated an increase in the cost of food products if such a
10 charge were imposed, itmight suggest that about 50 percent
11 of all containers in this country go into the beverage
12 industry — beer and soft drinks.
13 If other prooosals that have been <3uggested at
14 previous sessions of this group, namely the denosit system,
15 were imposed in the judgment of many of us, the steel or the
16 two-piece- can would find itself in great jeonardy. As in the
17 state of Oregon, it would find itself almost put out of
18 business. I suggest that if we are not making cans for
19 beverages, that is steel cans,that the cost for the food
/of
20 industry will go up in any event because the capital require-
21 ments to maintain this other 50 percent of the production.
22 In any event, 1 would agree with any spokesman, who
23 says that there is no such thing as a free lunch,and the
24 consumer will -ultimately pay for this just as the consumer no
25 pays something over $2 million a year in Federal and State
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jv36 1 Excise Taxes for the enjoyment of cmr beverage in moderation.
2 We will submit to this Organization or to this
3 Committee more detailed data within the next few days, and
4 I have with me, Mr. Richard Riddell, who is our Counsel and
5 who is qualified to respond in areas of taxation. I also
6 have with me Phil Katts (phonetic), our Research Director,
7 who has been instrumental in developing along with Dr.
8 Weinberg (phonetic) much of the material that we have made
9 available to your agencies and to your departments over the
10 past eight years.
11 Perhaps I have taken more time than I originally
12 planned. If you remember nothing else, remember that we once
13 volunteered and we are volunteering again.
14 MR. CLARK: One question for you. You suggested
15 that the tax be placed on at the manufacturing point. What
16 do you see as a difference between placing the tax at the
17 manufacturer of the container versus the manufacturer of the
18 oroduct — the beer, the brewer — versus placing it on
19 the raw material that you buy?
20 MR. KING: We have no real preference. It could
21 work either way. We do think that those materials that are
22 recy£ted should obviously not bo taxed again. Here is my
23 intelligence in this area.
24 MR. RIDDKLL: One of the obvious reasons for going
25 to manufacturers is that you could identify in use. We have
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considerable experience in the United States with the use of
manufacturers' excise taxes. Should you attempt to levy the
tax on the virgin production of materials, you would have
no way of identifying the proportion of the material that
is actually used and falls into products, which fall out
into the municipal stream.
Now, we had understood that this project was devoted
or intended to deal with what we denominate as municipal solid
waste as distinguished from industrial solid waste. Then
from the point of view of the Treasury Department and John
Copeland and Seymour Piekowsky and others, who administer
such a program. You have a great many problems of an
Administration with no experience with the system.
It is true that we have had certain products with
respect to wy.ich percentage depletion is allowed — a. taethod1
of ?3lowing a credit for the use of virgin materials, but
again you would not escape the problem as I said before of
identification. By the same token, it hag been suggested
that there be a credit for recycling. We would believe that
there you > ould avoid the administrative problems that such
a credit would pose by relying upon the price for which a
product is sold presumably as in the case of aluminum, which
has a high value when recycled.
The value of the recycling would be reflected in
the price of the product, which is taxed and, therefore, no
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credit would be needed for recycling. You have a powerful
economic incentive to recycle because of the lower cost of
production of the end product, which itself is bearing the
tax. Therefore, it will be sold at a relatively lower price
and no credit is needed.
We would also suggest to you that the rates, that
have been reflected in the Hart Bill, are very, very high.
I personally have had experience with two very well thought
out trust funds — one, the Highway Revenue Act of 1959,
which I helped draft as Tax Counsel to the Ways and Means
Committee; and second, with respect to the Airway User's
Tax, as Jim Tozzi will tell you over there. Both of those
funds have generated a considerable surplus; as a matter of
fact, fantastic surpluses considering the amount of the
funds there is that are actually used for the initial purpose
for which they were established.
There is a powerful incentive once a surplus is
generated to maintain the rate that continues to produce the
surplus for the simple reason that the Treasury Department;
and with all due deference to OMB, there is a fantastic
desire to maintain a source of revenue whether or not that
revenue is devoted the purposes for which it was intended.
One of the difficulties that we perceive with
people's attitude — that is industry's attitude towards the
user concept — is the fact that so far we have
very few expressions of rate at a realistic level. For
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example, when it is contemplated that your talking about a
rate of S26 per ton, you are bound to do no more or less
than scare the living hell out of everybody. In the firat
place, there is no v?ay that any meaningful system for the
collection, recycling, and use of solid waste as a national
resource,can be put into place over anything less than a
ten-year period of time to contemplate an initial rate that
would generate a sufficient fund. To begin to put into effect
the product of ten years labor in the first year of his
existence is absurd.
It occurs to us that it would be possible to put
into a system a meaningful national solid waste system at
substantially lower rates than has been suggested in any
studies so far presented by the Federal Government or other-
wise. Certainly, as in the case of the Coal Conversion
Program, which is/feurrently before the Congress in the Energy
Program, you have to take into account that this country
just simply does not have the existing resources to place
such a system into effect.
Therefore, in structuring a rate, we would go
through the same hypothesis we always go through in levying
a tax -- how much revenue is going to be needed to finance
the product in year 1, 2, 3, 4, 5, and you have got a turnoff
date. I have never seen or I doubt that Jim or the repre-
sentative from the Treasury has seen an earmarked tax that
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was not set too high to begin with; and subsequently, was
never reduced.
Therefore, to continue to discuss this problem in
the terms of $26 ner ton, is not only meaningless but unpro-
ductive. We would be happy to answer any other questions
concerning the method by which a tax should be put together.
MR. TOZZI: Two questions. The first question would
be addressed to Mr. King. As I recall your statement on the
beverage container issue, you as well as Mr. Stroh, stated
that one of your reasons for the opposition to the beverage
deposit approach was that it would injure the competitive
position of the small brewers.
In statements before us this morning, there have
been statements that a mandatory product charge would be
equally deleterious to small recycling operations. Have
you factored that one consideration into position of your
Organization?
MR. KING: I am not familiar with the testimony this
morning. You are suggesting to me that it has been testified
that a user's tax would adversely impact on recycling efforts
that are now under way.
MR. TOZZI: Small recyclers.
MR. KING: I am not familiar with the costs of these
existing facilities. I am aware of one that is quite
successful out in Phoenix, Arizona, but to be very candid
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with you if we are able,through national policy, to implement
a resource recovery system at municipal levels, many of
these individual offortq^hile they have served a very laudable
purpose at the time and have certainly done much to get
people to think in terms of resource recovery and recycling,
they will probably not be in existence ten years from now
if the cities, per se, are going to handle the municipal
waste.
So, to that extent, it is not the tax that is
adversely impacting upon them, it is the substitution of a
more efficient method that society elects to employ. But
certainly the tax with respect to my own specific industry,
other than the Coors Brewing Company, and T t'link I Xnow - -
as a matter of fact, I do know the attitude of the brewing
industry.
There are no brewers who would, if they had to make
a choice, they would all opt for the tax in ^reference to
the deposit approach. This is particularly true of small
brewers. As a matter of fact, small brewers recently in a
meeting of their own held in Florida reasserted a position
that they have had for a long time that they support our
position that a uniform,or rather a deposit system of any
kind,has adverse effects upon it.
MR. TOZZI: One other question. If some legislative
action would take place in this area, and if the alternatives
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were: (D the product charges we have been discussing today
or (2) a proposal similar to those that Mr. Hershon of the
National Barrel and Drum Association/ which really address
the same issue at least in his view to taxes, what would be
your preference?
MR. KING: I suspect and I will let nick elaborate
on it, but essentially we think we can generate more funds
more quickly through a user charge and develop the systems.
We think that the whole point of this procedure, in our view,
is to get resource recovery technologically viable and on
stream in the shortest number of years. As I indicated when
I testified on the deposit situation, the brewing industry
would be the very first to say that we cannot, in the long
run, justify packaging that is not recycled.
We share the same objectives as the environmentalists.
We are concerned with the abatement of litter, with the
management of solid waste, with the conservation of energy,
and with resource conservation or source reduction. The
fastest and most efficient way, in our judgment to do that,
is to speed up and accelerate source recovery systems at the
municipal level. We recognize even there that there may be
sections of the country that, because of the make-up of the
geography and the displacement of people and the like, that
some of these systems won't be immediately viable and
effective; and that landfill? will continue, in some
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sections of the country, to perhaps be the cheapest method.
MR. TOZZI: Under the product charges, they would
have their hands out.
MR. KING: I cannot envision Treasury with its
hands out of the pot as it relates to my industry. That is
a matter for you to determine. We are prepared to presxne
a fair burden in this. We do not presume what rates should
be for anybody else, however. We will come around and tell
you when we know a little bit more about this — what we
think is a fair rate for ourselves.
MR. TODER: I was just wondering if you could give
us a little more details as to what you think would be a
good way to assess the product charge in terms of whether it
should be based on weight or volume, or what you think is a
reasonable level?
MR. KING: No, I could not tell you at this point,
but we will do our best to get back to you.
MR. TODER: Fine.
MR. BROWN: Thank yon., very much.
MR. KING- I hone that I haven't made a mistake
and if T have made one, I hope the next one that the Brewers
make is 100 years from now too. Thank you, very much
CHAIRMAN BUTLER: Our next speaker is Mr. A.
Blakeman Early from the Environmental Action Association, and
I don't see him in the audience. Then we will move to Mr.
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St. Clair Tweedie, Director of Public Affairs for the Paper-
board Packaging Counsel.
MR. TWEEDIE: My name is St. Clair Tweedie, and I
am the Director of Public Affairs for the Paperboard Packaging
CounS'i 1 . We are headquartered here in Washington .
The Paperboard Packaging Council is the national
trade association of the U.S. folding carton industry. Our
members produce about three quarters of this nation's folding
carton output.
Our product is the form of packaging most frequently
encountered in everyday life. It is used to package products
ranging from foods to Pharmaceuticals. Breakfast cereals,
soaps, detergents, bakery, hardware, milk, literally thou-
sands of products are packaged in paperboard folding cartons.
More than half, however, are used to package Foods.
Most people, despite these daily encounters, simply
take the package for granted and would be hard pressed to
accurately define it or its many functions and uses. Simply
defined, the folding carton is a container made of bending
jrades of paperboard , plain or printed , cut and creased , in
a variety of sizes and shapes, folded and delivered flat, or
glued and collapsed. It is formed by the maker r set up,
filled and closed by the user. Folding cartons are made to
a multitude of styles — these are consumer packages, separate
ind distinct from set-up boxes and corrugated and solid fiber
raxes.
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Listening to several of the speakers this morning,
I would tend to be reinforced in the opinion that there is
an awful lot of education that needs to be clone as to the
functions and purposes of packaging. My Association along
with others in this industry <~>ught to sponsor a national
forum geared not to discussing slocians or emotional appeals
about the good and bad points of packagina, but what it is
and how effective it is in doing the job for which it is
designed.
Our interest in the concept of disposal charges as
has been advanced to date, largely by the Environmental
Protection Agency's staff and the legislative interpretation
rendered by Senator Gary Hart, is substantial.
The Board of Directors of the Paperboard Packaging
Council has taken a policy Position opposing the disposal
charge concept as proposed by Senator Hart. This action was
the logical result of assessing its serious weaknesses and
deficiencies in terms of the justice and eguity of the tax.
the basis for imposition, the uncertainty of incidence, as
well as the costs and complexities associated with collection.
Just to give you an example, folding paperboard
packages are made from folded box board. There is a third
more folding box board that is produced than is used in
folding paperboard cartons. Where does it go? Much of it
ends up in book covers, retail store displays, poster board,
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educational devices, things that never enter the post
consumer solid waste stream, products which are collected by
private collectors or recyclers. Yet, they would be taxed
as if they were post consumer solid waste.
My own impression is the closer to the point of
ultimate assumption a tax is levied if it were to be levied,
the more ease and the more effective it could be if it were
properly designed.
There are additional shortSr^tnings, every bit as
serious, with respect to other aspects of this bill, but this
is not the forum to go into them. Rather, I mention these
points to create an understanding as to the basis for our
opposition.
Let rae focus directly, from the perspective of the
>aperboard packaging industry, on the subject of disposal
charges. As beauty lies in the eye of the beholder, so too
do the objectives and goals of the product charge.
We are told that it is a sound method — this
internalization of the external costs of trash collection and
disposal — which will bring our economic system closer to
an idealized free market resource allocation solution.
We are also told that this excise tax on a portion
of post-consumer solid waste will provide a revenue bonanza
for certain sections of this country.
We are then told that the economically sound premise
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upon which the entire schene for the internalization of both
economic and/social costs regarding post-consumer solid waste,
serving as the justification for the proposal, can be picked
apart, some aspects retained, others discarded for the
purpose of administrative ease, without damaging the
theoretical or the practical application of the concept.
I state that one of the early developers of the
theory. Professor A. C. Pague (phonetic) would probably
roll over in his grave at the thought.
This is precisely the basic flaw contained in the
proposals being popularly discussed. A disposal charge,
designed to internalize costs of collection and disposal,
levied on only 40 percent of all the products included in
the post-consumer waste stream is grossly unfair and inequi-
table. For purposes of outright discrimination, administra-
tive ease or any other rationalization, such a measure
obviously overlooks the cost of handling all of the other
products, ranging from appliances to textiles, yard wastes,
leaves, etc. It also overlooks the relatively greater costs
of handling these often bulky elements. Regardless of the
product's construction — virgin, recycled or hybrid, durable
or nondurable, once the consumer puts it into the trash,
there is a cost associated with its disposal. In fact, to
date, there is no valid, effective statistical information
on what is actually collected and disposed of. There is no
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information on the frequency or incidence of durable goods'
disposal cycles or the seasonality of waste lofls and content.
Only estimates based on production.
I have had the interesting experience of standing
watching a conveyor loaded with consumer waste in Milwaukee
pass beneath me, and it is a frightening thought that we are
really wasting all this. Fortunately, in Milwaukee we are
putting it to use, but looking at the lawn mowers and
mattresses and upholstered furniture and automobile tires
going through that, there is a lot of stuff that we don't
give much consideration to.
Another much touted benefit of disposal charges,
in addition to reducing the amount of post-consumer solid
waste, is the impetus to substantially increase the volume
of materials recycling. The question, based upon our know-
ledge of what is presently occurring in this area, is will
it really produce these benefits, and at what costs? Too
often a program is given credit for accomplishing something
that was in the process of happening and would have material-
ized whether or not the program was implemented.
You need go no further than the paperboard packaging
industry to illustrate this point. Right now, today, a
substantial proportion of the more than two million tons of
folding cartons produced are made from recycled paperboard.
Over 52 percent of the product of this industry is made from
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recycled stock. There are no taxes, no special programs
to promote this end. But, it is happening. It is a result
of the forces of competition and a free market at work,
From the standpoint of the paperboard packaging
to^onvert from the use of virgin to recycled board. Those
such as strength of the board and its ability to meet the
very tight specifications of the high speed forming and
filling equipment in such wide use today.
There are also entire categories of 1%jckaqing where
the material used is governed by rigid government specifica-
tions. One such area is in milk packaging. The use of
board, solid bleached sulphate, made from virgin fiber is
required by the Food and Drug Administration.
This is by law sour bleached sulphate board made
from virgin fiber made in plants controlled by specifications
laid out in the Pasteurized Milk Ordinance. There is no
flexibility and there is no way to alter or change these
regulations to take advantage of a recycling credit or to
offset product disposal charges.
There is also a totally separate, yet fully related,
s<*t of economic ramifications. These have to do with
probable cost effects. Since one of the objectives of the
charge concept is to stimulate the use of recycled materials,
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the fact that it may simply push costs upward and thus do
little to achieve this particular goal, must be considered.
Such a result, more probable than not, would work to the
disadvantage of the paperboard packaging industry vis-a-vis
other packaging materials.
It was pointed out that although folding paperboard
packaging is light, films are perhaps half as heavy. Given
the existing demand for recycled paper and paperboard and
the projected increases passed on realistic assessments of
availability, it is easy to see how market prices can force
prices upward.
Given the existing demand for recycled paper and
paper board and the projected increases based upon realistic
assessments of waste paper supply and availability, it is
east? to see how market pressures can force prices upward.
If the tax is applied to virgin board, given these market
pressures, the price of recycled board will tend to increase
by the amount of the tax. Thus relative parity is maintained,
but at a higher price level.
We too often take packaging for granted. We forget
that the benefits are real and not simply the symbol of
luxury of a wasteful society. The implications of placing
a discriminatory tax on packaging appear obvious. They tell
us by reducing the amount of packaging used, this nation
can dramatically reduce or even eliminate the growing solid
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waste problem. Very simplistic, the use of less packaging,
in turn, means less going into the garbage cans, and in turn,
the dumps incinerators and landfills. Also less energy
would be expended in the collection and disposal of such a
"reduced" post-consumer solid waste stream.
I recommend for your reading by otto Bittman (phoneti
called The Good Old Days — They Were Terrible.
This, unfortunately, is simply not the case. Post-
consumer solid waste would be infinitely larger if packaging
were drastically eliminated or diminished altogether. In
addition to increased physical volume, its composition would
be substantially altered.
Paperboard packaging is a major component of this
nation's very efficient processing and distribution system.
More than half of all paperboard packaging is used for food
and food products. To claim that eliminating or reducing
the amount of packaging would lighten the solid waste load
is simply not based upon the facts.
Our modern system of food distribution in which
packaging plays a vital role has kept the bones, peels, pits,
innards, shells and other waste out of the garbage pail and
the solid waste stream and replaced them with a much lesser
quantity of a more desirable form of trash. Animal and food
wastes are kept where they are most productive — near their
sources where they can be and are processed into a variety
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of usable products and by-products.
A good example of the efficiency of paperboard
packaging in the area of trash prevention is seen in facts
as they relate to nine widely-consumed vegetables — lima
beans, snap beans, broccoli, carrots, cauliflower, sweet
corn, qtreen peas, spinach and Brussels sprouts. These
vegetables are available to the consumer both as fresh and
is packaged items: 33 percent are frozen, 20 percent canned,
and 47 percent are fresh. For the nation, as a whole, if
all of these were consumed fresh or purchased fresh and
canned or frozen at home, the result would be almost six
billion pounds of wet garbage.
To bring these figures into a more real wsrspective,
it is necessary to view then in more manageable terms. The
City of New York has a population of about 7.5 million. If
these people purchased and consumed the previously mentioned
vegetables (according to national percapita consumption
figures) in fresh form, the result would be 107,249 tons of
wet garbage entering the city's solid waste stream. On the
other hand, if consumers purchaser! these vegetables frozen
in ten ounce paperboard cartons, the contribution to the
city's solid waste stream would be only 6,529 tons — of
dry biodegradable, burnable paperboard.
Similar examples are widespread. For instance,
only 48 percent of a fresh orange is edible and 52 percent
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is rind, membrane and seeds. If New Yorkers used fresh
oranges for juice instead of that packaged in quart size
milk cartons (not concentrated), they would create 106,703
tons of wet garbage instead of 3,000 tons of paperboard
trash.
In view of these figures, it's not hard to see that
packaging does more to prevent undesirable garbage or waste
than it contributes to the rolid waste stream.
The paperboard packaging industry is well avare of
issues with which this Committee is concerned. We feel that
practical and realistic solutions are available. We are
opposed to unnecessary products, the overpackaging of any
product and litterincr by the final consumer. It would, how-
ever, be a mistake to consider packaging a luxury or a
misuse of valuable resources.
Our industry is well aware of the issues with which
this Committee is concerned. We feel that practical
realistic solutions are available now. We are opposed to
unnecessary products to overpackaging of any nroduct into
littering by the final consumer. It would, however, be a
mistake to consider packaging a Ixixurious misuse of valuable
resources.
On the contrary, it has been clearly demonstrated
that it is essential for the preservation of life and
health. There are, in fact, pressing requirements for more
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rather than less packaging.
The real concern should be how to make our solid
waste treatment and resource recovery systems as advanced
and efficient as possible as well as capable of responding
to the changing needs of a growing and dynanic nation.
I see very little inpetus to growing GNP. The
Paperboard Packaging Council believes that these problems
can be solved without destroying the world's most efficient
goods' production, processing, distribution ami marketing
systems in the process.
Energy legislation now pending before the Congress
contains: provisions providing incentives to municipalities
to recapture the energy content of their solid waste: tax
credits to firms who invest in machinery for materials
recycling purposes; and the Department of Energy is directed
to establish recycling targets for major industries in this
country. These incentives and provisions, along with
positive steps already taken in private/public voluntary
cooperation, along with the continued growth of efficiency
in the utilization of our natural resources, s'- inlet be more
than adequate solutions.
Public concern is good and should be encouraged, but
the public must also be brought to understand the real nature
of the problem and the implications of the various proposed
solutions. Thank you. If there are any questions, I would
be happy to answer them.
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jv55 1 MR. CLARK: Brussels sprout||s, you mentioned Brussels
2 sprouts.
3 MR. TWEEDTE: Yes.
4 MR. CLARK: \Jhat is the weight of a package of
5 frozen Brussels sprouts?
6 MR. TWEEDIE: There are two components of the
7 package.
8 MR. CLARK: The whole thing?
9 MR. TWEEDIE: Less than two ounces,
10 MR. CLARK: If we were charging this outlandish
11 price of ?26 a L-r\ how much would that increase the
12 price of Brussels sprouts?
13 MR. TWEEDIE: Knowing something about the highly
14 competitive nature of package buying, we are talking here
15 of units and fractions of a cent. It could be substantial.
16 I cannot give you a precise figure on the substitution of a
17 pouch or plastic bag for a carton at this point, but it
18 would be substantial.
19 MR. CLARK: So, you would expect to see the substi-
2o tution of plastic for the paper?
2i MR. TWEEDIE: In many market end uses.
22 MR. CLARK: But you were painting a picture that
23 everybody would stop buying frozen Brussels sprouts. Do
24 You really see that happening?
25 MR. TWEKDIE: No, I don't believe that is acceptable.
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That is an example of the ridiculousness of even a goal of
trying to do it. Pack R forms of packaging ideally lend
themselves to certain products — example, before freezing,
you have got Brussels sprouts only during seasonal times of
the year. You have got fresh peas only during a two-month
span in the summertime, and the rest of the year you lived
on turnips and perhaps cabbages that were stored on the
back porch.
Canning is usually adaptable or adapted to certain
vegetable product juices. Those areas where you try to
retain the desirable features of a fresh vegetable, like a
Brussels sprout or cauliflower or so forth, you freeze it
and it's available. It is simple as that.
MR. CIARK: Do you think a product charge would
significantly affect that?
MR. TWEEDIE: Not the availability. I think it
would push the price to the consumer up ultimately. Let me
just comment here. There is in place capital in the processing
plants — food processing plants — and there is a lead time
that any processor would require to change his capital base.
In the short term, and I don't know how long the
short term is, but I can't see a major turnover in food
processing capital. There would be tighter competition where
there was some interchangeability, but in general there would
(-!355il>T4
be this punching on of coat to the consumer and driving up
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jvS~T 1 of the recycled stock cost in order to take advantage of
2 some form of credit.
3 Mn. CLARK- I went through the calculation, and it
4 seems to be about two tenths of a cent.
5 MR. Twr^DIE• That is enouah to fake a decision.
6 MR. BROWN- Thank you, Mr. Tweedie.
7 CHAIRMAN BUTLER: Our next soeaker is Mr. A.
8 Blakeiaan Early from Environmental Actions. Incorporated.
9 MR. PARLY: Oood afternoon. My name is A. Blakeman
10 Early. I an here representing Environmental Action, Inc.,
11 a national citizens environmental lobbying organization
12 located here in Washington. Fnvironmental Action hag for
13 some time now been in support of the product charge concept.
14 Furthermore, ve en^or^ed the snecific nroposal encompassed
15 in the S. 1781, the National Material Policy Act introduced
16 last April by Senator nary Hart.
17 The product charge concept was developed in response
18 to a specific need essential to increasing greater resource
I
19 I recovery which has largely gone unmet despite the passage
20 of two major pieces of legislation on the subject, namely
21 the Resource Recovery Act of 1970 and the Resource Conserva-
22 tion and Recovery Act of 1976. There remains an urgent need
23 to stabilise the demand for materials once such materials
24 have been recovered frora the post-consumer waste stream.
25 Currently, the unreliability of demand for recovered materials
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and the wide fluctuation in the nrice paid for such material
present a najor impediment to individuals and companies that
seek to enter the materials recovery field. This is true
regardless of whether the recovery system is a mechanized
one that separates municipal waste after it has been
collected and nixed in the waste stream or a source separation
system that separates the valuable fron unvaluable wastes
prior to collection.
The classic example of this problem was provided
back in 1974 with recycled newsprint. By nid-1974, prices
for newsprint were the highest they had been since the
Korean War. The number of communities using municipal or
private systems for the curbsifle collection of newspapers
rose from approximately a dozen in the beginning of 1972
to 134 by the fourth quarter of 1974.
All these developments caused the optimism concerning
the energy and materials potential of solid waste to mount
dramatically. Then, as you know, the bottom dropped out.
The economy began to cool rapidly in nid-1974 and so did
the demand for recovered materials. By the last quarter of
1974, demand for waste paper was well below the demand level
of a year earlier. Naturally, a drop in prices accompanied
the drop in demand. By early 1975, recovered newsoaoers
could not be given away, much less sold for tho $40 per ton
previously being paid.
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One of the major reasons behind this price fluctuation
is instructive as to the general lack of recovered materials
use. The majority of the paper industry relies on recovered
newsprint only as a supplementary source of supply which is
used primarily when production is at or near maximum
capacity when virgin woodpulp is in short supply. When the
economy cools down, as it did in mid-1974, the paper manu-
facturers no longer need to suopleraent their raw material
supply with recovered newsprint and their purchases cease.
This leaves recovered newsprint suppliers with a large
inventory, which they have accumulated as a result of the
high prices. As suppliers seek to reduce their inventories
for which there is little demand, prices drop dramatically
and some suppliers are forced out of business.
Therefore, we need to ask why do manufacturers rely
on virgin materials for their raw materials supply and not
include recovered materials as part of that supply even when
production is not operating near capacity levels? A pattern
of incentives for the use of virgin materials has existed for
raaiiy years. Some of the elements of this policy include the
following:
1) The Homestead Act. This made virgin resources
available to anyone as long as they were developed.
2) The 1872 Mining Act. This act, revisions of
which are under congressional scrutiny today, encouraged the
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exploration and appropriation of virgin resources by extending
the rule of capture to the discovery of new mineral resources
on public lands.
3) The tax structure. It is well known that the
extractive sector of the economy is one of the most lightly
taxed sectors. Part of the lightened burden is from special
provisions for extractive industries, such as depletion
allowances, and capital gains for timber and coal and iron,
and expensing of exploration and development expenditures,
and part is from the special ability of extractive industries
to take advantage of uniform provisions in the tax code, for
example the foreign tax credit. These provisions tooether
have the effect of encouraging the use of virgin materials,
rather than recovered materials.
4) Failure of the price system to include the cost
of disposal in product price. Just as for many years product
price did not reflect the cost of air and water pollution
caused during manufacture, it still fails to account for the
cost of product disposal. This failure of the price system
is, of course, not intentional. Nonetheless, it acts as an
implicit subsidy to material use practices. Users of large
quantities of material are treated exactly like the manu-
facturer that reduces the solid waste problem by recovering
and reusing discarded material, in spite of the fact that
such large users create larger disposal costs for society.
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jv61 ' A hundred years ago this subsidy was not very important, as
2 the cost of disposal was a very small fraction of a product's
3 price. But now the cost of disposal has risen dramatically.
4 With high disposal costs, this failure of the price system
5 leads to serious resource misallocations, which we experience
6 as too much virgin material beina used and too little
7 recovered material being recvcled.
8 The product charge concept strikes directly at this
9 latter hidden subsidy and does so in a manner that does not
10 provide a continued incentive to be profligate in the over-
11 all use of materials, as would a tax subsidy to users of
12 recovered materials.
13 Environmental Action has been one of the more out,-
14 spoken advocates for the placerient of greater emphasis on
15 source reduction techniques in solving our solid waste
16 management problems. Though we do not view the product charge
17 as a source reduction measure, EPA studies show the incentive
18 overwhelmingly favors substitution rather than reduction, it
19 at least accommodates source reduction and even provides a
20 minimal incentive to reduce. These studies show that
21 reduction might increase approximately 2 percent, at least
22 in the packaging area. Under the product charge, the pro-
23 ducer subject to the tax has the option of reducing the
24 total amount of virgin material he is using, or substituting
25 secondary material, or both, in order to avoid- the tax.
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jv61 1 EPA has found that in the majority of cases he will opt for
2 the latter.
3 However, under subsidy approaches which are based
4 on the amount of secondary material which a producer uses,
o
5 he has a disincentive to surce reduce rather than recycle
6 because he gets no subsidy for reducing. This approach, we
7 believe, would be self-defeating. The creation of new sub-
8 sldies does not neutralize old ones. If we first subsidize
9 virgin materials and then subsidize scrap materials, the
10 result is that material throughput is doubly subsidized.
11 Subsidies for secondary materials will increase the use of
12 such materials because their price will lower. However, the
13 increased use of secondary materials will not result in a
14 corresponding decrease in virgin materials. Though virgin
15 materials use may drop some, the nore significant effect will
16 be a net increase in the combined use of virgin and secondary
17 materials — the exact opposite of what we suggest must be
1C our goal. More physical capital and more energy is required
19 to process the added throughput. And more solid waste would
20 be created.
21 In conclusion. Environmental Action urges the
22 Commission to endorse the product charge system as a means
23 of internalizing the coat of disposal and stabilizing the
24 demand for and price of recovered materials without providing
25 a disincentive to the reduction of overall materials use. We
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feel that the version introduced by Senator Hart as P. 1281
is the most administerable and most effective version of
the product charge that has been developed and would urge
the adoption of its specific provisions by the Commission, as
well. Thank you.
MR. TOZZI: Mr. Early, I gather that one of your
main concerns or reasons for supporting product charges is
inequities in the market system that gives, in your view,
preference to the use of virgin materials versus recycling
o£ existing materials.
In your view of the two proposals before this
Committee, the deposit approach and the product disposal
charge approach, which of the two do you think fulfills
that objective most closely?
MR. EARLY: ^loarly I think the product charge ful-
fills that aspect of the objective, because the major impact
and the major direction of the proposal is on the manufacturer
himself in influencing the decision, which he makes. The
major thrust of this deposit proposal is on the consumer in
providing motivation for him to return the container to the
manufacturer. It is our assumption that once provided with
that container in an efficient system, the manufacturer will
utilize it.
MH. TOZ7.T: I have one other question. Let's say
there is some tyr>e of product charge system addressed towards
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the goals of a product — the charges are going to be
implemented. In your view, what would be the most effective
way to levy a tax or use tax credits? I think you addressed
that in your statement, and I wasn't clear.
In other words, other speakers have suggested that
we use tax code to give tax credits on existing material as
an alternative to the utilization of imposition of a
product charge.
MR. EARLY: I am not sure I understand your question.
MR. TOZZI: Let's take the nature of the proposal
before the Committee now to levy independent particular
industries. There is a statement of $26 per ton in one of
the views of one of the speakers and that would be levied on
the output of the particular industry some place in the
production process.
A subsequent speaker was involved with the manu-
facture of industrial drums stated that possibly not to
use the product charge, but to amend a tax code to give
incentives through the taxed system to preferential treat-
ment for people that develop or use recycling material.
In other words, there would be no trust fund; it
would be on the tax code. What would be from your standpoint
the best?
MR. EARLY: Well, we feel that the product charge
would. If the Commission is interested in equating the
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incentives that are provided to manufacturers vis-a-vis'6
1
virgin versus secondary materials, from our standpoint,
2
it would be much more practical to remove the current
3
incentives, that are provided to the use of virgin materials,
4
rather than creating a countervailing subsidy, which was
5
the major thrust of ray statement.
B
MR. HERBST: Dick Herbst, the Department of
7
Commerce. Do you recognize any purposes for Congress passing
such a thing as this?
MR. EARLY: Well, I think that historically it was
assumed that it would promote the development and the use
of those virgin resources.
MR. HERBST: The other question. Did you say you
believed that the objective of the product chalje will
A
significantly reduce the waste stream? Is that your position?
MR. PARLY: I think it will contribute to that,
yes. It is hard to assess what percentage might be i ivolved?^
MR. HERBST: That is the difficulty I have because
we are still going to eat Brussels sprouts, and I imagine
they are still going to be packaged in some container. I
believe the container industry — the packaging industry
is competitive whether it is steel cans, aluminum, plastic,
paper, etc.
I am not exactly sure how significant, whether it
will be or what magnitude is this when we talk about a
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product charge? Is the waste stream going to be reduced,
and by how much?
MR. EARLY: Well, I clearly don't have the answer
to that, but I guess what is of great concern to us is the
fact that so much — certainly the legislation — has been
focusing on getting the material out of the waste stream.
The question is what do you do with the material once it
is obtained from the waste stream? You have to have a
market for it, and there have been very few proposals that
addressed incentives or disincentives to manufacture —
incentives to use reselected materials.
They have sources of the nature t^at I described
in the paper industry, and the question is how do you
motivate them to provide a stronger and more stable market
for the materials removed from the waste stream?
MR. HERBST: We tried to encourage resource conser-
vation through the facility, but apparently packaging is
done for a lot of different reasons. I don't think it is
going to go away, and I am not so sure. There is a lot
of reasons why it is there — sanitation, etc. That is the
only thing I wanted to bring out. What magnitude is it, or
will it increase:
MR. EARLY: Well, the amount of packaging
conceivably could increase. The question is what percentage
of that packaging might be made of recycled material. As I
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said, we do not view this as a source reduction type thing,
but at least it does not discriminate against source reduc-
tion.
If a packaging manufacturer wants to avoid the tax
by reducing the total weight of his packaging rather than
including more recycled material in that packaging as a
means of avoidance, at least he ha-3 that opportunity; whereas
with a tax subsidy that is based on the amount of recycled
material he uses, he gets an incentive for using virgin
materials and secondary materials. It creates the motivation
to use materials regardless of their source as opposed to
taking the opportunity of cutting back on the total material
used.
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MR. HERSHON: Then you have an equitable
approach on how to put this tax on each part of the
stream, paper, plastic, metal, aluminum, steal?
MR. EARLY: The Hart approach leaves considerabl
flexibility in that regard, try to apply it at the point
that's most administerable.
MR. HERSHON: That's what we are trying to
figure out, thank you.
MR. TODER: Mr. Early, we have one more
question. You are not going to get off that easy.
My question is, you have spoken, I think, of
the product charge as a way of correcting some distortions
in our price system in that subsidy use of Virginian
material, and also we do not charge consumers directly
for the cost of disposing of waste.
I think thats also been mentioned. And some of
the previous speakers have mentioned some distortions
that we might create by product charges such as the
fact that raw materials frequently don't enter the waste
stream, perhaps for many years or perhaps ever, even if
they are not recycled, so we might be changing things
that we shouldn't change,and also some speakers have
mentioned, and questioned the fact that we are putting
prices on some things which do enter waste streams and othe
things that are picked up on municipal waste are not
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1 touched by this product, charge,and I was wondering if
2 you had any suggestions as to how we might weigh the
3 different distortions.
4 Do you take these other points seriously and
5 how do you go about assessing this?
6 MR. EARLY: Well, it's true that things like
7 durable goods which are specifically excluded do appear
8 in the waste stream, but theydo it 011 a very long term
9 basis.
10 MR. TODER: And also I believe that people who
11 are disposing of those kinds of goods,industrial,would
12 be paying for disposal of those goods,at least in some
13 cases.
14 MR. EARLY: Yes, so I think that there is
15 a rational for excluding them. I am not sure what you
16 meant by your comment that some things that would appear
17 in the waste stream are never disposed of. Do you have
18 an example of that sort of thing?
19 Well, I don't mean never get into the waste
20 stream or may not get in for a very long period of
21 time, such as cartons that are used in books or something
22 of that nature, or paperboard that is used to make books
23 or something like that may aot eater the waste stream for
24 a long period of time.
25 I mean I think once it reaches the consumer
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1 then it does not reach the waste stream?
2 MR. TODER: Yes, perhaps that's an extreme
3 example.
4 MR. EARLY: Well, the principal reason for
5 excluding durable goods, although I must say that I had
6 to look harder at the paperboard category which really
7 doesn't strike me as being a durable good.
8 MR. TODER: Well, I hadn't thought of this
9 issue very much. I was wondering if you really questioned
10 what happened to those products?
11 MR. EARLY: That would certainly ba one of the
12 criteria on what would receive the charge.
13 MR. TOZZIi On that last statement, if you had,
14 let's take newsprint which is biodegradable, and you
15 compare that to some durable goods, I am not clear on your
16 statement, why would you give a higher priority to putting
17 charges on newsprint which, am I correct in saying
13 biodegradable, may have a less deleterious impact, timewise
19 and many other ways as compared to durable goods,and did
20 I understand you correctly that durable goods are giving
21 a lower priority in the product system?
22 MR. EARLY: Well, in terms of the cost that's
23 placed on the waste disposal system, nondurables comprise
24 a high percentage of the waste stream so that, in fact,
25 durables appear in the waste stream less frequently.
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1 It's true that they are not biodegradable,
2 but what we are really trying to focus on is the recycling
3 of materials as opposed to computing materials in this
4 particular instance.
5 MR. TOZZI: If you look at the adverse impact —
6 MR. EARLY: You are speaking in terms of total
•j adverse impact.
s MR. TOZZI: Yes, the biodegradables,at least
9 as it is now, if they emphasize that I am wondering in
10 your view from a total environmental standpoint, if
11 we are attacking the most significant problem?
12 MR. EARLY: I think that this is one means
13 of attacking. I think that the problems are probably
14 equally significant. I think in terms of, again,
15 focusing on encouraging manufacturers to create a market
16 for that which we are trying ro recover you can still have
17 an adequate rational for placing the charge on newsprint
18 and not on the durable good, because of the fact that the
19 durable good has many component parts which makes it hard
20 to recycle and, secondly, the fact that it appears in
91 the waste stream over such a long term.
22 MR. HERSHON: I am trying to remember which
23 treaty you gentlemen from the printing industry brought" up
24 this morning. I was curious when I heard his statement
25
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this morning with respect to educational material mat is
printed outside this country, that it's impossible to
put a tax on, and whether w«"thought about that or
whether you were aware of it?
MR. EARLY: No, I was not here this morning.
MR. HERSHON: Hell, apparently I believe it
was the Treaty of Warren's on printed Educational Material
coming into this country which could not be subjected to
taxes, which obviously then puts an advantage on the other
side, so to speak, and would you address that question?
MR. EARLY: No, I was unaware of that.
MS. BROWN: Thank you.
CHAIRMAN BUTLER: Our next speaker is Mr. Charle
Felix, the Director of Environmental Health and Public
Affairs of the Single Service Institute.
MR. FELIX: I am Charles Felix, Director of
Environment, Health and Public Affairs for the
Single Service Institute, located in New York City.
The Single Service Institute is the trade
association for manufacturers of disposable products for
food service and packaging — paper and plastic cups and
plates, linen and lace placemats and doilies, meat and
produce trays, egg cartons, and round nested containers
such as are used to package ice cream, cottage cheese and
other dairy products.
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I ara here not to speak for or against a solid
waste product charge, but to urge your Committee to
investigate and to weigh carefully the impact such a tax
might have upon the high levels of sanitation, safety
and food protection that these food service and packaging
products help to maintain in our nation's restaurants,
institutions, food stores and homes.
The public health values of disposable
products tend to be taken for granted and to be overlooked
in the search for solutions to the problems of solid
waste and litter. For this reason the American Public
Health Association at its annual meeting, held here in
Washington two weeks ago, adopted a policy statement
which underscores the importance of the health consider-
ations that are implicit in the increasing use of
disposables for food service and packaging.
The American Public Health Association is a
non-Governmental professional society representing all
disciplines and specialties in public health. It is the
largest public health association in the world, with a
combined membership of 50,000 he#Bh professionals. The
following is the policy statement the association adopted
through its Governing Council on November 2, 1977. It
is entitled "Single Service Materials, Resource Conser-
vation and Public Health" and reads as follows, and I'll
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read this in its entirety:
"The Resource Conservation and Recovery
Act of 1976 (Public Law 94-580) has advanced
resource conservation as a key element in the
nation's response to the problems of solid waste
disposal and materials and energy conservation.
Resource conservation can have serious con-
sequences to public health by removing from the
market place disposable devices which have cone
to be part of paxcel and modern preventive health
practice.
This is particularly true in the area
of food protection where single service articles
are often required or recommended for reasons
of sanitation. The American Public Health
Association affirms the preventive health value
of single service articles for selected food
service operations and cautions that curtailment
of single service articles may introduce
environmental hazards that are far more signifi-
cant in terms of overall impact upon human
health and safety tnan the possible reductions
that resource conservation may achieve.
The American Public Health
Association urges the U. S. Environmental Pro-
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tection Agency/ the Council on Environmental
Quality, and the Resource Conservation Com-
mittee to make careful assessment of the
public health impact of resource conservation
measures before these are applied to any
single service articles chat have come to
serve a significant health protection function.
The United States Environmental
Protection Agency has defined Source
Reduction as prevention of waste si. its source,
either by redesigning products or by otherwise
changing societal patterns of consumption and
waste generation.
A basic approach to source reduction
is the"substitution of reusable products for
single-use'disposable1 products." [Quotations
from the E.P.A.'s Third Report to Congress —
Resource Recovery and Waste Reduction)
Examples of items to which the
principle of source reduction could apply are
'beverage containers, food service item, and
certain napkin and towel products.1 [From
the same report to Congress]
It is the opinion of the American
Public Health Association that substitution of
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reusable food service items for disposable
products in many cases will be a regressive
stop, contrary to established public health
practice. The use of food service dis-
posables has become a recognized measure of
prevention against the transmission of disease
associated with use of the common drinking
cup4 and other contaminated utensils.
Public Health Regulations prevailing in
most states require the use of disposables
wherever sanitizing facilities are not
available, a condition that is recognized
to be normal in mobile food service and
frequent in temporary food service.
Food service at sports arenas, out-
door concerts and other similar gatherings of
large numbers of people cannot be satis-
factorily managed without the use of
disposables. Hospitals have effectively used
single service,9 where the individual nature
of the service is recognized to be hygienically
safer, particularly for isolation patients.10
Environmental health officials are in
general agreement that single-use products
contribute much to sanitation levels in food
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service facilities and that these public health
benefits are greater than possible disadvantages
deriving from urban solid waste and litter.
The National Environmental Health
Association and International Association of
Milk, Food and Environmental Sanitarians have
passed resolutions reaffirming the preventive
health value of single service products for
food and beverage service and warning that
restricting their use as an option in food
service would be regressive and opposed to
proven health practice.12
A direct connection between con-
taminated multiple use tableware and the
outbreak of a. food-borne disease has not been
adequately documented. However, the presence
of potential pathogens is sufficient to warrant
concern that disease transmission could
occur.18
On option to minimize this
hazardous condition is to require the use of
single service articles either as a temporary
measure or as a permanent substitute for
reusables. To remove this option of using
single service tableware beneficial to sound
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public health practice for the sake of potential
reductions in solid waste or energy saving? rcight
result in lower public health standards and,
consequently less protection for the consumer.
The same can also be said of many other health
care and packaging products which •serve a pre-
ventive health function.
The APHA urges the Environmental
Protection Agency, the Council on Environmental
Quality and the Resource Conservation Committee
to make a thorough analysis of the public-
health and safety impact of any disposable
devices before recorar.ending their curtailment
for the sake of resource conservation."
That concludes the WHA policy statement.
The Single Service Institute seconds M>HA in
that recommendation. Our members are concerned that the
application of a solid waste product charge limited to or
heavily weighted on single—use paper and plastic products
would make it difficult, if not impossible, for disposables
to remain competitive as utensils of choice anong those
who prefer them for reasons of sanitation, economy and
overall utility. This would have serious consequences not
only to the single service industry, its distributors, and
the food service systems to which disposable cups and plates
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are integral hut, as the APHApolicy statement affirms;
it would have serious consequences to public health
protection as well.
further more, the single service industry would
not be amoung those who might find relief from the pro-
posed tax by utilizing recycled paper or plastics in the
manufacture of their products.
Present technology does not allov the conversion
of post-consumer solid waste into a sanitary food grade
material. For this reason the regulations of the rood
and Drug Administration under toe Food Additives
Amendment, which prohibit the migration of any deleterious
substance from container to food contents, in effect
requires that only virgin materials be used in the manu-
facture of single-use articles that are by their nature
food contact surfaces.
In the investigation we trust that you will nake
of the public health impacts of a solid waste product
charge we urge you to seek out the opinion of public health
officials who are responsihle for the day to day surveil-
lance of sanitation standards in eating places and food
stores.
To assist you in that consuj.Cation I ar. including
with this statement a copy of a research paper that was
published recently in the Journal of Food Frotection entitled
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"The health Profession's Attitude Toward Single-Use Food
and Leverage Containers."
In this survey some 3,000 puMic health officials
were asked to bring their judgment — informed by education
and experience — to bear upon sone of the questions that
you are now considering. In the judgment of these health
professionals:
Disposables contribute significantly to the
health protection of the public;
Eliciniation of disposables would definitely
cause a decrease of sanitation levels in food
establishments;
Disposables do contribute somewhat to
a community's solid waste problem. But, when
measured against the health protection they provide,
that disadvantage is not nearly as significant as
the advantages of improved sanitation and safety.
The Single Service Institute hopes you will give
these opinions serious consideration. To quote the author
of the survey. Dr. Pailus Walker, Jr., Director of the
Environmental Health Administration of the Covernment of
the District of Columbia:
"In uany ways public health workers are
in a unique position to evaluate the health impact,
real or potential, or various policies and programs.
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such as solid vnste reduction as one a; proac'->
to ir.prover.unt of the physical "nvircm -r>nt.
They are continuously exposed to t"'>e
end results of these development'; and norc-ovnr
I'Ust translate scientific, technical, and
epidemiolotjical evidence into programs and
services for prevention of the occurrence and of
the progression of disease and disaMHty."
"Therefore, constructive and '-alanced
policies deaSr.g with the entire spectrum of
environrental quality issues ::'.ur,t tahe into
consideration the knowledne and attitudes of
professional pul]ic health worVerc."
The single Service Ii.<5tituta is please to have
th-is opportunity to offer constructive comment on the .Lrsue
of a solid v.-aste product charge. If at any tine ve can Ke of
assistance to the Committee in pursuing the ou> lie health
impacts of resource conservation we will he happy to
cooperate with you in any way that we can.
Thank you.
DR. CLARK: Thank you very r'uch. I think you
raised a very rood issue. I want to ask you a couple of
questions about it.
One is that I think probably to look at the impact
of a product charge on the one way food packaginc material we
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183
ought to go really to the manufacturers of these materials
rather than to the health officials. You -suggested that
a product charge of the size we have been talking about
would possibly elininate the whole industry.
Do you serious consider that likely?
K.K. ri'ilx: ^t this point arid time we don't
know the level of. the charge that will fe suggested, tc
what products it's going to be restricted and it could
possibly, the competition in these areas, the areas of
difference in price are very slir~ and it could, you know,
be one of those factors, there are others, the cost of
paperboard and plastics arising that would simply make it
no lonoer an economical as well as a sanitary alternative
to the reusable article.
Jo it's in the realm of possibility depending
on —
DR. CLARK: But you arc just talking about
marginal changes, you are not talking about wining out an
industry seriously. Paper plates you are talking about way
be l/500th of —
>'P. FELIX: however, as I reconstruct one of
the purposes it seems to n.e of the disposal charge was
to encourage the use of reusahlcs over disposables,
DR. CLARK: But the charge itself would not
affect that directly. As you say, you could not use
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1 reusal.les.
2 MR. FFLIX: Again, depending upon how this is
3 implemented and what sort of publicity accompanies the
4 announcement of that kind of an excise tax so thst it is
5 palatable and understandable to the public.
6 Source reduction which we kind of see this as
7 another way of applying source reduction. That's one of
8 its purposes, is really, basically, based en the principle
9 that we ought to not use disposables but to use reusables.
10 That's why the American Public Health Association has
11 taXen this strong position affirming that disposable
12 articles have a real value in terras of sanitation and
13 health in our society and we cannot ignore that.
14 DR. CLARK: Could I ask i?y question in perhaps
15 a different way. Would you>"association be able to,
IS and willing to help us makes the assessment of the impact
17 of a charge or should we go to another consultant?
18 MR. FELIX: To help you to what, again?
19 DR. CLARK: To do the study which really has
20 to look at the relative competition between the one way
21 disposable products and the reusable products?
22 MR. FELIX: We are quite willing to assist you
23 in any way that we can as I sajfl We have some particular
24 competence in this area of public health, because of a long-
25 standing involvement in the promotion of public health as
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105
an indirect way of promoting the use of disposable articles
which were, in fact, invented as art answer to public health
problems. But in these other areas v.-e are certainly very
willing, as I think ..embers of the E.P.A. can attest in
areas of cooperation that we have had with them over the
last couple of years that we will do whatever we can.
DR. CLARK: On the public health side, did the
studies you referred to look at the extent to which, if
any, the proliferation of trash with food on it in container);
spread throughout the city may have its own .public health
damages, for instance, rather problems in cities are
dependent upon food availability and is food disposed of
more widely with less containment because of the use of
disposable items or was that assessed in studies?
MR. FELIX: In the study that accompanies my
statement which is the one published in the Journal of
Food Production by Dr. Kalker that question was asked of
the health officials who recognize that disposables as
we recognize disposables are <» little proMer.,, and we are
doing what we can ~ to respond to that, and they felt that
while that is a problem, efforts to solve that problem
ought not to comply by way of regulation which they did
not think would be an effective approach, lut rather
by way of education and -endorse the Keep Anerican Beautiful,
Clean Community type of approach to the solution of that
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problem. But it is a serious community problem, yes.
KP. TOZZI: "i want to be sure I understand the
health effects that you are stating. I am not really
clear. If you have a paper plate that's a single service
thing that's used and discarded, and under, say, a product
charge approach you take that sairie paper plate and recycle
it and make another paper plate I don't quite appreciate
why a recycled paper plate is less healthy than the
original, not knowing thaw the original is made?
MR. FELIX: tlo, all paper plates are made out
of Virginian material and that is because recycled paper
that coso.es out of the Municipal waste strear?, that is
post-consuner solid waste} we are not talking ahout trim
that might be collected in a paper plant somewhere where
you have some control over the kind of paoer that you are
dealing with in-the recycling process, but that paper
which is raade out of the garbage, you know, the collected
newsprint and whatever else is tossed into the garbage
truck and delivered, paper plates and paper cups, and the
^
same is true in the plastic area, can't be made of those
because there is not way to eliminate all of the
contamination that is involved in that kind of an unstable
source of paper supply, unstable in the sense of you never
know what's in any particular batch of the paper that's
made, because of the nix that is mixed with it in the
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1 collection of the cities revenues.
2 MR. TOZZI: Well, then, the problem will come
3 Jown to whether it's cleaner to eat on paper plates or
4 plates that are washed, regular plates?
5 MR. FELIX: Lasically, whether you can eat on
6 any plate at all in the case of some circumstances, stadiums
7 concerts. The question is —
8 MR. TOZZI: Well, is the public health association
9 stating that they think there is an incremental health
10 difference between eating on a paper plate or a plate that
11 cones out of a dishwasher?
12 MR.FELIX: That's correct. There are hazards
13 that have been documented over the years and that are
14 still, as a matter of fact, very recently, I think, it
15 was the G. S. A. made a study of restaurants and found
16 that there is a high degree of contamination involved in
17 the -.washing process in restaurants, in the handling of
18 reusable utensils which, of course, receive a great deal
19 more handling than does a disposable article.
20 Our institute in working with the E.P.A. in this
21 matter made a study of restaurants in a city in
22 New York, not New York City, and went into restaurants and
23 made bacteriological assessments of documents of
24 disposable plates and cups and reusable plates and cups.
25 And the contamination of the reusable was 15 tirces higher
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than the contanination of the reusable and t'.iero '-'as some
contamination of the disposables.
The level of contamination and this IK numLer of
bacteria counted as well as the quality of soc.tc of the
l-acfcteria was found to he within liirits on the
disposable, 100 per fensil whereas the counts
on the useahles were considerably higher than that.
So there is that kind of a difference and thero
are, therefore, organises that can cau.se a problem. The
statement of the American Public Health Association points
out that it's extremely difficult to estailish that link
between the bacteria that's there and an illness that iray
occur as I think we all know from the difficult.Les with
the cause of the Philadelphia illnesses.
f'R. TOZZI: Has the nedical health association
-!>•" £- £ii
taken a position against the rrandatory deposit?
MR. FELIX: They have not. They have net
addressed it. I an not speaking for the 7u"eric.in FuMic
Kealth Association. I arr a r?eiril er of the American Public
Health Association. I ara speakinq for the Single Service
Institute.
MR. TOZZI: If you go with the r.andatory deposit
system it's fo:fce
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MR. FELIX: Well, there is an implication on
this resolution that other packaging products that serve
a health protective function ought also be taken into
consideration as well.
I am glad you raised that f-oint, because I was
at the hearings on the mandatory deposit legislation that
was held a couple of weeks ago, I guess, and erroneously
the Ai.ierican Public Health Association was listed aa one
of those organizations that did environmental action had
erroneously, and as I understand, through an honest error
there is testimony, or in the subsequent release listed
the American Public Health Association as endorsing its
position on Mandatory deposits,and that was not true,
because the association had not taken any position.
I spoke with the legislative staff person at
APHA and she said they had to refuse that endorsement
because the association has not taken a position on the
mandatory deposit issue.
I know from my own experience in discussing with
sanitarians around the country that they deplore the
raandatory deposit legislation, because of the problems of
infestation that they either see in the food stores
where that takes place or that they know froir experience,
the experience of those good old days when the returnable
was the container,that they fear that the sane problems of
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disease bearing insects and rodents will reoccur in our
food stores as the great numbers of containers returned
to the food stores should there be a mandatory Deposit
legislation action.
US. PROWN: Thank you.
MR. FELIX: Tbank you.
CrAIRKAN FUTLER: Our next speaker this
afternoon is Dr. Anthony Yezer, assistant Professor of
Economics at Ceorge Washington University. Dr. Yezer is
represented by the Public Interest Economic Fourdation.
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MR. YEZER: My name is Anthony Yezer, and
I am an Associate Economics Professor at George
Washington University.
I am appearing before you today as an uncora-
pensated individual based on a suggestion made by
members of the Public Interest: Economics Foundation.
First, I should note that I am in general
agreement with the analysis of solid waste charges by
Steve Buchanan in the September 1977 issue of "Public
Interest Economics." As noted in this gaper, the
primary rational for solid wast-v charges rests on an
efficiency argument based on the failure of user charges
for solid waste disposal to reflect social costs. High
administrative costs and the ease of illegal dumping
make it unlikely that an effective system of user charges
reflecting marginal costs of disposal can be designed
and implemented at the local level. My comments will be
based on the assumption that the solid waste product
charge is designed to deal with this source of market
failure. I shall take up the questions raised by the
Committee in the announcement of these meetings first,
and then consider some additional questions of my own.
1. What level of Government should levy
solid waste product charges? If the charge is based on
market failure as described above , then one must ask about
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1 the degree of spatial variation in solid waste disposal
2 costs. If these costs vary sharply from state to
3 state, and among cities of different sizes, then no
4 schedule of national charges on components of consumer
5 solid waste will provide adequate market "signals" to
6 consumers and producers. Unfortunately there is little
7 evidence on disposal costs in different areas, but my
S limited literature search provided some support for
9 the view that solid waste disposal costs (for which the
10 wage bill is about 75%) probably vary spatially about as
11 much as wage rates.
12 Recent research on spatial variation inoccupation
13 specific wage rates would put this variation at about
14 20 per cent across regions and city sizes for blue collar
15 occupations (see, Goldfarb and Yezer, 'Evaluating Theories
16 of Intercity and Interregional Wage Differentials,"
17 Journal o_f Regional Science, December 1976) .
18 Given that administrative costs would lae
19 much lower if scheduled at the national level, and levied
20 on bulk producers of packaging, there is a strong
21 incentive to recommend implementation at the national
22 level unless the variation in disposal costs is very large,
23 and perhaps larger than the 20 per cent figure.
24 2. How do product charges relate to other
25 charges and requirements? The waste charge , along with
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au exemption of recycled material inputs, should be a
substitute for deposit requirements and other regulations
designed to discourage the use of packaging which generai.es
solid waste. Indeed, the recent trend toward bottle bills
on the state and local level weakens the efficiency
argument for a national solid waste charge.
3. What impacts might be expected? Here I
assume that the charges are levied on all forms of packagin<
If this were not the case, the principal effect of the
charge would be to change packaging materials. The
first result would be to raise costs of packaging
manufacturers. Given the likely elasticities of supply
(quite large) and demand (rather small) for packaging,
the direct effect on packaging markets would be a small
reduction in output and an increase in price nearly equal
to the amount of the charge.
Now, if recycled materials are exempt from
the charge, and the recycling industry is perfectly
competitive and constant cost, then the price of recyclable
waste will also rise by an amount nearly equal to the
amount of the charge.
Now, the charges proposed for paper ($26 per
icon) and rigid containers (half cent each) represent a
sizeable fraction of the current price of recyclable
materials. Thus, the waste charge or product charge might
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1 result in very substantial increases in the prices paid
2 for recyclable materials. Note that recyclable paper
3 now sells for about $30 a ton, and aluminum cans can
4 be recycled for about a half cent per can.
5 I should insert here that the logical
6 conclusion of very sizeable increases in the prices paid
7 for recyclable waste could provoke a response in the amount
g of recyclable waste made available to recyclers.
9 4. What types of products or packaging should
10 be included in the charge? Clearly all close substitutes
11 must be included in the charge and taxed at rates that
12 reflect disposal cost. I would recommend that the
13 program begin with charges on all packaging materials.
14 5. How should the charge be determined?
15 Waste disposal cost should determine charge levels. It
16 is likely that weight is the most important determinant
17 of disposal cost.
18 6. How should product charge be adjusted to
19 reflect the amount of recycled material? There should be
20 no tax on the recycled material content provided that
2i recycling is not subject to some form of public subsidy.
22 Given that firms using recycled material are paying full
23 social costs for the material which they purchase, this
24 material should be exempted from a product charge.
25 Oneimportant issue, not mentioned in the
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literature which I have reviewed thus far, is the
treatment of exports and imports. The argument for a
product charge based on market failure in waste collection
suggests that exports be exempt from charges and imports
be subject. It may be difficult to administer such a
scheme, but some mechanism for dealing with the foreign
sector should be considered.
I take it from earlier comments that this
issue was raised earlier. I haven't a solution,especially
if international law forbids it.
MR. TOZZI: I have a question. I don't know if
I am asking you or Dr. Clarke. I think it was the third
point that you made in your statement, if I understand
you correctly, that the imposition of mandatory deposit
approach would decrease the efficiency of a product
charge, did I understand you correctly?
MR. YEZER: You have the wrong number point, but
since I cannot locate my number,! can locate the analysis,
intellectually, let me just respond in general.
If the rational for the charge is based on market
failure due to lack of user charges on waste disposal,
then other locally imposed charge schemes which are added
on top of the waste disposal charge tend to make it
virtually impossible to set an efficient level of waste
charge.
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MR. TOZZI: Would an answer to that be to
accept any activities of products covered by a mandatory
deposit legislation/ would that be a remedy to the
problems you have identified?
MR. YEZER: The problem you get into is that
you have to administer all charges at the same vertical
level of production, otherwise you would be in danger of
taxing and inputs to a higher level of production where
you would subsequently tax the input gain, and therefore
an inefficient allocation of resources.
Now, if you are going to implement all your
charges at the same level of production I would suggest
that you unify your charges under one single charge,
rather than have the manufacturer of the same product
have half of this product, subject to the charge
scheme under one set of legislation and the other half of
this product subject u> another charge scheme on another
set of legislation. I think that would make the producer
phr
less schizoisenic.
MR. TOZZI: Then, Doctor, in your view of the
two proposals before this Committee they are not
separable, The action on one has a definite bearing on
the action of another?
MR. YEZER: My recommendation is for an
integrated charge on the packaging components, certainly
of solid waste where you have a group of commodities, which
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are close substitutes or moderately close substitutes in
providing packaging. I heard other questions before,
baaed on treatment of durables. I have had limited time
to think about that, and I think it would be very
cavalier for me to offer an opinion about any other
market or any other good.
I was mainly considering packaging materials,
but that would include bottles.
PR. CLARK: Perhaps I can ask Professor
Yezer a slightly different question, and get. a different
answer. If you say that a beverage container deposit is
primarily for the purpose of reducing litter, rather than
.reducing solid waste stream. No prices have been talked
about for beverage containers, can be justified in terms
of disposables and you have these separable purposed,then
you have separable pieces of legislation.
MR. YFZER: Well, my diffculty in answering is
that I haven't considered the reasonableness of the
disposable bottle charge as an answer to the problem of
people throwing their bottles around the countryside.
So since I have no feeling for the reasonableness
of that policy I really can't answer your question.
DR. CLARh: I may have missed it. Did I get
a different answer from you, Jim?
MR. TOZZI: No, I don't think so.
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1 DR. CLARK: What are your feelings about the
2 trade-off between transactions costs and the inefficiency
3 of taxing items that don't appear in solid waste of
4 going up and down in production process of VirginlSn
5 material production for the manufacture of ten cans,for
6 instances?
7 MR. YEZER: You don't want to implement, it seemt
8 to me, this tax at a level of the Virginia material
9 producer, because it's very difficult to assess the waste
10 disposal consequences of an incremental ton of Virgin±«NA
11 material being produced.
12 On the other hand, as you get higher a.nd further
13 aware from Virgintaa material you tend to get more
14 producers and therefore more administrative complexity.
15 Buchanan recommends that it be implemented at the level of
16 the primary packaging producers, paper or aluminum cm/
H producer, and I would recommend that levei as a
18 reasonable compromise between administrative costs and
19 insuring accuracy.
20 By the way, I should mention that there is a
21 gentleman in Arizona, apparently who built a house out of
22 beer cans, which obviously indicates there are going to
23 be mistakes made. Clearly that houssis going to have a
24 very long half life, possibly long than mine, given the
25 brick work they provided me with, so there are going to be
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some errors, but one has to always decide whether these
are relevant or important areas, and I am fairly
confident about beer cans.
They are going to be disposed of.generally,
fairly quickly.
MR. TODER: I have a previous question from a
slightly different angle. Would not a disposal charge
such as you recommend by raising the price of recycled
materials that compete with Virginian materials also reduce
the incentive to litter and provide a disincentive for
littering and given that, if we have a disposal charge
would you suggest that there should not be a mandatory
deposit?
MR. YEZER: Well, that's what I had suggested.
I recognize there is some concern about extra legal
disposal of bottles. I hadn't thought about that as a
special concern, but I was recommending this charge as
a general charge on packaging in order to deal with the
marketing failure.
Now, people litter newspaper and all sorts of
other things. I don't see why bottles should be in any
sense singled out. I recognize that, so my prejudice
is that solid waste disposal tax solves the problem.
Certainly changes refuse into additional resource.
There is an interesting ex*aple of this in the
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area of food preparation technology where wet pealing
techniques were ustd extensively to prepare apeSches and
things like that, for canning,and ther. the price of
raw agricultural feeds for animals rose, and suddenly
dry-pealing came in because the peals were -coo valuable
to throw away.
They are apparently eaten and re-eaten by
cattle. So obviously you raise the price of raw recyclable
material, you raise the opportunity COST; of throwing it
away, and you deter cattle disposal. But, if we are
calking about the beer can you find on your front lawn
Sunday morning, I don't know what sort of charge would
deter that and I haven't thought about there being a public
purpose in going after that beer can through taxes. At
some point you should call the cops.
MS. BROWN: Thank you very much.
CHAIRMAN BUTLER: We have two more scheduled
speakers, and after those two have spoken, I will have
somewhat of an open discussion,and anyone who wishes,
both those who have already spoken and those who haven't,
will be given an opportunity to speak.
I ask those final speakers if they can, to
limit themselves to five rainutes so that we will be able
to finish about 4:30, or somewhat shorter after that.
Our next speaker is Mr. Thomas White. Mr. White
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1 is a City Councilman from Greenbelt, Maryland.
2 MR. WHITE: Thank you Mr. Chairman. My
3 comments would be fairly brief. I am sorry that I wasn't
4 here earlier when I was scheduled, but I had a difficult
5 time getting away.
6 Mr.Moderator and members of the Committee,
7 my name is Thomas X. White. I am a member of the City
8 Council of Greenbelt, Maryland, and the Control Task
9 Force of Prince Georges County, Maryland, Chairman of the
10 Metropolitan Council of Governments Health and Environ-
11 mental Policy Committee, and also serve on the National
12 League of Cities Environmental Quality Committee. I
13 must state, however, that I am speaking for myself and
14 not representing any of those organizations regarding
15 the subject.
1*> It is interesting to note that I learned of the
17 public meeting only by perusing the Federal Register Notice
18 and I raised this question question I think that if my
19 example is representative of other individuals who would
20 be interested in this very important subject,- then by ny
21 estimation that meeting had what could be considered
22 to be poor notice. Even learning as I did on November 8,
23 of a meeting to be held on November 17th the organizations
24 which I participate in would not be able to meet, and to
25 provide the comments that you need.
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My first suggestion would be, therefore, that
you consider additional public meetings on this very
important subject and that you broaden the notice and
distribution fco a much wider audience, at the very least,
the local Governments with an interest in solid waste
management should be advised directly.
For my part after today's session I will have
an opportunity to place the subject on the table of each
of the organizations in which I participate and hopefully
generate their interest and result in some meaningful
comments that could be transmitted to the Committee, and
I would offer the following brief comments of my own,
in regard to this subject based on my review of the announc<
ment notice.
It is ray view that additional solid waste
product charge could offer a much needed national
strategy for the problem of solid waste management, as
well as resource recovery. In the Metropolitan
Washington. Area we are witnessing quite disparate local
regulations regarding beverage containers.
One county places a deposit on all nonretumab:
beverage containers. Another county generates similar
legislation, but includes alcoholic beverage containers
where the other one excludes them. Another local
jurisdiction uses a tax method to try to tackle the
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regulation of beverage containers and so on. And the socia
market and aconomicsand enforcement problems with such a
hodgepodge of regulations between and among jurisdictions
is getting to be ridiculous. I think Federal legislation
resulting in a national solid waste product charge
including incentives for reuse of materials could go a long
way toward resolving the problems that local and regional
Governments are encountering. Another problem being
faced in this Metropolitan Area is that of ever decreasing
landfill space, and an increase awareness of the
environmental and economic costs of burying our waste.
This may seem like an over simplification. I
see the product charge as a source of revenues for local
Governments to provide them with the capital base needed
to fund alternative solid waste disposal methods, and
especially resource recovery facilities.
Secondly, in any solid waste product system I
would urge simplicity in the collection method and
distribution of revenue back to the local Governments.
It would be foolish to construct a hugh bureaucracy
that would collect a large share solely administering
the program. And for that reason the closer the product
charge is to an excise tax method the better.
That would be one that would utilize existing
Federal Tax Collection Methods. Within the limited time
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1 time I have had to review the paper in the notice, I think
2 these are the only comments I would make.
3 I would however urge continued discussion
4 on the subject and as I said earlier/ more widespread
5 distribution of the call for comments.
6 MS. BROWN: Thank you very i.Tuch.
7 CHAIRMAN BUTLER: Our last scheduled speaker
8 this afternoon is Mr. Marchant wer.tworth from the
9 Environmental Action Foundation.
10 MR. WENTWORTH: Thank you Mr. Moderator.
11 My name is Marchant Weutwortb and I am Research
12 Director of Environmental Action Foundations's Solid
13 Waste Project. I would like to thank the Resource
14 Conservation Committee for the opportunity to appear
15 before you on this important issue.
I6 An outgrowth of Earth Day, 1970/ the Foundation
17 attempts to educate and raise citizen awareness OB.
18 a variety of environmental issues. For the past four
19 years, the Solid Waste Project has been working with
20 citizen and environmental groups throughout the country
21 on solid waste problems. We are in a unique position
22 to present citizen concerns concerning the product
23 charge and the benefits it could bring to an increasingly
24 materials consumptive society.
25 The product charge is an idea that makes good
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economic and social sense. It represents an attempt
to assign a true cost to a product and marks the beginning
of an environmental consciousness that assigns a specific
responsibility for consumption and production. In the
past, the price for this consumption - the pollution of
belching smokestacks and stinking rivers was thought
of as the price we paid for progress.
While times have changed, we still continue to
selectively poison ourselves and maintain that "people
cause pollution — people can stop it." It is pointless
to dwell on the advertising misconceptions that this
statement nurtures. But this "original sin" idea that
people inherently pollute is not the issue. What is
at issue is the question of who should pay the pollution
bill. The product charge offers the most workable
solution to that question.
He see no need to recount the data on the product
charge that has already been presented to the Committee.
A more detailed treatment will be submitted for the record.
For the present, I will summarize our position and
present our views on some of the issues r/feised in the
background paper distributed by the committee.
Perhaps the single most beneficial aspect of
the product charge is that it works through the existing
economic system. Unlike the complex regulatory approach
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1 of many other environmental programs, the base of the
2 product charge is firmly placed in the market pl&ce.
3 The advantages of this approach are that the administrative
4 and regulatory costs are relatively small — especially
5 when compared to the potential benefits of the program.
5 Also, the program tends to be self-regulatory — expanding
7 and contracting according to the need — not according
8 to bureaucratic whim. The product charge can go with the
9 flow of recession and inflation, without overly penalizing
10 anyone income or interest group. Few programs have this
11 flexibility. With these advantages in mind, let us
12 briefly describe how this product charge can work alongside
13 other solid waste management options or strategies.
14 He strongly believe that not only is the product
15 charge compatible with beverage container deposit
16 legislation, but that the two complement each other.
17 For example, on the basis of experience in Oregon,
18 Vermont, and Yosemite Park, we believe that the primary
19 result of a beverage container deposit system will be
20 the return of beverage containers by the consumers.
2i The deposit places a burden OH the consumer to
22 retuin the container for the deposit. The product charge,
23 on the other hand, places a burden on the manufacturer
24 in the form of an extra charge. This charge creates the
25 economic incentive to reduce waste at the manufacturing
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1 level and avoid the tax. Recycling credits can supply
2 another incentive by reducing the charge in proportion
3 to the amount of post-consumer waste used by the
4 manufacturer.
5 The net effect is that the product charge
6 creates a demand for recycled materials and the deposit
7 system satisfies that demand by supplying containers
8 to the manufacturers for reuse and refabrication.
9 Because of this interaction between the supply and demand
10 sides of the market, we do not favor an exemption for
11 beverage containers under the product charge system.
12 Both must work together to produce an effective system.
13 Either one alone only does half the job.
14 The product charge concept can also be an
15 integral part of along range resource recovery - source
16 separation strategy. By providing a stable market for
17 recycled materials, the product charge would sever to spur
18 increased development in both high technology resource
19 recovery and low technology source separation. Either
20 way, the charge would insure that the energy and materials
21 devoted to the initial fabrication of our consumer goods
22 would not be wasted.
23 The product charge would also be a boon to the
24 citizen recyclers, who, more than any other group, are
25 responsible for us being here today. It was on the
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strength of citizen concern for solid waste problems, that
many of the recycling centers sprang up after Earth Day.
It is true that these citizens did not radically decrease
the load going to our dumps and landfills. But: by raising
the collective public consciousness about our solid
waste problem, they performed a job more valuable than
any reduction they could achieve. These centers provided
a vital education tool that provided many with what was
probably their first look at their own collected
garbage.
Moving on to some of the specific issues
raised in the position paper distribution by the Resource
Conservation Committee, we do feel that this charge
should be levied on the national level and that, as
we have discussed earlier, it should not exempt beverage
containers.
Revenues derived from the charge should be
returned to the state and local levels to fund solid
waste management programs.
In addition, we feel that a recycling credit
is vital to the integirty and workability of the product
T
charge concept. While it may be true that this recycling
credit does impose an additional administrative cost
on the program, this credit supplies the driving incentive
towards increasing the use of post-consumer waste and
easing the burden on our landfills, incinerators, and
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1 dumps. None of the other proposals mentioned provided
2 the needed push to reverse the present market situation
3 and actively promote the use of post-consumer waste.
4 We do support the use of post-consumer waste
5 by firms that are not covered by the disposal charge, but
6 it is not clear that recycling incentives are the
7 appropriate way to deal with this problem. It is also
8 not clear that reductions of the amounts of post-consumer
9 waste would actually occur in these rather specialized
10 situations. The recycling incentives are not the most
11 efficient method of encouraging the use of post-consumer
12 waste in this sector.
13 He are similarly not convinced that energy
14 credits for trash-to-energy projects are the wisest way
15 to spur the reduction and recycling of post-consumer
16 waste. These projects could well receive part of the
17 returned revenues of the charge, but direct energy credits
1° for energy recovery projects could encourage the development
19 of unnecessary energy plants that could serve to
20 perpetuate the flow of waste - not reduce it.
21 We feel that the resulting revenues from this
22 product charge should be transferred back to the state,
23 local and city Governments for solid waste management
24 purposes, not to the General Fund. The product charge
25 revenues should be used to alleviate the consumer's
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burden of any additional solid waste management costs.
We do believe, however, that local Governments should
be given maximum discretion in the use of these funds.
Finally, we would hope that the product charge
be phased in over a ten-year period thus mitigating any
drastic and undue economic and labor impacts. Administration
by E.P.A. and Treasury as outlined in the position paper
makes sense.
In conclusion, we strongly urge that the
Resource Conservation Committee endorse the Product
Charge concept.
Any questions:
MR. TOZZI-. Did I understand you to say in
terms of mandatory deposit legislation and product charge
those two are compatible?
MR. WENTWORTH: Yes, sir.
MR. TOZZI: Now, if we take two other things
that you mentioned in your testimony, one, recycling tax
credits and two, tax credits for the utilization of post-
consumer waste for energy purposes, are either or both of
the last two compatible with simultaneous implementation
of the first two?
MR. WENTWORTU: Not directly. It's our feeling
that there are better ways to do it to cure the inefficienc:
than, in effect, what would be a subsidy through a tax
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credit situation.
MR. TOZZI: For either energy facilities or
recycling?
MR. WENTWORTH: That's correct.
MR. TOZZI: So is it your position that out of
those four alternatives the recommendation you are
making to this Committee would be not to use any approaches
that involve tax cuts, but to rely on the imposition of
charges or mandatory deposit charges?
MR. WENTWORTH: That would be correct.
MS. BROWN: Thank you Mr. Marchant Hentworth.
CHAIRMAN BUTLER: Now, let's take the
opportunity to open the podium to anyone who wishes to make
a statement.
Yes, sir, please give your full name and your
association.
MR. MCKENNON: I am Russell McKennon, Executive
Vice-President of the Automatic Dismantlers and Hecyclers
of American. I represent about 1300 small businessmen
in the United States and Canada involved in the recycling
of automotive parts and truck parts.
wa would like for you to consider something
beyond the use of just packaging materials and considering
recycling and for you to consider the po^ibility of packagii g
materials, the recycling of tires, oil and auto and truck
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parts. We also feel that the solid waste product charge
is not necessarily the total answer. Such a charge could
result, in a burden on manufacturers thai; could result
possibly in reduced production, higher unemployment and
possibly higher costs to the consumer.
A more positive approach might be to stimulate
the recycling industries by providing tax credits to
those recycling businesses. Examples of rtteds in this
area include the requirement to recycle tires, recycle
oil and the recycling of auto scrap.
Suggestions along these lines were introduced
to the 94th Congress, and these suggestions were defeated
in both Houses of the Congress.
This overall approach might be more cost
effective for America and would result in stimulation of
recycling industries and eliminating the need to increase
the size of any bureaucracy required to administer such
a program that you are suggesting. I would be happy
to answer any questions on this. I am not fully
prepared in the sense that I only became aware of this
hearing two or three days ago.
MS. BROWN: No questions, thank you very much,
sir.
CUAIHMAN BUTLER: Thank you sir.
Would anyone else care to make a statement or
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ask a question?
Yes, sir.
MR. NORTON: My name is Lawrence Norton, here
on behalf of the National Agricultural Chemicals Associati<
I don't have a prepared statement, because this issue has
not been addressed by our Board of Directors as of yet,
but I would like to submit a comment.
The National Chemicals Association is a trade
association, made up of member companies who produce
virtually all of the .agricultural chemicals who are
sold in the United States. A large percentage of the
products which are produced by our member companies are
restricted use products. This is to say that they are
available to a small percentage of people here in the
United States who have passed a written examination
qualifying them or certifying them to use these restricted
use products.
My question is, would an agricultural chemical
be considered as a consumer product since it is only
available to people who have had a written examination
certifying them for the products usage.
MR. STEDT: Fred Stedt of the Resource
Conservation Staff. The package of the pesticide would
probably be included under any charge, but the cor.sunable
portion, noneof the current designs envision including
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the pesticide itself.
MR. NORTON: So you are saying live material
content of the package there would not be an excise tax
on?
MR. STEDT: None of the current designs would
include that, right.
KR. TOZZI: We regulate you enough under the
Pesticide Act.
MR. MORTON: Right. Thank you very much.
CHAIRMAN BUTLER: Would anyone else care
to make a statement? If not,that concludes this
public meeting on the issue of solid waste product charges/,
I thank you all for attending. I thank you
all for you patience in waiting until we wc:re finished
and 1 hope you will be following our deliberations in the
future.
Thank you.
(Whereupon, at 4:15 p.m. the hearing was
recessed.)
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TESTIMONY
FOR
RESOURCE COMSTRVATION COMMITTEE HEARING
•Jovember 17, 1977
Washington, D. C.
My name is Louis F. Laun. I am President of the American Paper
Institute. I am here today on behalf of our 200 member firms, who
provide over 90% of all the pulp and paper manufactured in this
country. Our industry employs nearly 700,000 people in virtually
every state in the Union. In 1976 we paid about $9.5 billion in
salaries and wages, and SI.4 billion in income taxes.
Ours is a unique industry. Unique in the fact that we are a
large basic industry that can compete in world markets on a free
trade basis. Unique in the fact that our resource base is forever
renewable.
I have great sympathy for the job you have in front of you,
having spent four years mysslf as Deputy Administrator of the Small
Business Administration wrestling with public policy problems I oe-
lieve are easier to solve than the ones you are facing.
I appreciate the opportune Ly to present to you our industry ' s
views on one aspect of these: the proposed solid waste disposal tax,
or product charge as it is sometimes called.
It is our understanding that you will be considering the ad-
visability of imposing solid waste product charges on all paper
and flexible packaging, as well as rigid containers, manufactured or
imported for domestic consumption and not made from post-consumer
waste. For our industry, this cnarge, when fully implemented, would
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be $30 per ton, plus a factor for inflation in future years.
The paper industry recognizes tnat solid waste management is a
growing national problem. We are mindful that we are part of that
problem insofar as much of what we produce to meet America's paper
needs eventually ends up in the nation's waste stream. This '"o^'mttee
should be aware that our industry is already rdking major contribaliens
that alleviate the solid wasto problem.
It :_s not generally known, but we have reached tro point vnere
over half of the fiber we use to make paper comes from waste Ta :erir1r,
such as waste paper, rags, wood wastes, and unusable by -product <5 of
lumber manufacturing. Additionally, the industry has spent b.. 1 1 o"= f-
make sure that its pollutants or manufacturing wastes ere handled in
such a way as not to impact the municipal solid waste s.tream at all.
But as I have indicated, the nation's solid waste problem is rra"i,
It is a problem to which there is no easy, quick or cheap solut^n. If
is a problem that is only going to be dealt with effectively if the
best efforts of government - federal , state and local - anc indistr i- re
forthcoming.
I am here today primarily to indicate to this Committee tiit tue
American paper industry is ready to work with you and others in the
public sector of our society and with those in the bus3 ness commu^ 11_ •,
who are earnestly seeking solutions to solve the solid waste problem.
I do not come here today with any pat answer. We do bel i ?• e t.hat
we can corne a lot closer to developing needed answers __f we c_>nL L.IL.C
our efforts and work on this problem together rather t! an sut u >
separate armed camps for the purpose of lighting about it. These art
problems shared by producc-rs and c-ons jmers ao /.ell j.? -,,. c:"~ - -
industry is rot "r-] octant to accept irs shaie of rt?pons_b_Lj_ '_
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American industry has always led the world in innovative and
technologically-advanced approaches to the most complex challenges.
We submit that the solid waste and allied problems create a situation
that deserves the best attentions of industrial expertise. We submit
that the best solutions to the solid waste problem are likely to be
found through coordinating governmental 'efforts with the brains and
efforts of the industries that manufacture the products which contribute
most heavily to the solid waste stream.
As I have stated, we are prepared to help.
I have come here today with a question and a concern.
My question has to do with the feasibility of a Federal solid
waste disposal tax, and my concern is that any recommendation from this
Committee in favor of a product charge approach would prove to be
counterproductive in that it could drain away industry's funds and
efforts, both of which I believe are essential to finding workable
solutions to the solid waste challenge.
You really have three problems in front of you, all intertwined.
The obvious two are the very localized and evergrowing municipal solid
waste and litter problems. The third is a national one - conservation
of natural resources. Any solution you devise must have a positive
effect in all three areas and should have as few as possible adverse
side effects. The American paper industry be 1 xeves that the proposed
solid waste disposal tax will fail to accomplish these objectives.
A product tax is not the answer because:
1) it would not assure a real solution to the growing solid
waste problem;
2) it would not provide a real solution to the litter problem;
3) it would not result in an improvement of our natural
resource base.
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In addition to not solving the three major problems in front of
us f it would also be an inflationary and regressive tax with a neqat vc
impact on employment and income. It would unfair]y penalize selected
industries, especially paper and paperboard. Most importantly, it
would inhibit an opportunity that is open to us to solve the litter
and solid waste problems ir. a constructive way that would, in addi t: on,
conserve the nation's resources and assist in the solution of the
energy problem.
Let me deal briefly with each of these.
PRODUCT CHARGE AND THE SOLID WASTi: MANAGEMENT PROBLEM
With present methods of dealing witn sol id waste in urioan «.nu
suburban areas the basic obstacle is the qrowing lack of land to u»e as
landfill sites. Many rural areas have less severe problems. It seeris
to us that any sensible approach toward solving the problem woa_J
have to incorporate a means other tnan landfill for dealing with
urban solid waste. Neither the product charge or any ot '>r kind of
tax will create available land where there is none.
We believe that a product charge levied against the paper industry,
while having numerous adverse effects on that industrv and the con-
sumers , would not have a s igmf icant impact on the totaJL volume of
products reaching the solid waste? stream and would not lead to effective
solid waste management.
The Role of Packaging
A solid waste disposal tax aimed at reducing packaging could be
counter productive. Modern packaging has been a large factor in making
the uniquely efficient and low cost American distribution systen wor ;
for peop Le from all economic strata in both rural and urbd:' ! _ . ±zi.. =.
In many cases, reducing packaging would actually increase the solic1
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waste problem. Packaging ol.minates millions of tons of solid waste
from the municipal waste stream. For example, when food is processed
and packaged, the leftovers, in the forms of rirds, husks, pods, bones
or whatever, are used in rural areas as fertilizer or animal feed. In
many products, a pound of packaging removes twenty to thirty times
its weight from the municipal waste stream (see Exhibit A). Can you
imagine the problem created in our cities if all that residue were dis-
carded into the municipal so]id waste system?
PRODUCT CHARGE AND THE LITTER PROBLEM
The proposed tax does not address the litter problem at all.
The general public has far gieater awareness of litter than of the
solid waste problem, according to a Yankelovich survey. A cost increase
on the original purchase doe'.n't discourage people from throwing away
articles no longer of use or value to them.
THE PROBLEM OT OUR NATURAL RESOURCES
The paper industry bel _eves that this Comrrittee should carefully
study resource recovery. We believe it must be a key element in any
solution of the solid waste problem. We don't see the pressure for
suitable landfill sites easiig, nor do we see the total volume of solid
waste actually decreasing un.ler a^y other proposed approacn, What must
be done, we believe, is to rocover and recycle the energy and materials
components of the solid waste jtr^am. We know the rechnology exists to
do th J.G , ana we be]iG"e tiiero should be national acceptance of the c ^nccpt.
The solid waste disposal tax, while exerting modest upward pressure
on recycling, would do nothiog to stimulate resource recovery. Senator
Hart's proposed legislation calls for an "Environmental Quality Assistance
: und " allocatea to nun a cioaliti.es on a population ratio basis. Why
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- 6 -
should municipal officials want to cet involved in the sort of "risk
venture" a resource recovery operation represents, as long as the federal
government will underwrite their present solid waste collection and
disposal operations and even protect them from inflation by regularly
increasing payments?
We believe the costs of solid waste disposal tax to our society
would far outweight the benefits.
First of all, such a tax is in f1ation a r y. With an initial rate
of $30 per ton on paper products and flexible packaging, tne proposed
tax in the first year of full implementation with inflationary es-
calation would cost the paper industry $2.6 billion. That cost wou i.d
become part of the paper cost structure. In addition to its adverse
effect on industry profitability, we estimate that to the extent that
this additional cost is marked up, as are other costs as they pass
through the distribution chain, it would be likely to add sone $4 to
$5 billion to the consumers' annual burden. However, although the total
effect on our industry and the consuming public is major, the effect on
any individual purchase is small. The fractions of a penny tl" at would
be added to each individual packaged item by a product charge would be
unlikely to chanqe the consumer's purchasing enough so as to make any
downward impact on total solid waste, except possibly in the case of
newspapers.
The tax would be regresjsvye. Low income families spend a
greater portion of their ircome on food, clothing, Pharmaceuticals
and other necessities which require packaging than dc higher -ncome
affluent citizens.
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- 7 -
The tax would result ir a aistort^ing_rise in the cost of news-
papers, magazines, and books. By increasing the cost of all paper,
the oroadcast media would en;oy an. unwarranted benefit over print media.
A fully implemented solid waste disposal tax would add $30, and,
as years go by, even $45 or $50 per ton, when inflationary effects are
taken into account, to the cost of newsprint. Canadian newsprint,
which accounts for nearly two-thirds of the U.S. supply, would be
particularly affected by this charge since, as a practical matter,
Canadian mills could not use significant amounts of U.S. waste news.
This proposed product charge would be likely to create a serious
distortion in international trade. In addition to the newsprint import
situation ]ust described, the export area would be affected. Our
industry's exports amounted to $2.6 billion last year, and our indirect
exports in the form of packaged goods amounted to $4 billion more. Since
it is expected that the proposed tax on primary products would be rebated,
it could create distortions : n the normal flow of exports, causing
serious international complications and might even be in violation of our
agreement within the framework of GATT not to subsidize exports. The
adverse impact on the cost structure of packaged U.S. products is
another factor deserving consideration.
UNFAIR IMPACT ON SELECTED INDUSTRIES AND COMMUNITIES
For the paper industry there are many more impacts that need to
be stressed.
The tax would be discriminatory. It would tax paper in all forms,
while other materials would only be taxed when used in packaging.
Many components of the solid waste stream escape taxation completely.
Paper products are less than 30% of the municipal solid waste stream,
yet current proposals would assess the paper industry about 75% of the
tax.
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En effect, double taxation would take place on commareidl-
iindustrial packaging, whi ch includes most corrugated boxes. Ninety
percent of this portion of the solid waste stream is disposed of bv
private haulers, and is already part of the consumer cost.
The tax could create market dis local ions. Since it wou]d be
imposed en 3 weight basis, it would f avo*" lighter materials. 7ni s
could cause a shut av^ay from paper, whic \\ is lade t ron renew?, t le
resources, to products that require nonrenewable natural resources.
The tax wouJ. d have a_ serious impact on thewajs/te pjape^r__ rnarke/t,
and on__tj^€^j3conorpj.c _vi_abi 1 ity of__sniall _rec_^'_c_l_inq im Ij^s. To avoid the
tax, the larger mills that make lir\crboarc, corrugatirg medium, and
newsprint would use more post-consumer waste. Th^se larger •nils
would be buying large quantities of waste paper, and to turn on new
collection programs they would be likely to pay higher prices for it.
Until collection systems arc working, this would mean that smell re-
cycling mills also would have to pay higher prices for a period of
time that can' t be estimated. Some of the small recycli ' rr.i 3 1 s are
only marcrnally profitable, so the negative effect of the tax could
cause their demise.
Large mills wou 1 d reduce_ their^ pu^L_ha_se_ of wo_od._chips f i o-^__snajjl
lumbej: and_plywood £ro_duc_e_r s. Since the larger mi ] is would dope nd
more on recyc 1 ed paper as at ax- avoidance ETeas are, they woul d have less
of a reason to u3e wood chips. This would prove destructive, since
smal 1 lumber and plywood f aci] itit^s often depend on chip sales, for
their pro f i LS . Less trsemand for wood chips would o; o n[~ t supp j j e r s t ^
leave more wastes in t he woods and that would inhih t new Lree growtn.
It should be remember ed that in many parts of tr>e cour1 try the cemar.fi
for wood product s, not paper, is the reason for t n^- harvest oi i_ irees.
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^'hese 11 lust rat r ur.^ of d ^st art ions can ,ed by the ta> alon^ arc
not ov ider.ce or trio f rtf '"jrcet a*- worK , as so'rts.1 * ix proponent s claim.
They show the problems f f /.-ailed capital ros^ ire es and of r;is Ice n_ed
mills and workers result inq f rom --i rove rnment mandate, and not the
j udgmcnt o+ tne narket -1 ace
The paper i ndustr> ' s c :>ntr ibut on- to the nat ion ' s growth wi] 1 be
seriously impeded b> th.s ra<. Th-s Lasic industry has the potential
for creating a moif conpet11 ive inaust rid 1 base * or t ne U.S.
1) Its renewable resource rase provide-3 the foundation for an
exportable surpl us of ^.ood chips, waste paper, pulp, paper,
and pap^r pi ocacis , Ih: s tax Mil V.GC ken ±f .
2 Ihe contribute" a I pocx.^n ng to ef f icient distr ibut ion
ana re Jucec. co ^*_ b _o con sumer s is riot or ] y lunorea in t r: j s
legislation bat- ic -Udl ly weakened. It shou L<._. al so DC noted
that paper not rt±ci_a imea by recyclina or re source recovery
_LS biodegradable with no lasting irroac t on chc c nvironment.
3 ) Long r ange in"e3t rr ^nt s i r J errp loyrnent opportunities in the
_ndus t •" / are •- 1 •: .uiC'c, o_j the uneven anu ancertaiii in'pac 15; of
tn is leg isiai-. o.. , _i;id r_; >_- r .i1- icn' s ecoiiony loses the be no f 11
'.~ 11 cine r cap i ta ] DUt 1^ /_-; for ex pans i on .
cor\r , r te1 : tc, resc ircn r' c^,\ c r\ , . ( h o^ ^r ra I f t r.. : . o. L osrd ^ n
rakinc. ^ipci in tht ! , i ' j'_- '-tait_:-, corring fror; r> cycled or reclaimed
•v.a stc rll("i tci i al.
^he Anericar T'apor \r*-~.~ it .it- and its me *ibc rs maintain several
I'jgrt ss i ire ;,roi grams that pj o'^o*- ^ nd encourage t ':e use of paper m^cie
f ro" re eye led - ate r i a 1 ^ -.ri'-i ,-,-orx, - o expand voi a, toer and conmercictl
systems to pick up wastf pio?r f or recycling. We have cooperated
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with EPA on these programs and have achieved a national recovery rate of
30%. Over two hundred cities have old newspaper col lection programs,
but more are needed. We need programs in some of the largest cities ir
the U.S. if we are to raise the national col lection figure much above
the present level.
And in addition to the fact that th] s great portion comes from
recovered wastes, the remainder of the fiber in paper comes not from
depletable petroleum or minerals, but fron trees, a reiewable resource
deriving its growth from the sun and rain. To help ma -te the resource
forever renewable, our industry plants millions of trees every year.
In 1976, approximately 700 million were planted in forests across the
country. We are currently crowing more wood every yea r than we are
harvesting either for wood products or paper manufacturing.
Moreover, our industry is concerned with enerqy conservation
and burns and recycles its piocess wastes to supply ovsr 45^, of the
energy we use. The figure is qrowing. This experience and attitude
convince as that the nation's waste, litter, resource, a..d energy
problems must be solved, and there has to be a better way to do ^t
than the tax.
Mary of us in industry have been working for some years to support
the non-profit National Center for Resource Recovery. Edwin D. Dodd,
Chairman and Chief Executive Officer of Owens-Illinois is its present
Chairman. Its President is Dr. Rocco Petrone, who ran the launching
operations of the national space program that put us on the moon. It
has on its board a wide cross section of people from business, labor
and the academic community. Through their efforts and the entre-
preneurial and techno logical j_nput of man.' American corpora nor,s, -_
small nurbor j*" -osource recovery plants is now in existence. We
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- 11 -
feel that these pioneers of^er a potential for actually alleviating
the problems of solid waste disposal while at the same tine improving
the capability to recover and reuse valuable components of solid waste.
The solid waste of the two thirds of the nation that lives in the more
urbanized sector contains important resources which are now being lost
forever. Resource recovery could recover each year 6 million tons of
ferrous metals, 5 million tons o*" Qlass, 500,000 tons of aluminum, the
energy equivalent of 220 million barrels of oil and millions of addi-
tional tons of waste paper by properly "mining" this solid waste stream,
and oy source separation of recyclable paper be fore it gets co-mingled
with the other waste.
We in paper are joininc an inter-industry Committee that is being
organized under Ed Dodd's leadership. This Committee will address the
subject of how this know-how can be further developed and expanded so
that not just a few, but many and hopefully all areas could solve their
solid waste and landfill prcblems, reduce litter, and recover valuable
resources and energy.
Both as members of suet a Committee, and as an industry, paper
would welcome the opportunity to work with your Committee, with the
Environmental Protection Agency and the new Department of
Energy, and with anyone else you rniqht suggest, to explore the problem
and possible solutions in more detail.
On a national scale, resource recovary is an awesome challenge ,
but the paper industry believes it is a challenge that should be
explored in depth. It could, if successful, also create a new industry
and reduce unemployment, particularly in larqe cities , and reduce the
nation's landfill needs bv ^0 .
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- 12 -
In conclusion, Madame Chairman, I appreciate that you have the
responsibility of recommencing a course of" action to the President.
0 tt en, when mak ing a decision, after all the pros and cons have
been sort c-d out, a few key ooints seem of over r id i ng importance- and, I
think we have such a situation here.
With tne h:gn probability of an increased Burden in new e nergy
taxes, social security taxes and an already spir£. 11'lg cost of living,
does it really rr.ake any sense to levy still another tax which is bot n
inflationary and regressive and that will further harden the economy,
in 3 ure srral 1 recyeiers and adversely affect the ab lit/ of a great
American industry to compote in the world marketplace?
Would the Administration want to take these
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The United States Department of Aqr i cul ture (UMj\) in its
publication Conrpj3S2-_t_i_on gj r'oods, has calculated the percentage
by weight of the nonedible portions of various food items based
on USDA averages•
1. For one pound of fresh peas in the pod, only 38^
is edible, and 621* consist s of peapods and other
waste.
2. For one pound of organes squeezea for ]uico, 48%
becomes ]uice , while 52% consists of rind, membrane,
and seeds.
3. For eacn ear o; corn on the cob, only 36'? is ediblo,
but 64% consists of husks, cob, ^nc silk.
USDA data also gives the average per person consumption per
annum in the United States. Using these figures toacther with
population statistics for jertain cities, it is possible to
determine the total volume of consumption, as we 11 as the com-
par at ive volume of waste gene rated from pre-packaged and no:,-
packaged foods:
of oranqe paice in auart-size pap orb or* rd containers
would rcsult in less than 3,000 tons of p^porboard
trash, or less than 3% of the so: id vactc cajsed b"
f resh oranges.
2,
Should consumers in the Ua.sh i-ic;ro- , ').C. , rvtro-
oolitan area switch troi\ : orzen -'-•• f T e^h -x as , ove t~
4,000 tons of oeapods wouln be added to L:H sol a d
waste s t re "-in , ^h i 1 c> packaood ,1^1-, ,• o 11 d o- " ;pno t it
about 2. '> 0 t ens of p aoe rboarcj .as e ,
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Gentlemen, I am Jo-epn '). lupton. I was a member of the Solid Waste
Task Force in Dekalb Count\. fip'irgia until the Task Force was disbanded.
I appreciate the opporturn',/ t al dollars. Not only is the cost un-
related Mine 7) the c^s1 i r, fir in excess of what it needs to b^ in Dekalh
County. Cee appendix i.
As to paragraoh two, it is my opinion that the major cost of disposal
is the type of technology used and the political philosophy whicn perpetua
ted our throw-away society;consumer product packaging which is mt 100'
reusable or recyclable all end up in the landfill today in Dekalb County.
Dekalb County does recycle a small portion of newsprint and is presently
installing a ferious recovery system. Time will tell how well it works.
The political leadership in Dekalb still feels there is no practical way
to get the public to source separate reusable material in large enough
quantities to significantly change the present disposal system.
As to Question 1, except for special cases and for some products, i.e.
in state parks and soft drink containers, there could be a local tax.
However, in the general case, there should be no product charge for consumer
goods or packaging at this time.
As to Question 2, state and local governments shculd be urged to promote
recycling and reuse of materials, but not the concept of a product charge.
By the withholding of Federal funds, I feel State and local governments will
be encouraged to move toward resource recovery in a meaningful way. See
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Appendix 2 for a list ni Southern cities which I surveyed. This list
indicates the poor shoi/imi n! resource recovery in these cities at the
present time. It should hp rei'iembered that none of these cities have the
necessary technology to perform otherwise.
Given that: the valuf1 of ;euseable material is highest when it is
in the hands of the end u^er.
Given that: mini>i:u:n ere* q'< retirements are needed to recycle materia'
jf_ they are kept separated.
Given that: miniHun' pollution of land, ground water and air occur
when recycling of material is used.
The long term solution is source separation and recycling of most of
the solid waste stream. At the present time, we lack the leadership, desire
and technology to be successful with source separation. The desire for
change will come when soaring cost and lack of land for landfills will
force a change. If product charges were placed on consumer products today
this money would simply be used to maintain the status quo. I think what
little recycling there is would see a decline.
As to question 3, beverage containers are a special case and therefore
tend to distort the overall picture. See Appendix 3 for a letter from
Richard H. Horsey, President, Atlanta Coca-Cola Bottling Company.
At to question 4, the social aspects for the Atlanta area would be
about the same as any other large city; no impact for the rich and just
something else to be endured by the rest of us.
As to question 6, at the present time and for the foreseeable future,
the environmental impact would be negative, because in the south at least
landfill would remain as the final end point for all solid waste.
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As to question 7, i"v .H-h f-lona' research is necessary or desirable.
As to question 8, thn-n i <• no need for product charge lenislation at
this time. If our methods "f handling solid waste change and if we can
truly find ways to effective!/ > euse what we collect, then a product charge
might serve the public goo:'.
As to question 9, see qu^tion .".
Mr. Chairman, I app>^r; ^f-e the opportunity to appear before you today
and fj~\ 11 remain available r^v further comments or other imuts to th~s
group, i* requested.
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7XXX Interservices, M.M
1/3 Administrative, 1/3 Roving Crewmen
Activity Total $
Tonnage
Cost Per Ton $
Cos t Per Ton Average to Date $
O?ER,VrLM": «« XAI^CTEXASCS COST
r/.:;uA?.£ 1975
Salaries.,.,., . . ..... .......................... $ 15,2 'V
Ksekly . ......... ... ........ $ 9,55?.36
B 1 -Weekly. .... .......... 1^955.90
Overtime ......... . ...... ... 762.59
Fringe Benefits ',? 197.,.. . ......... . ............. 3, -'"'-'
4XXX Personal Services .............. ...... ............. 13, 1' -
5111 Heating. ... .............. ........ .................
5112 Lights & Power ..... . ..............................
5113 Water & Sewerage ........ . ..... . .................. ,
5222 Telephones ........................................
5711 Maintenance & Repair - Buildings & Grounds ........
5712 Maintenance & Repair - Equipment .................. 1,209.
5935 Training & Education ..............................
5936 Conference & Travel ........ . ......................
5937 Dues, Subscriptions ..................... ...........
5939 Other Services ..... ... .c .................... ...,,.
5XXX Contractual Services ........... . .................. 3,931.
6111 Office Supplies & Printing ........................
6114 Drugs & Medicine ...... . .......... . ................
6115 Chemicals , Industrial .............................
6116 Housekeeping Supplies .............................
6117 Shop Supplies ............. . ....................... 1,Bli •
6118 Uniforms & Clothing .............................. ''->•,
6119 Supplies, Other. ... ....... . .................. .....
6311 Materials , M & R, Buildings & Grounds . ............
6312 Materials, M & R, Equipment ....................... ii,?^;'.
6XXX Commodities ........... . ........................... 6,lifO .
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DEKALI1 COUNTY, CHOI" P APRIL 27, l')76
DEPARTMENT OF SANIT,". L I'. '
'STUDY
OF
TRACTOR 1P.ULER JHGS REQUIRED TO TRANSPORT
SOLID WASTE FROM BUFORD, EXCHANGE PARK AND
TRANSFER STATION SITES TO SITE "E" LANDFILL
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SIZE, WEIGHT & LOAD 1,1?UTrtTIONS
The tractor/trailer rigs used by the Department of Sanitation
meet the width, length X height criteria of the Ga State Highway
Commission.
However, the tare veight of the tractor/trailer rig is 48,000 lif:
and with a max. distance between extreme axle groups of 49 feet,
the max. allowable gross weight is 78,500 Ibs and max. allowable
axle load is 20,340 Ibs.
Legal net load (payload) for this system is:
Payload = 78,500 - 48,000 = 30,500 Ibs or 15.25 tons
However, this study will be based on 17 tons (34,000 Ibs)
Payload = 48,000 + 34,000 = 82,000 Ibs or
82,000 - 78,500 = 3,500 Ibs or 4.4% over weight.
The State Highway Dept. does not appear to he concerned until
the vehicle is 6,000 + Ibs over legal weight.
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664 Sprinj Si , N W /Allnnt •
P O Crx 42G3
A'lan'a Ocorjjia 30302
404-892-4000
Richard H Horsoy
President
October 17, 1977
Mr. George v R. Smitn
c/o The Atlanta Journal
72 Marietta street, N. w.
Atlanta, GA 30303
Deal Mr . STnl *~ h :
I an writing to comirent on an editorial appearing in the October 12 Atlanta
Joui najl, entitled "Bottled Up On Bottle Bill".
I realize every newspaper article or editorial cannot contain every fact
on every subject covered, as this would take too much space and hould con-
stitute "beating the subject to death".
However, there are some relevant facts not mentioned in your editorial which
you and others should know who are interested in this subject.
You state that "bottle bills" have worked to reduce trash substantially in
Vermont and Oregon. (Incidentally, these are the only States which have
actually implemented this sort of legislation to date.) That "bottle bills"
had much to do with the reductions is questionable.
The ADS study employed by the State of Oregon reveals thai: total litter was
reduced only 10.6% during the first year following enactment of their bottle
bill, while the cost of picking up highway litter in Oregon increased sub-
stantially at the same time. Litter laws in Oreqon are actively enforced,
incl uding heavy fines and even jail sentences. The-re is evidence to suppcn t
the contention that Oregon prosecutes its litter laws more aggressively than
Georgia does its DUI laws. Perhaps increased enforcement and litter pic1-
up are the real reasons for litter reductions, not the bot.tle bill.
Furthermore, it is reported that 8 out of 28 bottlers of soft drinks who
operated in Oreqon at tho time the bottle bill was passed either sold out
or closed their doors within a year. In view of the smal] reductior in
litter, the trade-off wouldn't appear worthwhile, would ii_?
In Vermont, reductions in litter of 80% or more have been alleged as a resjlt
of their bottle bill. Since beverage containers only constituted about 30%
-------
Mr. George V. R. Smith
October 17, 1977
Page 2
of total 111'or thcte, it i < > i ..uus thit li 801 reductions uer e realized,
the bottle bill was not thr m.^on. Srme other activity, such as litter
law enforc"rr'~>n'-, puolic e In-.,*-1
-------
Mr. George V. R. Smith
October 17, 1977
Page 3
as perhaps 4 trips in othrr1,, U." latter return rate is no1: sufficient to
justify returnable bottlec: fr01:1 a cost or an energy conservation standpoint.
From the information availat le, U appears that the return rate of returnable:
is higher v-h^re convenience or rr> return containers are most available, indi-
cating that certain consunrts v^nt1 the convenience of no-return containers,
and will buy them where av*^i]Mile, but v.here not available will buy arid
discard ret-u en- for -deposit bottl in. Discarding the hea/ior re turn-for-deposit
bottles is a greater drain on r< fviirc<"^. including energy, it containers.
According to the Georgia Department of Transportation Research Project No.
7003, "Highway Litter in Georgia", there are more return-for-deposit soft
drink bottles in highway litter than no-deposit no-return bottles. Tris
confirms the fact cited above.
Finally, soft drink containers are not the litter or solid waste problem
they are often perceived to be. Soft drink cans comprise approximately 5.5%
of highway litter in Georgia. No-deposit no-return soft dr:.nk bottles account
for approximately 1.4%. Return-for-deposit bottles account for approximately
2.1%.
I think virtually everyone will agree that some wasteful practices in this
country need to be changed to conserve energy and to improve the quality
of life. But this is a function of motivating Amer icans to change hat it
patterns and perhaps life-styles, not a question of singling out one industry
which is a minor part of the problem for legislation of a punitive and dis-
criminatory nature, doing harm to those industrles and theii employees and
interfering with the free choice of consumers, while accomplishing little
if anything in the amelioration of the problem.
Yours very truly.
RHH:pph
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"ina1 Report
'• "par'nl Under
NSF Grant SIA74-20662
by
Energy and Environmental Analysis Division
Engineering Experiment Station
Georgia Institute of Technology
Atlanta, Georgia 30332
December 1976
J. M. Spurlock and R. M. Mason, Principal Investigators
A. M. Fey and J. S. Tiller
-------
TdMe 16.
Costs of I (•'lull 11 i mg in Southeastern Cities"
BirmirKi'i.in', ^''haina $1.40/ton
Mobile M-iKi! i $1.50/ton
Jacksoi" S1.80/ton
These costs are based on telephone interviews with officials of the
municipal ities listed. In most cases, the cost given does not reflect
the true cost of landfilling due to peculiarities in the accounting
procedures. For example, in some cities, revenue sharing funds are
allocated to waste disposal, and landfill charges are artificial 1" low.
In other locations, all disposal costs are lumped as conponents of
landfill costs; in such cases, landfill charges are artificially high.
-------
fiTATFMKNT OF WILLIAM M. LANDES AND RICHARD A. POSNER
SUBMITTED TO TItK RKSOUKCE CONCi'KYATlON COMMITTKK,
NOVEMBER 17, 1977, CONCKRNTHn C^OLII) WASTE
PRODUCT CHARGE LEr.ir.L
We are, respectively, an economist and a lawyer-economist at the
University of Chicago Law School who have taught and written extensively
with regard to the application of economics to public policy. Our cur-
ricula vitae are attached.
At the request of the National Goft Drink Association, we have analyzed,
from the standpoint of sound economic policy, the merits of proposed federal
Legislation restricting beverage container:;—in particular, mandatory deposit
and product charge legislation. We Previously submitted a statement to
this Committee, at its Octobe*- J9, 1977, public meeting, with regard to
mandatory deposit legislation. Our statement today will focus on both
mandatory deposit and product charge legislation. This double focus IE,
adopted not only because the Committee has requested that witnesses con-
sider the relationship between both types of legislation, "but, more impor-
tantly, because most proponents of federal intervention in this area regard
mandatory deposits and product charges as complements rather than substitutes.
In effect^ we shall be examining the case for a 5-5 cents tax on beverage
containers, consisting of a 5 cent tax on beverage containers in the form
of a deposit refundable to the person returning the container, and a -5 cent
excise tax on al] beverage containers, as proposed in the Hart bill.
Our comments are in two parti,. Part I analyses mnn-i'iLoi'^ <1oi>ont
1 egi slat ion , r.ummari z i ng and eyt*~ndi ng our previ ou'.ly uHr, i tt fd .' iter i nt
on thi s subject. Part IT anal v?ef; product charres .
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I. MANDATORY DEPOSIT LEGISLATION
The dramatic growth in recent years of the share of cans and non-
returnable bottles {both hereinafter referred to as nonreturnables) in
the beverage container market is not the result of producer whim or con-
sumer irrationality, but, we believe, of fundamental economic forces.
Foremost among these is the growing value of time to consumers, which has
made the full price of returnables (that is, inclusive of nonpecuniary
but real costs such as the time and inconvenience associated with trans-
porting empty containers from the home to the retailer) greater than that
of nonreturnables for an increasing number of consumers.
Changing supply conditions, which have tended to raise the relative
cost of returnables to nonreturnables over time, have also contributed
to the growing market share of nonreturnables. The technology of returnables
is relatively labor-intensive compared to nonreturnables, because o ** greater
handling requirements and the need to transport the retunable from the
retail outlet to the bottler. As a consequence, increasiig wage rates over
time have increased the cost of returnables relative to nonreturnab.Les,
leading consumers to substitute tovard nonreturnables. Similarly, rising
rental values over time have increased the cost of allocating space in
retail outlets to the collection of returnables, which in turn has "aised
the relative price of returnables and induced consumers to substitute toward
nonreturnables. Finally, the decline in trippage rates over time has
increased the relative cost of returnables, again lending to a consumer
shift toward nonreturnables.
In sum, the consumer preference for nonreturnables reflected in
their rapid growth over the yearn would appear to have thu same economic
-------
demand and supply basis, and hence the same presumptive legitimacy, as
consumer preference for any other product. This being so, a tax on non-
returnables, whether a refundable tax as in mandatory deposit legislation
or an explicit ta^c as in product charge legislation, cannot escape
scrutiny on the ground that it is simply designed to nudge the consumer
away from an activity which he engages in because he is irrational or has
been brainwashed by producers.
The size of the tax is obviously an important consideration in appraising
__its desirability. We shall present calculations of its size based on assump-
tions that Dr. Nordhaus, a member of the Council of Economic Advii.ers,
2
regards as reasonable. These assumptions are (l) the marginal trippaf.e
rate is 5 (i.e., the probability a container is returned is .8); (2) the
lav. imposes a 5 cents mandatory deposit; (3) this deposit causes half the
present users of nonreturnables to switch to returnables; and (M the
retail price of a nonreturnable is 3 cents more than an equivalent size
returnable (net of the 5 cents deposit).
The total number of nonreturnable containers (bottles and cans) for
beer and soft drinks was about 66 billion in 1976. Hence, if mandatory
deposit legislation had been in force then, the assumption of a 50 percent
switch to returnables would imply that 33 billion nonreturnables would have
been sold in 1976. With a 5 cents deposit and an assumed probability of
return of .8 (from the assumed trippage rate of 5), this yields an effective
1. For further evidence on this point, set1 our rtatcnient to this CoiiriiLtt1
of October 19, 1977, pp. P-OO.
2. See letter of October 31, 1977, to Richard A. Fosner from William D.
Nonlhau.., ]>. 1.
-------
tax on the purchase of 33 billion nonreturnables of $1 billion. This
tax is comprised of two elements: a tax of 5 cents per container on the
20 percent of nonreturnables that are not returned, and an average tax
of 2.5 cents on the 80 percent of nonreturnables that are returned.
To this $1 billion tax must be added the tax effect of a mandatory
deposit lav on the 33 billion additional returnahles that are purchased as
a result of the assumed 50 percent switch from nonreturnables to returnablea.
For this group the tax is $396 million, composed of a 1 cent, Ux on the 80
l!
percent returned and a 2 cents tax on the 20 percent not returned.
In sum, ve estimate that mandatory deposit legislation, hcd it been
in effect in 1976, would have imposed on the American consumer a tax of nt
least $1.^ billion. We say "at least" because we have utilizec assumptions
deemed reasonable "by a member of tlie Council of Economic Advisers who favors
mandatory deposit legislation, and we believe he has made assumptions unduJy
favorable to such legislation. We suspect the annual economic losses to
consumers of beverages from mandatory deposit legislation woulc exceed the
3. The 2.5 cents is the average inconvenience cost to persons returning
the "nonreturnables." It is derived from the assumptions that (l) persons
with inconvenience or other pecuniary and nonpecuniary costs of return
that exceed 5 cents will not return the container because their loss is
then limited to 5 cents and (2) there is a uniform distributior of costs
of return in the 0 to 5 cents interval. Obviously, if some perons with
return costs in excess of 5 cents returned nonreturnables, the 2.5 cents
figure vould be higher, making the tax on nonreturnables greater than $1 billion.
U. The 2 cents figure is derived from the assumption that a ronreturnable
costs the consumer on average 3 cents more than a returnable, not the 5 cmt--, deposit,
and hence that a container not returned costs 2 cents more than what person;-
who switch to returnables in response to the passage of the lav, were paying
for a beverage prior to passage. The 1 cent figure is ba:;ed on the fart, tint
persons switching to returnable^ and returning them are paying (including tin
cost of return) between 0 and 0 cents more than they were pnyirg for nonreturn-
ables prior to the law. Again the assumption of a uniform distribution of
these costs yields an average cost of return of 1 cent.
-------
$1.1| "billion estimate that we have made on the basis of his assumptions.
Moreover, the losses vould tend to be greater in future years because of
the growth in beverage consumption.
Are there offsetting benefits? We have never seen an attempt to
quantify them using the empirical methods of contemporary economicr.. The
main benefit would appear to lie in the area of ljtter reduction. Whether
a 5 cents mandatory deposit lav would reduce the social costs of litter
by an amount deemed sufficient to of feet a tax of at least $l..u billion
is an unanswerable question on the basis of existinr studies of the litter
problem. And even if there were basis for confidence that a mandatory
deposit law would have this impact on litter, it would be necessary to
consider alternative methods of litter reduction which might be cheaper,
such as adding trash cans or beefing up litter enforcement—rneu.ods that
would have the additional advantage of dealing with all sorts of litter
rather than just bottles and cans.
Many proponents of mandatory deposit legislation base their support
for it on alleged energy savings that it would yield. As explained in our
Statement to this Committee of October 19, ve do not believe that the alleged
energy savings, even if realized^ would constitute a genuine social benefit.
Here ve make an additional point: there may be no energy savings, but
instead an increase in energy consumption, as a result of mandatory deposit
legislation. In big cities, the cost of recycling containers is likely
to be very high because of the high labor and space costs in retail grocery
5. Tho rirba/-e collection and dir.ponal externality, evm if ro-tl {-m i - me
addressed both in our October 19 Statement to this Committee ami Jii Part 11
of the jirf'.'-'nt r.tatoriont}, i ", propor.ed to bo dealt with rot by mindal ory
deposit legislation but by a product charge, discussed in Part 11 beJ ow.
-------
stores and low trippage rates. These costs may drive bottles out of
the beverage container market because of the greater profitability of
recycling aluminum cans. This will greatly increase the demand for
aluminum cans which have a much higher energy component thaji glass bottles.
This effect will be reinforced by the potentially serious enforcement
pioblem posed by mandatory deposits on aluminum (as on other) cans. An
aluminum can costs about 3 to 2 cents to produce. The deposit liw, how-
ever, offers 5 cents for the return of such a can. The predicted market
response is that people will buy up cans and may actually f,o into the
business of producing cans solely for the purpose of obtaining the mandated
5 cents price for them.
The above is not of course a complete analysis of mancatory deposit
legislation. In particular, we have not discussed what we regard as
compelling objections to a federal mandatory deposit law. These and other
points are covered in our Statement of October 19 to the Committee. We
turn now to the question of a federal product charge.
II. PRODUCT CHARGES
The basis of most discussions of proposed federal product charges is
the Hart bill (S. 128l), which, for reasons uncle.ar to us, singles out
rigid containers (mainly bottles and cans) for much harsher treatement than
any other component of the solid waste stream. Whereas the- charge for paper
and flexible packaging materials is 1.3 cents per pound, the charge for
rigid containers is .5 centr, per container. For this to be- equivalent to
the per-pound Charge on flexi bio pac kagitir material :•, H ri ,'-id container
would hiwe to weigh ;m averagi1 of 6. IS ounces, which n; rnui-h nuro thmi it
actually weigh:.. Tliir, discriminatory trontincnt of the ri|*ul co-it ,-ii h< r h;i-.
not been justified in terms of differential costs of collection and disposal.
-------
in addition, the Hart bill is riddled with arbitrary exceptions,
including such delicacies in the solid waste stream as Junked antor, and
the solid vaste produced by sewage sludge. In fact, it appears that the
proportion of solid waste actually subject to the product charge will be
substantially less than 50 percent. The exclusions are not only unjus-
tified; they are economically harmful. If there i s a f;arbap;e collect]on
and disposal externality (on which more below), it is plainly not limtcd
to the items subject to the product charge. The result of the charge will
therefore be to cause substitution away from such items, a substitution
unjustified by differences in sociaJ (external) costs.
The' precise amount of the tax on beverage containers impo'.ed by the
product charge depends on the number of containers produced each year. If
mandatory deposit legislation were also adopted, the number of containers
produced annually would be smaller than at present {puttinp, a^ide the- prob-
lem of "counterfeit" can production discussed earlier), because returnable
bottles are, of course, used more than once. But plainly we are talking
about a tax of several hundred million dollars.
The economic case for such a tax is propounded in Appendix B to the
EPA's recently issued Fourth Report to Congress on Resource Recovery and
Wast Reduction. As we shall demonstrate, Appendix B is replete with
economic errors and, from an economic standpoint, fundamentally unsound.
1. The EPA assumes that there is an externality because those who
generate solid waste do not pay for the costs of its collection and disposal.
But in areas served by private scavengers, there i;; no external it y: the
scavenger will not charge lo.::, Unn the co..t 1o In-: of i-ol li o* i nr .'U'
-------
It ts alleged that municipal garbage collection service is frequently
priced below cost (or not priced at all). This yields the farriliar syllogism:
government adopts uneconomical policies; therefore there must be more govern-
mental intervention in the economy in order to correct the incfficiencies
of those policies.
There is no reason in principle why garbage colIcction cannot be priced
efficiently, thus eliminating any solid-waste externality. If because of
the nature of government, municipal agencies are incapable of -charging cost-
based prices for garbage collection, it seems unlikely that government can
institute and administer an efficient system of product charges either.
2. The Fourth Report states (at page 89) that consumers have no
economic or market incentive to consider solid waste collecticn and di svmsfil
costs when making their purchasing decisions. This is incorrect. Even
where no charge is levied for garbage collection (or where the charge is
completely unrelated to the amount or disposal costs of garbape), the con-
sumer has a substantial incentive to avoid buying products which generate
a lot of garbage. He must store his garbage between pick-ups and he must
carry it to the point of collection. He is therefore not indifferent tc
its bulk and weight—as is evidenced by the demand for garbage compactors
and kitchen-sink "disposalls." And the growth of the suburbs find the
increase in the value of people's time have increased the consumer's incen-
tive to economize on his garbage output.
Furthermore, insofar as there is a market demand for rrcyr-l abl o g.irbafo
components, the con-umer hn.'i an incentive both to scgrt •- it r 'itnl i s> r it'1 i n.-.rl-
able component that he can i.ell. Finally, to the extent th-i! Un- ton urn i
is (or could be) charged by his garbage collection service for the cost' of
-------
collection and disposal, he has (or vould obtain) a strong incentive to
substitute products that generate less garbage as measured by the social
costs of collection and disposal.
3. Even assuming that consumers lack an adequate incentive to
economize on their production of garbage, it does not follow that a federal
excise tax on products which are thought to generate a significant fraction
of solid wastes is an economically sound solution.
To begin with, since the social costs of solid waste collection and
disposal are almost always incurred vi thin the state in which the garbage
is produced (Chicago's solid wastes aren't hauled to Nevada to be disposed
of), there ic no basis for a federal rather thnn a state product rh,irgr.
Moreover, a uniform federal charge set equal to the average social cost of
garba^-,1- col] ection and disposal throughout the U.S. will distort i ncent i ve:>,
possibly an every state, because of the regional variations in the costs of
collection and disposal (i.e., high in densely ir.habitated areas, low in
sparsely inhabited ones). In states where the true social costs of solid
waste collection and disposal were below the national average reflected in
the uniform federal charge, the charge would create economic misallocation
by overpricing products relative to their true so_l Id-waste social costs; and
in states where the social rostr, of solid waste voro below the nat ional
average, the product charge would be insufficient to correct the assumed
social underpricing of the product. There IL; no pre1 umption in economic:.
that a product charge which had r.ur-h offsets would irrpi-ove the overall
of fineno\ of re-.rvai i-e U'.<- eor"p'irr<] to 1 _-'inr no i-h'irvtj M ill
*\ii th'Tiiorr, th'jM- i '10 b. i- ,n ft noi'-r ;r,ru ii-lt- ' vr }. • litvic- ''•>'
'i rrooiu't cti'irgo i -n i1 r!'i ( i •- 'it i\< t • mi o;' .-o t, •,•<;-' I .' '•>[' t < >' \ • ,
-------
10
cay, to a tux on household garbage output (measured, for example, by the
number of garbage cane the household put out for collection each week).
Suppose (ar, is quite plausible) that the most efficient method of conservinr
the resources employed to collect and dispose of certain types of ga -bage
is the home compactor or sink disposall. A household garbage tax would
create an incentive to adopt such devices. A product charge would not, for
the household which by installing a compactor or disposall reduced fie
social costs of collecting and disposing of its garbage would still lave to
pay the same product charge (in the form of a higher price for tlie product)
as households that did not adopt these economising; methods. Much more
research is needed before it can be conceded that a product charpp i r, the
correct nethod, from an economic standpoint, of correct:np any extcrlality
that may exist.
I;. Finally, the Fourth Report argues that a product charge would not
only improve efficiency in the pricing of products which generate garbage but
also yield substantial revenues to the government. These goals—improving
efficiency and generating public revenues—are in fact incompatible. Imagine
as an extreme case that the charge was so effective in shift ing consumption
to products and packages "that are cheap and easy to dispose of, and hence
would not be subject to the charge or would be taxed at a low rate, that the
tax "base shrank dramatically; then the tax would be a success from the stand-
point of altering the allocation of resources but it woulc generate little
or no revenue. Imagine ut the othrr ext reme that the tax had little or no
effect on patterns of production and corr.urv.ption, porh'ipi. brr.-m >c tit: co t<
of substituting products yielding lei>s or Jor.s coi.tjy ^olJd wa-.tt- w. it-
prohibitive; then the tax would gcm-rulo substantial revt-nu*1.., li|it it would
-------
11
be a failure in terms of the environmental purpose of the product charge
or tax which is to alter production and consumption in order to reduce
the social costs of solid waste. In sum, the success of the charge in
raising revenue would be a measure of its failure from the standpoint of
environmental policy.
CONCLUSION
A federal solid waste product charge cannot be justified on economic
grounds in the present state of knowledge, whether considered by itself
or as a supplement to a federal mandatory deposit law—for such a law is also
unjustifiable economically on the basis of present Knowledge. Considered
together, these measures involve a $2 billion or more add it ion to
American consumers' annual tax burden. Excise taxes are normally considered
a regressive and disfavored form of taxation. A $2 billion addition to
existing federal excise taxes cannot be considered a trivial alteration
in the public finance of the nation. We consider it regrettable, indeed
shocking, that such a measure can be seriously proposed without a responsible
effort to estimate costs and benefits and evaluate alternatives, an effort
not made to date.
-------
University of fbinro I,-iv Tcliool
1111 Tvi^l COth SI -cot
ChKMf',0, 1 1 1 inoi:, MJij'ii'
Education:
Occupation
RICIIABD A. POENER
Cnrrinil-an Vitne
A.B., Yale College, 1959, su: Tin cur,
laudc; LL.H., Iiarvird Lav ".clool, 1962
inirna cum laude and Fay Di n} OT.U (fii'-,t
in class), President, harv u d LJ.W Hc\:c
Lav Clerk to "r. Ju-ticc '.'ill inn J.
Brcnnan, Jr. , U.S. faprerc Co art
Other Activities.
Profosi.ion il Ilenberr.b
Senior Rese.ircfi Ar.noc-. Jite , ::it_ona3
Bureau of Economic [ie;,earcn (1971-^6!
Member, Senior Research St. iff, National
Bureau of Economic Research {since li,/?C }
Editor, Jjpii TK U _o f I •- C.G-.V. _^ - ' ' d i e i_
(since 1972)
Monber, President's Ta-,k Force on
Connctition raid Product i vi ,y (V^6n),
Anci'ican Hi; roiind'it ion's Co*1; ir^ion
to I.tudy tlio i TC (l')Co)
-------
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-------
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3.
It.
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WiU.TA", I'.''I'. !.) lA'IP/;,
uitr-or I'irUi
Place of Birth
Education
B.A., ]9GO Oolurtnn Cnlltx-:-
Ph.D., 19GG Coluijia L'.ii'-crsit-.'
Prc^u'.j-iL's re1 \;~la".j
Ajl-.lcy -. u-.1 :• ,'.i '!)'., 1,'- , '-^c.;
I\>p?iL-To.it at CouiTji;' L'n.'-'rniLy,
19 u 6
Mdtion:il Biax^au oT r.cono-.uc
tesearcli, Inc. Sciiior rsseajrch £>Laff, 1'J7J—
nDr^ardi Asoo-jiatu, 19G9-J973
R3£,p6
OUier Oirtcnt Affiliating
oks and I'nio-jranlis:
-------
William II.
I'aga 1\K>
Articles:
"The j:ffect of Stale Fair niployn'in. L,:r.i o;i ti'.c Lcxry.ruic !v-',itioii of
Nciv-.hite:, , "Papers and Proceeding of tlic ,'•.-!:• no in !'cr ' ;. lie
Review, Vol. LVI1, [Liy 1907.
"lie roonornics of Fair llrplo'/rent La-.T>," Jcyirr.nl of Polilu.vl IX'p-icrT.-,
Vo. 76, No. 4, l>art I, July/Aucj.ct l"yb8.
"Ftoundtablc on ttia AllocaLicTi of Pi-'soui'ccs Lo LJ: !.niorar-rv:nt,"
l\ij>ars and Procojdincj:, of Uie Arui ica;i Tc^nr v_c ^^/i", , Vol. IAX
May, 1969.
"An Economic Analysis of the Courts," Journal oC I/i ; ojid i^c- ^O.IUCG ,
Vol. XIV, Alinl 1971. (n->pirinLncfTn'l>?l>cr ?"d L,^ickT7r"!T:>~:;.
in Uio Ikxino.aics ql Crin; ar/J ^"l^J'i^^L. )
"Lar.\' and Fco'iomic;. , " Isajional IVL,'"c^n_ oJT Ilcx^io.^'i c r^^^-^tj^i - ^Js'c
Annual Ij££»£.t, Ssptenter 1'JVi.
History, ^!arc'n 1972 (with Lo./ib r,,:'.:mn.)
January 1973. (R^printfxl in ' ^ckor and I^indcs, Ki.
"Foreign Criminal Procedure: A Comrent," in Tne Economic;, c^f Crirc
cuid Punish-Tent, conference volurrc of tlic' American Enterprise
InstituLe for I;Tjblic Policy Research, 1973.
"Legality and Reality: Some Evidence on Criminal Procedure," Journal
of Legal Studies, June 197-1.
"The Private riiCorccirent of I^r.;," -Tou-rrial ot J^'^al .stivlics, Jan.
1975 (with Richard A. Posner).
"Bie Independent Judiciiiry in
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William H. I/Hides
Pago Ilircc
"Salvurs, Fjnderi;, Good Sar.\irit
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Comments of
William W. Sadd, President
GLASS PACKAGING INSTITUTE
1800 K Street, NW
Washington, DC 20006
(202)872-1280
Before the
RESOURCE CONSERVATION COMMITTEE
GSA Building
Washington, DC
November 17, 1977
My name is William W. Sadd. I am the President and General Manager
of the Glass Packaging Institute (GPI), a trade association the glass
container industry.
Let me preface my remarks by saying that although GPI has substantial
reservations with the disposal or product charge concepts advanced by
the EPA staff, we are not unalterably opposed to a form of product
charge.
Our basic concern is that the product charge concept has not been
put to the test of practicality. Instead of being a pragmatic instrument
for achieving realistic and nondisruptive goals, product charge proposals
have been clothed in "principles" and laudable generalities which are
expected to alter the behavior of consumers and producers for the "social
good." I'm afraid that the further product charges stray from the
garbage dump to the ivory tower, the less sense they make.
The wide swath that product charges are supposed to sweep is illus-
trated by EPA's Fourth Report tp_ Congress or^ Resource Recovery and Haste
Reduction, which observed that "Every production and consumption activity
should bear the full social cost of the good or service W question."
That has an appealing ring to it, but it isn't very realistic because
the calculation of "social cost" is extremely complex and laden with
highly subjective judgments.
The Fourth Report also observes that "individual waste discarders
are seldom charged in proportion to their total waste contribution"
which is "not only inequitable but also inefficient." Assuming, arguendo,
the validity of this claim, local government renders many services to
the community in addition to waste disposal such as education, police,
and fire fighting services which are paid for by local taxes unrelated
to usage. Some individuals pay more taxes than others, some use more
government services than others. Taxpayers who have no children still
pay for schools. How are the costs for these services to be equitably
taxed to their users? For household waste, one solution might be to go
to an all private collection and disposal system that directly bills
users. That would take care of the "externality."
-------
-2-
Again, the Report states that for a product charge, "The primary
social benefit would be to establish a framework of economic incentives
to stimulate economically efficient waste reduction and recycling efforts
by both producers and consumers." That, too, sounds laudable, but what
are "economically efficient waste reduction and recycling effort'-,"? And
what is government's role other than the imposition of a tax?
So, too, we have serious reservations about such statements in the
Fourth Report as "The first function is to provide an explicit financial
incentive to producers and consumers to alter their jointly determined
product and packaging decisions affecting solid waste quantities and
characteristics." Precisely how and what decisions are to be altered?
How is the consumer to respond? By purchasing less of certain products
because their cost has increased and more of other products not '.ncluded
under the charge? With what effect on solid waste?
The Report theorizes that "under full-cost pricing, consumers might
shift their purchasing more towards low-waste items (returnable containers,
reusable tableware, longer-lived durable goods) and might give more
emphasis to recycling as an alternative to disposal." Is this based on
anything more than wishful thinking?
These principles break down when applied to product charges The
Report noted that "In principle all products entering municipal waste
should be charged since all give rise to collection and disposal costs."
But practicality raises its head because of the "complexity" of dealing
with all products in the solid waste stream, so the Report product
charge proposal seems to be limited to "paper products and non-paper
packaging materials."
We suggest a more humble role for product charges rooted Tn a
realistic approach to municipal solid waste disposal and reclamation.
To GPI, the product charge design question is one of accelerating develop-
ment of resource recovery and reclamation. We are opposed to distortion
of the marketplace by excessive taxes and their attendant regulation
which are imposed by government in some sweeping effort to achieve
"social good."
We fear a calculation of "social benefits" and "social cost"." that
would reflect the bias of the regulators. We suspect that the cost of
not having packaging would be ignored. Are you prepared to include in
the "cost" equation a "credit" for product spoilage prevented by packaging?
Even if the product charge goal is set at a realistic level to
assist resource recovery and litter social questions, its design is
still fraught with complexities such as national application, preemption
over state and local law, distribution of revenues, and the base:, for
imposition of the tax. With regard to the taxable basis, the Fourth
Report appears to acknowledge that a weight-based product charge is
inappropriate for packaging. It should not be imposed on a dogmatic
"penny a pound" approach which doesn't allow for social equity. As the
Fourth Report noted, the change would weigh more heavily on lower income
groups as a percentage of annual income and be regressive.
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-3-
The concept of basing the charge on the total cost of collecting
and disposing of municipal waste is flawed, particularly if all products
are not included and if their separate "disposal" characteristics and
costs are not analyzed. Double taxation would probably result if product
charges were applied to householders and apartment dwellers using private
waste hauling.
Product charges should probably reflect the relative abundance of
resources such as the plentifulness of sand used to make glass. Are thf
relative values of the products to be considered?
A recycling credit in part begs the question. Government has
traditionally been responsible for waste disposal. Has the government
done its part to assist in the recovery of resources by encouraging home
separation, investigating and funding resource recovery technology and
facilities? What "bookkeeping" methods are to be employed to determine
what is actually recycled?
Revenues from a charge should be earmarked for recycling, litter
control and associated activities. Such uses are the only justifiable
reasons for imposing the charge. How would revenues be prorated to
local governments? New York City may have much higher costs than, say,
Carson City, Nevada. A per capita basis seems questionable. An examina-
tion of various local costs and an equitable formula must be designed.
It is unlikely that federal revenue rebates can accurately reflect what
the "individual waste discarders" contribute to municipal waste so the
highly theoretical goals of the Fourth Report will probably not be
realized.
These and other concerns cannot be brushed aside on the grounds of
"complexity." Before recommending a tax, this Committee must responsibly
investigate and address such ramifications.
In view of the very limited information published to date on variou
possible approaches to the product charge idea, it is premature to
conclude whether such a charge will create the benefits that appear
possible in the concept. The real issue is whether government, industry,
and others should join together to pursue the idea more intensively. We
think the answer to that question is "Yes."
In closing, I predict that the glass container industry would
probably support a low, broad based charge on all products in the solid
waste stream which wouldn't disrupt the marketplace and wouldn't be
inflationary. It must be an alternative to deposits and designed to
provide funding to the states for resource recovery and litter reduction.
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National
League
of
Cities
1620 Eye Street, NW
Washington, D C
20006
(202)293-7310
Cable NLCITIES
STATEMENT BY
Stephen W. Burks
on behalf of the
NATIONAL LEAGUE OF CITIES
before the
RESOURCE CONSERVATION COMMITTEE
on
PRODUCT CHARGE DISPOSAL
November 17, 1977
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Let me first thank the Resource Conservation Committee for this
opportunity to speak on the issue of solid waste product charges.
The National Municipal Policy, adopted at the League's annual
business meeting, calls for the initiation of a system of disposal
charges with recycling credits. Let me expand on this general
policy statement a bit.
As a rule, the costs of municipal solid waste services are distri-
buted to all taxpayers in the community, in many cases either through
increased property taxes or through a regularly levied user charge.
The ineguitability and inefficiency of such a system is made evident
by two facts. One, consumers are disproportionately charged for
services rendered, and two, producers lack encouragement to initiate
resource conservation or waste reduction practices. A system of
disposal charges with recycling credits would address both of these
problems. Under such a system as envisioned by NLC, the virgin
material content of a product would be charged, the secondary
materials would not. Solid waste services would then be priced
in direct proportion to a product's contribution to the solid waste
stream. This would not only provide incentive to producers to use
recycled materials, it would also encourage consumers to purchase
less expensive, low waste products.
Until such a time a product charge system incorporating these elements
could be initiated, and the associated cost and administrative
methods adopted, the National League of Cities is in support of the
initiation of limited and temporary tax incentives, at the national
and state level, to encourage the recycling of solid waste materials.
-------
Under any product charge system adopted, the National League of
Cities encourages the federal government to transfer the resulting
revenues to local governments. There are two general methods by
which this could be accomplished—on a general revenue sharing
"no strings attached" basis or as a payment earmarked for solid
waste management.
We are now in the process of exploring these options in greater
detail and will be happy to submit our written recommendations to
this Committee.
In closing, solid waste management problems faced by cities today
can only be solved through an aggressive program of source reduction,
volume reduction, resource recovery, and ultimate disposal.—all of
which must be compatible with sound environmental, social,, and
economic considerations. To be a viable component of this program,
a system of solid waste product charges must also meet these same
considerations.
Thank you.
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STATEMENT
On
SOLID WASTE PRODUCT CHARGES
Before The
RESOURCE CONSERVATION COMMITTEE
Washington, D.C.
November 17, 1977
By
Judd H. Alexander
Senior Vice President
American Can Company
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1.
My name is Judd H. Alexander. I am a Senior Vice President of
the American Can Company. My company manufactures paper, packaging,
cans and plastic, and we operate recycling plants for paper, aluminum
and tin plate. We are also the designers and operators of one of
the nation's largest solid waste resource recovery systems which
handles all of the residential waste for the City of Milwaukee.
My company is not opposed to the principle of disposal charges.
However, we are concerned about the ability of the Government to
develop a disposal charge tax system and a method for the disburse-
ment of the collected funds which is not discriminatory, disruptive,
regressive and inflationary.
The recommendations from EPA staff which call for disposal
taxes for only paper and packaging materials illustrate the diffi-
culty of developing an equitable tax. These limited products were
selected for taxation not because it is fair, but oecause it is
easy.
There are only 220 paper mills and about the same number of can
and bottle plants in the U.S. The EPA planners reason that the
I.R.S. could audit payments from these facilities, but they would
never be able to collect the taxes from hundreds of thousands of
producers of textiles, toys, appliances, furniture and sundries.
And, of course, they know no way of charging for the 30% of the
waste that is organic. I find this to be particularly ironic
because this organic component, mostly lawn and garden waste, is not
generated by families who live in apartments and tenements.
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2.
It is the home owners - the middle class and the well-to-do - who
produce this significant quantity of solid waste which would be
exempted from disposal taxes under the EPA's plan.
I disagree with an important conclusion of the EPA staff which
implies less impact of the tax on our poorer citizens than on the
rich. Observations of the garbage mix coming into our Milwaukee
facility indicate that the poor generate as much or more garbage as
do the wealthy. The work of Professor William Rathje at the Univer-
sity of Arizona, analyzing Tucson's residential garbage, confirms
that the volume of garbage is measurably greater from the lower-
income households than from medium and high income households. It
may be that per capita generation of garbage doesn't vary that much
among income groups (owing to the fact that poorer families tend to
be larger), but the proposed product tax falls on the wage earner of
each household, irrespective of family size.
The garbage of the poor contains more discarded furniture and
clothing, items which well-to-do families often trade in or give to
charity while still in useful condition. The same is true of pack-
aging waste. Market research data show that it is the poor and the
lower middle class, the working people, who are the primary consumers
of such large volume packaged goods as canned vegetables, stew, soup,
pot pies, TV dinners, beer and soft drinks. On the other hand, the
waste of the higher income citizens contains more newspapers and
magazines, cast-off sporting and leisure items and other up-scale
consumer goods, many not to be taxed. Arthur D. Little's exhaustive
study, "Packaging In Perspective," reports that nearly 20% of total
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3.
U.S. disposable income is spent on food and beverages (for poorer
families, the percentage is much higher) and that these "necessities"
account for nearly half of the use of all packaging materials. Yet,
it is on packaging that the proposed product tax falls more heavily,
and thus on those who rely most on packaging in their daily lives -
our less wealthy citizens. Users of canned products suffer particu-
larly because the proposed tax rate on cans is $95 a ton, triple the
rate of other packaging materials.
Studies done for EPA by Franklin and Associates show that 39%
of municipal solid waste orginates from commercial, as opposed to
residential sources. Paper and packaging are major components of
this commercial-derived segment of solid waste. The Franklin studies
also show that fully 90% of commercial waste is hauled by private
carters at the expense of the commercial establishments. Thus, a
large share of the cost of commercial waste is already "internalized,"
so to tax packaging and paper products in commercial waste at the
national average cost of municipal waste handling would amount to
double charging these users for this service.
The same threat of double charging confronts our residential
tax payers. About 50% of the communities in our country charge
directly for garbage pick up service, and most farmers manage their
own pick up and disposal. Although I admire the high rhetoric of
EPA staffers and legislative leaders who call for the internaliza-
tion of the cost of waste, I wonder if they really intend to charge
this important segment of our population twice.
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4.
Similar problems face government planners in the disbursement
of the collected funds. If the tax is to be based on the national
average cost, it follows that those citizens living in areas where
the cost for this service is below the national average will begin
to subsidize their brethern in the more expensive areas. The cost
of waste collection, a function of time, distance, labor rates and
congestion as well as volume, is substantially greater in urban
areas than in rural communities. Disposal costs vary by land value
and the proximity of oceans, lakes, wet lands, and other towns as
well as by volume and congestion. The costs for a major city may be
five to ten times greater than that for rural communities.
We cannot conceive of a federally organized system for interna-
lizing the cost of solid waste which does not result in substantial
transfer of tax service money from the country to the cities. If
this is the objective, it seems it could be fulfilled in a less
regressive manner by the use of general revenue funds rather than
through disposal charges.
In the Fourth Report to Congress the authors of the EPA solid
waste plan have expressed concern about the inequity of present
methods of funding solid waste. Yet, in their proposal, they are
prepared to sacrific equity in favor of administrative expediency by
taxing only selected items in the waste. The inconsistency of these
positions is difficult to follow.
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INFLATION POTENTIAL
The direct product taxes payable by my company on our paper and
packaging products under the plan outlined by the EPA would be
approximately $100 million per year. Since this amount of money
exceeds the profit my company makes on these products, it seems that
we would have little choice. The cost of these charges would have
to be passed through to our customers and by them to wholesalers,
retailers and consumers.
Two conditions support the probability of that tax reaching the
consumer at a higher level than that at which it was levied. First,
there is the profit multiplier effect. The higher cost at the
beginning of the chain triggers a mark-up at each succeeding level
as those business people seek to maintain their gross margins on
their total costs. Second, those of us who operate mills or package
converting plants sell our products by the carload, the ton, the
thousand, or the gross; and our customers, the packager, sells by
the case. It is relatively easy for us to pass through the $30 a
ton tax in a precise amount because of our bulk sales. The consumer,
however, does not buy her packaged products by the ton or the gross;
she buys most packaged items one or two at a time. Since most
individual packages weigh between one half and two ounces, the
internalized cost at $30 a ton is l/5th of 1
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6.
The EPA is ambivalent on this point. On one hand they suggest
that competition will prevent these costs from reaching the consumer.
On the other hand, they talk of the need for the consumer to recognize
the full social cost of her purchase decisions. To do this, she
must see the costs of the tax reflected in the price of goods.
WASTE REDUCTION
The tax as proposed by the EPA has two other objectives. It is
supposed to encourage (1) a reduction in the quantity of waste
produced by discouraging consumption, and (2) an increase in re-
cycling. The degree to which either objective would be reached and
the cost of reaching that point is open to conjecture.
As a financial incentive (or dis-incentive) - The presumption
is that if the external costs of solid waste are charged to the
producers, and hence to individual consumers through retail prices,
both consumers and purchasers will make decisions which result in
reduced generation of solid waste. This presumption is untested,
but EPA claims that two of its studies (by Research Triangle Institute)
indicate "that a product charge set at a level approximating average
waste collection and disposal costs would have significa.it: impacts
on the post-consumer solid waste stream." (Appendix B, Fourth Report).
Neither study is based on scientific data or consumer behavioral
sampling; both derive conclusions on assumptions and estimates. The
important observation here is that these EPA studies attribute
almost all of the expected achievement in source reduction to resource
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7.
recovery or recycling, and very little to the "incentive" function.
Presumably, resource recovery conversion can be accomplished by
conventional funding for those communities where it is applicable
without resorting to this complex and onerous tax.
EPA's estimate of the potential for a price-induced wasite
reduction program is 2,476,000 tons a year (Tables B4 and B5,
Appendix B, Fourth Report to Congress). This is 1.8% of oui current
garbage stream. For a city due to run out of landfill in fjve
years, a 1.8% reduction in waste will extend the life of the' land-
fill by oie month. It will be important to determine if the1 saving
justifies the burden of the tax.
To achieve this saving level, the required annual reduction,
per capita, in residential solid waste would be 14 pounds (2,476,000
tons x 20DO Ibs./ton—215 million people x 61% residential • 14
Ibs./person). This saving seems relatively insignificant when
measured against other figures reported in the EPA Fourth Report to
Congress. They show that the average EPA headquarter employee
generates 330 pounds of waste per year (p.39). At tlis rate, each
new employee hired to administer the tax program wo aid wipe out the
entire waste reduction expected to be achieved by tie sacrifice of
25 private citizens.
The potential for tax-induced waste reduction is difficult to
target. E have participated in several industry stady teams which
have tried to determine the effect. Always, the projections of the
economists are more generous and more precise than are those of the
experienced marketing and production specialists in the particular
-------
industry involved. The confusion and disagreements spring from two
factors: the complexity of the problem being analyzed and the un-
predictable consumer response.
The consumer reaction to convenience has been well demonstrated.
An example is the rapid growth of canned beer and soft drinks in
spite of the higher price assigned to this package configuration in
many brands. In fact, many marketers have recognized the strength
of this preference by assigning a higher gross margin to canned
beverages than to those packaged in refiliable bottles even though
the handling expense is less.
No one knows for sure the price increase required to force
consumer shifts away from convenience or to change consumer product
preferences. For most of the taxed products, the tax represents an
insignificant per cent of the price open to purchase consideration
by the consumer. The zeal to reduce the amount of garbage produced
must be tempered by the cost this reduction throws on other components
of society. Again, I will use beverage containers as the example.
Currently, the nation disposes of 1 1/2 million tons of beverage
cans and 6 million tons of beverage bottles each year. If they were
all eliminated from our waste (a practical impossibility), the
savings to our fixed-cost intensive collection and disposal system
would be about $120 million a year. On the other hand, the cost of
the beverages would rise by as much as $1.2 billion according to a
study made by the University of Pennsylvania's Wharton School of
Finance and their School of Civil and Urban Engineering. We would
spend 10 times as much extra on beverages as we would save on solid
waste. What a spend-thrift way to attack the garbage problem.
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As detailed earlier, the $30 a ton tax on most consumer products
packaged in paper and plastic is less than 1/5 of It, hardly enough
to be a decision maker for consumer products that retail for 50C or
more. Even with reading materials, the tax is often insignificant.
A one pound magazine sells for $1.00 and produces for the publisher
gross advertising revenue of another $.65 per copy. The tax on one
pound of paper at $30 a ton is 1.5C, or less than 1% of a total
revenue for the magazine.
Packaging, too, has a function value quotient that is far
higher than its raw material value, to say nothing of its modest
disposal cost. For my example here, let me use a toothpaste tube.
The newest tubes are made from laminations of plastic, paper and
foil and they are much lighter than earlier metal toothpaste tubes.
We sell the tubes by a per thousand price which figures out to about
$2 per pound, or $4,000 per ton. The toothpaste maker adds another
$700 (per ton of tubes) in capital, labor and transportation in
packing the tubes. Finally the retailer spends about $300 (per ton
of tubes) in distributing the product.
The true cost of the packaging function in this case is $5,000
per ton of tubes. The $30 a ton Disposal cost is O.f* -e the
functional value. The same exercise applied to most other packaged
products will illustrate a base functional value of at least $1,000
per ton, and an average of close to $1,500 a ton. The $30 a tton
tax, therefore, does not provide a significant additional incentive
for source reduction.
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10.
This is especially true in light of already existing stimuli to
reduce packaging based on the cost of the material itself. Most
packaging decisions are made by professional purchasing agents who
have a strong economic orientation. There is a constant drive to
eliminate or reduce packaging in cases where service is not sacrificed.
In the past 20 years vegetable cans have been reduced in steel by
20% and in tin use by 50%. The standard ice cream carton has been
reduced in density, caliper, square inches, wax and ink, so that it
is 30% lighter than two decades ago. My company has recently started
marketing a beer can which uses 25% less metal than those in common
use two years ago. And we have introduced a new paper towel which
uses 56% less fiber per case than it predecessor. Plastic has
replaced glass for bleach bottles and fiber has replaced metal for
motor oil. The point is that these changes go on all the time and
they are accomplished without help from tax disincentives.
Solid waste is not the only problem in our society, nor is it
the most costly. The nation spends between $1 billion and SI.5
billion to collect and dispose of packaging each year. But pack-
aging helps hold down the cost of pilferage (estimated at $4 billion
per year), shipping damage (anoth^" $4 billion) and thr uncounted
billions in food waste. Packaging has helped make possible prepared
foods and IDW cost fast food restaurants (both admittedly solid waste
intensive), but these developments, in turn, have reduced, in one
generation, the time America's home makers spend in meal preparation
by two thirds. What is the price of time? What is the value of
family enrichment and freedom from drudgery? Is it worth a few
pennies in solid waste cost?
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11.
Can we substitute administrative judgment for that of the
marketplace in determining the viability in our society of packaging
products? If we do, should not this judgment be made from a view-
point broader than that of solid waste costs?
I was pleased to see that the EPA in their recommendation
recognized the competition that exists between containers made from
metal, plastic and glass, and chose to tax all three at the same
rate ($.005 per container). They did not extend the same wisdom to
other competitive products - paperboard and plastic packaging, for
example.
I will give one example of the cross purpose involved in such a
view. The competitive packages for deluxe hamburger sandwiches are
paperboard cartons and foam plastic boxes. The plastic has much
greater crush resistance and greater bulk, but it is only hali the
weight and thus would pay half the tax. This seems to be counter to
the stated objectives of the recommendation. Is it not better to
let the marketplace resolve these complexities rather than trying to
substitute administrative judgment?
In EPA1s zeal to keep the tax on competitive containers equal
regardless of weight/ which has merit, they have ignored both size
and value/ apparently for reasons or adininistrative expediency. The
ludicrous result is that the proposed tax is the same for a 12-
tablet aspirin tin as it is for a five gallon paint can. And the tax
is the same for a jar of caviar as it is for a can of pinto beians,
with no consideration for the retail value of the products or the
economic status of their purchasers.
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12.
The EPA states that the tax is expected to raise $2 billion per
year when fully operational. The 85 billion cans which make up less
than 4% of the collectable waste by weight would produce $400 million,
or about 20% of the anticipated revenue. The explanation for this
inequity is administrative expediency.
I wish you could travel with me to Milwaukee. There you would
see the waste of 700,000 people traveling slowly up a conveyor six
foot wide and one foot deep. A few yards away is another, much
narrower, conveyor carrying away the cans extracted from the garbage.
This conveyor is moving faster but the cans appear in single file
about 10 inches apart. This illustrates far more graphically than
statistics that taxing cans for 20% of the nation's waste costs is
unjust.
I suppose this disproportionate penalty stems from the animus
many regulators and environmentalists feel toward beverage cans.
But what about food containers? Are peaches in winter bad for
society? Is frozen juice concentrate, so important to nutritional
health of urban masses, to be penalized? Will it be government
policy to favor retortable pouches over sanitary cans, in spite of
the record for sanitation and integrity compiled by the latter,
simply to cater to garbage reduction objectives?
Many packaged products actually reduce urban waste. The municipal
garbage per serving for fresh corn, peas, beans, and orange juice is
eight times greater than that, left behind by the canned or frozen
product, and the fresh product in a major city is double the price,
even in summer. If all New Yorkers were to eat their peas fresh.
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13.
the City's annual garbage pile would grow by 24,000 tons, its
citizens would pay $21 million more for their peas, and the 13PA
disposal tax revenue would decline since it does not tax food waste.
Is this tax really designed to internalize the cost of solid waste?
.... or is it merely a vehicle for material management, or another
attempt to use a social issue as an excuse to expand the tax base?
This tax proposes that food cans be placed at a $4.50 per
thousand disadvantage to many of the alternate packages with which
it competes. My company makes frozen food packages and retortabl.e
pouches as well as cans. They do compete effectively one with the
other and they could do so bearing the "full social cost of waste
collection and disposal," but not when these costs are deterriinecl
arbitrarily for administrative expediency which violates sound
economic considerations.
Surprisingly, the portion of the tax proposal which may receive
the greatest amount of support from the industries involved ].s the
tax on containers for soft drinks and beer. The tax is perceived as
the lesser of two evils. It would be less deleterious to the: health
of the industry and less costly to the consumers served than would
the EPA alternative propsal for mandatory deposits on ail beverage
containers.
It would be inapposite for the EPA to recommend a solid waste
tax on only beverage containers, especially since they represent a
relatively small percentage of total waste and are consumed primarily
by lower income segments of our society. However, there is a separate
segment of the garbage problem in which beverage containers play a
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14.
more prominent role — litter. Cans and bottles make up a highly
visable 15 to 25% of roadside litter, and a smaller portion of
urban litter which is the greater part of the problem. A special
national litter assessment on these containers would make more
sense than a disposal tax. Since the states currently spend $47
million on litter control, and an estimated additional $235 million
is spent by local governments, taxing beverage containers their fair
share of these litter costs would raise $42 million and is entirely
feasible. This would be a tax of about 6/100 cents per container
on the 48 billion beverage cans and the 20 billion beverage bottles
to be produced this year. In my view, though, such a tax would be
more effective if it were administered by the states rather than
the Federal government, as demonstrated by actions taken in Washington
and California.
1 expect broad industry support could be gained for such a
measure if adopted by the states, and I suspect other industries
would come forward to accept their fair share of such an assessment.
The alternative method, beverage container deposits, is unavailable
as a solution for the other 80% of litter, either on a national scale
or in individual states.
May I offer one additional caution. Even this tax would fall
on the innocent as well as the guilty. Ninety three percent of all
canned beverages are consumed indoors and are not even candidates
for litter. The most generous professional estimate, an RTI study
done for EPA, suggests that 3.8% of beverage cans are littered. The
tax would internalize the cost of beverage litter to all beverage
consumers, not just those who litter.
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15.
The questionnaire announcing this hearing asked what additional
government studies are needed. The greatest element of missing data
relates to the true cost of alternative source reduction programs.
For example, previous studies done for the EPA on the effect of
beverage deposit legislation on prices ignored costs which may well
reappear on other products. They ignored the tendency for both
fillers and retailers to subsidize the cost of refillable bottles,
and they ignored the price impact of lessened competition between
materials, containers, and fillers.
Let me use one example here. It is well known that food
retailers make a minimum profit, about 1% on sales. To achieve
this, thei average a gross profit of 17.4%, with the1 difference
covered by labor, rent, inventory, energy, taxes, insurance, etc.
The retailer gross profit on the 68 billion containers of beer and
soft drinks currently sold is estimated at $3 billion, of which more
than $2.8 billion is used to service overhead. Bec^LUse the return
to the store of disorganized, dirty containers will more than double
the cost of storage space, labor, pilferage, fraud and sanitation,
and produce a lesser increase in inventory investment (5* per
container, filled and empty), it ^ f^."sih;F to ^n.^i'-1- *his
retailer cost at something over $2.5 billion. The EPA studies
suggest that this extra cost will not show up in price increases on
beverages. Where does it go, then? Is it buried in the prices
charged for meat, potatoes, salt, lettuce and other foodstuffs? An
analysis of these hidden costs will be an important prerequisite to
any recommendation for legislative action. Solid waste cost savings
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16.
may be only a fraction of the extra costs loaded onto the distribu-
tion system, and hence onto all consumers, an unwise trade-off
indeed.
ENCOURAGEMENT OF RECYCLING
The other stated objective of the disposal tax is to encourage
the use of recycled materials. Although the objective is noble, the
effectiveness of the method selected is questionable. The authors
demonstrate limited understanding of the source, application and
economics of recycled materials.
Many recyclers feel that the expansion of demand for recycling
encouraged by the tax disincentive, without an expansion of the
supply of clean, homogeneous collectables, will force the price of
the waste to rise to meet the level of the tax, with a resulting
inflationary effect. This has been demonstrated by the recent
efforts of the Federal Energy Administration to encourage the use of
recovered newspapers for the manufacture of insulation. The program
has begun to work and the price of news has risen by $30 a ton in
the last few months. Ironically, this Federally induced demand has
already wiped out the projected advantage the solid wai^e bill was
expected to offer the users of recycled product.
Another complication of the proposal is the limited sources of
recoverable fiber (essentially industrial clippings and publisher
overruns, old corrugated, mixed office waste, and newspapers), arid
the multiple use points. The major recycler of news print is the
boxboard industry, along with some use in tissue, the emerging
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17.
insulation application and the reuse for newspapers themselves (only
about 3% of newspapers are made from recycled stock). In a way,
newspaper s are also recycled when they are used to produce energy in
a Milwaukee-like operation or when they receive a second use to wrap
the garbage, start the fireplace, line the bird cage or train the
puppy, but these valuable applications go unrecognized by the EPA's
disincentive tax. A program designed to encourage more recycled
newspapers will quickly begin to rob from other markets.
I find it curious that the proposed tax gives no credit for
paper recycled into energy in a land where energy is scarcer and
more finite than fiber. Once again, this is an argument against the
wisdom of garbage people playing a too dominant role in the deter-
mination of national policy.
There are other examples where the stimulation for greater
recycled use is ineffectual. My company is one of the nation's
largest manufactures of cartons. The predominant share of our
cartons are made from virgin paper. There are several reasons for
this. A large portion of the cartons we make are used in direct
contact with moist foods such as meat, dairy products, beverages and
frozen foods. We are able to guarantee a higher level of purity
than would be possible with cartons made from post consumer waste.
Second, more than 60% of our cartons are made from paperboard
which is between 10/1000 and 16/1000 of an inch in thickness. The
minimum practical thickness for recycled paperboard (made by a
different process) is 20/1000 of an inch.
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18.
Third, our lightweight cartons are formed on high speed equip-
ment in our customers' plants. Experience shows more dependable
performance and greater efficiency is produced from virgin fiber
cartons. A $30 a ton tax would not overcome these advantages, but
it would add to the price of our products.
There are some other factors, too/ of national policy interest.
Recycled cartons presently use only about half the energy of virgin
cartons. However, one third of the energy required to make the
virgin product is self-generated from its own by-products. Then, if
you add the potential for energy recovery by using the cartons for
fuel in a Milwaukee-like system, the virgin cartons use less energy,
not more.
We manufacture part of the virgin paperboard used for our cup
and carton making operations. Our mill is located in a remote,
rural county in western Alabama. We are the principle employer in
the county. We are the largest buyer of agricultural products
(trees) in the county. Our $20 million paperboard machines are not
equipped to run waste paper, even if dependable supplies could be
found. All the waste paper produced in the county woula run that
mill for about 20 minutes a year. ant. ;JG^_I cj-og -LCU.-L imj- ..a. cations of
government programs designed to drive business away from rural mills
and into city mills located near the source of waste should receive
careful study.
My company does use recycled paperboard in some of our products.
It has many excellent applications and it serves half the paperboard
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19.
packaging market. Certainly, where dependable supplies of clean
recycled fiber can be maintained at competitive prices, its expanded
use is bo be encouraged. We question the $30 a ton tax proposal,
however, because it will raise the price levels of both recycled and
virgin paperboard products while achieving a minimal increase in the
use of post consumer waste.
In the case of plastics, much of which is made from petroleum
derivatives, the best form of recycling may be into energy. Many
plastics have a BTU value 1-1/3 times as great as coal, and their
use as ei fossil fuel substitute avoids the need to classify, clean,
and transport for conventional recycling. The EPA tax offers no
encouraqement for this most efficient use.
The application of the EPA tax to metal recycling is less
clear. Where the tax would fall on nearly 100% of paper production,
it would apply to only about 5% of the steel consumed (that used for
cans) and a slightly higher proportion of total aluminum. The
percent of metal recycled is increasing but it remains important to
seek the best sources of scrap and to use them for the most practical
applications. Under the EPA proposal, recovered cans used to make
reinforcing rods would receive no credit since the ro^& ^r^ not a
taxed item. On the other hand, perhaps, since well over 5% of steel
is made from post consumer waste, and only 5% is used for cans,
steelmakers could claim a complete exemption from the tax. It is an
example of the difficulties of administrating a program which is
inherently arbitrary and selective.
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20.
Recycling is good because it extends our finite resources, but
it must be done economically to avoid massive inflation. We cannot
encourage artifically priced recycling without absorbing the cost in
higher prices for the manufactured product. If we make automobiles
from recycled cans collected at $1100 a ton rather than virgin pig
iron at $140 a ton, the price of the automobile should increase by
$1000 or more.
In Milwaukee, we collect a ton of shredded steel cans and load
them in a railroad car for $23.50. The true cost to get cans back
through supermarkets with a deposit system may be as high as $1100
per ton. If we are willing to spend $1100 a ton to recover iron,
virgin iron which makes up 5% of the earth's crust is a near limit-
less resource.
EPA's proposal to encourage recycling works only as a cost
incentive to expand the market. But, there are reall> four factors
required to make recycling successful. You need markets, supplies,
facilities and economics. I do not believe you can achieve signif-
icant recycling by dealing only on the market side. Resource
recovery has more promise for expanding recycling economically than
does the EPA1s tax proposal.
RESOURCE RECOVERY
Resource Recovery systems hold the additional promise of offer-
ing viable, long term solutions to the disposal problems of our
ma]or urban areas. At the moment, the economics are questionable
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21.
because Resource Recovery is required to compete with the cheapest
alternatives, however short term. If the Federal government can
find a way to assist the cities in funding the capital cost of these
facilities, many of the objectives of the EPA recommendation will be
fulfilled without the administrative and disruptive consequences of
the tax scheme,
The National Center for Resource Recovery has estimated that
enough facilities of the Milwaukee type to serve half the popula-
tion, the urban half, could be built for $3.8 billion. Inflation
will increase that figure over the 10 years required to complete
construction, but once financed, the operational cost, in a congested
city, will be cheaper than landfill and inflation resistant as the
value of recovered materials continues to increase in concert, with
energy costs and advancing technologies. In constant dollars, the
total capital need over 10 years, much of which could be funded
locally, is $380 million a year ($1.77 per capita), an amount far
lower than the proposed tax. A modern Resource Recovery facility
will cost only about one quarter as much as the sewage treatment
plants required to serve the same city.
Solid waste pick-up and disporal rema in^ a re.1 at iv< •>"' \> inexpen-
sive and not inappropriate public service. The per capita annual
cost for our 136 million tons of municipal waste today is less than
$19, and about 44% of that is already paid privately.
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22.
RECOMMENDATION
The cost of collecting and handling waste has always been a
local prerogative. It must remain that way for greatest efficiency
and cost control. The development of capital to assist the cities
in building Resource Recovery systems is a reasonable public policy
objective.
The fairest way to produce this money is through the use Of
general revenue. If a solid waste tax is perceived necessary, it
should meet the following criteria to avoid discrimination, regression,
disruption and inflation.
1. Limited in time and rate to the achievement of a
set capital objective.
2. Applied to all products in the municipal waste stream.
3. Based on the value of the products in the waste
rather than on their weight or bulk.
4. Applied at a level as close to the consumer as
is administratively possible, to minimize the
multiplier effect.
Such a tax should have the single objective of funding solid
waste recovery facilities for our urban centers. And it should remove
the temptation for economic disruption and bureaucratic manipulation
of our materials, distribution, and public information policies by the
solid waste authorities.
All good tax legislation has a single objective. The EPA
recommendation has confused the issue by attempting to service three
objectives with one tax: revenue generation, quantity reduction and
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23.
increased recycling. In the end, however, their own figures dem-
onstrate that the goal of expanded resource recovery holds the
greatest promise for effective waste management. They show that
97% of their anticipated waste reduction will come from resource
recovery, not tax disincentives. And, it is obvious that the expan-
sion of Resource Recovery facilities supplying consistent quantities
of homogeneous materials will offer less disruptive opportunities
for the increased use of recycled materials than will tax penalities
on virgin products.
Thank you for this opportunity to offer my company's views on
this important issue.
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TIRE RETREADING INSTITUTE
A Division of
NATIONAL TiriE DEALERS and RETREADERS Association. Inc.
131,3 L Street, N W. • Washington, D.C. gOOOS
Area Code (202; 638-6650
TESTIMONY E2FORE RESOURCE CONSERVATION COMMITTEE
IT NOVEMBER 1977
AM THE DIRECTOR OF TRI. TRI AMD I.'TDRA REPRESS;:'!' OVITS i',000 i:."DL?3;DENT
BUSINESSES IN THE tniTEB STATES AilD OTHER COUK-RIES IK i'HIS Hai£?HESE;
ABOUT hO% OF THDSE BUSi:S)SSES EXIST TO REC/CLE AUTOMOTIVE AIID Tiv,"'<
TIRES THROUGH RtTRK-JUIIG. EACH IEAP Tj'E TIRE RE'^'rEAMIIS IIIDUSTRY,
RECYCLES MORE THAU '-'} ::ILLIOH TTRES /u:D It: 'JH" 1'SOCESS SAVES APPRO^l: 14TELY
'lOO MILLION GALLONS 0? OIL E.JUIVALE7T. TK2 TIRE RLTR?7iDi::G IKDUSTPY IS
A RECYCIIKG IliDUSTS ; ' 'E MORE OUR 3uSi;[E3S I'VDOVES, THi. MO'-iE I!/, I'ERIAL
THAT IS RECYCLED.
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INTERESTED IN ALL POLICY OPTIONS WHICH WILL PROMOTE, OH ECONOMICALLY AND
ADMINISTRATIVELY VIABLE BASES, THE FLO'.. OF QUALITY S1C03DARY MATERIALS
TKT ARE VITAL TO OUR OPERATIONS, AS WELL AS THOSE OF OTHER RECYCLERS.
TIFES ARE OFTEN OVERLOOKED AS A SIGNIFICANT COMPONENT OF THE WASTE
STBEAM; YET EACH YEAR OUR COUNTRY DISCARDS ABOUT 200 MILLION TIRES. 7EES3
TIRES, COMPOSED ALMOST ifflOLLY OF CRUDE OIL PRODUCTS, REPRESENT A TRE!ENDOUS
ENERGY, AS WELL AS ENVIRONMENTAL AND MATERIALS INVESTMENT. THI3 INVESTMENT
CAN BE RECIAIMED BEST THROUGH RETREADING. WHILE A HUMBES OF TIRE RECYCLING
METHODS EXIST, NONE COME CLOSE TO MATCHING RETREADING IN RECLAMING
ENERGY, AND MATERIALS AIID IN MINIMIZING ENVIRONMENTAL EFFLUENTS. RETREADING
UTILIZES THE BEST I.ETHOD OF RECYCLING—DIRECT REUSE. IH RETREADING THE
TIRE CASING, WHICH REPRESENTS 60-75$ OF THE AVERAGE TIRE, IS DIRECTLY
REUSED. EACH TIME A PL'TREADED TIRE TS USED IK3TEAD OF ONE MADE OF
VIRGIN MATERIALS, ABOUT FIVE CALLOUS OF CRUDE OIL EQUIVALENT IS SAVED
FOR THE CASE OF A PASSENGER CAR TIRE, AND TWENTY GALLONS IS SAVED FOR A
TRUCK TIRE. ALL THE ENVIRONMENTAL POLLUTANTS ENTAILED IH THE MANUFACTURE
OF A VIRGIN TIRE CASING ARE ELIMINATED IN THE RETREADING CASE.
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FOR MANY YEARS THE PRIVATE SECTOR EAS I'AINTAINED A T±RE P-;CYCL1IIC SYSTEM,
BASED Oil SUPPLY AND DC'JUID, THAT 1IA3 FURNISHED TF" TJRE RETREAUTHG PUU3TRY
WITH WASTE TIRES. THIS SYSTEM HAS WORKED WELL. AT TTF PRESENT TIME,
HOWEVER, A DOUBLE EDGED PROBLEM OF a) SHORTAGES OK SuPPLIES OF RK1EEADA3LE
TIRES A:ID b) THE COSTLY ACCUMULATTO'i OF I.OH-RETREADABLS WASTE TIRES IS
ACCUMULATE LARGE QUANTITIES OF UI RETREADABLi1; WASTE TIRES FOR WHIC"i TKEY
MUST EIIfD MARKETS, OR FOR WHICH THEY I""jT 3PKJD !;n.. { TU DlSPO.'.i OF,
PROVIDED DISPOSAL SJTFS ARE AVAILABLE. PRESEHTLY FLu' r-'A;:Ki;TS EXIST FOR
THESE REJECT TIRES, WHICH IN RFALI^x' FWE ECONOMIC VALUF. THIS SI'IUATION
COULD CHARGE DRASTICALLY, HOWETO1H, WITH THE DEVELOPMENT OF RFSOUF^F,
RECOVERY SYSTEMS RECLAIIIIKG LKIIiGY AHD/OR COIISTITL'ETIT ILVI^RIALS FROM
UTILIZING WASTE TIHE3, HOWSVEK, Rl"i'?EA2ERS ARE IKCREASIKGLY FACFD WITH
THE COSTLY STORAGE, TRANSPORTATION, A33 DlSl'OS/i P»OBL>:;S OF UKB3TREADABLE
TIRES. J'HIS FOi&IS A SIGNIFICANT BARPTIR TO THE UNI'lhirjWD FLO",.' OF i.'ASTE
TIRES INTO RKTREADI-.G SHOPS FOR Pn;-/:i3LF USE III K TREADING.
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CLEARLY, A COORDINATED '.'-'iSTE TIRE 11ANAGEHENT PI AM, VfflJ CH WOULD ASSURE
THAT RETREADERS HAVE i" FIPST CRACK AT DISCARrED TIRES 'iND THAT WOULD
WE HAVE LOOKED AT A NU.'^IR OF PRODUCT MARGE SCENARIOS, WHICH WILL BE
DISCUSSED IN MORE DS1.«IL T!T SUBMITTED WRITTEN TESTIMONY. T,'[E ThO 1IAIN
APPROACHES WOULD BE p.l ^ TAX ON TIRES OR TO) A DEPOSIT ON TIRES. IT TS
IN TLE UNITED STATES, ^:; i.'", ORDER OF Si. 00 P"R TIRE, WOU[,D COS!' USERS
AT ]"AST $150 'Al'uLIS" iXi,Ij\?:J PER YEAR;' THIS TUGURE DOES NOT IIIC'LUTE
PRODUCT CHARGES LE"J_E:i h.'i TIRES INCLUDED WITH I.'iW CAR STANDARD EQUIPMENT.
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WHICH IS REfREADIJG, AS WELL AS TO SOLVE T)'2 WASTE TIRE DISPOSAL PROBLEM.
TO DO THIS IT IS IIECESSARY TO SOLVE THE PROBLEM OUTLINED ABOVE, THAT
OF IKCREASIKG THE FLOW OF WASTE TIRES TO RETREADERS BY DEVELOPING MARKETS
GOVERNMENT MECHANISMS FOR MARKET DEVELOPMENT. SECTION 5003 OF RCRA,
FOR INSTANCE, CHARGES THE DEPARTMENT OF COMMERCE WITH MARKET DEVELOPMENT
TASKS. VIGOROUS IMPLEMENTATION OF THIS SECTION OF RCRA COULD WELL MAKE
SIGNIFICANT ACCOMPLISHMENTS IN THIS AREA FOR MUCH LESS THAN $150 MILLION.
A TIRE DEPOSIT SYSTEM MIGHT PROVIDE INCENTIVES FOR CONSUMERS TO RETURN
MORE USED TIRES TO DEALERS IN BETTER CONDITION. BUT DEALERS CANNOT MAKE
ACCURATE DETERMINATIONS ON THE RETREADABILITY OF TIRES; HENCE, THE CONDITION
OF RETREADABILITY FOR RETURN OF DEPOSIT WOULD HAVE LIMITED MEANING. FULL
REFUNDING OF TIRE DEPOSITS WOULD, IN ADDITION, MEAN THAT NO ECONOMIC
INCENTIVES WOULD EXIST FOR TIRE DEALERS TO MAKE EXTRA EFFORTS TO GET
THEIR BETTER TURNED IN WASTE TIRES TO RETREADERS. PARTIAL REFUNDING WOULD
PROBABLY PROVE UNSUITABLE TO THE CONSUMER, DIMINISHING HIS OR HER INCENTIVE
TO RETURN TIRES IN GOOD CONDITION.
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WOULD ULTIMATELY AID CUR SUPPLY PROBLEI/S, OR WHETHER THEY WOULD SIMPLY
ADD TO TIRE PRICES, CAUSE CONSUMER CONFUSION, ADD MEAH UNNECESSARY PAPERWORK
III ADDITION, IT IS V3FY IMPORTANT FOR THE COMMITTEE TO REALIZE THAT HOST
TJRE RETREADING OPERATIONS ARE SMALL, WITH VERY LIMITED STAFF CAPABILITIES;
Ai:Y PAPERWORK OR BUREAUCRATIC REQUIRE iEIITS THAT MI KIT COME THEI? WAY
OPERATIONS. A PRODUCT CHARGE MIGHT BE BENEFICIAL FOR CERTAIN LOCAL
THE TIRE RETREADi::", II S'i'ITUTZ, REPRESTT LUG THE MEN AND WOMEN WHO DIRECTLY
RECYCLE MILLIONS Of TIR1S ANNUALLY Ai:i) HOPE TO RECYCLE MANY MORE IN THE
FUTURE, IS CURRENT!.' :-/CL3RIIIG A RICHER OF '..'AYS TO [HCSKASE THE SUPPLY
O1-' Rr"R::ADABLE TIRES. ".," ARE OpriMTETlC iriAI ThtOUGli I'tpPOVEl) ",,"A3TE
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MANAGEMENT PROBLEMS MIGHT EXIST IN A LOC4L JURISDICTION NECESSITATING
THE APPLICATION OF THE "POLLUTER PAYS" CONCEPT BY THAT LOCAL OR STATE
GOVERNMENT. SUCH ACTION, IF DEEMED NECESSARY, SHOULD BE DETECTUlljI) BY
LOCAL, OR POSSIBLY STATE, GOVERNMENT WITHOUT FEDI3AL LT.VEL PMTTC FPATIO;:
CHARGE APPROACH. WE LOOK FORWARD TO SUCH INTERACTION.
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National Wildlife Federation
1412 16TH ST, N W, WASHINGTON, DC 20036 Phone 202—797-6800
Comments of the National Wildlife FederatiDn
to the Resource Conservation Committee on
the Solid Waste Product Charge Issue
November 17, 1977
As the nation1s largest conservation education organization with af Eiliates
in all 50 states, Guam, Puerto Rico and the Virgin Islands, and som>2 3.5
million members and supporters, the National Wildlife Federation (NWF)
has been keenly interested in the activities of the Resource Conservation
Committee (RCC). We have participated in previous public forums and
submitted comments to the Committee members both individually and
collectively, most recently vociferously urging the Committee to formally
endorse national mandatory beverage container deposit legislation. We
appreciate the opportunity today to present our views on the solid ^aste
product charge issue.
We are providing the Committee, along with this testimony, copies of a
resolution adopted by our organization at its annual meeting in March
of this, year. In this policy statement we urge the adoption of a
comprehensive national materials policy. The NWF believe s that the solid
waste product charge should be an integral part of such a policy.
The Resource Conservation and Recovery Act (RCRA, P.L. 94-580), the law
which authorized the RCC, also mandates a desirable national program to
mitigate the degradation of our environment due to improper or inadequate
solid waste management practices. The bulk of the burder for improvinr
these practices will fall upon local governments. Tt will be local
governnents, therefore, which assume the financial responsibility
entailEid in this process.
The so;_id waste product charge concept recognizes the reality that the
local government is being required to pay for a problem which was not
its creation, that is, the generation of waste. It recognizes that the
costs for solid waste management are actually part of the true cost of
consumer goods, and it provides for the internalization of those costs so
that the consumer pays the price when the item is purchased. It further
provides a ready source of capital to assist local governments in
developing adequate solid waste management systems. The NWF believes
that this is not only equitable, but logical as well.
Also enclosed with this testimony are copies of an artic Le which appeared
recently in the NVF publication, CONSERVATION NEWS. Entitled "Disposal
Charge: The Polluter Pays," this article contains our evaluation of the
solid waste product charge concept in detail. I would, however, l:.ke
to summarize and emphasize some key points, addressing some of the specific
questi.-ms posed by the RCC.
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National Wildlife Federation
NW Comments -2- November 17, 1977
1) We do not view the product charge as an alternative to mandatory
deposit legislation on a state, federal or local level. On the contrary,
we view these two concepts as complimentary elements of a balanced national
solid waste strategy.
2) We see no problems with phasing the charge in over a period of
years, and we feel that the approach of implementing the charge in 10
percent increments over a decade is a fair one.
3) The NWF believes that the charge should be indexed to the costs
(on an average) for the proper handling and disposal of solid waste
nationally. We advocate a levy per ton on paper and packaging materials,
and for rigid containers we support a per container charge.
4) The NWF believes that the most eqi itable, practical and effective
point to levy the charge is at the production source and not later at the
wholesale or retail level. We feel that this further evidences the
advisability of federaj. action on this issue.
5) The NWF believes that the funds accumulated under a product charge
should be provided to local governments earmarked specifically for solid waste
management purposes. We would recommend an allocation formula which would
be sensitive to circumstances of individual communities as opposed to a
rigid per capita formula.
6) The NWF believes that the structuring of the charge levy to reward
producers for the use of recovered materials is an essential element
of this concept. We think that this will result in an improved situation
for the economics of recycling nationwide.
7) The NWF believes that the bolid waste product charge will result
in both increased recycling and use of recovered materials in manufacturing;
however, we do not feel that it will result in significant reductions in
waste generation. This is why we feel that the charge must be part of
a comprehensive national strategy that includes efforts at waste ieduction
but provides for the facilitation of recycling and proper disposal of
wastes which cannot be eliminated.
In conclusion, the NW urges the RCC to endorse solid waste product charge
legislation, but must reiterate that the charge is not the complete solution
to our solid waste ills. It will be an excellent addition to a balanced
national strategy and provide a financial boost to local governments that
is essential if RCRA 's legislative promise for an end to sol icl waste
pollution is to be net.
I will be glad to elaborate on any point or answer questions to the
best of ray ability.
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Resolution No. 10 Passed in Annual Meeting
March 24, 1977
NATIONAL MATERIALS POLICY
WHEREAS, this Nation's consumption of its natural resources centimes
at an alarming rate; and
WHEREAS, the U.S. dependence upon foreign sources for giowing amounts
of crucial raw materials continues; and
WHEREAS, the national security is dependent upon adequate supplies
of many of these resources; and
WHEREAS, the national economic stability is threatened ty the
potential cut-off of foreign sources or exhaustion of domestic supplies
of critical resources; and
WHEREAS, the extent of the U.S. dependence upon foreign sources for
materials nay well be based upon their economic availability as opposed
to their actual domestic supply; and
WHEREAS, the search for more deposits of resources, their removal,
transport:, i_se, and eventual disposal have significant effect s upon the
natural environment; and
WHEREAS, the Nation's disposable and "conveneence-oriented"
lifestyle produces burgeoning amounts of unnecessary waste; and
WHEREAS, the U.S. lacks a comprehensive policy toward these resources,
their availability, costs, most advantageous uses, recovery from the
waste stream, and environmental repercussions of their use;
NOW, THEREFORE, BE IT RESOLVED that the National Wildlife Federation,
in annual meeting assembled March 24-27, 1977, in Washington, B.C. hereby
proposes thet the Federal Government determine what its reserves of
material anc energy resources are, project the expectancy for their
availability, determine their domestic availability identified with the
economic disincentives to the use of domestic sources, asses:; the extent
of true dependence upon foreign sources for raw materials, examine how
resources a:e being used, determine the availability of alternative
sources or substitute tsaterials, and identify disincentives 1:0 the use
of recovered materials; and
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BE IT FURTHER RESOLVED that this organization recommends the adoption
of a comprehensive, policy toward the use of the Nation's precious
resources to minimize unnecessary waste, maximize efficiency of use, and
recognize that goods must reflect their complete economic and environmental
prices, remove impediments to and provide incentives for the use of
recovered resources and develop a national strategy to minimize potential
adverse effects of shortages and foreign embargoes.
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conservation^
news
July 15,1977 Issue
DISPOSAL CHARGE: THE POLLUTER PAYS
nter-a;4em v stu
cr> C
Buried deep in the back pages of the new
Recovery Act (RCRA, P L 94-580) is a prov
panel (composed of such heavyweights as the Secretaries of
the Treasury with the EPA Administrator as chairman), (,
serv^tion Committee This committee is charged with the
duct i ng a one-year study of "all aspects of the economic , soc a I and en „ iron men a I
consequences of resource conservation 'with spec ial attention to the ettects of
'solid waste management charges on consumer products Ihis study might well
have followed the route of so many government surveys, eventually collet ting dust
on a forgotten agency shelf It was given A significant boost in the arm however
when President Carter, in his May 23 Environmental Message, mstrufti'd the ( om-
rnittee to ace elerate its work and present him with its first recommendations within
six months (see Conservation News July 1) With all ot the rush and bluitor it might
he a good idea to examine just what the ' solid waste management i hai ge ' known
also as the disposal or product c harge, i
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The disposal charge is based upon the "polluter-pays" principle The pollution m
question is that which results from improper solid waste management practices,
ranging from roadside littering to open-burning dumps The cost that the charge is
designed to offset is the price for implementing adequate solid waste management
services, both collection and disposal, that is normally borne by local governments
The polluters who would be made to pay their fair share of the cost burden are the
manufacturers whose products end up as solid waste as well as the consumers who
purchase such products The products to be targeted are paper and packaging
Because the cost of proper waste disposal Is not Incorporated Into the cost of the
product, It Is society which must ultimately pay the price of solid waste
management through either Increased taxes or unsightly and unsanitary open
dumps The disposal charge seeks to equitably internalize this cost
materials and rigid containers Estimates by the Environmental Protection Agency
(EPA) indicate that these materials comprise between 40 and 50 percent of all
municipal solid waste
Two things can possibly happen to solid waste One, it can be handled properly, that
is collected, perhaps have reusable resources removed, and then have the remaining
portion placed into environmentally acceptable disposal sites If this is done, local
governments and their taxpayers pay the bill EPA estimates that this collec-
tion/disposal cost is currently averaging around $30 per ton nationally, but the
figure has been escalating steadily as fuel prices for collection vehicles, labor costs
and landfill space shortages have increased EPA estimates that in 1976,
municipalities spent over $4 billion on solid waste management The National
League of Cities has found that solid waste management is the second most costly
municipal service nationwide, behind education, but ahead of such expensive ser-
vices as police and fire protection'
Unfortunately, far too much solid waste falls into the second category waste that is
improperly handled These wastes end up as litter, in promiscuous open dumps or in
inadequate municipal disposal sites The prime factors for this improper handling
are the ever increasing amounts of waste that are being produced (over 150 million
tons last year) and the high costs associated with proper dispc sal practices Im-
provements would mean higher taxes and/or user fees, a prospect unpopular with
politically-conscious municipal officials While much irnpro\ ement has been
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achieved in the past, new actors have entered the picture in recent yec rs in the form
of state and federal restrictions on improper practices, culminating in RCR-A which
mandates the elimination of all open dumps no later than 1984
The concept behind the disposal charge is that this high cost for solid waste
management is actually a part of the real cost of the consumer goods which end up
as wastes Because the prices of these goods do not reflect this true cost and are
therefore artifically low, the local taxpayer is left footing the bill instead of the
manufacturers and consumers who produce the trash in the first place This current
system results m a "windfall" for the manufacturers Their produces seem more
atti active than they would, were the consumers aware of how much the products are
really costing them as taxpayers The local governments, on the other hand, are get-
ting the short end of the stick a lot of trash to handle with no financial resources to
assist them
HO.V would the disposal charge work? One proposed system would require that the
manufacturers of flexible packaging materials and paper products (such as plastic
wrappings, pouches, paper napkins, paper towel>, etc ) excluding building, con-
struction and industrial grades, pay a charge of $30 per ton for heir finished
product This $30 price corresponds to the average solid waste management cost
nationally However, the charge would be indexed to rise and fall with the costs of
sol d waste management Manufacturers of rigid containers (including glass, metal,
plastic cans, jars and bottles) would pay $5 per 1,000 containers (or the equivalent of
l,0')0 10-ounce containers)
Revenues from the product charge would go into a fund to provide local govern-
ments with the much needed financial assistance for their solid waste management
expenses This fund might be structured to distribute the money to communities on a
per capita basis provided that the community implement an acceptable solid waste
management system falling within the minimum guidelines established by EPA and
approved by the state The fund might also set aside certain amounts for use by com-
munities with novel waste recovery approaches or special waste pioblems EPA
prefects that the charge, when fully implemented could generate upwards ot $1 3
billion dollars annually EPA also estimates that little of the funds co Ice ted uould
be lost in administrative red tape, comparing the charge- to federal experiences with
excise taxes and revenue sharing funds
The disposal charge is not a new concept Legislation proposing impU mentation of
some variation on the charge has been floating around Capitol Hill for several
leg slative sessions and has even been toyed with by some states, though im-
plementation of the concept on a state level would seem applicable in only a tew
of the largest states In the current Congress, Sen Gary Hart (Colo) has intro-
duced S 1281, the National Materials Policy Act of 1977, which would phase a dis-
posal charge into effect over the course of a decade
As an added bonus, a disposal charge system could he structured so lhat recycling
and resource recovery would receive a major boost EPA anticipates that revenues
provided bv the charge would give many communities the ready capital the\ need to
mv.'st in systems for recovering resources trom their wastes through reuse of
recyclable materials, conversion to energy, or a combination of the1 two The other
important ingredient in recycling and resource recovery is the availability of d
ma ket for recovered materials The charge system could include a provision tor
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packagers and container manufacturers who use recycled materials in their product
to pay a reduced product charge perhaps equivalent to the percentage of recovered
materials contained within their finished products For example, a manufacturer of
paper products made from 100% virgin fiber would pay the full $30 per ton disposal
charge, but a competitor using 50% recovered material in his product would pay
only $15 per ton The effect that this would have upon the competitive market could
mean a dramatic (increase m the use and availability of recycled materials, giving the
recycling economics picture a much needed degree of stability All of these factors
acting together could usher in a whole new era for recycling and resource recovery
The disposal charge should not be viewed as an alternative to waste reduction ef-
forts It is not incompatible with the beverage container deposit concept, for exam-
ple In fact, the two are quite complimentary With a disposal charge, all beverage
container manufacturers would pay a charge on their product Consumers, however,
would have an option When a beverage is purchased m a throwaway container, the
consumer buys the container and hence pays the full disposal charge Meanwhile, if
the consumer purchases the same beverage in a returnable container carrying a
refundable deposit, the consumer is agreeing to either return the container or forfeit
the deposit If the container is a can and is returned, the product charge would add
greater incentive for its recycling, especially with the improved recycled materials
market If the container is a refillable bottle, the consumer is only borrowing the
container and sharing it with other users Since these bottles are refilled upwards of
15 times, all of the users would share the disposal charge, making the cost m-
tmitesimal to each
While the disposal charge, especially the revenues it would provide to local govern-
ments and the boost it could give to the recoverv of resources from waste, would be
a ma|or addition to our national solid waste management program, it must be
viewed from the proper perspective It is by no means the complete and final answer
to the solid waste dilemma Alone, it will not necessarily result in a reduction m
wasteful packaging and the attendant waste of energy and material resources It is
not enough to recover materials and energy from waste if we cannot prevent them
from being wasted in the first place
While the disposal charge would mternah/e the costs for solid waste management, it
would not internal^1, or, better yet, prevent the waste and pollution that result from
the production ot all ot these items m the first place The disposal charge concept
does recogm/e, however, that even if we develop a wise waste reduction program,
eliminating as miu h of the wasteful practices as possible, we are still going to have
significant amounts of these matenals which ultimately must be handled as solid
waste Coupled with waste reduction measures such as the beverage container
deposit, though, the disposal c [large has tremendous potent la I
Conservationists will be waU hi rig the activities of the Kesourt o ( onscrvation Com-
mittee with as much interest as President Carter They will be looking not only at (he
packaging implications, but also at the potential applicability of the "polluter pays"
principle to A variety ot other c ircuinstances in whic h polluters t urrently are getting
a free ride In the meantime, Tor further information on the disposal c har^e, contact
Ottu e ot Solid Waste, U S 1 nvironrnenUil Protection Agenc v, 401 M Street, S W ,
Washington, D C 20-460
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My name is James W. Shields, and I am appearing in my capacity
as Vice Jhj.it/nan of the GoverrmjnL Affairs Committee of thf Printing
Industries of An.erica. I am alio Chairman of the Board of Judd's, Inc.,
a consmer ~ia] printing company located in Washington, D. C. I am accompanied
by John P. Grant, Director of Government Affairs for Printing Industries
of America.
The'Printing Industries of America, Inc., is a national federation
of regional, state, and city trade associations, represent ing approximately
eight thousand member commercial printing companies throughout the United
States. PIA is the world's largest graphics communications association,
and in the ninety-plus years since its foundation, has been a leader in
the rapid technological growth of this industry, which comprises what is
commonly known as "American Printing."
The Federal Register of November 8, 1977, set fotth a number of
question;; dealing with a solid waste product charge. The question is so vast
and the ^ime so short that we cannot hope to answer all the questions, put forth.
In fact, the premise underlying the theory of a solid waste product charge
begs the question in that it treats certain items as unrecLaimable wastes
rather than resources which significant segments of our society can use
and are using in an economically pioductive fashion.
When, one looks at the products under cons Lderal ton, one sees a
maj or dis t met ion between those inn time rated in Table T (Va >er Product s) and
those in Table II (Non Paper Products). Paper product-, are a renewable
resource, Not only may they be initially produced without significart
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effects on the environment, but albo when their intended u^.e is satisfied,
they may be ut L J ized in an environ!11 en tally sound manner.
Let me- illustrate. Of all the products set for the in both the
tables, only paper products are biodegradable and nay be utilised as a
source of fuel. Private industry is realizing this to a great extent.
Forward thinking local governments, in some instances, are now using
what has heretofore been considered waste as an energy-producing fuel to
provide other products and services. In my own industry, the printing
industry, we have estimated that approximately 20 percent of the paper
entering a printing plant is bundled, baled and sold as recyclable scrap
paper to be remade into paper, chip board and even insulating material.
The figure of 20 percent for the industry is considered a minimum and often
is higher depending on the product or process involved.
It is significant to note that in its fourth report to the
Congress on resource recovery and waste reduction, the Environmental
Protection Agency recognized that while paper non-durable goods and
packaging constituted a significant portion of solid waste, they
also constituted as a class the highest percentage of all waste recycled.
Let us make some assumptions about the solid waste product charge as
set forth in the notice of the hearings. Let us assume that the charge
will be $30/ton and that it is to be levied on the. producer, that is,
the paper company, and that the funds realized from this charge will be
passed on to local communities to assist them in solid waste management.
The imposition of such a charge* would have a telling e f for-1 on our industry
and the general economy as well. Do not think for a minute that you are
merely taxing cereal boxes and candy wrappers. You will be raising the
cost of printed products to the major users of that product. As an example,
the United States government, through the Government Printing Office and
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other federal agenc^e,, annually products approximately $1 billicr worth
of printed material. School districts ACL J local governments liken/ LSG Eire
najor consumers of p.iuor and printed iintei ial . If one were ,_o exer.pt
materials not likely to bo_ disposed, such as library books, county ] and
records ami the myriad of documents stored by the National Archives,
what admin Lbtrative nightmares would such a system generate.
The question of a credit for recycling is an intrij3;uin^ one.
We understand that the leading posit ion under consideration Ls to provJ de
to the producer of the raw material a credit comparable to the amount
of recycled material contained in the product. At the present time, some
paper manufacturers are using approximately 20 percent of recycled material
in the production of some printing papers. A credit of this type would
mean that the paper producer pays and passes on to his customer a charge
of $24. F;_ne papers, on the other hand, which do not contain recycled
materials would bear the full $30 charge. If the point of this proposal
is to reduce packaging, it is curious to note that the very material thf.t
is most likely to become packaging material would bear a lower charge than
that which is most likely not to enter the solid waste disposal stream to
any significant degree. Because of the strength, color and handling character-
istics, it is most likely to be used as low quality packaging luaterial.
Vie in the printing industry, who look upon paper as our major raw
material, have experienced significant increases in the price of that raw
material in recent years. Simple econoric demands have causpcl oar cust omers
not to order more packaging material than is absolutely necessary.
Because of these economic consi derations spurred bv the rising
cost of paper, our industry association, the Printing Industries of America,
through its component section, the Graphic Communications Computer Association,
initiated within the last year a nationwide program called War on Wjiste.
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The purpose of this program is to increase efficient material handling and
usage. Its effect has been to decrease the amount of paper that a printer
uses to produce a finished product. It decreases the absolute need for
paper and likewise decreases scrap, both recyclable and non-recyclable.
We in the industry are impressed with its dramatic results and look upon
it as an example of what industry can do in attempting to solve a problei
that affects us all.
To return to the problem of a credit for recycling, again some
consideration musL be given to the use of the product manufactured by the
user of the raw material. Fine printing papers are used in the manufacture
of books which are unlikely to enter the solid waste disposal stream to
any signficant degree and are also used for the printing of throw-away
advertising brochures which are likely to enter the disposal stream.
Are these two uses to be given no different consideration for a recycling
credit? Again, if the credit has already been taken by the manufacturer
of paper, what incentive is there for the printer to sell his scrap to be
recycled rather than dumping it into the municipal system? A large printing
firm in the Northeast has reported that in the period of January to August
of this year their total waste constituted 23.09 percent of materials entering
the plant. Only 1.89 percent of the total material entered the municipal
system, whereas 21.10 percent was sold for recycling. Similarly, a medium
size company in the Washington, D.C., area has reported that in the year
ending September 1977, its recyclable scrap was six times its waste product.
Rather than $30/ton, perhaps consideration should be given to charging
printers a charge based on the actual percentage of material entering the
disposal system and not that which is being recycled.
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I wish to advance one other point. When one considers the imposition o7 a
product charge upon new material, what is to be done with printed material
that is produced abroad upon paper which is also manufactured abroad. r:he
easy answer would seem to be to impose the tax upon the importer. Yet,
under the Florence Agreement to which the United States is a signatory,
the United States is precluded from imposing a tax on educational material.
This means that educational material produced in this country will bear the
product charge while that produced abroad will not. This is compounded by
the fact that after 1981 the creators of educational and other material will
be able to secure a United States copyright on material produced anywhere in
the world. These two factors will contribute to making United States
produced goods significantly non-competitive in both domestic .and world narkets.
Let us look further down the line. If the funds realized fror:
such a charge are to be passed through the federal government to local
governments, how will these funds be utilized7 They might well be utilized
to raise the salaries of garbage collectors rather than spurring needed
initiatives in the management of solid waste. The hearing notice remarks
that presen: local government efforts to manage solid waste disposal are
inefficient and inequitable. Since those who deposit solid waste
material ar<» presently paying through taxes or user fees for its disposal,
how much better it would be to correct these alleged inefficiencies and
inequities. The proposal of levying a $30/ton charge would have the effect
of having these users pay twice — first, through higher costs and secoidly,
through presently existing taxes and user charges.
In a study prepared by the Urban Data Service of the International
City Management Association published in August of 1977 and based on a survey
conducted ii the fall of 1976 by the National Association of Counties Research
Foundation, it was shown that 54.5 percent of the counties reporting were
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using general revenue sharing funds for solid waste d J spo.sal programs. The
material from this study follows.
RESOURCE RECOVERY
Counties were asked to identify any resource recovery practices
that they use. Of all resource recovery techniques listed on the questionnaire,
separate collection is most frequently used (an 8.7% response rate),
followed by volunteer stations (4.6%), shredding (3.3Z), composting (3%),
and incineration (1.1%) (Table 11). The majority of county activity in
each of these categories is in the higher population groups (not shown in
table). The response to the incineration category was influenced by
respondents' failure to differentiate between incineration a_s_ a method of
disposal and incineration _f qr_ resource recovery from the incinerator residue.
Supplemental fuel generation at 0.7% was used as a resource-
recovery technique by cities in only two population groups (100,000 to 499,999).
Methane gas as a method of resource recovery received a minimal 0.2% response
rate and was used by only one respondent in the 1,000,000 and over population
group (not shown in table).
Sixty-nine counties (52.2% of reporting counties) gave readily
available markets as their main reason for having resource recovery (no table
shown). Other reasons were: public demand (23.2%), shortage of available
land (21.7%), state or federal incentives (11.6%), and political roadblocks
to siting a new landfill (7.2-<).
Counties which cited ^tate or federal incentives as the primary
reason for entering into a resource recovery pro 31 ..mi ' 'ere asked which o L
the following incentives we re mo& t important. F inane Lai assistance wac_> the
leading incentive (44.4% ol respondents) and planning assistance was next (33.3%).
Technical assistance and the "don't know" category each received 11.1% (no
table shown).
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Minloial resource recovery activity is estimated within the next
five years. Separate collection is estimated to risp frc-n 8.7% in currenl.
use to a projected total of 10.8% within the next five >.-ars (Table 11).
Composting is expected to increase to a projected 3.3%, methane gas recovery
to 2%, shi eddi-Ug operations to 7.8%, incineration residut s to 4.5%, and
supplemental Fuel generation to 8.7%.
The higher population groupings are definitely more interested :.n
resource reco/ery techniques. However, the lower population groups, especially
the 25,000 to 49.999 group, indicated a significant interest in beginning
some form of resource recovery (no table shown).
Counties indicated the need for various types of resource recovery
assistance. Technical assistance (40.1%) of 299 counties reporting ranked
highest as the type of resource recovery assistance needed most. Other
resource recovery assistance categories were: management planning, 24.7%,
financial management, 24.7%; and contact with ongoing project(s), 17.1% (no
table shown)*
Use Of Resource Recovery Techniques In Counties Now And Over Tb.3 Next Five Years
Present resource recovery Future recovery plans
Techniques
Total, all co mties
Separate collection
Composting
Methane gas recovery
Shredding for resource recovery
Residue ftom mcineration
Supplemental fuel generation
Volunteer stations
Other techniques
No.
counties
reporting
538
47
36
1
18
6
4
25
50
7. of
total
100.0
8.7
3.0
0.2
3.3
1.1
0.7
4.6
9.3
No.
counties
reporting
538
58
18
11
42
24
47
7
29
% of
total
100.0
10.8
3.3
2.0
7.8
4.5
8.7
1.3
5.4
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TABLE 6
Counties Using: General Revenue Sharing Funds J"QJ: SplidWaste Disposal Programs
[Breakdown by population size and region deleted]
Use revenue sharing funds
No. of Yes No
counties
surveyed % of % of
(A) No. (A) No. (A)
Total, all counties 539 294 54.5 190 35.3
From the above figures it can be shown that 52.2 percent of
the reporting counties recognized that there is a market for resource
recovery products. Only 11.6 percent mentioned state or federal incentives
for entering in such a program. And of that figure, 44,4 percent
cited financial assistance as the leading incentive while 33.3 percent
chose planning assistance. Of those counties that cited a need for
various types of resource recovery assistance, 40.1 percent chose
technical assistance. If efforts were made to correct the alleged
inefficiencies and inquities in the present funding procedure, and full
utilization of presently available federal funds was accomplished, it
appears that the greatest need of local governments is to receive technical
assistance so that economically viable methods of solid waste recovery
iT.iy be j>p]eirentc-d. Let us concentrate our efforts where the need is
greatest, at the local government level. EPA should be acting as a
clearinghouse for infornvilion which can be used by local governments in
their planning efforts. Consideration might be given to a program whereby
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EPA would assist governments on this endeavor. If these local governments
failed to take advantage of this assistance, their citizens would suffer
the loss of the federal tax deductibility of that portion of real estabe
taxes paid by local citizens for waste disposal. In this manner, control
would cemain in localities and local governments would have the incentive
that would be provided by their own citizens losing preferred tax
considerat ion.
The proposal hefore you is Indeed a far reaching one and one
that cannot be treated in a perfunctory or off-handed manner. It requires
detailed, prolonged study of its impact both environmentally and economically.
The printing industry would be most happy to assist the Rescurce Conservation
Committee in its examination of this question.
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November 17, 1977
COMMENTS
by the
NATIONAL CANNERS ASSOCIATION
for the
November 17, 1977
PUBLIC MEETING
of the
RESOURCE CONSERVATION COMMITTEE
on the
SOLID WASTE PRODUCT CHARGE ISSUE
My name is Jack Cooper. I am Director of Environmental Affairs for the
National Canners Association which is a non-profit trade association with
approximately 500 member companies that pack about 85% of the total U. S.
production of canned foods for human consumption.
The members of our association are interested in the Solid Waste Product
Charge Issue because enactment of such a program would result in increased
costs to the consuming public for processed foods. While we have no established
position on the Solid Waste Charge Issue, we do have some general comments to
make and some questions that we feel must be addressed by the Resource Conserva-
tion Committee as it proceeds in developing is recommendations to the President.
In our view, there are several factors which must be considered by the
Committee when assessing the need for "internalizing" the collection and disposal
costs of food packaging materials. Some of these are:
1. The Effect of the "Charge" on the Economy. In Table B-6 of Appendix B
of EPA' s Fourth Report to Congress on Resource Recovery and Waste Reduction,
it is noted that the price of canned food would increase 4. 2% if a product charge
similar to that contained in Senator Hart's bill, S. 1281, was enacted. This increase
for canned foods nearly equals the average pre-tax return on sales for the canning
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- 2 -
industry from 1961 through 1973 (see attachment 1), which was 4.4%. It is thus
apparent tnat the tax could not be absorbed by the industry and must be- passed on
to the consumer.
It is a fact that many fresh foods are unavailable to tie consumer during
non-growing seasons. Commodities such as peas, sweet corn, peaches, and pears,
are desired components of most persons' diets during the winter season. The
Committee must,we believe, address the question of whether it is a desirable
social goa' to artificially mc*rease the price of such commodities to the consumer
through the imposition of this tax. This additional burden would likely fall heaviest
on low income groups least able to afford the increased cost, (Although higher
income groups spend slightly more in total for canned fruits and vegetables than
families below the poverty line, low income families spend a much higher propor-
tion of total income, and a higher proportion of their food budget for citnned fruits
and vegetables. )
2. The value to the consumer of the intrinsic qualities of the various
processed a_nd packaged food products in the market place.
The intrinsic values of canned foods to the consumer must not be ignored.
Canned foods can be stored for long periods of time without additional inputs of
energy or significant nutrient losses. This intrinsic value to consumers is not
realized with most other types of food products, fresh or processed. Another
intrinsic value of packaging is protection of food products from rodents, insects,
and microorganisms which are in constant competition with man for available
food supplies.
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- 3 -
The convenience factor is also intrinsic in processed foods and it does
have a social value, which must be considered along with the social value of the
product disposal charge concept. More and more, consumers are relying on
food products which require Less preparation and cooking time. Processed foods,
properly packaged in convenient quantities meet that demand. Working married
women particularly depend on convenience foods to minimize meal preparation
time.
In order to achieve reduction in the amounts of packaging materials utilized
in protecting most processed food products, there would have to be a decrease
in the number of smaller containers produced. To do this would discriminate
against consumers who wish to purchase smaller containers. In view of the fact
that the average family size in the United States is decreasing, the demand for
smaller containers is increasing.
Attached to my statement (Attachment 2) is an article from yesterday's
(November 16) Wall Street Jcu_rnal which clearly points out this trend and discusses
its implications to food processors. The article states that this trend has ". . .
prompted food processors to repackage their goods in one-serving sizes. "
It seems unreasonable to us to expect a one or two-person household to
purchase the same size container that would be suitable for a larger household of
four or more persons. It also seems unfair to tax a single family purchaser one-half
cent per serving and a four-person family one eighth-cent per serving, as would be
the case under the Hart bill.
3. The value^to the consumer of not having the collection and disposal cost
included in the purchase price. Whether or not a tax is imposed in the future on
packaging materials, households will still require the services of solid waste
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. 4 -
management collection services to pick up and dispose of discarded materials.
Particularly, food wastes generated daily must be picked up and disposed of,
preferably bi-weekly, in order to prevent odor, rodent and insect problems
from oc curring. Further, solid waste management collection and disposal
systems wjll be required for other products not covered by the disposal charge.
Examples include, yard wastes, worn-out clothes, and other unwanted household
debris such as broken furniture, small appliances, and busted toys, a£> well as
discarded Christmas trees in December. We must ask the question "What is
wrong with allowing the consumer to spread the cost of the p ck up and disposal
of the above-mentioned items with the cost of disposing of packaging wastes.
4. It is possible that the imposition of such a tax could result in an
increase in the amount of solid waste to be handled rather than a decrease.
If, because of the tax, there was a dramatic shift away from processed
foods to fresh foods, there would be a significant increase in the amount of house-
hold wastes generated. For example, if there was a shift away from frozen orange
|Qice concentrate to fresh oranges, the orange peels would either go down the
;arbage disposal or wind up in the solid waste stream. This would be extremely
nfortunate because at the present time about 97% of the residuals from citrus
processing operations are utilized for animal feed. The same is true "or many
other foods such as corn and potatoes. If there was a dramatic shift LII the con-
sumption of processed forms of these foods to fresh forms, the peelings and husks
would be handled by the consumer as a waste; but 94 and 90%, respectively, of
these residuals are currently utilized by processors for animal feed (see Tables
VI and XII of Attachment 3). Much of these wastes would probably go into the
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- 5 -
home garbage disposal, thus transferring the solid waste problem from the food
processing plant to the municipal sewage plant resulting in increased sludge loads,
the disposal of which is an important community problem today. We do not believe
that shifting the solid waste problem from the food processing plant to the home and
then to the municipal solid waste contractor or the municipal sewerage agency is a
proper social goal.
5. The consjjrner may not decide to purchase "low solid waste value" products.
Throughout the discussion of the rationale for the product charge concept and
throughout Appendix B of the Fourth Report to Congress, the word "might" is
extensively used. It is apparent that no one knows how many consumers would decide
to purchase "low solid waste value" products and forego some of the intrinsic values
they have come to expect from processed foods. If few made such purchases,
possibly the greatest result and impact of the tax would be an increase in the cost
of food to the consuming public.
In_5onclusi_qn, since our association currently has no official position on
the solid waste product issue, we cannot offer specific answers to the fourteen
questions proposed in the announcement of the public hearings. However, we do
recommend that the committee seriously consider the issues we have raised before
making its recommendations to the President.
I appreciate this opportunity to present some of our industry's concerns
regarding the Solid Waste Product Charge Issue.
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ATTACHMENT 1.
CANNED FRUITS AND VEGETABLES
PRETAX RETURN ON SALES*
(Unaudited)
Thirteen years 1961-1973
Calendar All
Year Firms
1961 5.3*
1962 4.1
1963 5.3
1964 5.1
1965 6.0
1966 6.2
1967 6.3
1968 3.5
1969 1.3
1970 2.7
1971 3.5
1972 4.1
1973 5.5
Three Yeeir Average -
1971-1&73 4.4
Ten Year Average -
1961-1S>70 4.4
Thirteen Year Average-
1961-1S>73 4.4
Number of Firms 31
Dollar Sa.les -
1973 (millions) $3.148
Over
$100 Million
Sales
5.454
4.4
5.6
5.3
5.9
6.0
6.0
3.8
2.2
3.5
3.6
4.0
5.4
4.4
4.7
4.6
5
$2.448
Under
$100 Million
Sales
4.9%
2.3
3.8
4.4
6.4
7.1
7.6
2.0
(2.7)
(.6)
3.0
4.7
5.8
4.7
3.3
3.7
26
$700
*Pretax profit is after interest and before taxes and extraordinary
items.
All pretax margins are weighted averages.
For cooperatives, reported pretax profits were on an established
value basis.
From: A report prepared for the National Canners Association by louche Ross & Co.,
titled Financial Ratios - Canned Fruits and Vegetables, Thirteen Years 1961-1973.
-------
WALL STREET JOURNAL, Wednesday, November 16, 1977
ATTACHMENT 2.
On Their Own
A Living-Alone Trend
Affects Housing, Cars
And Other Industries
Singles Like Condominiums,
Town Houses, Mustangs;
A Problem in Appliances
SSW Ds Don't Need Pampers
By JUNE KKONHOLZ
Staff Reporter „/ THE WALL STRKBT JODRWAL
DALLAS-The 4000 block of Park Lane,
10 miles north of downtown Dallas, was a
fairly typical American street a decade ago
Families of four and five people lived in
most of the tidy brick homes Middle-aged
couples whose children had married lived in
the rest.
Today the couples are still there and so
are some of the families, but now there is
this difference Someone lives alone in one
out of every four houses on the block
What's happening on Park Lane exempli-
fies some sweeping changes taking place in
the way Americans are livmg-and spending
their money People who live alone have
breathed new life into the town-house and
condominium markets, fostered a new line
of kitchen mini-appliances and prompted
food processors to repackage their goods in
one-serving si7.es
"We're bullish on those goods and ser-
vices that either complement or facilitate
the life style of people living alone," says
Michael Langevln. a securities analyst for
Donaldson, Lufkin & Jenrette Inc., the in-
vestment bankers
More than 15V4 million people live alone
and account for 21% of all the households in
the country, up from n% seven years ago
The Census Bureau says that In the past
seven years the number of people living
alone grew by 43% while the number of
households with both a husband and wife
grew by only 6%
Expected to Continue
Last year alone. Americans formed 1.3
million new households Couples, witfl or
without children, accounted for 174,000 of
them, singles for 549,000 One-parent fami-
lies accounted for most of the rest.
Later marriage, higher divorce rates and
a widening gap between the life expec-
tancies of men and women are behind the
big increase in one-person households. And
while there is disagreement as to how pro-
nounced the trend will be in the future, the
trend is expected to continue for a long
time
Frank Purstenberg, a University of
Pennsylvania sociologist specializing in the
family, is one of those who envision a pro-
nounced trend. He sees Americans becom-
ing "separate economic and psychological 1
modules" who "move In and out of relation-
snaps" quite rapidly It Is very likely, he,;
says, that family living soon will be "rele- ,
gated to a certain short part of the life span, j
the middle years, and outside of that seg-
ment people will spend time living alone or
in transitory arrangements "
How people live is important to business
because It tends to determine how they
spend their money (people who live alone
earned $115 billion last year, an aver-i^p
-------
acrw,s town from his parents four years age
when he was 22 "I wanted the experience of
runn.ng a household and managing the bills
before I got married," he explains "That
way, I'd be the only one hurt if I made a
mistjike "
Young singles like Mr Simunek account
for less than 97* of all one-person house-
holds, but they're the fastest-growing seg-
ment of the household population. The num-
ber cf young women living alone is up 108%
in sjven years, and the number of young
men Is up 174%
The divorce rate, which doubled In the
past decade, also is behind the trend toward
sing e-person households. About 1.1 million
marriages ended in divorce last year alone.
At that rate, the Census Bureau predicts
that one person In three between the ages of
25 and 35 will get a divorce. And while about
80% of them will remarry, the chances of a
succsssful second marriage are even worse
Widows account for one-third of all one-
person households While the life expectancy
of both men and women is rising, a woman
now can expect to live to be eight years
older than her husband was when he died,
compared with 6 7 years In 1960 and two
year; m 1900
Because of the gradual aging of the popu-
lation, the Census Bureau says, elderly
worn1*!! will outnumber elderly men by 6 5
miUna by the end of the century Widows
once moved in with the:r children, but now
they're likely to have fewer children to de-
pend upon, the children are likely to have
diffe-ent attitudes of obligation, and the
widows themselves are likely to t>e more In-
dependent than in the past ,
Cirolyn Taylor of Fort Collins, Colo,
says it never occurred to her to move In
with one of her six children when she was
widowed in 1973. "I didn't want to burden
myself having to consider other people in
my plans," she says Mrs Taylor just
bought a three-bedroom house and is busy
Investing in real estate and planning to open
an art studio. "It would, have been a great
sacrifice on both sides." she says, if she had
moved hi with her children
26% by 1985?
Arthur Norton, who heads the Family
and Marriage Statistics Branch of that Cen-
sus Bureau, says that 267o of all households
will consist of just one person by 198!» Mr.
Langevin of Donaldson. Lufkin & Jenrette
thinks people who live alone will account for
30% of all households in 1985 Richard A.
Brown, who heads population studies for
Tempo, a General Electric Co think tank,
predicts the number of young people living
alone will double by 1985
Carol Brock Kenney, an economist for
Loeb Rhoades, doesn't think the increase
will be that remarkable Mrs Kenney be-
lieves that the "backlog1' of unm imr 1
young people will slow the trend She ex-
pects 16 million people to marry for the first
tune by 1980, and she thinks that many of
the 7 2 million people who currently are di-
vorced will be ready to remarry soon
Two other trends also could slow the
growth of one-person households
Mr Norton of the Census Bureau esti-
mates that there are about one million un
married couples living together and that the
proportion of such couples in the household
population could tuple over the next decade.
Then, too. the baby-boom ranks are eas-
ing About 4 3 million youngsters will reach
age 18 this year, the third-largest crop in
history But future groups of childrei born
in the same year will be smaller, until in
1990 only 3 4 million people will rearh age
18
Mrs Kenney of Loeb Rhoades suggests
that those future young people will marry
and raise families in about the same propor-
tion as they do today, slowing the innual
rate of household growth But many sociolo-
gists say that that won't happen They agree
with the University of Pennsylvania's Mr
Furstenberg that a dramatic social change
is occurring.
-------
ATTACHMENT 3.
FOOD PROCESSING SOLID WASTES
TABLE VI
FraU Ulilizillon ind Dupo.ll at Rnlduli
(WM Weight)
From:
FRUIT ANIMAI
RESIDUAL FEED
% >o
APPLE If
APRICOT 4T
CHERRY 16
CITRUS 9T 1,
CRANBERRY 10*
. MANUFACTURE DISPOSAL
«/ if Wn.^ H' ton.*
IZT.S30 30 98,100 31 101. 170
4,197 13 1.3SS 40 4, I6B
6.696 .. ... B4 IS. 154
448,971 .. ) 106,669
k.9« 10' 1.656 60' 9.936
OUVE 81 6.TST .. IT
PEACH IT 12 , T2S 15 28, 875 61
PEAR 64 It, lib . . . 16
PINEAPPLE %> 166.633 ^ . . JIO
TOTAL 84 k.Ul.103 S 217.J66 1 1
GRAND TOTAL - MlMV*
1,384
130,900
40.134
18, 51 i
W.flSO
TABLE XII
Vegetable: Utilization and Disposal of Residuals
(Wet Weight)
ARTICHOKE. GLOBE*
BEAN. LJMA, SHELLED
BEAN, SNAP
BEET
BROCCOLI
BRUSSELS SPROUT*
CABBAOE
CARROT
CAUUFLOWEM
CUCUMBER*
POTATO, WHITI
POTATO. SWSET"
PUMPKIN/SQUASH
SPINACH
TOMATO
TOTAL
GRAND TOTAL • ?.TO9>1)
*" tail* %"
44 It. Ill 36
10 t.Oli 50
4« 74,910 12
10 19.711 10
BO 1*,B&4 ZO
SO IT. ill 20
•i 1.024 •>!
TI l6l,T5fl IB
100
90 SI,OS1 10
41 Jt,56i ie
71 10.844 21
11 ,14 440 TI
76 h^S.^W Z4 1
"The Potential of Food Processing Solid Wastes
Enzymatic Conversion," by Jack L. Cooper, 1976,
Symposium Number 6, Pages 251-271, Published by
,-ER DISPCBAL
19.418
6,017
Bl.lil
T«,4)l
B,96t
I.f373
ai.uB
62,90;
ZZ.I4I
40,TS«
S 784
10 924
*..?««
..363.9*0
as a Source of
Biotechnology
John Wiley &
Cellulose f
and Bioenqi
Sons, Inc.
-------
PROPOSED SOLID WASTE PRODUCTS CHARGE
TESTIMONY NOVEMBER 17, 1977
NEAL POTTER, CHAIRMAN
NACO SOLID WASTE COMMITTEE
The National Association of Counties has not yet developed an official
position on solid waste product charge^ but looks on the idea with much interest
and considerable favor. In ray own county of Montgomery, in Maryland, our interest
is very strong, and we have moved a little way in this direction by levying a tax
on malt beverage and soft drink containers.
The complexities of making such levies on the local level are considerable;
and it seems clear to us that if there is to be a more general effort to reach
these products, it is essential that the levy be made at the national level. In-
deed, if the system is to be reasonably tight, and to avoid discrimination, there
will be a need for import levies (and export credits) as well.
Conceptually, the charge could most fairly and logically be levied on
all solid raw materials except fuels, since solid waste is their ultimate destiny,
unless they become museum pieces.
Recycled materials may appear to be an exception, but they are not, unless
they are recycled forever. However, since recycled materials add nothing to the
waste stream until they cease to be recycled, there is a logical case for exempting
such materials from the charge.
-towever, modifications in such a simple and logical system will no doubt
be required to deal with the problem of public acceptance. Every ne^ idea has
difficulties with public perceptions and understanding, and in this case the
undeistaiding is likely to be readiest for materials which become waste within a
matter of days or months rather than years, and which constitute major parts of
the waste disposal problem. Thus I would accept the idea that the charge be
-------
Potter Testimony
Page Two
limited at least at the outset to paper products and container and
wrapper materials. There is however an extremely strong case for adding
plastics and rubber to this list. These materials are generally manufactured
from energy raw materials, and present some of the most difficult waste disposal
problems.
Your staff memoranda seem to indicate a considerable difficulty over
the question of where the charge should be levied, and how credits for re-
cycling should be administered. It appears to me that these need not be
problems representing great complications. If paper and plastics are taxed
regardless of their end product destination, a large portion of the problem
can be dealt with very simply, by taxing virgin materials when and where pro-
duced, which is generally rather few points. In the case of glass and metal
for containers, the charge can simply be levied on virgin materials utilized by
manufacturers in producing such commodities. There is no need to provide
special credits for recycled materials, since the tax on virgin materials will
automatically give recycled materials an extra advantage.
To improve the public image of the charge, I think it is desirable to
transfer the revenues to local governments or other agencies involved in dis-
posal of the subject wastes. This connects an inevitably unpopular tax with
the problem it is designed to deal with. If the revenues were put into the
general fund, or dispensed as general revenue-sharing funds, the objectives of
the tax might be lost sight of, and the costs which refuse disposal imposes
would not serve as the logical basis for the levy. In addition, revenues put
in the federal general fund tend to relieve income taxes, while the costs of
refuse disposal generally fall on the payers of property taxes. Since property
taxes create a much more serious problem for taxpayers than do income taxes in
-------
Potter Testimony
Page Three
a g.reat many cases, the tax relief function of the levy distribution would be
much less if the funds were placed in the general fund.
A formula for distribution should I think be as simple as possible,
because federal paperwork requirements are quite onerous, and can add little'
to the equity of distributing funds on a per capita or parhaps somewhat better,
per - ton-of-refuse-disposed basis for allocation.
At this point I would like to note that the dollar amounts in
the discussion papers which were prepared are far less than our costs of
refuse disposal. Our landfill costs, between the high cost of Istnc' and the
sizeable cost of environmental protection (buffering from adjacent land uses,
cover Material, top soil cover and landscaping, long-tern ground W5ter protec-
tion and monitoring, etc.) are over $15 per ton. Total costs including col-
lection and disposal, are about $75 per ton. These are nore than double the
costs in your memoranda, and though they appear high, 1 suspect chat current
experience in urban areas is generally closer to Montgomery County's experience
thai to the staff figures based on older data and perhaps, more rural experience.
1 W3ulc recommend additional research to get latest figures, with careful
attention to urban costs, where most of the disposal must: occur, ard to the
costs vhere adequate environmental standards are being met, as the> must 3e
in the future in all are'ip. Ii- addition, it is necessary if legislation :ls to
des Lgnate the charges to be made over a five or ten year phase-in period, (;hat
allowance be made for inflation which can be expected in that period, and for
the increased costs which will have to be borne when environmenta1 standards
aie properly met.
-------
Potter Testimony
Page Four
A word as to alternative .methods of imposing a charge on disposable
materials. The principal alternative appears to be to levy on disposal, as for
example making a charge on landfills and/or incinerators. Charges of this sort
only add to costs which already are becoming very heavy, and unless refunded
would add to the property tax burden of local governments. A charge levied at
the household level, as for example so much per can or 100 pounds of refuse
disposed, is too complex to be administered, since it requires separate weighing
of collections at each household each week or each day that collection is made.
Moreover a charge heavy enough to discourage production of disposable materials
will add a substantial incentive, when added to the real costs already being
paid, to roadside dumping and increased use of garbage grinders thus addifig ,to
sewage problems, and will encourage home incineration and other unacceptable
methods of disposal.
Finally as to the need for compensation for affected industries. A five or
ten-year phase-infer such a charge makeshardships and readjustment problems mini-
mal, and therewith the case for compensation would be weak. If any compensation is
thought necessary, it must be provided in such a way /to accelerate changeover to
HW methods of production or new industries which do not create the problem
which the charge is intended to diminish. Any lasting support of a business
which is "hurt" by the charge would merely offset the impact of the charge,
and might in addition develop into anofiber wasteful and expensive federal
program.
# #
-------
STATEMENT OF MORRIS HERSHSON, PRESIDENT,
NATIONAL BARREL & DRUM ASSOCIATION
TO THE RESOURCE CONSERVATION COMMITTEE
ON THE SUBJECT OF
"SOLID WASTE PRODUCT CHARGE"
SUPPLEMENTING REMARKS MADE AT MEETING IN
WASHINGTON, D.C. ON NOVEMBER 17, 1977
My name is Morris Hershson. I am President 01 the National Barral
and Drum Association, which has its offices in Washington, D.C. We
represent the steel drum reconditioning industry, which reconditions
and outs back into reuse approximately 40-50 million 5--gallon steel
arums annually Our Association represents about 75$> if all recon-
aitloners in the country, and roughly Q^%-^0% by volume of the total
national volume. Our sales service volume is in excess of $300
mi 11Lon.
Reconditloners of steel drums have, for a half century, been
conserving the nation's assets —conserving steel, conserving energy,
conserving natural resources— and reducing solid waste polution. By
reconditioning 40 million drums annually we save each year one tc 1 1/4
million tons of sheet steel. According to the American Iron and Steel
Institute, it takes 2 1/2 tons of iron ore, manganese, limestone, coal,
coke, etc to manufacture one ton of steel. So we assist in conservir<,
2 1/.2 million tons of these precious and irreplaceable natural resources
every year.
Furthermore, the Institute reports, in the manufacture of one million
tons of raw steel, over 10 1/2 million gallons of residual oil, 1-9
in 11ion gallons of tar and pitch, 4.5 million mcf of natural gas,
-------
33-5 Million mcf of blast furnace gas, 38 million kilowatt hours
of electric power, and 1 $/k billion cubic feet of oxygen are
consumed, as well as the energy equivalent of one billion 800
million gallons of oil.
The standard 55-gallon steel drum, for decades, has been made
of 18-gage steel, a thickness that has proved itself to industry.
In peace and in war time it has been a bulwark of strength in
transportation, storage, stacking, reconditioning, and reuse. For
safety reasons, according to Department of Transportation Regula-
tions, almost all hazardous materials shipped in steel drums must
be shipped in drums made of l8-gage steel or heavier.
This introduction to our industry leads me to the reason for my
appearance before this Committee. For the past 10 or 15 years the
steel industry, through its subsidiaries, has been promoting and
encouraging the purchase of "throwaway"drums (for one-time use) and
short-lived drums (with a limited reuse capability. These are drums
with thinner walls, lighter in weight, fabricated of 20, 22 or 2k
gage steel.
A 20/l8-gage drum was introduced, made with an l8-gage top and
Dottom and a 20 gage body. This drum is 10 pounds lighter than the
standard 18-gage drum. This drum has a short commercial life which
permits only two or three trips to the reconditioner, compared with
the eight or ten trips afforded by the standard l8-gage drum. Still
lighter weight drums, such as those made of 2^--gage steel, cannot be
reconditioned at all.
-------
Because the 20/18 gage drum is made with less steel it costs
about $1.25 less than the standard l8-gage drum. And because of
this differential many industries —such as chemicals, peti^ochem-
icalsj varnishes and paints— which sell drum ani contents together
purchase the cheaper drum. On the contrary, the oil industry, in
the main, operates on a returnable drum basis. It pays the extra
$1.25 in order to gain the economy of its longer life.
For years the National Barrel and Drum Association has endeavored
to persuade industry to revert to the standard l<3-gage druii. Despite
our efforts, and despite the energy and resource savings inhsrent in
the l8-gage drum, production of "throwaway"and ILyi^ed-use drums nas
risen from only 2% in 1957 to kyf, in 1972.
This sharp rise in the manufacture of inefficient drums does not
concern the steel industry,which is not concerned with the energy
wastage and the expenditure of natural resources that result. It
now promotes an all-20-gage drum which has virtually no rei.se capa-
city, and which arrives at the reconditioner in poor shape. This
ominous trend in the manufacture of too many short-lived drums has
caused an acute shortage in drums available to the industry that can
be reconditioned.
There are about 20-21 million drums manufactured yearly. Thus, the
number of drums now reconditioned each year is more than double the
number of new drums that are manufactured. They are^ reconditioned
by Association members, who are in the category o" small businesses,
-------
whose plant investment ranges from a half million to seven million.
Our industry is not directly engaged in the recycling business.
We are instead a "reuse" industry —cleaning, reconditioning, and
refurbishing steel drums so that they are once again reusable by
industrial fillers of the many products that are shipped in drums,
both hazardous and non-hazardous. A "reuse" industry, we believe,
should be given as much, if not more, encouragement than a recycling
industry.
Our energy savings are demonstrable. A study prepared by
economists at the University of Illinois, which is submitted with
this statement, calculates that the manufacture of a new steel drum
requires tentimes as much energy as the reconditioning of a drum.
The study states, in part:
"A shift from the current mix of reusable and single-use
drums to an all-l8-gage drum system, with an average of
8 reconditionings per drum (9 fills), would create
energy savings of 17,043 billion BTU per year, which
is 23% of the total energy requirement of the present
system, and enough energy to provide electric power
for one month to a city the size of San Francisco.
"Clearly, efforts to increase the use of 18 gauge drums
and the rate of return of such drums (by such means as
deposits) would conserve energy. Conversely, a trend
to increase the use of light gauge drums, or to reduce
the return rate of drums would further burdern American
energy resources."
And as for solid waste pollution: if these drums were not picked
up, reconditioned and put back into the market place they would
constitute a serious blight, and be a contributing factor to the
pollution of our earth, air and water. Most drums contain residue
of their previous content — oils, chemicals, petrochemicals,
-------
pesticides, paints, etc, Our industry serves as an unpaid collection
system. It receives all of these pollutants, treating them, cleaning
the containers and returning them to commercial reuse, while at the
same time disposing of the residual sludge.
The First Report issued by this Committee to the Congress and
to the President in June 1977 stated that the Cbmmittee vould examLne
a range of policy issues including:
"(A) the appropriateness of recommended incentives and
disincentives to foster resource conservation..."
And in the Fourth Report, August, 1977, it was stated that a key
element would be to stv»dy and make recommendations "on a broad ran,?e
of present and proposed national policies affecting resource recovery
abd the use of our natural resources."
The reconditioned steel drum is the classic example cf what the
Congress had in mind. Although the Federal Register Notice of
November 8, 1977 is entitled "Solid Waste Product Charge" we submit
that implicit in that title is the promulgation of any proposal which
will serve the purposes for which this Committee was formed.
We believe that a tax incentive —or perhaps a disincentive —
would serve the national interest. An incentive given to the pur-
chaser of reusable drums provides an effective weapon against waste
of energy and natural resources. It acts to recognize the purchaser
who performs a "social Lenefit" rather than causing a "social cost."
Such an approach is extremely desirable in the field of industrial
containers —a field which cannot be equated with toothpaste tubes,
cardboard packaging etc. The reconditioning industry ras, over the
-5-
-------
years, created its own system of reuse. In the absence of wasteful
procedures initiated "by the steel industry, it can continue to make
appreciable savings in energy and natural resources. But, because
of such wasteful practices, government action is required in a manner
easy to administer and practical in approach —a tax incentive that
would remove the artificial attraction of a "cheaper" container.
In this one industry, by the adoption of a simple tax incentive,
the nation saves energy, protects natural resources, reduces solid
waste pollution, and aids in the fight on inflation.
We urge the Committee to take early action to save this industry,
and -we are looking forward to your advice as to how The National
Barrel and Drum Association can best cooperate in this effort.
Respectfully submitted for the
NATIONAL BARREL & DRUM ASSOCIATION,
1028 Connecticut Avenue, N.W.
Washington, B.C. 20036
Morris Hershson,
President
-------
Congressional Uecord
United States
of America PROCEEDINGS AND DEBATES OF THE
CONGRESS, SECOND SESSION
Vol. 118
WASHINGTON, THURSDAY, MARCH 30, 1972
No. SO
Senate
Nonreturnable Steel Drum Use Should Be Discouraged
Mr RANDOLPH. Mr President, litter
on our streets and highways, and in
our parks and recre&tion areas, in our
countryside, is of national concern In
response, several States have passed
legislation concerning this public-arous-
ing problem, legislation directed at
beverage containers—beer and soft drink
containers, bottles, and cans.
The concept of "throwaway"—"use
and discard"—has now been extended to
55-gallon steel drums In effect, the steel
drum manufacturing industry has cre-
ated a 55-gallon beer can and the cost
of disposal has been transferred from the
private or industrial waste disposal cycle
to potentially public, solid waste dis-
posal systems.
Since its formation in 1963, the Sub-
committee on Air and Water Pollution
has received extensive testimony and
considerable Information concerning the
potential environmental problems asso-
ciated with solid wiiste disposal The
culmination of this effort was the enact-
ment of the Resource Recovery Act of
1970 I had the responsibility to chair the
Senate-House conference on this needed
legislation
During these hearings, a great deal of
emphasis was placed on the recycling of
containers and, especially, the land pol-
lution and esthetic problems caused by
the Increased use of throwaway beer
cans and soft drink bottles. Another
major area of discussion was the prob-
lem of abandoned automobile hulks,
which are not only a menace to the
beauty of our countrysides, but also are
a waste of natural resources.
The concept of reuse received little
emphasis during those hearings; most of
the expert witnesses presented testimony
on how recycling could be employed to
accomplish major gains in the fight
against pollution. Yet the concept of re-
use, whether encouraged by public policy
through the establlsliment of disincen-
tives, as proposed be Senators NELSON
and JAVTTS, or by production controls,
was not fully explored. The idea of dis-
incentives, as was pointed out at that
time, wouia naturally require action by
the Senate Finance Committee. That
does not, however, preclude a proper dis-
cussion of disincentives before the proper
environmental committees of the Con-
gress so that they can acquire the back-
ground they need to carry out their
responsibilities.
During the next 2 years, the Public
Works Committee will initiate hearings
that will shape future public policy re-
garding the reuse and recovery of re-
sources It Is my purpose at this time to
call attention to the fact that a complete
review and analysis will be made in these
hearings of the potential for reuse of
products and containers as a means for
conserving our disappearing natural re-
sources, as well as a means for effective
environmental quality management
One facet of the reuse concept was al-
luded to in my prefacing remarks In
1970 the committee received a letter
from the National Barrel and Drum As-
sociation—NBADA—a trade association
with over 150 members who operate
plants that clean 55-gallon steel drums
so that they may be reused over and over
again—volume IV, beginning at page
2125. In its letter, the association com-
mented that it is, after all, "a service
industry; it does not manufacture new
drums, it has no voice in the policymak-
ing of those who do It exists only to re-
ceive the used drum and to prepare it
for reuse "
The drum reconditioning industry had
its real growth during a period of na-
tional awareness of the dangers of de-
stroying our natural resources During
World War n, and the Korean war, the
War Production Board and the National
Production Authority issued rules that
made it impossible to buy new drums un-
less the user had made every effort to
use already manufactured drums until
their useful life had been exhausted.
Only then could he buy new drums.
How, w* have come full cycle The new
steel drum manufacturing industry has
moved into the production of nonreturn-
able steel drums that have limited reuse
capability I must question the implica-
tion of this practice for resource con-
servation and, even more specifically, its
consistency with the aims and objectives
of the public policy enunciated in the Re-
source Recovery Act of 1970.
In the New York Times, on January 2,
1971, there was a story from Anchorage,
Alaska, that started out as follows.
In Alaska the main Utter problem !• not
empty beer oana but discarded oil drums At
Barrow on the Arctic coast, about 48,000 of
the metal barrels are scattered about the
tundra In the winter, them barrels are fro-
wn Into the aoll or poods and covered with
•now In the summer, the tundra th*wo to
a ooggy consistency that malcea It impracti-
cal to use vehicles to remove the barrels
In the Time magazine for October 25.
1971, there was a picture of littered oil
drums on the Aleutian Island of Am-
chitka The article talks of an "oil drum
culture" and notes that over a million
such drums are scattered along Alaska's
north coast
This is the "environmental decade"
and the drum reconditioner satisfies an
important environmental function.
When drums are left to rot, they con-
tain residue of acid, paint, or chemical,
which ultimately are rele:ised into the
environment. The drum reconditioner
performs the first step in abating this
potential environmental problem when
he cleans the residue out of used drums.
At that time, he collects the residue and
sludge deposits in the drum and disposes
of it in accordance with developing en-
vironmentaJ practices
The traditional standard 18-gage steel
drum can be reused over and over again
for as many as 10 or 15 times A lighter
weight, 20/:8-Eage drum can usually be
reconditioned two or three times How-
ever, a ligrter-weight, new-type drum,
known as 24-gage or Monos ress, has now
been put on the market at, an intended
"throw-away" or a "single use" drum
After one UE.C, it has no further function-
al value If society is lucky, these drums
will end up in a scrap yard where they
can be recycled, but even then the dis-
posal cost irust be borne by the taxpayer.
At other times, however it may very
well end up as an unsightly 55-gallon blot
on our Nation's countryside
I have ufied the analysis of the steel
drum to illustrate the need for the Sub-
committee on Air and Waiter Pollution
to take a close look at the concept of
reuse, both as it relates to the conserva-
tion of our national resources and as a
valuable tool for enlarging the effort to
protect the world in which we live
Prior to hearings next year, the Public
Works Committee intends to review busi-
ness practices which encourage single-
use consumer products sucti as the steel
drum. The committee also will provide
for Federal guidelines which will serve
as disincentives to such practices hi
order that the public interest can best
be served
Just imagine, if you can, a six-pack of
55-gallon "throw-away" cans
-------
THE ENERGY REQUIREMENTS OF STEEL DRUM
MANUFACTURING AND RECONDITIONING
by
Laurel Lunt Prussing
and
John E. Prussing
Urbana, Illinois February 14,1974
-------
ABSTRACT
This study estimates and compares the energy require-
ments of reusable and single-use steel drums. Single-use
drums require twice as much energy per fill as heavier drums
which can be reconditioned. This is because the greatest
energy requirement in the steel drum system is for the manu-
facture of steel. It takes roughly ten times as much energy
to manufacture a drum as to recondition a drum.
A shift from the current mix of reusable and single-
use drums to an all 18 gage drum system with an average of
eight reconditionings per drum (9 fills) would create energy
savings of 17,043 billion BTU per year, which is 23% of the
total energy requirement of the present system and enough
energy to provide electric power for one month to a city
the size of San Francisco.
Further energy savings could be realized if the number
of reconditionings of reusable drums could be increased.
-------
TABLE OP CONTENTS
List of Charts and Tables ii
About the Authors • iii
Introduction I
Estimates of the Energy Requirements for Steel Drums...1
Conclusion 10
References 12
Technical Appendix A-l
-------
ii
LIST OF CHARTS AND TABLES
Flowchart, Steel Drum Reconditioning System.......3
Table I Estimated Energy Requirements for the
Manufacture, Transport and Reconditioning of
Steel Drums 4
Table II Energy Requirementsi Manufacture and
Delivery of Nev Drum to Filler; Reconditioning
and Delivery of Used Drum to Filler 8
Table III Comparison of the Cumulative Energy
Required for 100 million fills of Reusable
and Single-use Steel Drums
-------
iii
ABOUT THE AUTHORS
IAUREL LUNT PRUSSING
Mrs. Prussing is an economist with research and
practical experience in the economics and politics of
recycling. Her academic background includes A.B.,Wellesley
College, A.M..Boston University, and graduate study at the
University of California, San Diego. She is presently a
Ph.D. candidate in the Department of Economics at the
University of Illinois at Urbana-Champaign. As an elected
official of Champaign County, Illinois, she is charged with
the responsibility of finding solutions to county solid
waste problems. She was formerly an Urban and Regional
Economist with Arthur D. Little, Inc., Cambridge, Massa-
chusetts and an Economist at the Center for Advanced
Computation, University of Illinois.
JOHN E. PRUSSING
Dr. Prussing is an Associate Professor of Aeronautical
and Astronautical Engineering at the University of Illinois
at Urbana-Champaign. His academic degrees are S.B., S.M.,
and Sc.D. from the Massachusetts Institute of Technology.
His research and teaching interests are in optimal control
of dynamic systems, a field in which he has published
numerous articles in professional journals. Prior to
joining the faculty at the University of Illinois, Dr.
Prussing was Assistant Research Engineer and Lecturer at
the University of California, San Diego and at M.I.T.
-------
INTRODUCTION
This study was commissioned by the National Barrel
and Drum Association to determine the energy requirements
of reconditioning steel drums versus discarding or recycling
drums by scrapping and remelting. The steel drum recondition-
ing industry has long promoted its product as a more economical
alternative to single-use or limited reuse drums. However,
as in other types of packaging, there has been a trend toward
throw-away steel drums.
In 1973 fuel shortages caused Americans to realize that.
nature's riches are not infinite. The United States may be
returning to an earlier ethic of resource conservation. It
is appropriate to examine the role of the steel drum recon-
ditioner in such conservation.
The method used in this report is based on Bruce Hannon's
classic study of the energy requirements of reusable versus
recyclable beverage containers. Professor Harmon has been
of invaluiible help in this analysis of the steel drjm industry.
ESTIMATES OF THE ENERGY REQUIREMENTS FOR STEEL DRUMS
Ener
-------
2
from that maze of interrelationships and selects the most
significant energy requirements of the steel drum system.
This study traces the energy needs of steel drums from
raw materials procurement through steel making, drum manu-
facturing and reconditioning and all transportation links
between these activities. The flow chart on page 3 shows
the steel drum system and the processes for which energy use
was estimated. Activities enclosed by broken lines on the
chart were not included in the energy estimates. The energy
requirements of fillers and industrial users, for example,
dwarf the portion that might properly be allocated 1;o the
use of steel drums within the industry.
Although there are other industries besides steel from
which drum manufacturers purchase inputs (e.g., paints) sheet
steel comprises 95% by weight of all such inputs. Similarly
an insignificant fraction is omitted by not including chemical
and paint purchases by reconditioners.
Table I on page 4 gives the energy required at each
stage of the flow chart for three types of steel drums,
the durable 18 gage drum, the lighter weight 20/18 gage
drum and the single-use 22 gage drum. Although the 18 gage
drum is heavier and requires more steel and more transport
energy at each stage, its ability to withstand many recondi-
tionings eventually reduces its total energy requirements
considerably below the 20/18 gage reusable drum and the 22
gage single-use drum.
*Notei the finished weights of these drums are 46 Ib., 38 Ib.
and 28 Ib., respectively. Each requires an additional 25% of
steel from the steel mill to allow for fabrication scrap.
-------
FLOWCHART
STEEL DRUM RECONDITIONING SYSTEM
INDUSTRIAL
USER I
_J
Scrap
-------
TABLE I
ESTIMATED ENERGY REQUIREMENTS FOR THE MANUFACTURE,
TRANSPORT, AND RECONDITIONING OF STEEL DRUMS
Process
Energy Requirement
(1,000 BTU/drum)
Mining of ores
Transport of ore
Manufacture of steel
Transport of steel to
drum manufacturer4
Manufacture of drums
Transport of scrap from
drum manufacturer to
steel industry"
Transport to filler
Transport of filled drums
to industry8
g
Transport of used drums i
a) to reconditioner
b) to scrap dealer
c) for discard
Reconditioning of drums
Transport of reconditioned
drums to filler11
Scrap yard
Transport of scrap to
steel industry
18 aaae drum
(46 Ib. )
100.1
27.0
1,322.5
10.9
113.0
2.7
7.2
108.7
2.0
1.4
1.4
147.6
2.5
0.9
5.9
20/18 qaoe drum
(38 Ib.)
82.7
22.3
1,092.5
9.0
113.0
2.3
6.0
107.0
1.7
1.2
1.2
147.6
2.1
0.9
4.9
22 qaqe
(28 Ib.)
60.9
16.5
805.0
6.7
113.0
1.7
4.4
104.8
0.9
0.9
0.6
3.6
Notes on following page
-------
Notes Cor Table I (complete list of references on p.12)
1. Hannon, Table 3i 1,740 BTU/lb. of finished steel
2. Ibid.. 470 BTU/lb. of finished steel
3. Ibid.. 23,000 BTU/lb. of finished steel
4. Ibid., 190 BTU/lb. of finished steel to transport steel
to drum manufacturers an average of 392 miles. Includes
weighted average of rail and truck transport at 640 BTU
per ton-mile and 2,400 BTU per ton-mile respectively
tHannon, p. 12)
5. Census of Manufactures, MC67(S)-4, Table 4, "purchased
electricity" converted to thermal energy at 1 kwh= 11,620 BTUj
"kilowatt hour eqivalents of purchased fuel" converted to
the.rmal energy at 1 kwh=3,412 BTU (Hannon, p. 12). Alloca-
tion of fuel requirements for steel drums in SIC 3491,
"Metal Barrels, Drums and Pails" computed fro-n the value
of steel drums as a percent of the value of the industry's
tot.il output in 1967 (reference 3). This share—65%--is
virtually identical to the physical measure of drum output
versus total output in terms of the surface area of the
steel processed.
6. 25% of the transport energy used from steel industry to
drurti industry
7, Average distances and mode of transport from reference 4
8. Share of drum output to each filler from reference 5,
distance and transport mode from reference 4
9. Reconditioner receiptsi 8596 local by truck 10 miles; 14%
by truck 100 milesj 1% by rail 250 miles. Energy of local
truck shipments! 4 miles per gallon diesel fuel; 138,000 BTU
per gallon. Energy to scrap dealer and disca.rdi 10 miles
by truck; 4 miles per gallon diesel fuel; 240 drums per
truck. Energy reduced for lighter drums by weight.
10. Reconditioning energyi natural gas (1 therms 10 BTU),
purchased electricity as in note 5 above
11. Reconditioned drums shipped an estimated 25% further
than reconditioner drum receipts
12. Gasoline consumption of scrap dealer less energy for
10 mile haul from local sources (note 9 above)
13. Ba:ied on average shipping distance of a midwest scrap
dealeri 400 miles by rail
-------
6
The manufacture of a steel drum begins with the mining
and transport of ores to the steel industry. Sheet steel
from the mill is then shipped to the drum manufacturer.
The steel required to make a drum includes an extra 25%
allovance for each pound of finished drum to account for
scrap incurred in the drum manufacturing process. This
scrap ia returned as an input to the steel industry.
Steel requirements and transportation energy are estimated
in proportion to the weight of each of the three types of
drums. Drum manufacturing energy, however, was estimated as
equal for all three, since surface area rather than weight
seemed a more reasonable measure of the energy used in the
fabricating of drums from sheet steel.
The transport energy required to ship drums to fillers
was estimated from a weighted average of the proportion of
drums shipped by rail and by truck. Slightly more than half
of new drums are shipped by truck and the rest are shipped by
rail. Rail shipment takes about one fourth as much energy
per ton-mile as truck shipment (640 BTU per ton-mile, versus
2,400 BTU per ton-mile according to Hannon's estimates).
The energy required to ship filled drums to industrial
users was computed as a weighted average based on the type of
filler (chemicals, SIC 281j paints, SIC 2851j and petroleum
products, SIC 291), the average distance to customers from
each filler by rail and by truck, and the proportion of each
filler's output shipped by rail and by truck.
-------
7
Once drums are emptied by industrial users they can
be reconditioned, scrapped, or discarded. (In this model
we have included in "discard" drums which may find a useful
purpose such as highway markers or even stoves and shower
stalls in Alaska; in short, drums which are no longer used
to ship the output of fillers.) The energy required to ship
used drums to any of these alternatives is relatively small.
Information on the energy used to recondition drums was
supplied by a reconditioner who prefers to remain anonymous.
Reconditioning energy was assumed to be the same for both
types of reusable drums since the energy is needed to clean
and repair drum surfaces.
The energy requirements to ship reconditioned drums to
fillers and to compress drums for scran and to ship the scrap
to steel mills are negligible compared with other requirements
of the drum system.
Table II on page 8 sums the appropriate energies from
Table I and indicates the savings made possible by rerondi-
tioning a drum rather than manufacturing a new one. 7or the
18 gage drum reconditioning energy is one tenth as mu:h as
manufacturing energy.
Table III on page 9 indicates the total amount of energy
which would be required for each type of drum to provide 100
million fills, the estimated annual number of fills ot" steel
drums in the United States. The energy ratios at the bottom
of the table show that an all single-use drier, system would
-------
TABLE II
ENERGY REQUIREMENTSl
MANUFACTURE AND DELIVERY OF NEW DRUM TO FILLER!
RECONDITIONING AND DELIVERY OF USED DRUM TO FILLER
(1,000 BTU/drum)
18 gage 20/1B gage 22 gag
New drum1 1583 1328 1008
Reconditioned drum2 152 151
1 Table I down to and including transport to filler
2 Table I, transport to reconditioner, reconditioning
energy, and transport to filler
-------
TABLE III
COMPARISON OF THE CUMULATIVE ENERGY REQUIRED
FOR 100 MILLION FILLS OF
REUSABLE AND SINGLE-USE STEEL DRUMS
Reusable
18 gage
20/18 gage
Single-use
22 gage
56.489 bil. BTU
77,735 bil. DTU
111,400 bil. BTU
(9 fills per
drumi 8 recon-
ditionings)
(4 fills per
drum) 3 recon-
ditionings)
(new drum far
each fill)
.ENERGY RATIO
20/18 gage drum
18 gage drum
= 1.4
22 gage drum
18 gage drum
2.0
-------
10
require twice as much energy as an all 18 gage system.
A complete 20/18 gage system would require 40% more energy
than an all 18 gage system.
Table III is based on a systems analysis in which all
flows of material on the flow chart have been estimated.
The equation and an explanation of the variables upon which
Table III is based are given in the Technical Appendix.
Table III is based on the reconditioning industry's
conservative estimates of eight reconditionings per 18 gage
drum (9 fills) and three reconditionings per 20/18 gage
drum (4 fills). Lighter weight drums which can be recondi-
tioned have an initial advantage over heavier drums until
the number of reconditionings of the heavier drum exceeds
that for the lighter drum. (Single-use drums are at a dis-
advantage after the first reconditioning of an 18 gage drum.)
Lighter weight drums are less durable and generally cannot
be reconditioned more than three times. The 18 gage drums,
however, could be reconditioned up to 16 times with little
problem. Any increase in the number of reconditionings will
lower the energy requirements of the steel drum system.
CONCLUSION
The estimated energy requirements of the current mix of
reusable and single-use steel drums in the United States is
73,532 billion BTU per year. If the system were converted
to all 18 gage drums with an average of eight reconditionings
(9 fills per drum) an estimated 17,043 billion BTU per year
-------
11
couLd be saved. This is enough to provide the equivalent
in electrical energy for a city the size of San Francisco
for one month.
If the return rate of 18 gage drums were increased so
that the average number of reconditionings was raised to
15 ( 16 fills per drum) then the United States could save
an estimated 29,707 billion BTU per year, the equivalent
of 238 million gallons of gasoline, by converting to an
all 18 gage drum system. This would raise the ratio of
energy requirements of the 22 gage single-use drum to
energy required for the 18 gage (16 use) drum to 2.5.
Clearly efforts to increase the use of 18 gage drums
and the rate of return of such drums(by such means as
depcisits) would conserve energy. Conversely, a trend to
use more light weight drums or to reduce the return rate
of drums would further burden American energy resources.
2 See Hannon, op. cit.. p. 23.
3 If no losses occurred in the 18 gage system (no discsirds
and no drum failures) the ratio would reach a maximum of
4.2. This is because as the number of reconditionincis
increases, the average energy approaches the reconditioning
energy, since the energy required to manufacture the drum
becomes a smaller and smaller fraction of the cumulative
energy used. Mathematically, in equation A-4 of the Techn-
ical Appendix the average energy for the 18 gage drum
approaches a lower limit of 265.5 x 10^ BTU per fill as
the number of fills becomes infinite. The average energy
for the 22 gage drum is 1113.5 x 103 BTU per fill.
-------
12
References
1. Hannon, Bruce, "System ftiergy and Recycling! 4 Study of the Beverage
Industry", Center for Advanced Computation, University of Illinois,
CAC Document No. 23, revised March 17, 1973.
2. U.S. Bureau of the Census, Census of Manufactures, 1967, Special Seriesi
Fuel and Electric Energy Consumed, MC67(S)-4, U.S. Government Printing
Office, Washington, D.C., 1971.
3.. U.S. Department of Commerce, "U.S. Industrial Outlook, 1974., Metal
Shipping Drums and Palls".
4.. U.S. Bureau of the Census, Census of Transportation, 1967, Vol. Ill,
Commodity Transportation Survey, Part 3, Commodity Groups, U.S. Govern-
ment Printing Office, Washington, D.C., 1970.
5. U.S. Department of ComerCB, "Current Industrial ReportsiSteel Shipping
Drums and Palls, Summary for 1967", M34K(67)-13.
-------
A-l
APPENDIX A
Technical Appendix
The system analysis of the steel drum reconditioning
system is based on the flowchart of the system. On the
next page the flowchart is shown with the energy
variables of the system labelled. These variables denote
the amount of energy required by a process, such as ED_
(the amount of energy required to mate a drum) or the
amount of energy required for transportation, such as
ECm no ( the energy required to transport the steel for a
o 1 ,]JK
drum from the steel industry to the drum maker). On the page
following the flowchart a symbol list is given which defines
each of the symbols appearing on the flowchart.
The total energy required to mine raw materials,
make a new drum, fill it and deliver it to the industrieil
*
user is called E , and is equal toi
E* = EM + EM,ST * EST * EST,DR + EDR,ST + EDR +
E + E (A~1}
DR.F LF,I
Next, an equation is derived, based on the flowchart,
which describes the total energy requirement for the
complete reconditioning system. The total energy
-------
FLOWCHART
STEEL DRUM RECONDITIONING SYSTEM
A-2
RAW
MATERIALS
"M.ST
— » r
STEEL
INDUSTRY
EM
EST
3DR,ST EST,DR
1
DRUM
MAKER
ESC,ST
EDR
1 "|EDR.F
FILLER
( *
J INDUSTRIAL
| USE
'-«- , —
EI,DI
^^•^^von
EI,SC
I
1 DIS
>
ER,F
1
'
R
I CR.SC 0
Esc
1
CARD ' ' bCKAlJ
1 DEALER
-------
A-3
LIST OF SYMBOLS FOR FLOWCHART
Energy Requirements
£„ = Mining of ores
EJJ ST = Transport of ore
ES_ = Manufacture of steel
EST DR = Transport of steel to drum manufacturer
E__ = Manufacture of drums
EDR ST = Transport of scrap from drum
' manufacturer to steel industry
EDR F = TransP°rt to filler
Ep _ = Transport of filled drums to industry
ET „ = Transport of used drums to reconditioner
11K
E_ pj = Transport of used drums to discard
E. g- = Transport of used drums to scrap dealer
ER = Reconditioning of drums
E_ „ = Transport of reconditioned drums to filler
K 11
Ej, s_ = Transport of reconditioned drums to
' scrap dealer (equal to Ej S(,)
ESC = Scrap yard
ESC ST = TransP°rt of scrap to steel industry
-------
A-4
requirement, E, is expressed in terms of N, the number
of reconditionings of a drumt By changing the value of
N in the equation, one can calculate the energy requirement
for any number of reconditionings.
The general equation for the energy requirement for
N reconditionings (N + 1 fills) isi
E = E + N
f3 [EI,R * ER + f4 (ER,F + EF,I> + f5 (ER.SC + (A-2)
^ « « - ., V .'}
ESC + ESC
where
f^ = fraction of drums from industrial user to scrap
f2 = " " " " " " " discard
fj = " " " " " " " reconditioncr
( Note that these fractions must sum to onei f. + f- + f, = 1)
f. = fraction of drums from reconditioner to filler
f j = " " " " " " scrap
Numerical values for these fractions are given on the following
page. The values for the energy vaiiables are given in Table I
of the report.
-------
Numerical values for the fractions f. i
1 H OAr.E 20/18 GAGE
f3 1.03 N/(N+1) 1.05 N/(N+1.I
f4 0.97 0.95
f 0.03 0.05
Notei f, is determined from fjf^> which is the return
rate for the reconditioning loop, equail to
1 - 1/(N+1) = N/(N+1).
While expressions for the fractions f and f_
( the fractions of the drums from the industrial user
which go to scrap and discard) can be determined, the
terms in Eqn. (A-2) in which they appear have very small
coefficients. These negligibly small terms are ignored
in obtaining the simplified equations which appear later
in the appendix.
Assuming f1 and f2 are equal, expressions for them
arei f1 = f2 = 1^N°^3N for the 18 gage drum, and
fl = f2 = 1^N°'°5N for the 20/18 gage drum.
-------
A-6
Once the total energy requirement E for a given number
of reconditionings N is calculated for a given weight
drum, the average energy requirement per fill can be
calculated by dividing E by the number of fills, N+l.
This average energy per fill, Eav , is the number which
decreases as the number of reconditionings of a drum
increases. The total energy used, E, increases each
reconditioning, but less than for new drums.
E = E / (N+l) = average energy per drum ,. ,,
per fill. (A~3'
The magnitudes of the energy variables in the energy
equation are given in Table I as follovs> (in 1000 BTU's
per drum)
IB gage 20/18 gage 22 gage
E 1692.1 1434.8 1113.5
EI.SC * ESC\
8.2 7.0 5.1
0.9
105.3
3-2 7.0 4.2
* ESC.ST J
EI,DI
EI,R + ER
ER,F * EF,I
1.4
149.6
111.2
1.2
149.3
109.1
ER,SC * ESC1
+ ~«SC.ST J
-------
Jt-7
SIMPLIFIED EQUATIONS for the cumulative energy per drum
(E) for an arbitrary number of reconditioning! (N)i
Equation (A-2) , after substitution of the values cf
the energy variables, can be simplified. Some of the terms
in the equation are negligibly small and can be ignored.
The simplified equations are as followsi
IB GAGE DRUM
E = J1692.1 (2N+1) + 265.5 N^J/ (N+l) (A-4)
20/18 GAGE DRUM (maximum of 3 reconditionings)
for N<3 :
3
-------
COMPUTER PROGRAM
A small computer program was written to calculate
the cumulative and average energy requirements per drum
for the reconditioning system. A listing of the program
appears below.
DIMENSION E<50>
NR-0
NC-4
CC NC IS THE MAX. NO. OF FILLS FOR 20/18 DRUM.
KMOD-0
DO 100 K-1,16
NF-NR+I
NZ-NF+NR
NSB-NR*NR
E1B-<1692.I»NZ+265.5»NSQ)/NF
E22-1113.5«NF
AV18-E18/NF
IFCNF.GT.NC) GO TO 10
E2018»U43«.8»NZ+266.»NSQ>/NF
AV20-E2018/NF
E(NF)"E2018
GO TO 99
10 1F(MOD(NF/NC).EQ.1) KMOD-KMOD+1
E2018-E
E(NF)-E2018
AV20-E2018/NF
99 WRITE(6<98) NF*NR,ES2»ESO16/E18.flwag,AV18
98 FORMAT;ix,sis.5F1t.l>
100 NR-NR+l
97 STOP
END
On the following page a list of symbols and their
explanation is given. The equations programmed are the
simplified equations from the preceding page.
-------
A-9
COMPUTER PROGRAM SYMBOLS
MR = number of reconditionings
NC = maximum number Of fills for the 20/18 gage drum.
NF = number of fills
E18 = Cumulative energy requirement in 1000 BTU's per
drum for 18 gage drum
E2018 = Cumulative energy requirement for 20/18 gage drum
E22: = Cumulative energy requirement for 22 gage drum
AVI 8 = average energy per drum per fill for 18 gage drum
AV20 = average energy per drum per fill for 20/18 gage drum
-------
TABLE A-l
OUTPUT OF COMPUTER PROGRAM
JU10
r^
+
Z
CO
rH
rH
'H
IU
It
0
L<
01
JO
9
z
1
2
3
4
5
6
7
8
9
10
11
12
13
14
zT
n
_?
•<-t
c
o
1U-H
O 4->
•H
fcTJ
2S
§k:
z u
0
1
2
3
4
5
6
7
8
9
10
11
12
13
&
b E
S2
OJ T3
01 01
> DI
36
n
rH IN
3 (N
§
O
1113.5
2227.0
3340.5
4454.0
5567.5
6681.0
7794.5
8908.0
10021.5
11135.0
12248.5
13362.0
14475.5
15589.0
&
u
01 01
C Dl
oi n
Dl
01
> CO
-H fl
•PX
10 O
rH (N
3
tj
1434.8
2285.2
2746.0
3109.4
4544.2
5394.6
5855.4
6218.8
7653.6
8504.0
8964.8
9328.2
10763.0
11613.4
>, E
Dl 9
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Notei The average energy per drum per fill for the 22 gage
drum is 1113.5 regardless Bf The value of N.
ALL NUMBERS SHOWN ARE IN UNITS OF 1000 BTU's per drum.
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My name is Henry B. King. I am President of the United States Brewers
Association, Inc., a not-for-profit national trade association i ncorporated
under the laws of the State of New York, whose headquarters office is located at
1750 K Street, N.W. in Washington, D.C.
The United States Brewers Association, Inc. is the oldest continuously incor-
porated trade association in the United States having been formed in 1862. The
Brewer Members of the USBA consist of approximately thirty-fojr American brewers
ranging from national brewers whose malt beverages are sold in all fifty states,
to reg i ona1 brewers whose markets are in various sections of the nation, to local
brewers whose products are merchandised basically within a few states. In addition,
there are eleven foreign brewers who belong to USBA as Affiliated Members. The
Brewer Members of the USBA produce close to 95 percent of all malt beverages sold
in the U.S.
I should note at this time that 1 am not speaking on thi> issue for the
Adolph Coor E. Company wh i ch is a member of the United States B "ewers Assoc iat i on.
The Adolph Coors Company sees beverage container deposits as .nevitable and feels the
uniform nationwide mandatory deposit system is the only pract cal solution.
In addition to Brewer Members, the USBA includes among i^s membership scores
of Assoc i atij Members representing a 1nos t every Amer Scan enterprise suppiyin •
pro ducts or services to the brew ing Industry -- f rom adhesive'^ to yeast Among
the many supplier industries represented by membership in the USBA are the malting,
milling, hops, paperboard, can, glass container, crown, grain and feed, advertising
sIgns , b rewing machinery, steel and aluminum industries.
Litter reduction, so lid waste management, energy conservat I on and re source
recovery are certainly national goa1s we all seek.
1 testified at a public hearing on October 19th concerning container deposit
proposals which are supposed to reduce litter and solid waste, increase employment,
reduce costs to the consumer and save energy. I stated the oppos itlon of the
brcwi ng industry to such proposals then because our studies show that mandatory
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deposits do not solve the problems and such legislation would actually cost the
consumer more and resuit in loss of skilled jobs. We submi tted studies previously
and subsequently wh ich verified our position that mandatory depos i ts do not
address the problem of all litter nor attempt to solve the larger problem of solid
waste management.
Today, I state, as I did in my letter to Ms. Barbara Blum of October 13, the
USBA is now prepared to accept as a matter of principle a broad-based user charge
or tax. We feel this charge - the subject under discussion today - would be
levied against all components of municipal household solid waste and litter. The
funds would be allocated to the states under appropriate formulas for litter manage-
ment and/or resource recovery systems.
We feel, however, that additional research Is necessary as it relates to
resource recovery technology and suggest that revenue derived from a charge should
be utilized in part to advance the state of the art. In addition, of course,
research is necessary prior to the establishment of rates or charges for the vary-
ing materials in the sol id waste stream.
We additionally suggest that the charge be applied at the point of product Ion
of the material represented in the solid waste stream as it would be extremely
difficult, for instance, to assess the rate structure if it were based at the t ime
of mineral extraction. We also fee! that it would not be necessary or desirable
to reduce the product charge in relation to the amount of recycled material since
the market price or market system will in effect adjust for the more scarce or
valuable materia 1s.
In establishing the rate structure for the product charges and considering
phase In time, it must be recognized that in order to achi eve an obj ective set
for ten years hence a rate structure should not be set which wi11 accomplish the
revenue requ i rements in the first year
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1 wish to state some rationale of why USBA supports this general user product
charge concept over deposit legislation as a more effective solution to the
problems alrt-ady stated. The tax approach addresses all areas of litter -- not
just beverage containers. More importantly, it can offer a very meaningful support
to resource lecovery and recycling programs by providing a source of funds for the
more significant attack on sol id waste and energy recovery.
As far as litter is concerned, USBA has been a supporter of the Clean Community
System that was or i g i na!1y developed from grants by i ndustry through KAB and
which has demonstrated in Charlotte, North Carolina, Macon, Georgia and lampa,
Florida that there are other alternatives to managing litter and, indeed, reducing
it in all its forms. As our additional contribution, the brewers are taking this
research and imp!ementing it wi th other concepts that we have developed out of our
own experience. These programs have no relationship to the bottle and can deposit
issue. They are not political in nature, but they are demonstrated evidence of our
concern for solutions and our willingness to put our personnel and resources to
bear in helping to allevlate them.
S i nee we have offered the new Positive Litter Reduct ion Program, over 200
communities -- in the past 6(H days -- have elected to adopt this sophisticated and
efficient litter reduction program. The new program is headed in each city or
county o F governments 1 department officials. It does not rely on volunteer citizen
groups a =, mc^t earlier litter-reduction efforts have done.
The Clean Community System and the new Positive Litter Reduction Program can
resuit in 70 percent or better reduction in litter without costing the consumer;
costing loss of skilled jobs or causing an adverse disruption to industry. And,
it aims at all litter, not just the 20 percent made up of beer and soft drink con-
tainers.
I wish now to discuss the larger problem of sol id waste management and the
need for increased support of resource recovery and recycling effects.
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For the past seven years, the United States Brewers Association has advocated
a nationwide network of local resource/energy recovery and recycling systems. The
brewing industry has argued that the development of a nationwide network of
resource/energy recovery and recycling systems is essential for the country in order
to aid in accomplishing our national energy and materials conservation objectives.
We have previously submi tted documented ev i dence (in our Reference Source
Book, based on EPA studies) that proved that a resource recovery strategy is a far
more cost-effect i ve solut i on for accomplishing our national energy and resource
conservation objectives than any source reduction strategy based on banning non-
returnable beverage containers.
Municipal recycling makes more envIronmenta1 sense in other areas as wel1 .
It will help eliminate the rodent and ground water contami not ion prob 1 ems assoc i-
ated with our present dumping and land fill practices, to say nothing of the
environmental problems associated with the off-shore oil wells, atomic power plants,
and coa1 strip mines that will be required if the recovery of energy from muni c t pa 1
solid waste continues to be neglected. A favorable balance of payments impact of
more than $2 billion annually from the development of this energy source should
not be ignored as weli, nor should the 1ong-Lerm consequences of d t s s ? pat Ing
prectous environmental capital for costly and wasteful solutions to very serious
env i ronmenta1 probI cms.
When we talk about resource recovery, we are not indulging in wishful thinking
about SOiie f utu re techno) otj t ca 1 breakthrough Let n.e revi ew wi th you wha t the
Na 11ona1 Cen ter for Resource Recovery recen 11y reported.
In 1970, there was virtually no piocesslng of city waste through facilities
for any kind of recovery There were then, as now, source separation programs
where scrap processors, citizens groups and industry recla imec1 i nd i vidual waste
components. At mid-decade four or five capital-intensive recovery plants were
opera ting primarily prototype in nature -- initial facilities demon^trating new
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approaches to recover energy and materials from mixed refuse. Now, in late 1977,
there are 15 plants on line. Seven more are under construction, with at least
20 jurisdictions in advanced stages of final planning, contract awarding or ground-
breaking. Concurrent with these commitments, dozens of other communities are
actively considering recovery approaches.
At the beginning of 1980, by conservative estimate, the plants that wi11 be
on-line will :>e processing more than six million tons of municipal refuse annually
for recovery. This is in addition to a probable 10 million tons of source separated
materials -- artmarily paper.
For thoss impatient for quicker remedies to waste disposal ills, let me
just state that the problems we encounter with trash and garbage are ancient in
character and a re not susceptible to quick "fixes." As for other i ssues perta i n ing
to residuals, the drive for environmental betterment, the searci for new energy
sources, and the goal for conservation of resources are ail new national objectives.
Fortunately, resource recovery is advancing to the point where it can moderate
waste disposal problems while producing significant conservation benefits in the
doi ng.
The conditions and climate are becoming more favorable for resource -ecovery.
For example, the Resource Conservation and Recovery Act of 1976 has an important
and desirable provision which mandates the termination of unsound environmental
land-disposal practices. This mandate will result in increased disposal costs, thus
1eadIng to the po i n t where resource recovery will be econom i ca11y compet i t i ve with
disposal ,n more cities.
Some very positive steps have been taken during 1977. Large energy and
materials recovery plants began operating in Milwaukee, Chicago and Baltimore
County, Maryland. Materials recovery is getting underway this fall In New Orleans.
Demonst ration projects are being activated in San Oi ego County and Mountain
View, California. Facilities are under construction In Hempstead and near Rochester,
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New York, In Bridgeport, Connecticut; Akron, Ohio; Lane County, Oregon, and Pompano
Beach, Florida. Already operating at the beginning of the year were the plants in
Ames, Iowa, operating in communities in Arkansas and New Hampshire.
I would like to append to my statement this recent report from the National
Center for Resource Recovery which descr i bes the status of resource recovery
facilities in this country. It lists the town, cities and counties (and there
are some 50 shown) and the status of their recovery programs including key partici-
pants, tonnage and capi ta1 costs.
As Mr. Stroh stated on October 19th, the United States Brewers Association has
recently prepared an analysis which examines resource recovery as an alternative
energy source. This analysis shows that the capital required to build a national
network of local resource recovery systems is significantly less per barrel of oil
per day equivalent than the capital required to support the widely discussed
synthetic alternatives. It also shows that, when adjusted for a reasonable
learning curve effect, the investment required to support a national resource
recovery system becomes competitive with the investment required to develop our
coa1 resources.
The data sources for this analysis entitled, "Resource Recovery As An
Alternative Energy Source" which was submitted to the Resource Conservation
Comrni ttec on October 19 are basically studies for the EPA and Al coa by Frankl i n
Associates and Mi clwss t Research Institute and the MIT Workshop on Atternati ve
Energy Strategies (WAES) Second Technical Report "Energy Supply to the Year 2000."
Very briefly, this study notes that if total synthetic energy sources were
utilized, by 1990 the country wouId receive 700,000 BDOE for an investment of
$26,^90 BDOE compa red with 7&0,000 from resource recovery sys tenis at less than
ha If the cost.
(norc)
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We believe that when the Resource Conservation Committee analyzes this report,
they will agree that resource recovery can and must make a vital contribution to
not only our growing solid waste problems, but also, more importantly, when all
national interests are taken Into account, to our essential energy needs as well.
I feel i/ery strongly that the bridge financing for such a nat ionw i de network
of resource recovery facilities can best be provided by a broad-based tax on all
the items that contribute to both 1itter_and municipal solid wds_te_.
The resource recovery systems, coupled with the sophisticated Clean Litter
Reduction program I mentioned earlier, achieve the goals to wh ch we all aspire
and agree wich, and to which I referred to earlier -- conservation of resources,
energy savings, elimination of litter and reduction of solid waste.
In closing, I repeat that USBA Is now prepared to accept, as a matter of
principle, a broad-based user charge or tax, the charge to be levied against those
components that constitute a source of litter and mun i cI pa 1 househoid soli d was te
and the funds to be allocated to the states under appropriate formulas for litter
management ard/or resource recovery systems.
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(f
STATEMENT BY
ST. CLAIR J. TWEEDIE
DIRECTOR OF PUBLIC AFFAIRS
PAPERBOARD PACKAGING COUNCIL
BEFORE
THE RESOURCE CONSERVATION COMMITTEE
PUBLIC MEETING ON PRODUCT DISPOSAL CHARGE LEGISLATION
NOVEMBER ]?, 1977
My name is St. Clair Tweedie. I am Director of Public Affairs for the
Paperboard Packaging Council. We are headquartered here in Washington.
The Paperboard Packaging Council is the national ti*ade association of the
U.S. folding carton industry. Our members produce about three quarters of this
nation's folding carton output.
Our product is the form of packaging most frequently encountered in everyday
life. It is used to package products ranging from foods to Pharmaceuticals.
Breakfast cereals, soaps, detergen ts, bakery, hardware, 1i terally thousands of
products are packaged in pape rboard foldi ng cartons. More than half, however,
are used to package foods.
Most people, despite these daily encounters, simply take the package for
granted and would be hard pressed to accurately define it or its many functions
and uses. S imply defined, the folding carton is a con tainer made of bend ing
grades of paperboard, plain or printed, cut and creased, in a variety of sizes
and shapes, folded and delivered flat, or glued and collapsed. It is formed
by the maker; set up, filled and closed by the user. Folding cartons are made
to a multitude of styles -- these are consumer packages, separate and distinct
from set-up boxes and corrugated and solid fiber boxes.
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Our interest in the concept of disposal charges as has been advanced to date,
largely by the Environmental Protection Agency's staff and the legislative
interpretation rendered by Senator Gary Hart, is substantial.
The Board of Directors of the Paperboard Packaging Council has taken a
policy position opposing the disposal charge concept as proposed by Senator Hart.
This action was the logical result of assessing its serious weaknesses and
deficiencies in terms of the justice and equity of the tax, the basis for imposi-
tion, the uncertainty of incidence, as well as the costs and complexities
associated with collection. There are additional shortcomings, every bit as
serious, with respect to other aspects of this bill, but this is not the forum
to go into them. Rather, I mention these points to create an understanding as to
the basis for our opposition.
Let me focus directly, from the prospective of the paperboard packaging
industry, on l:he subject of disposal charges. As beauty lies in the eye of the
beholder, so l.o do the objectives and goals of the product charge.
We are told that it is a sound method — this i nternal izati on of the external
costs of trash collection and disposal — which will bring our economic system
closer to an idealized free market resource allocation solution.
We are also told that this excise tax on a portion of post-consuiner solid
waste will provide a revenue bonanza for certain sections of this country.
We are then told that the economically sound premise upon which the entire
scheme for the internal ization of both economic and social cost1* regarding post-
consumer solid waste, serving as the justification for the proposal, can lie
picked apart, some aspects retained, others discarded for the purpose of adminis-
trative ease, without damaging the theoretical or the practical application of
the concept.
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- 3 -
This is precisely the basic flaw contained in the proposals being popularly
discussed. A disposal charge, designed to internalize costs of collection and
disposal, levied on only 40 percent of all the products included In the post-
consumer waste stream is grossly unfair and inequitable. For purposes of
outright discrimination, administrative ease or any other rationalization,
such a measure obviously overlooks the cost of handling all of the other products,
ranging from appliances to textiles. It also overlooks the relatively greater
costs of handling these often bulky elements. Regardless of the product's
construction -- virgin, recycled or hybrid, durable or nondurable, once the
consumer puts it into the trash, there is a cost associated with its disposal.
In fact, to date, there is no valid statistical information on what is actually
collected and disposed of. There is no information on the frequency or Incidence
of durable goods' disposal cycles or the seasonality of waste loads and content.
Only estimates based on production.
Another much touted benefit of disposal charges, in addition to reducing the
amount of post-consumer solid waste, is the impetus to substantially increase the
volume of materials recycling. The question, based upon our knowledge of what
is presently occurring in this area, is will it really produce these benefits,
and at what costs? Too often a program is g>ven credit for accomplishing
someth ing that was in the process of happen ing and would have mater I a I I zed
whether or not the program was implemented.
You need go no further than the paperboard packaging industry to illustrate
this point. Right now, today, a substantial proportion of the more than two
million tons of folding cartons produced are made from recycled paperboard. Over
52 percent of the product of this industry is made from recycled stock. There
are no taxes, no special programs to promote this end. But, It is happening.
It is a result of the forces of competition and a free market at work.
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From the standpoint of the paperboard packaging industry, it should DC noted
that it is not a simple matter to convert from the use of virgin to recycled
board. Those areas presently using virgin board, many do so because the
recycled stock does not lend itself to product requirements — such as strength
of the board and its ability to meet the very tight specifications of the high
speed forming and filling equipment in such wide use today.
There are also entire categories of packaging where the ma:erial used is
governed by rigid government specifications. One such area is in milk packaging.
The use of board, solid bleached sulphate, made from virgin fiber is required by
the Food and Drug Administration. There is no way to alter or change these
regulations to take advantage of 3 recycling credit or to offset product
disposal charges.
There is also a totally separate, yet fully related, set of economic
•amifications. These have to do with probable cost effects. Since one of the
objections of the charge concept is to stimulate the use of recycled materials,
the fact that It may simply push costs upward and thus do little to achieve
this particular goal, must be considered. Such a result, more probable than
not, would work to the disadvantage of the paperboard packaging industry vis-a-vis
other packaging materials. Given the existing demand for recycled paper and
paperboard and the projected increases based upon realistic assessments of
waste paper supply and availability, it is easy to see how market pressures
can force prices upward. If the tax Is applled to vi rgin board, gi ven these
market pressures, the price of recycled board will tend to increase by tt~e
amount of the tax. Thus relative parity is maintained, but at a higher price
level.
We too often take packaging for granted. We forget that the benefits are
real and not simply the symbol of luxury of a wasteful society. The implications
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of placing a discriminatory tax on packaging appear obvious. By reducing the
amount of packaging used, this nation can dramatically reduce or even eliminate
the growing solid waste problam. The use of less packaging, in turn, means less
going into the garbage cans, and in turn, the dumps incinerators and landfills.
Also less energy would be expended in the collection and disposal of such a
"reduced" post-consumer solid waste stream.
This, unfortunately, is simply not the case. Post-consumer solid waste
would be infinitely larger if packaging were drastically eliminated or diminished
altogether. In addition to increased physical volume, Its composition would be
substantially altered.
Paperboard packaging is a major component of this nation's very efficient
processing and distribution system. More than half-of all paperboard packaging
is used for food and food products. To claim that eliminating or reducing the
amount of packaging would lighten the solid waste load is simply not based upon
the facts.
Our modern system of food distribution in which packaging plays a vital
role has kept the bones, peels, pits, innards, shells and other waste out of
the garbage pail and the solid waste stream and replaced them with a much lesser
quantity of a more desirable form of trash. Animal and food wastes are kept
where they are most productive -- near their sources where they can be and are
processed into a variety of usable products and by-products.
A good example of the efficiency of paperboard packaging in the area of
trash prevention is seen in facts as they relate to nine widely-consumed
vegetables -- 1ima beans, snap beans, broccolI, carrots, caul if lower, sweet
corn, green peas, spinach and Brussels sprouts. These vegetables are available to
the consumer both as fresh and as packaged items: 33 percent are frozen, 20
percent canned, and 4? percent are fresh. For the nation, as a whole, if all of
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- 6 -
these were consumed fresh or purchased fresh and canned or frozen at home, the
result would be almost six billion pounds of wet garbage.
To bring these figures into a more real perspective, it is necessary to view
them in more manageable terms. The City of New York has a population of about
7.5 million. If these poeple purchased and consumed the previously mentioned
vegetables (accord! ng to national per cap i ta consu-npt ion figures) in fresh
form, the result would be 107,2^9 tons of wet garbage entering the city's solid
waste stream. On the other hand, If consumers purchased these vegetables frozen
in ten ounce p.sperboard cartons, the contribution to the city's solid waste stream
would be only 6,529 tons -- of dry biodegradable, burnable paperboard.
Similar examples are widespread. For instance, only ^8 percent of a fresh
orange is edib'e and 52 percent is rind, membrane and seeds. If New Yorkers
used fresh oranges for juice instead of that packaged in quart size milk
cartons (not concentrated), they would create 106,703 tons of wet garbage
instead of 3,000 tons of paperboard trash.
In vetw or these figures, it's not hard to see that packaging does more
to prevent undesirable garbage or waste than it contributes to the solid waste
stream.
The paperboard packaging industry is well aware of issues with which tnis
Commi ttee is concerned. We feel that practi cal and reali st i c solutions are aval lable
We are opposed to unnecessary products, the overpackag ing of any product and
littering by the final consumer. It would, however, be a mistake to consider
packaging a luxury or a misuse of valuable resources. On the contrary, it has
been clearly demonstrated that it is essential for the preservation of life and
health. There are, in fact, pressing requirements for more rather than less
packaging.
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- 1 -
The real concern should be how to make our solid waste treatment and resource
recovery systems as advanced and efficient as possible as well as capable of
responding to the changing needs of a growing and dynamic nation.
The Paperboard Packaging Council believes that these problems can be solved
wi thout dest roying the world's most effi clent goods' product ion, process ing,
distribution and marketing system in the process.
Energy leg is 1 at ion now pending before the Congress contains: p rovi s ions pro-
viding incentives to municipalities to capture the energy content" of their
solid waste; tax credits to firms who invest In machinery for materials recycling
purposes; and the Department of Energy is directed to establish recycling
targets for major industries in this country. Thes'e in cent i ves and
provis ions, along with posi 11ve steps already taken in private/pub1i c voluntary
cooperation, along with the continued growth of efficiency in the utilization
of our natural resources, should be more than adequate solutions.
Pub Ii c con cern is good and should be encouraged, but the pub 1i c mos t also
be brought to understand the real nature of the problem and the implications
of the various proposed solutions.
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Good Afternoon. My name is A. Blakeman Early. I am here representing
Environmental Action, Inc., a national citizens environmental Lobbying organization
located here1 in Washington. Environmental Action has for some time now lie en
in support of the product charge concept. Furthermore, we endorsed the specific
proposal encompassed in the S. 1281, the National Material Policy Act int roducei
last April by Senator Gary Hart.
Tne product charge concept was developed in response to a specific need
essential to increasing greater resource recovery which has largely gone unmet
despite the passage of two major pieces of legislation on the subject, namely
the Resource- Recovery Act of 1970 and the Resource Conservatioi and Recovery Act
of 1976. There remains an urgent need to stabilize the demand for materials once
such materials have been recovered from the post-consumer wast? stream. Currently,
the unreliability of demand for recovered materials and the wide fluctuation in
the price paid for such material present a ma3or impediment to individuals and
companies that seek to enter the materials recovery field. This is true regardless
of whether the recovery system is a mechanized one that separates municipal waste
after it has> been collected and mixed in the waste stream or a source separation
system that separates the valuable from unvalvtable wastes prior to collection.
The classic example of this problem was provided back in 1974 with recycled
newsprint. By mid-1974, prices for newsprint were the highest they had been
since the Korean War. The number of communities using municipal or private
systems for the curbside collection of-newspapers rose from approximately a dozen
in the beginning of 1972 to 134 by the fourth quarter of 1974.
All these developments caused the optimism concerning the energy and materials
potential o': solid waste to mount dramatically. Then, as you know, the bottom
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dropped out. The economy began to cool rapidly in mid-1974 and so did the demann
for recovered materials. By the last quarter of 1974, demand for waste paper -.a i
well below the demand level of a year earlier. Naturally, a drop in prices
accompanied the drop in demand. By early 1975, recovered newspapers could not
be given away, much less sold for the $40 per ton previously being paid.
One of the major reasons behind this price fluctuation is instructive as
to the general lack of recovered materials use. The majority of the paper industry
relies on recovered newsprint only as a supplementary source of supply which
is used primarily when production is at or near maximum capacity when virgin
woodpulp is in short supply. When the economy cools down, as it did in mid-1974,
the paper manufacturers no longer need to supplement their raw material supply
with recovered newsprint and their purchases cease. This leaves recovered newsprint
suppliers with a large inventory, which they have accumulated as a result of
the high prices. As suppliers seek to reduce their inventories for which there
is little demand, prices drop dramatically and some suppliers are forced out of
business.
Therefore, we need to ask why do manufacturers rely on virgin materials
for their raw materials supply and not include recovered materials as part of
that supply even when production is not operating near capacity levels? A
pattern of incentives for the use of virgin materials has existed for many years.
Some of the elements of this policy include the following:
1) The Homestead Act. This made virgin resources available to anyone as
long as they were developed.
2) The 1872 Mining Act. This act, revisions of which are under congressional
scrutiny, encouraged the exploration and appropriation of virgin resources by
-2-
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extending the rule of capture to the discovery of new mineral resources on public
lands.
3) The tax structure. It 15 well known that the extractive sector of the
economy is one of the most lightly taxed sectors. Part of the lightened burden is
from special provisions for extractive industries, such as depletion allowances,
and capital gains for timber and coal and iron, and expensing of exploration
and development expenditures, and part is from the special ability of extractive
industries to take advantage of uniform provisions in the tax cede, for example
the foreign tax credit. These provisions together have the effect of encoiraging
the use of virgin materials, rather than recovered materials.
4) Failure of the price system to include the cost of disposal in product
price. Just as for many years product price did not reflect the cost of air and
water pollution caused during manufacture, it still fails to account for the cost
of product disposal. This failure of the price system is, of course, not intentional.
Nonetheless, it acts as an implicit subsidy to material use practices. Users of
large quantities of material are treated exactly like the manufacturer tha'i
reduces the solid waste problem by recovering and reusing discarded material, in
spite of the fact that such large users create larger disposal costs for society.
A hundred years ago this subsidy was not very important, as the cost of disposal
was a very small fraction of a product's price. But now the cost of disposal has
risen dramatic-ally. With high disposal costs, this failure of the price system
leads to serious resource misallocations, which we experience as too much virgin
material being used and too little recovered material being recycled.
The product charge concept strikes directly at this latter hidden subsidy
and does so in a manner that does not provide a continued incentive to be profligate
-------
in the over-all use of materials, as would a tax subsidy to users of recovered materials.
Environmental Action has been one of the more outspoken advocates for the
placement of greater emphasis on source reduction techniques in solving our solid
waste management problems. Though we do not view the product charge as a source
reduction measure, EPA studies show the incentive overwhelmingly favors substitution
rather than reduction, it at least accommodates source reduction and even provides
a minimal incentive to reduce. These studies show that reduction might increase
approximately 2 percent, at least in the packaging area. Under the product
charge, the producer subject to the tax has the option of reducing the total
amount of virgin material he is using, or substituting secondary material, or both,
in order to avoid the tax. EPA has found that in the majority of cases he will
opt for the latter.
However, under subsidy approaches which are based on the amount of secondary
material which a producer uses, he has a disincentive to source reduce rather than
recycle because he get no subsidy for reducing. This approach, we believe, would
be self-defeating. The creation of new subsidies does not neutralize old ones.
If we first subsidize virgin materials and then subsidize scrap materials, the
result is that material throughput is doubly subsidized. Subsidies for secondary
materials will increase the use of such materials because their price will lower.
However, the increased use of secondary materials will not result in a corresponding
decrease in virgin materials. Though virgin materials use may drop some, the more
significant effect will be a net increase in the combined use of virgin and
secondary materials — the exact opposite of what we suggest must be our goal.
More physical capital and more energy is required to process the added throughput.
And more solid waste would be created.
-------
In conclusion. Environmental Action urges the Commission to endorse the
product charge system as a means of internalizing the cost of disposal and
stabilizing the demand for and price of recovered materials without providing
a disincentive to the reduction of overall materials use. We feel that the
version .introduced by Senator Hart as S. 1281 is the most administeraole and
most effective version of the product charge that has been developed .and would
urge the adoption of its specific provisions by the Commission, as well.
-------
Statement of the Single Service Institute
Resource Conservation Committee Public Meeting
"Solid Waste Product Charge Issue"
Washington, B.C., November 17, 1977
I am Charles Felix, Director of Environment/ Health & Public
Affairs for the Single Service Institute, located in New York
City.
The Single Service Institute is the trade association for manu-
facturers of disposable products for food service and packaging
— paper and plastic cups and plates, linen and lace placemats
and doilies, meat and produce trays, egg cartons, and round
nested containers such as are used to package ice cream, cottage
cheese and other dairy products.
I am here not to speak for or against a solid waste product
charge, but to urge your Committee to investigate and to weigh
carefully the impact such a tax might have upon the high levels
of sanitation, safety and food protection that these food service
and packaging products help to maintain in our nation's restau-
rants, institutions, food stores and homes.
The public health values of disposable products tend to be taken
Ici r^gni-^H »rrt -^ be overlooked in ^c search for solutions to
the problems of solid waste and litter. For this reason the
American Public Health Association at its annual meeting, held
heie In w'ashinqton two weeks aqo, .i-Jopti^l a policv s tateir-'nt
which undeiscoiob the importance of the hoalLh cons i delation:.,
-------
- 2 -
that are implicit in the increasing use of disposables for food
service and packaging.
The American Public Health Association is a non-go/ernmental
professional society representing all disciplines and specialties
in public health. It is the largest public health association
in the world, with a combined membership of 50,000 health pro-
fessionals. The following is the policy statement the associa-
tion adopted through its Governing Council on November 2, 1977.
It is entitled "Single Service Materials,, Resource Conservation
and Public Health" and reads as follows:
"The "Resource Conservation and Recovery Act of 1976"
(Public Law 94-580) has advanced resource conservation
as a key element in the nation's response to the prob-
lems of solid waste disposal and materials and energy
conservation. Resource conservation can ha.vs serious
consequences to public health by removing from the
market place disposable devices which have coire to be
part and parcel of modern preventive health practice.
This is particularly true in the area of food protec-
tion where single service articles are often required
or recommended for reasons of sanitation. The
V^ri^;*™ D>'hlic HeaTth Ascccictci en affirms the pre-
ventive health value of single service articles for
selected food service operations and cautions that
-------
- 3 -
curtailment of single service articles may introduce
environmental hazards that are far more significant
in terms of overall impact upon human health and
safety than the possible reductions that resource
conservation may achieve. The American Public Health
Association urges the U.S. Environmental Protection
Agency, the Council on Environmental Quality, and
the Resource Conservation Committee to make careful
assessment of the public health impact of resource
conservation measures before these are applied to
any single service articles that have come to serve
a significant health protection function. The U.S.
Environmental Protection Agency has defined Source
Reduction as prevention of waste at its source,
either by redesigning products or by otherwise chang-
ing societal patterns of consumption and waste'
generation. A basic approach to sourre reduction
is the "substitution of reusable products for single-
use 'disposable' products." [Quotations from the EPA's
Third Report to Congress — "Resource Recovery and
Waste Reduction"]
Examples of items to which the principle of source
reduction could apply are "beverage containers, food
service items, and certain napkin and towel
products." [From the same report to Congress]
-------
- 4 -
It is the opinion of the American Public Health Asso-
ciation that substitution of reusable food service
items for disposable products in many cases will be
a regressive step, contrary to established public
health practice. The use of food service disposables
has become a recognized measure of prevention against
the transmission of diseases associated with use of
the common drinking cup and other contaminated
utensils. Public Health Regulations prevailing in
most states require the use of disposables wherever
sanitizing facilities are not available, a condition
that is recognized to be normal in mobile food
service^ and frequent in temporary food service.
Food service at sports arenas, outdoor concerts and
other similar gatherings of large numbers of people
cannot be satisfactorily managed without the u:;e of
disposables. Hospitals hava effectively used single
9
service, whore the individual nature of the service
is recognized to be hygienically safer, particularly
for isolation patients. Environmental health
officials are in general agreement that sinqle-use
products contribute much to sanitation levels in
food service facilities and that these public health
benefits are greater than possible disadvantages
11
deriving from urban solid waste and litter. The
National Environmental Health Association and Enter-
-------
- 5 -
national Association of Milk, Food and Environmental
Sanitarians have passed resolutions reaffirming the
preventive health value of single service products
for food and beverage service and warning that
restricting their use as an option in food service
would be regressive and opposed to proven health
practice.
A direct connection between contaminated multiple use
tableware and the outbreak of a food-borne disease has
not been adequately documented. However, the presence
of potential pathogens is sufficient to warrant, con-
cern that disease transmission could occur. One
option to minimize this hazardous condition is to
require the use of single service articles either as
a temporary measure or as a permanent substitute for
reu^ables- To remove this option of using single
service tableware beneficial to sound public health
practice for the sake of potential reductions in solid
waste or energy savings might result in lower public
health standards and, consequently less protection for
the consumer. The same can also be said of many other
health care and packaging products which serve a pre-
ventive health function
The APHA urges the Environmental Protection Agency,
til- Coutv: i 1 or; I,T, L, '> •• • '), i' o •'•:'•, 'i' Iv i'-'oun--
-------
- 6 -
Conservation Committee to make a thorough amilysis of
the' public health and safety impact of any disposable
devices before recommending their curtailment for the
saJ
-------
_ 7 -
effect requires that only virgin materials be used in the manu-
facture of single-use articles that are by their nature food
contact surfaces.
In the investigation we trust you will nake of the public health
impacts of a solid waste product charge we urge you to seek out
the opinion of public health officials who are responsible for
the day to day surveillance of sanitation standards in eating
places and food stores. To assist you in that consultation I
am including witlv this statement a copy of a research paper
that was published recently in the Journa^of Food Protection
entitled "The Health Profession's Attitude Toward Single-Use
Food and Beverage Containers."
In this survey some 3/000 public health officials were asked to
bring their judgement -- informed by education and "experience —
to bear upon some of the questions thai, you are now considering.
In the judgement of these health professionals:
Disposables contribute siynificantly to the health pro-
tection of the pub lie;
Elimination of disposables would definitely cause a de-
crease of sanitation levels in food establishments,;
Disposables do contribute somewhat to a community's
-------
- 8 -
solid waste problem. But, when measured acjainst the health
protection they provide, that disadvantage is not nearly
as significant as the advantages of improved sanitation
and safety.
The Single Service Institute hopes you will give these opinions
serious consideration. To quote the author of the survey, Dr.
Bailusi Walker, Jr., Director of the Environmental Health Admin-
istration of the Government of the District of Columbia:
"In many ways public health workers are in a unique
position to evaluate the health impact, real or poten-
tial, of various policies and programs such as solid
waste reduction as one approach to improvements of the
physical environment. They are continuously exposed
to the end results of these developments aid moreover
must translate scientific, technical, arr! epideiniolo-
ciical evidence into programs and services for preven-
tion of the occurrence and of the progression of disease
Eind disability."
"Therefore, constructive and balanced policies dealing
with the entire spectrum of environmental quality issues
must take into consideration the knowledge and attn.a-jc~
of professional public health workers."
-------
The Single Service Institute is pleased to have this opportunity
to offer constructive comment on the issue of a solid waste pro-
duct charge. If at any time we can be of assistance to the Com-
mittee in pursuing the public health impacts of resource conserva-
tion we will be happy to cooperate with you in any way that we can.
Thank you.
Enclosures: American Public Health Association Policy Statement and References
"The Health Profession's Attitudes Toward Single-Use Food and
Beverage Containers", Journal o'f Food Protection, Vol. 40, No. 2
(February 1977).
"What's Singular About Single Service?" — in which paper and
plastic food service products are placed in perspective.
-------
Amarican Public Health Association Policy Statement
Adopted at the APHA Annual Meeting, November 2, 1977
$1*00 Service Materials, Resuirc* Contenatton and
P iUG Health
The Resource Conservation and Recovery Act ot 1976 IPun
IH Law 94 580) his advanced resource conservation as a key
efment m the nation s response lo (he firoblems ol said
wish disposal and materials and energy consenation Re-
st we* conservation can have srnoiis consequences lo public
health by removing from the market place disposable devices
wtich have come to be part and parcel of modem preventive
hialth practice This is particularly true m the area of lood
(Melection where single service articles are often required or
recommended lor reasons ol sanitation The American Put tic
Hratth Association affirms the preventive health value of
si ngle service articles for selected food sotvice operations and
c.iutwns that curtailment of single service articles may m-
Ifriutt environmental hazards ihat at? tar more significant
in terms of overall impact upon human health and safety
Mian the possible .eductions thai resource conservation may
a-hieve The American Publn- Health Association utjes the
U S Environmental Protection Agency the Council on environ-
mental Quality and trie Resource Conseiva' MI Committee to
make careful assessment of lie public health .mjHtcl ol re
source conservation measures betore these are applied to any
single service articles Ihat have come to serve a significant
ln-aHh protection function The (J S Environmental Pro'wlion
A;ency has delined source leflt.c'icn as prevention ol waste
a ts source either by redesigning products w by otherwise
cliangiM societal patterns of consumption and waste genet-
inon ' A Mac approach M uurce reduction is the subK'lu-
lun ol riuuUa m*iKU IK siifle use diswaWe prod-
wli"'
Eumillf •) KMI la vhici Ike pn»cip4e at MUIM (educ
ties are nnl avail
aote' a condition that is recognized to be nofmal m mobile
1 'reque
7 tood si
' Foo
sivice at sports arenas oi'iJoo* concer*s and other similar
galhermjs ol large numbers of people cannot be salisfac
tmily managed wilhout the use cf disposables Hospitals nave
efecKvety used single service' where the individual "atuie of
t le sfvice is lecognned lo be hygiemcally safer particulatly
tin isolation patients'" tnvironmeltal health officials are in
jenerai agreement tnat single use products contribute much
tn station levels in fond Mtvice lacil'ties and that these
juOliL health ben«tits are. jrealw than possible dis
advantages deriving horn urban solid waste and litter " Tr-e
ftatiooal Fni/ironmenlal Health Asscc.alwn and International
•^satiation of Milk Food and Environmental Sanitarians have
passed resolutions reafdimmg the preventive health value c>f
single service products n solid wade or energy
Jtwnji might result in kwe> public health standards and
consequent!* lest pntjcliofl tor the consumer The same can
aba be si id ar miny othw health care and cacltaging rxod
ucti which ttfvt • preventive fioalth functioD
Ike APHA urges the tnvuonmental Protectiw Agency the
Council on Ermronncntal Quality and the Rtsoutct Con-
urviticM Committee to make a thorough anarysi > nl the pud-
IK beirth and safety impact ot any disposable d!*vices before
rccomiMe*dm( llwi curtailment fo> the sake ol resource con
SmK» SiMUbM H*MH Includtni i Mod>J foot SWIM
«4 Mt
Hutth Stmu p y
Snvlct SMtitacii HMM< Ineddni i UDdi4 Find Srrvict
MMK*, I ITS RMnn PrtiwUcitian (on Food and
Vii M, H» 2
II Rn«ltitwn N> I
AfMqL Mil Wiite Hanfrtmtnt GiMWinti lor B
•*fW k) 1M Nttiintl [nwwraentil Hutth AitMiiit f,n hit, 1976
ni (In U S tmtwuiwiHt! Piotectnt Jitney s Sobd
rrl GutOcliiw fw Snvart Contaiwis idopMd ti»
Iht Inttmiltonil Aiiecitlion 01 Uitt, Fotd and Ennoiinntil SinHK-
<*nt.**iutl3, 197S
It e**i tilw > KB Mfiilind IM pis pnUcNoi. fnm-
-------
120
Hi'print I'll from
Journal ut fund Prol
vnght
1977 I
i Vol 40, No 2 Pages 120-124 (February, 1977}
ial Association of Milk, Food, and Environmental Sanrta
The Health Profession's Attitudes toward
Single-Use Food and Beverage Containers
BAILUS WALKER, JR. and MELBA S. PRICE
Governmentalthe District of Columbia
Washington, D C 20002
(Received for publication June 10,1976)
A national survey w
public health profes
ABSTRACT
s conducted to determine the attitudes of the
ion toward single-use food and beverage
arized in this report were obtained from 2,760
of 1,000 questionnaires mailed to survey participants Results of this
study reveal that public health workers identify single-use food and
beverage containers as beneficial in terms of reducing the potential for
cross- infection and disease transmission among users Respondents
also recognize the importance of these products in eliminating the need
for dishwashing facilities and in conserving energy Accordingly, most
public health workers are ot the opinion that single-use products
"contribute \erv much" to sanitation levels in food service facilities
While redlining the benefits derived from paper and plastic food service
products, public health professionals recognize that they contribute to
solid waste problems How/ever, most of the respondents agree that the
public health benefits, of paper and plastic food service products are
greater than the possible disadvantages, such as the contribution of
ihest. products to the character and volume of urban solid waste
Since passage of the Solid Waste Disposal Act of 1965
and its Amendment, the Resource Recovery Act of 1970,
attention has been drawn to reduction, recovery, and
recycling ot material from the urban solid waste stream.
This attention has resulted in a plethora of activity at the
federal, state, and local levels of government
Most notably, banning of non-returnable beverage and
food containers has been forcefully advocated as a
practical approach to source reduction Several such bills
have been introduced in the U S Congress but more
activities have taken place at the state and local levels.
Legislation banning single-service containers has been
introduced in 50 state legislatures and numerous county
and city legislative bodies since 1971
Other proposals to stimulate source reduction and
resource recovery have advocated guaranteed loans for
recycling facilities, price support for scrap materials,
ending depletion allowances for virgin material and
eliminating biases against recycled materials in rail
freight rates The primary rationale for these proposals is
that less solid waste will be generated by reducing the
amount of material contained in products, increasing the
lifetime ot products, and substituting reusable for
single-use products
However, solid waste control, as a compenent of
environmental quality, is also related to at least three
major national goals' economic growth, public health
and safety, and amenities and natural ecological values.
Therefore, in developing public policies and programs
for reduction of solid waste, it is necessary to evaluate
them in terms of their contribution to all three goals. In
addition their effects on other national goals such as
employment and income distribution must be examined
to reveal to policymakers the incidental consequences of
proposed actions concerning strategies for solid waste
management that appear to be quite unrelated.
Industry, labor unions, and conservation groups have
respectively addressed in clear and concise terms the
questions of economic growth and development, and
amenities and natural ecological values, as these may be
affected by a reduction in use of single service products
such as beverage and food containers.
But with the exception of a resolution concerning "the
U S. Environmental Protection Agency's Solid Waste
Management Guidelines for Beverage Containers,"
adopted by the International Association of Milk, Food
and Environmental Sanitarians, Inc. at its 62nd Annual
Meeting in 1975, the public health and safety goals have
not been examined in any significant detail, and the input
of professional public health workers has been virtually
ml
In many ways public health workers are in a unique
position to evaluate the health impact, real or potential,
of various policies and programs, such as solid waste
reduction as one approach to improvements of the
physical environment. They are continuously exposed to
the end results of these developments and moreover must
translate scientific, technical, and epidemiological
evidence into programs and services for prevention of the
occurrence and of the progression of disease and
disability
Therefore, constructive and balanced policies dealing
with the entire spectrum of environmental quality issues
must take into consideration the knowledge and
attitudes of professional public health workers In this
direction a survey was undertaken to determine the
-------
SINGLE-USE FOODSERVICE CONTAINERS
121
attitudes of professional public health wodcers toward
the proposed elimination of single-use food and beverage
containers. Questionnaires were mailed to 3,000 workers
in organized community health programs in the United
States. A summary of the results of the survey are
presented in this report.
METHODS
Data used in this study were obtained from a national survey of
public and envtror mental health professionals who are responsible for
administration, management, and implementation of food protection
programs in the United States. Also participating in this study were
public health academicians and public health officials in federal
agencies such as the Food and Drug Administration and the Center for
Disease Control Upon completion of a pretest the questionnaire was
mailed to 3,000 public health professionals who were randomly chosen
from the directory of state food and drug officials (1976) and the
current (1975-76) membership of public and environmental health
organizations. These organizations included the National Environ-
mental Health Association; the Association of Food and Drug Officials
of the United Sta'es; the Conference of Local Environmental Health
Administrators, the Association of State and Territorial Health
Officers, the International Association of Milk, Food, and
Environmental Sanitarians, Inc.; and the American Public Health
Association (Sectnin on the Environment). Cross checks were made to
ensure that persons who were members of more than one organization
were not selected twice for inclusion in the survey. The findings in this
study are based en the return of 2,760 questionnaires, providing a
response rate of 91%.
RESULTS
Positions and organizations of respondents
Information on the positions held by those public
health professionals who were surveyed is shown in Table
I. Forty-five percent (1,245) of the respondents are public
TABLE 1 Positions and organizations of respondents
Position and organre tion
Number of Percent* of
respondent reapoodenta
Public/Environmental Health Administrators
(State and Local) 1.245 45
Officials of Professional Public /Environmental
Health Organizations 18 1
Sanitarians (Field Level-State and Local
Agencies) 1,145 41
Public/Environmental Health Academicians 67 2
Environmental Health Scientists (State and
Local) 240 9
Public Health Officials (in Federal Agencies) __45_ _2_
TOTAL 2-7&O 10Q
Percentages are lounded to the nearest integer
health administrators who direct and manage 46 state
and 1,218 local public and environmental health
agencies. These officials also include middle*level
managers such as supervisors of food protection
programs at the local level. One percent (18) of those
surveyed are health officials of professional public and
environmental health organizations. In addition, 41%
(1,145) of those responding are sanitarians who are
responsible for implementing food protection and public
health education programs. While 9% (240) of those
responding art environmental health scientists, 2% (67
respondents) are academicians who are responsible for
training public and environmental health practitioners
and an additional 2% (45 respondents) are public health
officials working in federal agencies.
A further characteristic of the public health workers
participating in this study is that of experience.
Fifty-seven percent (1,5821 of the respondents have 11 or
more years of experience in the public health field.
Twenty-six percent (715 resondents) have been public
health professionals between 6 and 10 years and the
remainder, 17% (463) of those responding, have between
3 and 5 years of experience.
TABLE 2 Public health benefits derived from paper and plastic
angle-use products
Benefit*
Number of Percent" of
421
15
Reduce possibility of cross-infect ion
If properly stored and handled, i
transmission of diseases Sbo JJ
Practical and economical means for food service
facilities to operate when reusable products are
impractical 208 8
Eliminate need for dishwashing facilities 426 15
Provide consistently high level of food sanitation 385 14
Reduce human involvement required for cleaning
and sanitizing 243 9
Convenience 128 5
Conserve energy 47 2
No real public health benefit 36 1_
TOTAL 2.760 Too"
aBenefits were listed by responcents
bPercentages are rounded to thr nearest integer
Public health benefits of single-use products
Table 2 summarizes responses to the open-ended
question on the "public health benefits derived from
paper and plastic single-use products." Forty-six
percent of the public health workers agree that these
products reduce the possibility of cross-infection and
when properly stored and handled, they reduce
transmission of diseases In addition, 24% of those
responding state that single-use producis eliminate the
need for dishwashing iacilities and reduce human
involvement that is required for cleaning and sanitizing
multi-use products. Complementing these views is the
judgment of 14% of the public health experts that
single-service products provide a consistently high level
of food sanitation in food service facilities However.
other veiwpoints' relate to non-health benefits. For
example, 8% of the respondents feel that "disposables
are a practical and economical means for facilities to
operate when reusable products are impractical," while
7% list such reasons as convenience and energy
conservation. The remaining 1% of those responding
believe that there is no real public health benefit derived
from paper and plastic food service products
Recognizing the possibility of the existence of
disadvantages associated with single-use products,
respondents were asked to enumerate thiise possibilities.
The responses in Table 3 reveal that 54% of the public
health workers are of the opinion that paper and plastic
disposable products contribute to solid waste disposal
problems, adding to the volume and bulk of solid waste,
-------
WALKER ANP PRICE
TABLE 3 Disadvantages derived from paper and plastic single-use
products
Disadvantage* i
Contribute to solid waste disposal problems
Add to volume and bulk of solid waste
Increase litter
Contribute to disposal problems, especially with
plastics that are n on -biodegradable
Increase need for additional storage space
Poor quality of some disposable products
Limited acceptance in all restaurants by
consuming public
Increasing cosl of disposable products
TOTAL
a Disadvantages were listed by respondents
^Percentages are rounded to the nearest integer
Number of
782
485
474
229
237
98
3%
59
2,760
Percent15 of
i respondents
28
18
17
ft
9
4
14
2
Too"
especially with plastics that are non-biodegradable. On
the other hand 40% of the responses include such
disadvantages as the increase in litter, need for additional
storage space in facilities, and limited acceptance of
paper andplastic single-use products in all restaurants by
the consuming public.
1 ABLE 4 Comparison between benefits
single-use products
Comparison
Benefits are greater than disadvantages
Disadvantages are greater than benefits
Benefits and disadvantages are fairly equal
Undecided about comparison
TOTAL
and d,sadMtages of
Number of Percent' of
respondents respondents
2,208 80
173 6
297 11
82 3
2,760 100
Percentages are rounded to the nearest integer
The relationship between the public health benefits
and the disadvantages derived from single-use products
is shown in Table 4. As perceived by 80% of the
respondents, benefits are greater than disadvantages
However, 6% of the public health workers view the
disadvantages as having a greater impact on environ-
mental quality than the health benefits While 11% of
those responding suggest that the benefits While 11 % of
those responding suggest that the benefits and
disadvantages are fairly equal, 3% support an indecisive
position in comparing benefits and disadvantages
derived from single-use products
Single-use products and sanitation levels
Table 5 reviews the position of the public health
profession on the contribution of paper and plastic cups
and plates to sanitation levels in food service facilities.
Accordingly, 74%of those responding concur that these
products "contribute very much" to sanitation levels,
while 16% replied that they "contribute somewhat." In
addition 9% agree that the contribution is slight Only
1% of those responding feel that paper and plastic food
service products do not contribute to sanitation levels in
food service operations.
To further analyze these opinions, cross-tabulations
were made between the attitude toward the contribution
of paper and plastic food service products on sanitation
levels and the position held by the respondents As seen
in the table, most respondents in each position believe
that the relationship between single-use products and
sanitation levels in food establishments is significant. For
example, an overwhelming majority (70%) of public and
environmental health administrators agree that these
products "contribute very much" to sanitation levels
When queried about their opinion regarding the
impact on sanitation levels if single-use products were
eliminated, respondents remained consistent- Seventy-
four percent were adamant that sanitation levels in food
establishments would definitely decrease. It is interesting
to note, however, that 9% of the public health workers
qualified their opinions by inserting that "sanitation
levels would definitely decrease in facilities where
reusable products are not practical "
Complementing these viewpoints is the issue of the
impact on sanitation levels in food establishments if
single-use products were required. The responses reveal
that 74% of the public health professionals agree that
"sanitation levels definitely would improve."
On the question of the recommended use of single-
service products in public facilities, data collected
indicate that public health workers feel it necessary to
increase the level of use of these products in such
facilities as fast food restaurants, hotels and motels,
other restaurants, hospitals, and schools. In addition,
many respondents added the need for an increase in use
TABLE 5 Cont
Public health professi
Public/ Environ me
Administrators
Officials of Profes
Samtatians
Pubhc/Environme
Public Health Offi
Agenc,es
TOTAL
nbution of paper
on.l
ntal Health
sional Public/
health Organizatic
ntal Health
alth Scientists
icials in Federal
and plastic cups
Cont:
very
(No)a
876
ins 10
978
112
29
2.043
. and plates
much
(%ID
70
56
85
47
64
74
to saute
Com
(No I
207
6
129
69
7
432
IHOR levels a
:nbute
ewhat
<%1
17
33
11
29
16
16
n foods ervice
Contnbul
(No)
153
30
50
7
249
jaeiittics
e Do not contribute
•tall
C*,1) (No ) I"*)
12 9 1
— 2 11
3 8 1
21 9 4
16 2 4
9 36 1
ToU
(No 1
1,245
18
1,145
240
45
2,760
il
(%)
45
1
41
9
100
aNomber of respondents
bPercent of respondents, percentages rounded to nearest integer
-------
SINGLE USF FOOUSFRVICE CON TA1NERS
123
of single-service products in jails and prisons (938
responses) as well as in day care centers (1,314
responses)
There is one advantage ot using paper and plastic food
service products which many public health officials tend
to overlook [ his advantage is the safety factor associated
with these products. Fifty-one percent of the respondents
view this satety aspect (non-breakage) as "very
important," while 27% perceive it as "somewhat
important " Although 14% responded to a slight
importance, only 8% do not attribute any importance to
the safety derived from the use oi paper and plastic cups
and plates
Contribution of disposables to solid waste
As a cross-check of the attitude of the public health
profession toward use of paper and plastic food service
products, respondents were asked to summarize the
impact ot single-use containers on their community's
solid waste problems Thirty -two percent of the
respondents stated that there is "somewhat" of a
contributor to the solid waste problem While 17% said
that they contribute very much to their communities'
solid waste problems, 29% qualified this viewpoint by
stating that the contribution of disposable containers to
solid 'Aaste problems is onJy in terms of volume
Additionally, ]4% teel that the contribution is slight and
8% feel that these products do not contribute to solid
waste probhms
Attitudes toward restricting disposable food
and b>jvt>ra?e containers
In summarizing the attitude of the public health
profession toward restricting the use of disposable
products, over halt (52%) of those responding "disagree
somewhat" that restrictive measures against use of
disposables are effective methods for reducing litter
Twenty-sev-n percent ot those responding "disagree
completely" uith this position However, 15% ot the
public health workers "agree somewhat" with this policy
and 6% "agree completely" with this judgment
When asked to develop suggestions for dealing with
the problem ot litter, respondents varied in their
opinions Forty-two percent of the public health
profession; Is suggested development of educational
programs tor the public An overwhelming majority
(90%) ot these respondents injected that the problem ot
litter stem', from public attitudes and behavior Other
suggestion-, for treating the litter problem include stricter
enforcement of litter laws (25% of the responses).
increasing the number and convenience of litter
containers (14% of the responses), prohibiting
non-returnable bottles and cans (8% of the responses),
hiring more trash collectors (3% of the responses),
developing a special tax for non-returnables (4% of the
responses) and increasing the seventy of fines for littering
(4% of the responses)
DISCUSSION
Given ihe desirability ot reducing the volume arid
changing the character of the urban solid waste stream, a
central question anses-is elimination of single-use food
and beverage containers, specifically plastic and paper
cups and plates, which are used in food service
operations, a desirable approach from a public health
and safety viewpoint9 The data presented in this report
indicate that it is not
Public health workers identified single-use food and
beverage containers as beneficial in terms of reducing the
potential for cross-infection and disease transmission
among users The theoretical basis for these views is the
well-recognized sequence ot factors which are essential to
development of the infectious disease process (7) These
are («) causative or etiological agents (viruses and
bacteria), (fe) a reservon or source of the causative agent,
(c) a mode of escape from the reservoir, (cf) a mode ot
transmission from the reservoir to the potential new host,
(e) a mode of entry to the new host, and (f) a susceptible
host
Elimination of one of the links, or where possible
attacking simultaneously all six links, is the guiding
principle for application, on any appreciable scale, of
disease prevention measures to the animate or inanimate
environments ot man This precept has been described
as the principle of multiple barriers, the foundation on
which rests much of the past and current successes in
controlling waterborne and foodborne diseases It
recogni?es as axiomatic the fact that all human efforts,
no matter how well conceived or const tously applied, are
impertect and fallible (5) To be su-e, dishwashing in
tood service operations has its "good and bad days" and
is subject to occasional lapses, primarily due to the
human element which controls boti the dishwashing
procedures and equipment
Walker, in a 4-year study of washing and sanitizing
procedures of reusable beverage glasses in 66 American
hotels, found that over 90% of the "washed and
sanitized" containers were "unacceptable ' from the
standpoint ot both bacteriological atid esthetic
standards, 50% contained pathogenic microorganisms
Substandard dishwashing practices were identified as a
major factor in the bacterial conteni ot the 500 glasses
analyzed (7)
In this setting use of single-service tood and beverage
containers would essentially remove one link, the vehicle,
trom the chain of disease transmission and reduce the
need for dishwashing, and its irrpingement on the
community's water resources, which was identified as
another public health concern by th; respondents
On the water conservation issue. Salvato (6) has
calculated the hot nnse water requirements for food
service establishment) of varyious sizes For example, a
restaurant which serves a maximum ot 450 meals, and
washes dishes over a period of 1 Vi h requires 181 gal of
water per hour. II no storage of hot water is provided, the
required gas heater is 376,000 BTU/h. a factor to be
considered in assessing energy consumption This spent
water contains irorgamc chemicals-ihe basic ingredients
-------
124
WAIKER AND PRICE
of dishwashing compounds-which are ultimately
discharged into natural watercourses, and which may
become concentrated enough to interfere with water
uses. They may also contain end products which are toxic
to man and animals
Litter on streets and highways, a continuing issue in
urban communities, was recognized by public health
workers as a problem that is exacerbated by single-use
products But the respondents indicated that people
litter not only single-use food service items but all kinds
of single and multi-use materials and products
A three-year research study of littering in Charlotte,
N C , Tampa, Florida, and Macon, Georgia listed five
sources of litter, pedestrians and motorists, improper
storage of household refuse, mismanagement of
commercial trash and garbage, loading and unloading
docks, uncovered trucks, and construction and
demolition sites (4)
Littering is a "behavior problem" influenced primarily
by the knowledge and attitudes of those who
indiscriminately deposit their used products on open
space, on streets and highways. In many urban
neighborhoods, which are evolving through the packing
and thinning stages of urban growth, buildings designed
in earlier >ears have been subdivided into numerous
crowded living units with little provision for solid waste
storage Receptacles are often non-existent, makeshift,
or in poor condition-all leading to 3 situation in which
wind, animals, and vandals spread litter throughout
houses and neighborhoods The abundance of vacant lots
and abandoned structures, already strewn with refuse,
encourages turther junk, garbage, and other debris
An intensive national program is currently underway
to reduce litter through an educational campaign This
comprehensive, voluntary system pioneered by Keep
America Beautiful, an industry-sponsored group, takes
into account the interrelationships among varied factors
and it has been successful in reducing, by 65-70%, litter
in at least three major urban centers and in the
Washington, D.C metropolitan area
Finally, it is evident that solid waste management is an
environmental quality problem, with many ramifica-"
tions, which must be solved. But moving from the
identification of an environmental quality problem to a
clear-cut "solution" to that problem must not
circumvent the often difficult task of defining the
applicable goals to be served by public policies and
programs designed to improve environmental conditions.
To be sure, the "problem-goals-alternatives-best
solution" approach is far more productive in these
situations than the "problem-solution" approach
Hufschmidt (3) cites an example "the problem of
proliferation of DDT, which adversely affects wildlife
and ecological systems, is perceived, and a "solution" is
adopted involving selective or total prohibition of the use
of DDT The solution never considered the adverse effects
of such action on the public health objective." These
adverse effects have been identified by Handler (2) and
the World Health Organization (8)
Unquestionably, the current health, economic, and
social settings require that environmental improvement
efforts, such as solid waste control, recognize the
importance of fitting the means to be used to the goals to
be achieved (A copy of the detailed study may be
obtained from the authors )
RLILRFNCFS
1 Anderson, G W , M G Arnstem. and M R Lester 1%9
Communicable disease control (4th ed ) The Macmillan Company
New York
2 Handler,? 1971 The Federal Government and the scientific com-
munity Science 171 144-51
3 Hufschmidt, M M Environmental quality as a policy planning ob-
jective Amer Inst Planners 37 231-241
4 New litter guide 1976 Citizens' Committee to Reduce Litter,
Washington, DC , May II
S Phelps.F B 1948 Public health engineering John Wiley and Son,
New York
Wiley Interscience, New York
7 Walker, B Bacterial content ot beverage glasses in hotels (in press)
8 World Health Organization 1971 DDT, health and wildlife Press
Release WHO'13, Geneva, Switzerland, February 12
-------
Whats
singular
about
single-
service?
In which paper and plastic food service
products are placed in perspective
cups, plates, containers, trays,
place mats, and related items
-------
Single-Service:
To Define and
Clarify
Everything is disposable and,
eventually, is disposed of. No
exceptions. Buildings, boats, cars,
toys, foods, newspapers, films,
clothing, containers, bottles,
chinaware. paper cups, plastic
dishes. Everything.
In the material world,
disposability is just a matter of
time, and it's all relative.
The key question: When'
Now, later, after one use, after
many uses?
In today's climate of
environmental awareness and
concern, there's much talk about
products called "one-way" or
"single-use" or "single-service"—
and much confusion. These
descriptions mean exactly what
they say: Designed to be used
just once, not returned, not
reused. (Such terms, we feel, are
more precise than "disposable,"
which in the long run applies to
everything and differentiates
nothing.) But single-use products
are as varied as the materials of
which they are made and the
purposes they serve: Paper towels
and tissues, glass bottles, plastic
utensils, paper and plastic
containers, steel and aluminum
beverage cans, paper and plastic
food service items.
Materials are chosen and
shaped to fulfill a wide range of
specific functions and needs. And
each material, each product,
represents a different mix of
performance and aesthetic
characteristics, health and
sanitation attributes, economic
factors, and environmental
consequences.
Yet often, "one-way"
products are all lumped together
as though they were not only
"one-way" but one and the same
— in their applications and
advantages, their limitations,
their claims on resources, their
impact on the economy and the
environment.
There is no easy way to think
about these matters. Complex
environmental, health and
economic problems interlock;
our attempts to solve one may
exacerbate another Almost
always, therefore, trade-offs are
called for But the necessary
trade-offs differ from one product
or material to another; they
differ from one geographic area
to another; and they differ over
time as the problems themselves
change.
The solutions will not be
simple, nor will the process by
which they are arrived at. The
American people are now deeply
involved in this process The
press, television and radio play
a critical role by gathering and
transmitting facts and interpreta-
tions to the public
Our industry feels that if the
process is to be productive,
analysis must replace labelling
It is important to define and clanfy.
Toward this end, the Single
Service Institute would like to
draw for you a sharper profile of
the products we know best and
feel qualified to discuss. These
are the single-service products
made by our member companies
Paper and plastic cups, plates,
nested cup-shaped containers,
meat and produce trays, egg
cartons, place mats and related
food service items
Paper and Plastic
Food Service Products
Who Buys and
Uses Them?
Everyone uses them at one
time or another. If you've ever
drunk hot coffee from a poly-
styrene foam cup, or a cold
drink from a waxed paper cup or
a clear plastic tumbler, or eaten
lunch from a paper or plastic
plate, you're a user of single-
service products, even though
you may not have bought them
directly.
Where do people use them?
Anywhere and everywhere At
home, in hospitals, on patios and
beaches, in schools, colleges,
restaurants, cafetenas and fast-
food establishments, on trains
and ferryboats, at sports events in
stadiums and circuses in arenas,
in hotels and motels, and in
rowboats and canoes. Everywhere
And for every purpose Soup
in bowls, juice in cold cups,
bouillon in hot cups, meats,
vegetables and salads on plates,
ice cream in containers, and any
or all of these on place mats or
trays. Paper and plastic single-
use food service products.
How do they reach you^ Our
products flow to individuals and
families for home use through
supermarkets, variety stores, drug
stores and other retail outlets For
mass feeding, products move
through such commercial
establishments as restaurants and
fast-food outlets and through
such institutions as hospitals,
schools and employee cafetenas.
In every case, the final user
of paper and plastic food service
products remains the individual—
the diner in a restaurant, the
-------
patient in a hospital, the student
in a school or college dining hall,
the employee in a company
cafeteria, a child or pa'ent at
home.
People have been buying
and using these products in
increasing volume Industry
sales have more than (doubled in
the past 15 years
Much of this growth
parallels the rapid expansion of
the fast-food industry, which was
made possible in large part by the
availability of single-us.e paper
and plastic food serw e products
This growth also reflects the
increasing home use of these
products on a regular year-round
basis rather than on a seasonal,
warm-weather basis
Why this growth'1 The
answer, we feel, lies in the singular
benefits provided by single-service
products that meet real public
needs
Paper and Plastic
Food Service Products
Why Are They
Different?
The singular benefits of
single-service are intrinsic to the
products themselves and the way
they are designed to be used
These advantages — sanitation,
safety, adaptability and economy
— are built nght into the single-
use concept They are not added
to the products, but exist in their
very nature
Sanitation
Single-service products
originated as a response to a
public health need Early in this
century a young public health
officer in Kansas banned com-
mon drinking utensils from
trams in his state Other states
followed suit, and the single-use
paper cup was developed to meet
the need
Single-service products
promote sanitation by reducing
the danger of cross-infection—the
spread of disease from one
person to another At the same
time, they may help reduce the
danger of food poisoning
When a permanent plate or
cup is used by a person with an
infectious disease, that may start
a chain of infection True, the
plate or cup can be washed
before reuse. But what if it isn't
washed properly to get rid of
germs or bacteria9 Suppose the
water isn't hot enough for
effective sanitizing? Or dishwash-
ing equipment isn't working
properly' Or workers are careless
and fail to use the equipment
properly7 That's where health
hazards he
In contrast, single-use
products insure sanitation by
helping to "break the chain "
Materials that may be contami-
nated are disposed o!', not reused
Public health officials
recognize this In some food
service situations, the use of
single-service products is required
by law This requirement is in the
U S Food and Drug Administra-
tion's Food Service Ordinance
and Code
" . all food sen/ice
establishments which do not have
adequate and effective facilities
for cleaning and sanitizing
utensils shall use sincje-service
articles"
At its national convention in
1975, the International Associa-
tion of Milk, Food and Environ-
mental Sanitarians, a leading
organization of public health
professionals, passed a resolution
with these words about the
sanitation values of single-service
products-
"The introduction of single-
service containers for food and
beverages has reduced the
infestation of insects and rodents
in the food service environment
in public buildings, and food and
beverage plants have improved
their sanitation through the use
of single-use food and beverage
containers "
What the professionals
already know, housewives are
growing increasingly aware of
More and more families appreci-
ate the uniqueness of single-
service as a sanitation
precaution, especieJly dunng
periods of sickness in the home
Safety
A cracked glass that seems
about to break apart in your hand
A chinaware cup with a chip in
-------
the rim just where it meets your
lips. Expenences like these are
common, dangerous and
avoidable
Since permanent ware is
breakable, personal injuries are
a potential danger for both
patrons and employees m
restaurants
Not so with single-service,
which substantially reduces the
safety hazards of food service
operations The same safety
factor applies at home, too —
especially important where small
children are concerned
The professional sanitarians,
quoted earlier, say this about
safety:
"The danger from glass
breakage to both employee and
consumer has been eliminated by
the use of single-use beverage
containers "
Adaptability
Or if you prefer, "conve-
nience" Or "utility!' Or "flexi-
bility" All these terms help
define this quality of single-
service, and all mean that more
choices and possibilities are open
to users of these products
With single-service, the
housewife who chooses not to
"do the dishes" can have her
wish Single-use products adapt
to her needs, whether she's just
plain tired after a busy family day
or whether she's a working wife
with limited time and energy for
household chores. According to
the Census Bureau and the U.S
Department of Labor, 46 7% of
all Amencan women now hold
jobs Among mamed women,
some 43 6% are working For
many of them, the "convenience"
of skipping dishwashing is really
a necessity—and single-use
products provide it, automatically
These products make last-
minute decisions and changes of
plans easier to carry out. They
reduce household fuss and
formality as new life styles and
more leisure create new options.
Increasingly, one option is
eating out, and single-service
products have a lot to do with
that. In a 10-year penod beginning
in the mid-60's, the number of
meals eaten by Amencans away
from home rose by about 45%
—from 145 million meals per
day to about 212 million
Much of this was made possible
by the use of single-service
products, which afforded the
food service industry great
flexibility in offenng good,
sanitary meals in many new
places and at convenient times.
This adaptability has enabled
food service operators to reach
out and serve their customers
anywhere at their convenience—
in schools, factones, offices, in
transportation, and with "take
out" food.
Economy
In the food service industry,
it's widely recognized that single-
service products can effect
substantial economies in four
major cost areas Labor, dish-
washing equipment and materials,
storage space, and replacement
of broken or pilfered permanent
ware The need for such econo-
mies, particularly in today's
inflationary period, underlies the
conversion of many food service
operations from reusables to
single-use products, and accounts
for part of the single-service
industry's growth
In vending and fast foods
especially, single-service permits
cost-saving changes in the design
of the meal delivery system itself.
The food service activity is from
the start designed around the
assured supply of a broad range
of single-service products
Without these products, the
fast-food industry would surely
diminish, or perhaps disappear as
we know it now, resulting in
serious economic consequences.
-------
Paper and Plastic
Food Service Products
What Are The
Environmental
Issues?
The singular benefits of
single-service, we feel, are clear
and strong. But along with the
pluses, there are minuses. Single-
use products do add to the solid
waste stream, and, with an
important assist from people,
they do add to the litter on our
streets and highways.
Some people, with the best
of intentions, would like to
eliminate single-service products.
They say that sourc e reduction—
cutting down or banning the use of
throwaway items—would save
material resources and energy
while helping to end litter and
minimize solid waste.
But would it? Let's try to
- place single-service items in their
environmental perspective.
Resources
Paper and plastics are the
two major matenab involved.
Paper is made from trees,
which are a renewable resource.
Actually, we are now growing
more wood than we are con-
suming. Fact: In 1970 there was
a net gain of 4.6 billion cubic feet
of timber over the previous year,
according to a study by the
Midwest Research Institute The
same study looked as far ahead
as 1985, and foreceist a continua-
tion of this forest bu ild-up.
Furthermore, technology is
advancing both for increasing
forest producti"** ="id recycling
paper.
As for plastics, they're
petroleum-based, not renewable,
and they happen to be substan-
tially a by-product produced in the
course of making other products.
Fact: Only a small percentage—
about 1.5 %-of the
petroleum used in the United
States goes into all plastics. And
only a tiny percentage of that
ends up in single-service products.
This, of course, is not an argu-
ment against using materials
wisely and efficiently, but another
perspective on the problem.
Energy
Think about this question'
Which uses more energy— food
service with single-service items
or food service without them?
In a study for the National
Restaurant Association, the
Midwest Research Institute made
these findings in comparing the
energy requirements of meal
preparation in five different
types of food service establish-
ments with home meal
preparation:
• Fast-food operations used
only 77% as much
energy to serve one
customer as was used in
home meal preparation.
• Coffee shops used only
78%.
• Cafeterias used 89%.
Significance: These three
types of food service operations
use single-service commonly and
in great volume.
The two types of food
service operations that tend to
use less single-service—table
service restaurants and hotels/
motels—required more energy
per customer than home meal
preparation.
Reasonable inference: Far
from being a "waste" of energy,
single-service enables the food
service industry to be more
flexible and therefore to use
energy more efficiently.
This flexibility shows clear
energy economies especially in
the area of transportation, both
of customers and supplies, to
conveniently loceited fast-food
establishments.
Solid Waste
Once more, let's put single-
service into perspective
America's waste stream totals
almost four billion tons a year.
Of this sum, the overwhelming
bulk is contributed by animal
waste and by agricultural, mining
and industrial operations.
According to a report by the U S.
Environmental Protection
Agency, only about three and a
half percent-some 144,000,000
tons—consists of "municipal
waste," collected and disposed of
by our communities. Packaging
materials of all kinds account for
about one half of one percent of
all solid waste. And single-service
products are only a tiny fraction
of packaging materials—in short,
a minor part of municipal waste,
and an almost infinitesimal part
of all solid waste.
F.ven if all single-service items
were eliminated and permanent
ware substituted, a net environ-
mental gain is unlikely. There
would probably be an additional
use or "waste" of dishwashing
water, and more soaps and
detergents would be discharged
into sewers and streams, adding
to an already severe water
pollution problem The "trade-
offs" here seem to tip in favor of
single-service.
In any case, solid waste,
including single-service products,
has its positive uses. With new
technology, resource recovery is
already winning back valuable
materials for recycling—paper,
-------
metals, glass, oil and gas. Paper
and plastic products are particu-
larly important in efforts to
produce energy from waste
materials Single-use food service
items are part of the soggy mix of
food wastes, and the paper and
plastics assist significantly in the
burning process.
In addition, solid waste, with
its component of single-service
products, continues to play an
important part in landfill opera-
tions which help restore unused
areas to productive community
use.
Litter
People litter single-service
products. They litter all kinds of
products and matenals. Littering
is a "behavior problem" that can
be solved through education,
re-training, and the establishment
of a system that encourages
people to stop littenng
This is already being done
through the Clean Community
System, formerly called the
Action Research Model,
pioneered by Keep America
Beautiful, an industry-sponsored
organization This comprehen-
sive, voluntary system has been
tried successfully in Charlotte,
N.C., Macon, Ga., Tampa, Fla,
and other cities, achieving litter
reduction rates in the 65-70%
range
Paper and Plastic
Food Service Products
How Do They
Balance Out?
There are no clear cut or
easy answers to environmental
problems. You get something,
you give up something—trade
offs
Single-service products
contribute to solid waste But
they're only a tiny fraction of all
packaging matenals, which make
up only about one-half of one
percent of all solid waste
Single-service products
contribute to litter But so do
many other products and
materials, the litterer doesn't
care what matenals he throws
away. And voluntary methods
have been developed that seem
to be successful in altering littering
behavior and in reducing litter
volume substantially
Single-service products
consume material resources and
energy. But paper comes from
a renewable resource, and
plastics are to a considerable
extent a by-product produced in
the course of making other
products. Plastics used for single-
service represent only a very
small part of the tiny percentage
of petroleum that goes into all
plastics And single-service,
especially in fast-food establish-
ments, may permit energy to be
used more efficiently than
permanent ware can
That's the minus side, seen
in context.
On the plus side, single-
service provides singular benefits.
Sanitation, safety, adaptability,
economy. These are not inci-
dental, they are inherent in
these products, and they make
the products unique
When measured against the
negatives, the special qualities of
paper and plastic single-use
products stand out sharply,
whether these products are used
in the home or in commercial and
institutional settings. When the
trade-offs are analyzed and
weighed, we hope you will agree
with us that the balance favors
these products
Published by
Single Service
Institute, Inc.
250 Park Avenue
New York, New York 10017
(212) 697-4545
The Single Service Institute is the
national trade association of manu-
facturers of disposable food service and
packaging products
-------
Statement Before The Resource Conservation Committee
on the
Solid Waste Product Charge Issue
Anthony fezer November 17, 1977
Associate Professor of Economics
George Washington University
Washington, U.C. 20052
I am appearing before you today as sn uncompensated individual
based on a suggestion made by members of the Public Interest
Economics Foundation.
First 1 should note that I aa in general agreement with the
analysis of solid waste charges by Steve Buchanan in the September,
1977 issue of "Public Interest Economics." As noted in this paper,
the primary rational for solid waste charges rests on an efficiency
argument based on the failure of user charges for sulid waste disposal
to reflect social Eoets. High administrative costs and the ease of
illegal dumping make it untikely that an effective system of user
charges .reflecing marginal costs of disposal can be designed and
implemented at the local level. My comments will be based on the
assumption that the solid waste product charge is designed to d^al
with this source of market failure. I shall take up the questions
raised by the Committee in the announcement of these meetings first
end then consider some additional questions of my own,
1. What level of government should levy solid waste product
charges? If the charge is based on market failure as described
above, then one must ask about the degree of spatial variation in
•olid waste disposal costs. If these costs vary sharply from
state to state and among cities of different sizes, then no schedule
-------
- 2 -
of national charges on components of consumer solid waste will
provide adequate market "signals" to consumers and producers.
Unfortunately there is little evidence on disposal costs in different
areas but my limited literature search provided some support for
the view that solid waste disposal costs (for which the wage bill
at -Mat <-
-------
- 3 -
supply (quite large) and demand(rather small) for packaging, the
direct effect on packaging markets would be a small reduction in
output and an increase in price nearly equal to the amount of the
charge. Now, if recycled materials are exempt from the charge, and
the recycling industry is perfectly competitive and constant cost,
then the price of recyclable waste will also rise by an amount
nearly equal to the amount of the charge. Now the charges proposed
for paper ($26 per ton) and rigid containers (-J- t each) represent
a sizable fraction of the current price of recyclable material:..
Thus the waste charge or product charge might result in very
substantial increases in the prices paid fox recyclable materials.
No$e that recyclable paper now sells for * ** /^»*»
and aluminum cans can be recycled for about.-jr £ per can.
4. What types of products or packaging should be indluded
in the charge? Clearly all close substitutes must be included
in the charge and taxed at rates that rsflect disposal cost. ] would
recommend that the program begin kith charges on all packaging
materials.
5. How should the cearge be determined? Waste disposal cost
should determine charge levels. It is likely that weight is the
most important determinant of disposal cost*
how should
6. ih« product charge Khan be adjusted to reflect the amount
of recycled material? There should be no tax on the recycled
material content provided that recycling is not subject to some fora
of public subsidy, Given that firms using recycled material are
paying full social costs for the material which they purchase, this
material should be exempted from a product charge.
-------
- 4 -
One important issue, not mentioned in the literature which
I have reviewed thus far, is the treatment of ecpocts and imports.
The argument for a product charge based on market failure in waste
collection suggests that exports be exempt fBon charges and imports
be subject. It may be difficult to administer such a scheme but
sone mechanism for dealing with the foreign sector should be considered.
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Ito. CHAiRMAN AND MEMBERS OB THE COMMITTEE, MY NAME IS THOMAS X, ll
I AM A MEMBETt OF THE ClTY COUNCIL OF GREENBELT, MARYLAND, A MEMBER OF THE
LITTER CONTROL TASK FORCE FOR PRINCE GEORGES COUNTY, I"IARYLAND, CHAIRMAN OF
THE METROPOLTAN HASHINGTON COUNCIL OF GOVERNMENTS HEALTH AND ENVIRONMENTAL
PROTECTION POLICY COMMITTEE, AND ALSO SERVE ON THE ?!ATIONAL I£AGUE OF CITIES
ENVIRONMENTAL QUALITY COMMITTEE. I MUST STATE,' HOWEVER, THAT TODAY I AM
SPEAKING FOR MYSELF AND I AM REPRESSING NONE OF THOSE ORGANIZATIONS*^
IT IS INTERESTING TO NOTE THAT I LEARNED OF THIS PUBLIC
H'ONLY BY PERUSING THE FEDERAL REGISTER OF TUESDAY,
I RAISE THIS QUESTION 3ECAUSF I "HINK
THAT IF MY BWIPLE IS REPRESENTATIVE OF OTHER INDIVIDUALS WHO WOULD BE JN"ERESTED
IN THIS VERY IMPORTANT SUBJECT, THEN BY MY ESTIMATION THIS MEETING HAD RELATIVELY
POOR NOTICE, EVEN LEARNING AS I DID ON NOVEMBER 3 ABOUT A MEETING TO BE HELD
ON "foVEMBER 17, THE ORGANIZATIONS IN WHICH I PARTICIPATE WOULD NOT BEEN ABLE TO
GIVE NOTICE TO THEIR MEMBERS, MEET AND CONSIDER THE SUBJECT AND BE ABLE TO
PROVIDE THE CCTWENTS THAT YOU NEED, MY FIRST SUGGESTION, THEREFORE, IS THAT
YOU CONSIDER ADDITIONAL PUBLIC MEETINGS ON THIS VERY IMPORTANT SUBJECT AND THAT
YOU BROADEN THE NOTICE AND DISTRIBUTION TO A MUCH WIDER AUDIENCE, AT THE VERY
LEAST, EVERY LOCAL iSWSWN WITH AN INTEREST IN SOLID WASTE MANAGEMENT SHOULD BE
ADVISED,
FOR MY PART, AFTER TODAY'S SESSION I WILL HAVE Mi OPPORTUN.TY TO PLACE THIS
SUBJECT ON THE TABLE OF EACH OF THE ORGANIZATIONS IN WHICH I PARTICIPATE AND
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-t-
HOPEFULLY GENERATE THEIR INTEREST AND RESULT IN MEANINGFUL COMMENTS TO THE
COMMITTEE AND TO THE ADMINISTRATION AS WELL AS THE CONGRESS.
I WOULD OFFER THE FOLLOWING BRIEF COMMENTS ON HY OWN IN REGARD TO THIS
SUBJECT:
(1) IT IS MY VIEW THAT A NATIONAL SOLID WASTE PRODUCT CHARGE COULD OFFER
A MUCH NEEDED NATIONAL STRATEGY FOR THE PROBLEM OF SOLID WASTE MANAGEMENT
AS WELL AS RESOURCE RECOVERY, IN THE METROPOLITAN HASH1NGTON AREA WE ARE
WITNESSING QUITE DISPARATE LOCAL REGULATIONS REGARDING BEVERAGE CONTAINERS.
OJE COUNTY PLACES A DEPOSIT ON ALL NONRETURNABLE BEVERAGE CONTAINERS.
ANOTHER GENERATES SIMILAR LEGISLATION BUT INCLUDES ALCOHOLIC BEVERAGE CON-
TAINERS. ANOTHER LOCAL JURISDICTION PLACES A TAX ON ALL ALCOHOLIC AND
NONALCOHOLIC BEVERAGE CONTAINERS AND SO ON, THE SOCIAL, MARKET, AND
l /I I.", f
ENFORCEMENT PROBLEMS WHICH SUCH A HODGEPODGE OF REGULATIONS^ ALL WITH A
STATED PURPOSE OF LITTER CONTROL IS BECOMING RIDICULOUS. I THINK FEDERAL
LEGISLATION RESULTING IN A NATIONAL SOLID WASTE PRODUCT CHARGE INCLUDING
INCENTIVES FOR REUSE OF MATERIALS WOULD GO A LONG WAY TOWARD RESOLVING
THE PROBL01S THAT LOCAL AND REGIONAL GOVERNMENTS ARE ENCOUNTER ING.
ANOTHER PROBLEM BEING FACED IN THIS METROPOLITAN AREA is THAT OF EVER-DECREASING
LAND FILL SPACE AND AN INCREASING AWARENESS OF THE ECONOMIC, SOCIAL, AND
ENVIRONMENTAL COSTS OF BURYING OUR WASTE, ALTHOUGH THIS MAY SEEM LIKE AN
OVER SIMPLIFICATION, I SEE A NATIONAL SOLID WASTE PRODUCT CHARGE AS A SOURCE
OF REVENUES FOR LOCAL GOVERNMENTS TO PROVIDE THEM WITH THE CAPITAL BASE
NECESSARY TO FUND ALTERNATIVE SOLID WASTE DISPOSAL METHODS AND ESPECIALLY
c
RESOURCE RECOVERY FACILITIES.
(2) IN ANY SOLID WASTE PRODUCT CHARGE SYSTEM I WOULD URGE SIMPLICITY IN
THE COLLECTION METHOD AND DISTRIBUTION OF REVENUE BACK TO THE LOCAL GOVERN-
MENTS. IT WOULD BE FOOLISH TO CONSTRUCT A HUGE COLLECTION BUREAUCRACY
THAT WOULD CONSUME A LARGE SHARE OF THE PRODUCT CHARGES SOLELY IN ADMINISTER-
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ING THE PROGRAM. I GUESS FOR THAT REASON THE CLOSER THE PRODUCT CHARGE
IS TO AN EXCISE TAX METHOD THE BETTER; ONE THAT WOULD UTILIZE EXISTING
FEDERAL TAX COLLECTION METHODS,
WITHIN THE LIMITED TIME THAT I HAVE HAD TO REVIEW THE DISCUSSION PAPER
PUBLISHED IN THE FEDERAL BEGJ5TJER NOTICE, I THINK THOSE ARE ABOUT THE ONLY
COMMENTS THAT I WOULD MAKE. 1 WOULD, HOWEVER, URGE CONTINUED DISCUSSION ON
THIS IMPORTANT SUBJECT AND AS I SAID EARLIER MORE WIDESPREAD DISTRIBUTION OF
CALLS FOR COMMENTS.
THANK YOU FOR THE OPPORTUNITY OF APPEARING BEFORE THE COMMITTEE.
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My name is Marchant Wentworth and I am Research
Director of Environmental Action Foundation's Solid
Waste Project. I would like to thank the Resource
Conservation Committee for the opportunity to appear
before you on this important issue.
An outgrowth of Earth Day, 1970, the Foundation
attempts to educate and raise citizen awareness on
a variety of environmental issues. For the past four
years, the Solid Waste Project has been working with
citizen and environmental groups throughout the country
on solid waste problems. We are in a unique position
to present citizen concerns concerning the product
charge and the benefits it could bring to an increasingly
materials consumptive society.
The product charge is an idea that makes good
economic and social sense. It represents an attempt
to assign a true cost to a product and marks the beginning
of an environmental consciousness that assigns a
specific responsibility for consumption and production.
In the past, the price for this consumption - the pollution
of belching smokestacks and stinking rivers was thought
of as the price we paid for progress.
While times have changed, we still continue to
selectively poison ourselves and maintain that "people
cause pollution - people can stop it." It is pointless
to dwell on the advertising misconceptions that this
-1-
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state1 ment nurtures. But this "orginal sin" ide-a that
people inherently pollute is not the issue. What is
at i£.sue is the question of who should pay the pollution
bill. The product charge offers the most workable
solut ion to that question.
We see no need to recount the data on the produe t
charge that has already been presented to the C'ommittee.
A more detailed treatment will be submitted foi the record
For the present, I will summarize our position and
prese'nt our views on some of the issues raised in the
background paper distributed by the committee.
Perhaps the single most beneficial aspect of the
product charge is that it works through the existing
economic system. Unlike the complex regulatory appro ac li
of ma.ny other environmental programs, the base of the
product charge is firmly placed in the market place.
The aid vantage s of this approach are that the aclmini strative
and regulatory costs are relatively small - especially
when compared to the potential benefits of the program.
Also, the program tends to be self-regulatory - expanding
and c-ontracting according to the need - not according
to bureaucratic whirn. The product charge can go with the
flow of recession and inflation, without overly penalizing
any one income or interest group. Few programs, have this
flexibility. With these advantages in mind, let us
-2-
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briefly describe how this product charge can work alongside
other solid waste management options.
We strongly believe that not only is the product
charge compatible with beverage container deposit
legislation, but that the two complement each other.
For example, on the basis of experience in Oregon,
Vermont, and Yosemite Park, we believe that the primary
result of a beverage container deposit system will be
the return of beverage containers by the consumers.
The deposit places a burden on the consumer to return the
container for the deposit. The product charge, on the
other hand, places a burden on the manufacturer in
the form of an extra charge. This charge creates the
economic incentive to reduce waste at the manufacturing
level and avoid the tax. Recycling credits can supply
another incentive by reducing the charge in proportion
to the amount of post-consumer waste used by the
manufacturer. The net effect is that the product charge
creates a demand for recycled materials and the deposit
system satisfies that demand by supplying containers
to the manufacturers for reuse and re fabrication.
Because of this interaction between the supply and demand
sides of the market, we do not favor an exemption for
beverage containers under the product charge system.
Both must work together to produce an effective system.
Either one alone only does half the job.
-3-
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The product charge concept can also be an integral
part of a long range resource recovery-source separation
strategy. By providing a stable market for recycled
mate rials, the product charge would serve to spur
incieased development in both high technology resource
recovery and low technology source separation. Either
way, the charge would insure that the energy and
matۥ rials devoted to the initial fabrication of our
consumer goods would not be wasted.
The product charge would be a boon to the citizen
recyclers/ who, more than any other group, are responsible
for us being here today. It was on the strength of
citizen concern for solid waste problems, that many
of the recycling centers sprang up after Earth Day.
It :_s true that these citizens did not radically decrease
the load going to our dumps and Iandfills. But by raising
the collective public consciousness about our solid
waste problem, they performed a 3 ob more valuable than
any reduction they could achieve. These centers provided
a v.ital education tool that provided many with what
was probably their first look at their own collected
garbage.
Moving on to the some of the specific issues raised
in i;he position paper distributed by the Resource
Conservation Committee, we do feel that this charge
shoald be levied on the national level and tha-t, as
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we have discussed earlier, it should not exempt beverage
containers.
Revenues derived from the charge should be
returned to the state and local levels to fund solid
waste management programs.
In addition, we feel that a recycling credit is
vital to the integrity and workability of the product
charge concept. While it may be true that this recycling
credit does impose an additional administrative cost
on the program, thi s credit supplies the driving incentive
towards increasing the use of post-consumer waste and
easing the burden on our landfills, incinerators, and
dumps. None of the other proposals mentioned provided
the needed push to reverse the present market situation
and actively promote the use of post-consumer waste.
We do support the use of post-consumer waste by
firms that are not covered by the disposal charge, but
it is not clear that recycling incentives are the
appropriate way to deal with this problem. It is also not
clear that reductions of the amounts of post-consumer
waste would actuaj.ly occur in these rather specialized
situations. The recycling incentives are not the most
efficient method of encouraging the use of post-consumer
waste in this sector.
We are similarly not convinced that energy credits
for trash-to-energy projects are the wisest way to spur
-5-
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the reduction and recycling of post-consumer waste.
These projects could well receive part of the returned
revenues of the charge, but direct energy credits for
energy recovery projects could encourage the developmert
of unnecessary energy plants that could serve to
perpetuate the flow of waste - not reduce it.
We feel that the resulting revenues from this
product charge should be transfered back to th= state,
local, and city governments for solid waste management
purposes - not to the General Fund. The product charge
revenues should be used to alleviate the consumer's
burdsn of any additional solid waste management costs.
We do believe, however, that local governments should
be given maximum discretion in the use of these funds.
Finally, we would hope that the product charge
be phases in over a ten year period thus mitigating any
drastic and un due economic and labor impact s. Administ ration
by EPA and Treasury as outlined in the position paper
make s sense.
In conclusion, we strongly urge that the
Reso urce Conservation Commi ttee endorse the Product
Charge and send a positive recommendation to the President.
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7/V CrownZellerbach
/:_,/
Chairman of the Board
December 2, 1977
Us. Barbara Blum
' hairman, Senior Advisory Group
resource Conservation Committee
•101 M Street, S. W.
Washington, D. C. 20460
near Ms. Blum:
I would like to bring to the attention of the Resource
''onservation Committee the concerns that Crown Zellerbach has
'"egarding the proposal for solid waste disposal charges, and to
1 upport the testimony presented by American Paper Institute
''resident Louis F. Laun on November 17th in Washington, D. C.
1ecause we are a large user not only of virgin pulp (2 million
tons annually) but also of waste paper (400,000 tons annually) and
'aste wood, we recognize the balancing of interests that must come
into play as solid waste issues are addressed.
Solid waste issues are complex and do not lend themselves to
-imple solutions. We therefore urge investigation of alternatives to
" straight disposal charge in order to accomplish your stated goals
,'hich we agree with, of "increased recycling and conservation of
"nergy and natural resources."
We oppose the charge for the following reasons:
1. It is essentially an inflationary value-added
tax. By placing it on the producer, the tax will be marked
up at every phase of distribution, increasing the burden
on the consumer.
One Bush Street,San Francisco CA 94119
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2. It is a regressive tax weighing most heavily
on lower income groups who spend a major part of their
income on packaged food, drugs, clothing and other
packaged items.
3. It is inequitable in that it singles out one
category of solid waste. While EPA statistics show that
paper and packaging contribute less than 30% to the total
solid waste stream and perhaps 50% to the municipal stream,
75% of the proposed charge would fall on these products.
4. It would create disincentives for resource
recovery, since municipalities, knowing that the federal
tax would underwrite solid waste disposal costs, would
have no incentive to institute resource recovery operations.
We continue to believe that resource recovery will, in the
end, prove to be the most effective way to "meinage" solid
waste.
5. Since the incidence of the charge would be on the
producer instead of the disposer, no incentive would be
developed for the disposer to segregate and separate reusable
waste materials, and to recycle or reuse, products which
currently enter the solid waste stream.
6. Packaging serves a variety of functions —
sanitation, protection from theft, advertising, education,
ease of distribution, etc. "Excessive" packaging does
not in fact exist since the market system and its
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associated laborr energy and transportation costs now
provide incentives to keep packaging at the minimum
needed to meet the producer's and the consumer's needs.
7. It creates market dislocations by favoring
lighter materials, many of which are highly energy
intensive. Preferential stimulus to their production
will, therefore, make further inroads into the supply of
already scarce fuels.
Crown Zellerbach recommends instead, that the following
•ilternatives, which embrace concepts endorsed by the Environmental
Protection Agency, be further investigated:
1. Continued support for resource recovery and
research devoted to both the economies of resource recovery
and the importance of tailoring any system to the locale.
Major portions of available EPA research funds should be
channeled accordingly.
2. Improved and expanded source separation programs,
which would result in clean waste paper, such as newspapers
and used corrugated boxes.
3. Additional investment tax credits for recycling.
4. Government purchasing specification-s that allow
increased use of recycled materials.
5. Direct charges on disposers to pay for solid waste
collection and disposal.
6. Programs for consumer acceptance of products made
from recycled materials.
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Such investigation of alternative approaches would assist
in addressing what we see as the crux of the matter: that the
waste disposal "problem" is, in fact, a multitude of local,
individual, and very different problems. These entail the
differences among municipal collection systems, the a.vailabillty
of local fill sites, population distribution, the variation among
markets for' recycled materials, and the types and amounts of Local
funding, etc. Given the many varying conditions, multiple approaches
•
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.d
It is our desire to be helpful in the analysis of soli
•;aste questions and in the solution to ma^or problems as they
-ire identified and reduced to the scope most appropriate for
actions, and we will be happy to work with you to that end. We
appreciate and thank you for the opportunity to comment.
Sincerely,
C. R. Dahl
Chairman of the Board
'.RD:db
~c: Ms. Susan B. Mann °*
Public Participation Liaison
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National Center for Resource Recovery, Inc.
1211 Connecticut Ave , N W Washington, D C 20036 (202)223-6154
Edwin D. Dodt!
Chairman of the Boaid
August A. Busch, III
Vice Chairman
Or. Roceo A Patron-*
Present November 23, 1977
The Hen. Barbara Blum
Deputy Administrator
Environmental Protection Agency
401 M Street, S. W.
Washington, D. C. 20460
Dear Mrs. Blum:
[ attended the morning session of the Resource Conservation Committee
public meeting in Washington on November 17, and I wish to submit bhe
attacied brief statement for inclusion in the proceedings.
My interest, and that of the National Center, is in pursuing resource
recovery as an increasingly practical solution to many of the problems
cities face with the disposal of solid waste. In realizing recovery
systems, there are definite conservation benefits in the form of fossil
fuel substitutes and zecyclables to reduce the demand on virgin materials.
What impressed me at the hearings was that resource recovery was often
proposed as an alternative to those items that the Committee is currently
addressing: mandatory beverage container deposits and oroduct disposal
i-av«c. v^i-, ln articulating resource recovery as a prcolem-solving
there was often confusion about the concept, its characteristics
In nearly seven years of operation, the National Center has gained
e.xteisive experience in this field. We have been involved in many
aspects of research and development, test and evaluation, demonstration
and education. The Center has. received a number of grants and contracts
from EPA and the Department of Energy to conduct various projects, both
_i_n source separation and in capital-intensive technology.
I wish to offer our assibtance and cooperation to you, the Committee and
the senior staff in providing whatever services and in formation that might
.oe helpful. I believe we can supply objective input to perhaps clarify
some' of the confusion aoout resource recovery and to facilitate the considera-
tion by RCC of this important mechanism for problem solving.
CQNSER i/,4 TION of Materials and Energy Through the Utilization of Was
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National Canter for Resource Recovery, tnc
The Hon. Barbara Blum -2- November 28, 1977
Please call on me if we can help. On December 7, we are planning to
host a tour and briefing for Administrator Costle at the pilot Equipment
Test and Evaluation Facility here in D. C. We would be delighted if you
could join us to see the test work being conducted on recovering metals,
glass and an energy product from solid waste.
Sincerely,
A. Petrone
Enclosure
cc: Mr. John Robinson
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STATEMENT FOR THE RESOURCE CONSERVATION COMMITTEE
by
DR. ROCCO A. PETROHE
President
NATIONAL CENTER FOR RESOURCE RECOVERY, INC.
November 25, 1977
My sta -ement is in response to various questions raised and some
statements delivered at the November 17, 1977 public meeting in Washington,
D. C. My comments do not pertain to either the solid waste product charge
or the mandatory beverage container deposit system being considered. Rather
they relate to resource recovery, and I will attempt to clarify some of
the confusion that was evident in testimony of several individuals.
1. There was confusion about the often used terms, "lov- technology"
and "high technology." Low technology refers to those programs and systems
that are essentially labor-intensive although they might incorporate the
use of some processing and separation equipment, trucks, etc. Source
separation programs are often described as low technology efforts to separate
and collect individual target items — newspapers, metal cans, bottles —
for sale and ultimate recycling by manufacturers.
The tenon "high technology" is often used to describe systems to
mechanically separate recyclable materials and energy products from mixed
municipal solid waste. A more accurate term is "capital intensive," since
most of the large-scale resource recovery plants do not emplcy advanced
technology; rather, they use machinery and equipment tnat, for the most
part, have been utilized in other industrial processing, energy production,
etc.
As a point of reference, multi-million dollar incinerators have been
a traditional means of volume reduction of solid waste for many years.
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There is a definite and desirable trend away from straight burning of refuse
without any recovery — and toward utilizing the heat value of waste as a form
of energy. We can expect that the energy-from-waste systems will be cost-
competitive to the straight incineration systems. These plants — which
are not high technology — will serve two needed functions: waste disposal
and energy recovery.
2. I wish to clarify an obvious misunderstanding by at least one
testifier about the status of resource recovery. After a number of years
of research and development on a number of recovery approaches, we are not just
at the initial stages of commercial application. Many of the presently
operating 15 systems are prototype or demonstration in nature, There are
at least six other large plants under construction, and in 1978, five or six
more will begin construction.
By the early 1980's, scores of cities will have resource recovery
systems and many more will follow. In short, we are witnessing the beginning
stages of recovery implementation as an increasing number of cities are
finding that this approach is the only means of stabilising disposal costs
and extending landfill lifetime.
3. Mr, Joseph Lupton made some inaccurate comments about the Recovery 1
facility operation in New Orleans. The National Center has been involved
with that project since its inception in 1972, and we serve as technical
adviser to the City. The Center is providing more than $1 million to
the private builder and operator. Waste Management, Inc. in the form of
a loan/grant to advance the technical and financial experience with resource
recovery. We are, therefore, very familiar with that program and the economics.
Mr. Lupton stated that there were no markets for materials recovered from
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the plant and implied that the operation was unsuccessful. One of the
first objectives of that, or any type of recovery project, is to gain
long-term markets for recovered components. Without markets contracts,
a recovery facility cannot be built. In New Orleans, we gained contracts
for ferrous metals (Proler International, and Southern Scrap, Ltd.),
aluminum {Reynolds Metals Co.), other nonferrous metals (Scuthern Scrap, Ltd.)
and the glass (five glass container manufacturers).
The recovery part of Recovery 1 is now in the shakedown stage, But
already the City has benefitted by gaining an environmentally sound, lower
cost and more efficient form of waste disposal — and the closing of five
4. One final point of clarification: what constitutes an "economically
viable" resource recovery system for a community and the participants? For
the city, it is when the system provides a means for waste disposal that is
cost competitive to present and, particularly, to projected conventional
disposal methods. In New Orleans, for example, the City was paying above
$14 a ton to burn wastes in incinerators that could not meet air qualij /
standards. It is now paying the facility about $11 a ton.
For the various private sector partners — it is when a reasonable
return on investment is realized from the undertaking.
At this time, there are few locations wh<=--e all economic and technical
objectives have been met. But, as I have stated, we are at the very early
stages of recovery implementation. We are learning from the experiences
in New Orleans; Milwaukee; Chicago; Ames, Iowa; Saugus, Massachusetts, and
elsewhere. Many other solid waste-problemed jurisdictions are gaining from
these first generation undertakings.
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I would hope that the Resource Conservation Committee will directly
address the potential of resource recovery so that the movement to implement
can be expedited. The needs for it are present: the RCRA objective for
environmentally acceptable land disposal, which can only be roa±jzed in
many cities with the inclusion of recovery systems, and the national
objectives for conservation of materials and energy, to which resource
recovery can provide new alternative sources for virgin materials and
fossil fuels.
We at the National Center will be pleased to assist the Committee
in this important consideration.
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ATTENDEES -November 17, 1977
Agrawl, S.K.
P.O. Co. Health Dept.
10210Greenbelt Rd.
Seabrook, MD. 2080)
Alexander, Judd
American Can. Co
American Lane
Greenwich, Conn. 06830
Apffel, Fred P.
Intenco, Inc.
12620 1-45 N
Suite 218 International Plaza
Houston, Texas 77060
Bahan, Cathleen
Institute of Acrap
Iron and Steel
1627 K Street M.W.
Washington, D.C. 2006
Bailey, Anne
INSWMA
1120 Conn. Ave. N.W.
Washington, D C. 20036
Beachey, Jacob E.
Franklin Assoc Ltd.
8440 Mission Road Suite 101
Prarie Village, Kansas 66208
Behrens, Edwin L.
Mgr. of Tech. Affairs
Procter & Gamble
1801 K Street NW
Washington, D.C. 20006
Brumidage, Joyce
P.P.C.
1800 K Street
Washington, D.C. 20006
Buchanan, Steven J.
Pub. Interest Economics Cntr.
1714 Mass. Avenue N.W.
Washington, D.C. 20036
Buhler, Franchot
State of Florida
Resource Recovery Cncl.
2562 Executive Cntr. Crcl.
Tallahassee, Fla. 32301
Burks, Stephen
N.L.C.
1620 I Street
Washington, D.C. 20006
Chamberlain, Walter C.
Pepsi Co. Inc.
Purchase, N.Y. 10577
Cobb, Cliff
National Association of Counties
1735 New York Ave. N.W.
Washington, D.C. 20006
Cooper, Jack L.
National Canners Assoc
1133-20th Street N W.
Washington, D.C 20036
Cunningham, E.W.
Standard Oil Co. of Ohio
Midland Bldg.
Cleveland, OH. 44115
Davis Millard C.
Solid Waste Adm.
32 E. Hanover Street
Trenton, NJ. 08625
Dawson, Russell
Solid Waste Report
P.O. Box 1067, Blair Station
Silver Springs, MD. 20910
Denslow, Victor A.
Amoco Chemicals Co.
200 E. Randolph
Chicago, III. 60601
Denyes, Wells
Eastman Chemical Prods. Inc.
500 12th Street S.W.
Washington, DC. 20024
Donahue, James E
Amer. Newspaper Pub. Assn.
Sunrise Valley Drive
Reston, VA. 22091
Donnelly, Joan
Can Manuf Institute
1625 Mass Ave , N.W.
Washington, D.C. 20036
Downey, Robert M
Bureau of Domestic Commerce
U.S. Dept. of Commerce
Washington, D.C. 20230
Drance, Andrew
Garden State Paper Co.
2425 Wilson Blvd.
Arlington, VA. 22201
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Early, A Blakeman
Environmental Action
1346 Conn. Ave. N W. Rm. 731
Washington, D.C. 20036
Easterbrook, Gregg E.
Waste Age Magazine
6311 Gross Point Rd.
Miles, III. 60614
Edwards, J Rodney
American Paper Institute
260 Madison Avenue
N.Y., NY. 10016
Eggan, J. Alfred Jr.
Nat'l Assn. of Manufacturers
1776 F. Street N.W
Washington, D.C. 20006
Elwood, John
International Paper Co,
220 East 42nd Street
N.Y., N Y. 10017
Felix, Charles G
Single Service Institute
250 Park Avenue
New York, New York 10017
Ferngan, James J.
Bethlehem Steel Corp.
Martin Towers
Bethlehem, PA. 18017
Festa, John L.
American Paper Inst.
1619 Mass. Ave N W.
Washington, D.C. 20036
Fitzgerald, William
Office of Technology Assessment
U S Congress
Washington, D.C. 20510
Flannagan, John C
Dept. of Commerce
14th & Constitution
Washington, D.C. 20230
Fleischaker, Marc L
Arent, Fox Kimtner,
Plotkm & Kahn
1815 H. Street N.W.
Washington, D C 20006
Ganano, R.J.
General Electric Co.
1 Plastics Avenue
Pittsfiled, MA. 01201
Hafner, E.A.
Hafner Industries Inc.
Box 3923 Amity Station
New Haven, CT. 06525
Hallman, Paul W
C M.I
1625 Mass. Ave.
Washington, D.C. 20036
Hapworth, Peter
National Restaurant Assoc
Suite 505; Madison Bldg.
1155 15th Street
Washington, D.C. 20008
Harris, Gladys L.
Environmental Protection Agency
Office of Solid Waste
401 M Street S W.
Washington, D.C 20460
Haupt, J.D
St Regis
1625 £ye Street
Washington, D C. 20006
Heeb, Louis
American Can Co
American Lane
Greenwich, CT. 06830
Helsmg, Craig R.
Can Manuf. Institute
1625 Mass. Avenue N W.
Washington, D.C 20036
Helvey, Brian
EPA. (WH-463)
Office of Sohd Waste Mgt
401 M Street SAW.
Washington, D C 20460
Hershon, Morris
National Barrel & Drum Assoc
1028 Conn. Ave. N.W.
Washington, D.C 20036
Hoiz, Gaye
GSA, PBS, Office of Buildings Ivigt.,
Concessions Div.
18th & F Street:. N.W
Washington, D.C. 20405
Hill, Chris
O.TA.
U.S. Congress
Washington, DC. 20510
Holladay, Phillip C.
Shell Oil Co.
1025 Conn Avenue
Washington, D.C. 20036
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Hollms, Arthur L.
State of Md D.N R.
1445 Otis Place N.W. No. 315
Washington, D.C. 20010
Hunt, Robert G.
Franklin Assoc.
8340 Mission Road.Suite 101
Prane Village, Kansas 66206
I nee, H C. Jr.
J.P Stevens & Co., Inc
Box 2789
Greenville, S.C. 29602
Jaiscie, Allen
Dept. of Energy
1200Penna. Ave. N.W.
Washington, D.C 20461
Jessar, J.S
Hill & Knowlton
1425 K Street N.W.
Washington, D C. 20005
Jimmmk, Mary
International Nonwoven &
Dispensables, Inc
1619 Mass Ave. IM W
Washington, D.C. 20036
Jurman, Ruth E
Glass Packaging Institute
1 BOOK Street N.W.
Washington, D.C 20006
Keiser, Kenneth D
Environmental Health Ltd.
1097 Nat'l Press Building
Washington, D C. 20045
Kelley, James L
Dept. of Commerce
14th & Constitution Ave
Washington, D.C 20230
Kendnck, Pete
S.C.S. Engineers
11800 Sunrise Valley Drive
Reston, VA. 22070
Kerns, B.A
Westinghouse Electrical
1601 Westinghouse Bldg.
Pittsburgh, PA, 15222
Killeen, Michael D
General Services Admin
(F.W.R ) Crystal Sq No. 5 Rm 900
Washington, D.C. 20406
King, H.B.
U.S. Brewer's Assoc.
1750 K Street N.W.
Washington, D.C. 20006
Kleeman, Richard P.
Association of Amer. Publishers
1707 L Street N.W. Suite 480
Washington, D C 20036
Klug, Marilyn
Sidley & Austin
1730 Pennsylvania Ave.
Washington, D.C. 20006
Krummenochl, N.
Environmental Report
330 Nat'l Press Bldg.
Washington, D.C. 20004
Kupper, Louis
U.S. Dept. of Commerce
14th & Constitution Ave.
Washington, D.C 20230
Lane, Samuel M
Mobil Chemical Co.
P.O Box 26683
Richmond, VA 23261
Landes, William M.
University of Chicago
Chicago, III. 60637
Laun, Louis F.
American Paper Institute
260 Madison Ave
New York, N.Y 10016
Lazar, Emery C.
U.S. E P.A.
Office of Planning and Evaluation (PM-223I
Washington, D.C 20460
Loopstra, Sandra
Environmental Protection Agency
401 M Street S W
Washington, D.C 20460
Lopez, Louis A
Gov't Prtg Office
Washington, D C 20401
Ludolph, Charles M
U.S. Dept. of Commerce
14th & Constitution Avenue, Rm 3119
Washington, D.C. 20230
Lupton,Joe
Georgia Tech. EES/ASL
Atlanta, GA. 30332
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Marder, Howard
The Continental Group, Inc.
633 Third Avenue
New York, N.Y. 10017
McBride, Barbara L.
Food Marketing Institute
1750 K Street, N.W.
Washington, D C. 20006
McClure, Roger
Sierra Club
1925 K Street, N.W. Suite 407
Washington, D.C. 20006
McFadden, Robert H
Motor Vehicle Manuf. Assoc.
1909 K Street N W.
Washington, D.C 20006
McHenry, Mary D
State of Maryland
Tawes State Office Bldg
Annapolis, Md. 21401
Mclntyre, John A.
Can Manufacturers Inst.
1025 Mass. Avenue N.W.
Wasmgton, D.C. 20036
McKinnin, Russell F.
Automotive Dismantles & Recyclers
of America
1000 Vermont Ave. N W.
Washington, D.C. 20005
Miller, Peter P. Jr.
Scott Paper Co.
Scott Plaza 1
Philadelphia, PA. 19113
Mitchell, Thomas E.
Glass Packaging Inst. Suite 400
1800 K Street N W.
Wasington, D.C. 20006
Moore, Clarence W.
National Barrel & Drum Assoc.
91017th Street, N.W.
Washington,D.C 20006
Nelson, Tobey G
Bureau of Environmental Services
D.P.W.
3430 Court House Drive
Ellicott City, MD. 21043
Nelson, J.S.
General Electric Co.
Fan-field, CT 06430
Nichol, R.A.
Alcoa
1501 Alcoa Bldg.
Pittsburg, PA 15219
Norton, Lawrence
National Agricultural Chemicals Assn.
1155 15th Street
Washington, D.C. 20005
Payne, P R.
American Can Co.
American Lane
Greenwich, Conn. C6830
Petrone, Rocco A.
National Center for Resource Recovery
1211 Conn Avenue IM W.
Washington, D C 20036
Pilcher, Kay
Environmental Action Found.
724 Dupont C rcle Bldg.
Washington, D.C. 20036
Posner, Richard A.
University of Chicago
1111 East 60th Street
Chicago, III. 60037
Potter, Neal
Montgomery Conty Council
County Office Bldg.
Rockville, MD. 20850
Praskievicz, Robert
U.S. Government Printing Office
N. Capitol & H St , N.W
Washington, D.C. 20401
Price, James [)
Gordian Associates, Inc.
910 17th Street, N W. Suite 917
Washington, D.C 20006
Ptitsky, W W
Aluminum A;,soc.
818 Connecticut Avenue
Washington, D.C 20006
Prendergast, J.D.
American Newspaper Publishers Assoc.
Reston, VA. 22075
Purcell, A.H.
T.I. P. Suite 217
1346 Connecticut Avenue N W.
Washington, D.C. 20036
Raulston, Carol L.
International Paper Co.
16201 Street N.W.
Washington, D.C. 20006
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Resler, Barcaly
Aluminum Association
818 Conn. Avenue
Washington, D.C 20006
Rhoads, Austin
Milk Ind. Foundation
Intl Assoc. Ice Cream Mfrs.
91017th Street N.W.
Washington, D.C. 20006
R liter, George W.
Alton Box Board Co (Alton, Inc.)
3914 King Arthur Road
Annandale, VA. 22003
Rohrbach, R.A.
Boise Cascade Corp.
1625 I, N.W. Suite 809
Washington, D.C. 200C6
Robinson, Katherine
American Paper Institute
1619 Mass. Ave., N.W.
Washington, D.'C. 20036
Roosevelt, Edith K.
Manchester Union Leader
1661 Cresent PI., N.W.
Washington, D.C. 20004
Scanlon, John R.
General Electric Co.
Appliance Park 1-220
Louisville, KY. 40225
Schlegel, Charles R.
Rawls Div. Nat'l Standard Co
2725 Abington Road
Akron, Ohio 44313
Schmidt, Ann
Denver Post
220 "C" Street S.E
Washington, D.C 20036
Scott, Robert L
Container Corp of America
5853 E Ponce de Leon
Stone Mountain, GA. 30087
Sellery, W.C
Owens-Illinois
1717 K Street, N.W
Washington, D C. 20006
Sherman, Kathleen
League of Women Voters
1730 M Street
Washington, D.C. 20036
Shields, James
Printing INdustries of America
1730N. Lynn Street
Arlington, VA 22209
Shulma, Arleen
National Association of Counties
1735 New York Ave. N.W.
Washington, D.C. 20006
Shuyler, T Randolph
Printing Industries of America, Inc
1730 N. Lynn Street
Arlington, VA. 22209
Skillmg, Kenneth H
Environment Reporter
BNA Publications Inc
1231 25th Street, N.W.
Washington, D.C. 20037
Starley, Ralph
Loomis, Owen, Fellman
2022 K Street
Washington, DC. 20036
St Clair, Wade
Nat'l Cntr for Resource Recovery
1211 Connecticut Avenue
Washington, D C. 20036
Sullivan, Mark
Nat'l Wildlife Federation
1412 16th Street, N.W.
Washington, D C 20036
Swigart, Richard P.
American Can Co Suite 201
1660 L Street, N.W.
Washington, D C 20036
Taft, Phillip H.
T.R I
1343 L Street N W.
Washington, D C 20005
Tether, Juan L
Environmental Law Inst.
1346 Connecticut Avenue N.W
Washington, D.C. 20036
Titus, Dick
Society of the Plastics Ind
1101 17th Street N.W. Suite 204
Washington,D.C. 20036
Tozzi, Jim
Office of Management & Budget
Washington, D C 20503
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Tweedie, St. Clair
Paperboard Packaging Council
1800 K Street N.W.
Washington, D.C. 20006
Ullrich, ArheJ.
Eh Lilly & Company
Indianapolis, In. 46227
Valdes-Coghano, Sally J.
League of Women Voters
1730 M Street, N W.
Washington, D.C. 20036
Vaughan G.W.
Union Camp Corp.
1850 K Street, N.W.
Washington, D.C. 20006
Vignovic, Anne
U.S. Brewers Assn.
1750 K Street, N.W.
Washington, D C. 20006
Wadleigh, David
Scott Paper Company
Scott Plaza
Philadelphia, PA. 19113
Walker, Elaine N.
Can Manufacturers Inst.
1625 Vass. Avenue, N.W.
Washington, D.C 20036
Walton, Robert
SCM Corp.
700 W. Taylor Rd
Philadelphia, PA. 19120
Wentworth, Marchant
Environmental Action Found.
Dupont Circle Bldg , Suite 724
Washington, D.C. 20036
Wesson, Sheldon
American Metal Market
605 Nat'l Press Bldg.
Washington, D.C 20045
Whalen, Curtis
Continental Group
633 Third Avenue
New York, NY 10017
Whitaker, John
Union Camp
1850 K Street, N.W.
Washington, D C. 20006
White, Thomas X., Councilman
City of Greenbelt Md.
8 Woodland Way
Greenbelt, Md. 20770
Wiechmann, Richard J.
American Paper Institute
1619 Mass. Avenue, N.W.
Washington, D.C. 20036
Williams, Kristin
Glass Packaging Institute
1800 KStreel, N.W.
Washington, D.C. 20006
Wood, R.M.
Mobil Chemical
Technical Center
Macedon, N.Y. 14502
Wolf, Frank Fl.
1901 N. Mooie Street
Suite 804
Arlington, VA 22209
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