RECYCLING
Reprinted from
GOVERNMENT
AND THE NATION'S RESOURCES:
REPORT
OF THE NA TIONAL COMMISSION
ON SUPPLIES
AND SHORTAGES, December 1976
-------
2d Printing, October 1977
An environmental protection publication
in the solid waste management series (SW-601)
U.S. ENVIRONMENTAL PROTECTION AGENCY
1977
-------
FOREWORD
The National Commission on Supplies and Shortages, established by Public Law
93-426, is the latest major attempt by our nation to obtain advice on how best to
use our natural resources. The Commission's final report, Government and the
Nation's Resources, was published in December 1976 and was distributed in
limited quantities. Chapter 8 of the report, "Recycling," contains material of
particular relevance to those concerned with conservation issues. The Environ-
mental Protection Agency has played a significant role in promoting recycling, and
this role will be expanded under the Resource Conservation and Recovery Act of
1976. To ensure that the Commission's findings and recommendations on recycling
reach a wide audience, EPA decided to reprint and distribute copies of the chapter.
The major findings and recommendations of Chapter 8 are as follows:
• Recycling can reduce the escalating capital requirements and environmental
degradation which accompany the exploitation of lower grade virgin resources;
national energy demands; and dependence on imports.
• Sizable amounts of some major materials are already recycled, but as a per-
centage of total consumption recycling has been static or declining, and only a
small portion of post-consumer waste is recycled. Present rates of recycling can be
increased substantially to supply a limited, but important, fraction of our total
needs for materials.
• A number of Government practices deviate from the principle that the rate of
recycling should reflect informed decisions made on the basis of the true cost of
materials. The 94th Congress acted to eliminate such practices as: discrimination
against recycled materials in procurement specifications; possible discrimination
against recyclables in regulated freight rates; and a variety of institutional barriers
which cause localities to miss recycling opportunities.
• The Commission recommends that Congress take further action to implement
the true-cost-of-materials principle. It should internalize the cost of disposing of
materials by means such as mandatory deposits on beverage containers, excise
taxes on nonreturnable containers, and product disposal charges on other consumer
packaging and on paper.
• Due to the absence of compelling evidence for its continuation, the Commis-
sion recommends repeal of the percentage depletion allowance for minerals.
• The Commission recommends that Congress avoid actions that are contrary
to the true-cost-of-materials principle, such as new or extensive Federal funding of
systems to recover resources from waste.
These important findings and recommendations should be well considered by all
those who are concerned with effective conservation of resources and protection of
the environment.
-SHELDON MEYERS
Deputy Assistant Administrator
for Solid Waste Management
U.S. Environmental Protection
Agency
-------
NATIONAL COMMISSION ON SUPPLIES AND
SHORTAGES
DONALD B. RICE, President, The Rand Corporation
Chairman
BILL BROCK, United States Senator (Tennessee)
ALAN GREENSPAN, Chairman, Council of Economic Advisers
HENDRIK S. HOUTHAKKER, Professor of Economics, Harvard University
GEORGE KOZMETSKY, Dean, College of Business Administration and
Graduate School of Business, University of Texas
JAMES T. LYNN, Director, Office of Management and Budget
THOMAS M. REES, Member, U.S. House of Representatives (23rd
District, California)
L. WILLIAM SEIDMAN, Assistant to the President for Economic Affairs
WILLIAM E. SIMON, Secretary of the Treasury
Vice Chairman
]. WILLIAM STANTON, Member, U.S. House of Representatives (llth
District, Ohio)
PHILIP H. TREZISE, Senior Fellow, The Brookings Institution
JOHN V. TUNNEY, United States Senator (California)
NAT WEINBERG, Director, Special Projects, UAW (Retired)
-------
CHAPTER 8
Recycling
PUBLIC LAW93-426 directs the Commission to report on private and
public practices which affect the supply of materials and on alternative
actions to increase their availability.
Recycling affects the available supply of materials. Sizeable amounts
of some major materials already are recycled, but as a percentage of
total consumption, recycling has been static or declining in America,
and only a small portion of postconsumer waste is recycled. Not all of
the materials consumed can be economically recycled but present rates
of recycling can be increased substantially, to supply a limited but
important fraction of our total needs for materials.
The term "urban ore" has been applied to the materials used up and
discarded by consumers. Some economic considerations discourage the
recycling of "urban ore" in much the same way that similar considera-
tions discourage the exploitation of virgin ore deposits. Moreover, a
number of (k)vernment practices effectively (if inadvertently) discour-
age recycling. Such practices are deviations from the principle that the
rate of recycling should reflect informed decisions made on the basis of
the true cost of materials. Within the last year, Congress has taken
legislative action to eliminate discrimination against recycled materials in
procurement specifications, possible discrimination against recydables in
regulated freight rates, and a variety of institutional barriers which
cause localities to miss recycling opportunities. Further action should be
taken in furtherance of the true-cost-of-materials principle—for exam-
ple, repeal of tax subsidies to producers of virgin materials and the
imposition of disposal charges and refundable deposits on containers
and paper products.
THE POTENTIAL FOR RECYCLING
The American economy uses approximately 4.5 billion tons of
nonfood materials each year. A large fraction of current consumption
of major materials is met from recycling. However, as Table 15 shows,
the portion of materials demand met from recycling is static or
declining overall— and most recycling comes from scrap created by
industrial production and fabrication processes rather than from
materials which consumers discard.
Proponents claim four major benefits from increased recycling in the
United States.
1. Increasing demands on the world's virgin resources are making
155
-------
TABLE 15—Total Recycling as a Percent of Consumption
Steel Aluminum Copper Paper
1955 51 21 53 26
1965 50 17 61 21
1973 51 18 55 21
Postconsumer Waste Recycling as a Percent of Consumption
1973 16 3 19 14
Sources: Statistics tor steel, aluminum, and copper recycling are derived from United States Department of the
Interior, Bureau of Mines Minrrtib Yparknok: statistics for aluminum and copper recycling are limited to purchased
scrap. Statistics tor paper are also limited to purchased scrap: they are taken from American Paper Institute,
Slitli\fit\ it/ Pn/irr and Pajit^tifitird.
their extraction more and more costly in terms of capital requirements
and environmental degradation. Recycling material in postconsumer
waste can reduce those demands. Once such material is discarded and
buried, it becomes much more difficult to recover economically.
2. The production of manufactured products from recycled materials
generally results in a "significant'saving of energy. For example, energy
equivalent to 6,700 kwh is required to produce a ton of steel from
virgin resources, and only one-third of that amount is. required to
manufacture a ton from scrap; 70,000 kwh are required to extract a
ton of aluminum from virgin resources, and only one-twentieth of that
amount to extract it from scrap; substantially more energy is required
to manufacture a ton of paper from virgin resources than from scrap.'
3. Recycling provides a domestic source of materials. This reduces
the political uncertainties of foreign sources of supply and the adverse
impact of the demand for imported materials on the Nation's balance
of trade. '
4. A fourth major benefit is beyond the narrowly defined bounds of
materials policy. Solid waste handling accounts for the second largest
expenditure of our major cities; cities can expect a 20 to 30 percent
increase in real disposal costs over the next 10 years; landfill sites are
becoming scarce in heavily populated areas and disposal presents air
and water pollution problems. One potential by-product of recycling is
a smaller waste stream whose constituent parts are more easily
managed.
To what extent can increased recycling of industrial and postconsu-
mer solid waste provide these benefits?
It has been assumed in the past that all the industrial waste
economically available is being recycled. This assumption is based on'
the fact that much industrial scrap is high-grade and available at
convenient locations. There has been relatively little study of actual
rates of recycling industrial solid waste, however, and there is a large
new source of such waste about which even less is known Under the
Clean Air Act and the Federal Water Pollution Control Act the
Environmental Protection Agency (EPA) has promulgated regulations
which require that materials formerly discharged as air and water
pollutants must now be collected and handled as solid waste. The
mineral concentrations in many such wastes exceed those in many ores
now being processed.2
156
-------
TABLE 16—Potential Additional Materials from Recycling of Postconsumer Waste
(percent of domestic consumption)
Steel Aluminum Copper Paper
Postconsumer waste (Population Commission,
1972)
Municipal solid waste (EPA, 1974)
Municipal solid waste (FEA, 1974)
2
7
4
15
8
6
10
5
—
—
14
14
Sources: Fischman and Landsberg, "Adequacy of Nonfuel Minerals and Forest Resources," in Commission on
Population Growth and the American Future, Research Report1, Vol. 3, 98 (1972). These estimates are based on
projections of the amounts of materials likely to be in use in the year 2000 and of the useful life (and "retirement"
rate) of such materials.
EPA, Second Report to Congress; Resource Recovery and Source Reduction 14 (1974). These estimates are based on
EPA calculations of the amounts of materials in municipal solid waste collected in standard metropolitan statistical
areas during 1971; recovery efficiencies of 30% lor paper and 80% for other materials are assumed.
Federal Energy Administration, Report hi Congress: Energy Conservation Stud\ 83 (1974). These estimates are based
on calculations by Resource Planning Associates of the amounts of materiafs in municipal solid waste collected in
standard metropolitan statistical areas during 1970; recovery efficiencies of 80% for steel, H0% for aluminum and
30% for paper are assumed.
There has been much more study of municipally-collected postconsu-
mer solid waste, including some 80 million tons of metals, paper, and
glass. At present less than 10 percent of this material is recycled.3
Excluding the postconsumer wastes that are discarded in remote
locations, lost in litter, or are unusable for technical reasons, it has been
estimated that recycling the remainder could contribute significantly to
the Nation's supply of materials. Three recent estimates, shown in
Table 16, may be regarded as "ball-park" figures.
The estimates in Table 16 are consistent with the independent
assessments made by the Commission staff: ferrous scrap potentially
recoverable from municipal solid waste has been put at 4 or 5 percent
of total consumption by industry sources; skyrocketing costs of plant and
equipment, energy, and raw materials will provide substantial incentives
to increase the recycling of aluminum; the chances of increased
recycling of copper are more modest." It has also been estimated that
increased recovery of resources (both materials and energy) from
postconsumer solid waste could save energy equivalent to 521,000
barrels of oil per day—7 percent of all the fuel consumed by utilities in
1970.5 Balance-of-trade effects would admittedly be modest, but in the
right direction. Currently available resource recovery systems can
readily reduce by 65 percent the amount of solid waste which must be
disposed of.6
OBSTACLES AND OPPORTUNITIES
If recycling is economically beneficial, why isn't more material being
recycled? The economic value of some material in postconsumer waste
is not as high as the cost of exploiting it, often for much the same
reasons that value of virgin material is insufficient to justify exploita-
tion. The material in some postconsumer waste may not be sufficiently
concentrated to be of economic value—for example, roadside litter. Or
the material may be so far removed from processing plants that
transporation costs would be prohibitive—for example, waste in remote
157
-------
rural locations. Not only may the positive economic value of material in
postconsumer waste be insufficient, but its negative economic value may
also be insufficient. The economic value of recycling material in
postconsumer waste is the sum of the money realized from recovery of
the materials and the money saved from not having to dispose of the
material. While actual postcollection disposal costs in the Northeast may
run to $15 a ton and provide a strong incentive to recycle rather than
dispose, such costs in the West can be as low as $1 or $2 per ton and
thus afford little incentive.
However, quite apart from these market considerations, some
Government practices discourage recycling: these practices deviate from
the principle that the rate of recycling should reflect informed decisions
made on the basis of the true costs of materials. Until 1975,
congressional enactments which have dealt explicitly with recycling7
have been limited to authorizing further study or allocating Federal
money for technical research, development and demonstrations.*
Recently, the Congress has been giving much closer attention to
recycling. ,
Federal Funding of Demonstration Projects
The 94th Congress considered and rejected several recommendations
for Federal funding of projects to demonstrate the recovery of
resources from solid waste. A House Committee marked up legislation
which would have authorized loan guarantees for projects to demon-
strate the recovery of resources from solid waste in amounts up to $2.5
billion. A House-Senate conference committee recommended an au-
thorization of $300 million in loan guarantees to produce energy from
biomass (defined as urban and industrial waste, crops, animal waste,
sewage sludge), and an authorization of $5 million for a price-support
program to demonstrate the production of fuels and energy-intensive
products from solid waste. And four House committees reported a bill
authorizing loan guarantees in varying amount up to $3.5 billion for
projects to demonstrate the production of synthetic fuels from domestic
resources, including solid waste.
None of these bills (is an effective approach to the problem of
*The Solid Waste Disposal Act, as amended by the Resource Recovery Act of 1970,
does require EPA to establish guidelines for solid waste collection, separation,
disposal, and recovery systems. Essentially, the guidelines are binding only on Federal
agencies which dispose of solid waste. Under the Act, EPA has promulgated
guidelines which:
(1) Require a deposit of at least 5(Z on all beverage containers sold in Federal
facilities;
(2) Require any Federal facility disposing of 100 tons or more per day of solid
waste to separate and recover materials or energy, or both, from it;
(3) Require Federal facilities to separate at the source, collect and sell high-grade
paper for the purpose of recycling (in offices of over 100 workers) used
newspapers (on residential facilities of more than 500 families), and corrugated
containers (from any commercial establishment generating 10,or more tons per
month).
Federal agencies may determine not to comply with these guidelines Upon a finding
that compliance would be economically impracticable.
158
-------
increasing recycling. It does not appear that increased recycling is being
thwarted by any lack of government-supported research and develop-
ment. R&D programs on resource recovery are currently maintained by
the Office of Solid Waste Management Programs in EPA (which has an
appropriation of $15.7 million for fiscal 1977), by the Solid Waste
Division of the Bureau of Mines (which administers programs funded
at $5.5 million for fiscal 1977), and by the Energy Research and
Development Administration (ERDA), which has appropriations of $4.6
million for its Urban Waste Technology Branch and $5.2 million for its
fuels-from-biomass program in fiscal 1977. There are areas which
warrant continuing technological research, but there is a broad
consensus that inadequate technology is not the major (or even a major)
restraint on recycling. The House Committee on Government Opera-
tions has reported that:
Representatives of municipalities, of State Government, of the
Federal Government, of private industry and of financial institu-
tions are in basic agreement that the technology of resource
recovery is now available.8
Besides, until recently most recycling of municipal solid waste was
accomplished by a low-technology method—requiring users to separate
their trash. The preliminary results of demonstration projects currently
assisted by EPA suggest that source separation is still a cost-effective
means of resource recovery.
The availability of Federal money for demonstration projects can lead
local governments to uneconomic decisions: only by adopting new high-
technology, capital-intensive systems can cities transfer their costs to the
Federal Government. To subsidize the recovery of energy, but not of
materials, from solid waste would be to compound pressures for the
inefficient use of resources. (For example, use of old newspapers as fuel
is significantly less energy-efficient than recycling of the same newspa-
pers into newsprint.5') Furthermore, Federal investment decisions can
be uneconomic and counter-productive—a substantial risk in any system
which is (necessarily) driven by political considerations.
The EPA demonstration program, perhaps because of i& modest
size, has been able to avoid political pressures to a large degree; the
program appears to be more successful than other Federally-funded
demonstration programs included in a recent study sponsored by the
Experimental Technology Incentives Program of the National Bureau
of Standards. This study concluded that demonstration projects have a
narrow scope for effective use and that diffusion of the technology to
be demonstrated depends on "market pull" rather than "technology
push".10
Some high-technology local projects for resource recovery are in
operation or under construction without Federal support, and invest-
ment bankers have expressed interest in financing other projects. "The
House Committee on Government Operations has concluded that:
Congress should not authorize Federal financial assistance...(or)
Federal guarantees of municipal or State bonds...to finance re-
source recovery or other municipal solid waste disposal systems.12
159
-------
These considerations all suggest that Government funding of re-
source recovery demonstrations should not be increased substantially
above its present modest size. The Resource Conservation and Recovery
Act of 1976 recognizes these considerations by providing that EPA may
not fund a full-scale resource recovery facility unless it finds:
• that the facility will demonstrate at full scale a new or
significantly improved technology or process, a practical and
significant improvement in solid waste management practice, or the
technical feasibility and cost-effectiveness of an existing but un-
proven process;
• that the facility will not duplicate any other facility on which
construction has already begun; and
• that the facility is not likely to be constructed or operated
without such funding.
To the extent that solid waste disposal costs present overwhelming
financial problems to cities which justify Federal assistance, these
problems would best be met through some form of general revenue
sharing, and not through a system of financial assistance which would
require a city to adopt something other than the least expensive
solution.
The Commission opposes Federal funding of systems to recover
energy or materials from waste, whether by means of grants, loan
guarantees, or price supports; exception should be made only for
the limited number of systems which possess the characteristics of
true demonstration projects.
Tax Subsidies
There is a broad consensus that lack of long-term, stable demand is a
major deterrent to utilization of resources in postconsumer waste. The
degree to which tax preferences to the consumption of virgin over
recycled materials undermine long-term, stable demand for recycled
materials has not yet been adequately calculated; however, scattered
pieces of evidence indicate that such preferences have a substantial
undermining effect. The 94th Congress considered proposals to repeal
tax subsidies for the consumption of virgin materials and to create
countervailing tax subsidies for the consumption of recycled materials.*
*Amendment No. 1882, proposed by Senator Haskell to H.R. 10612 and rejected
by the full Senate, would have effectively repealed a variety of tax subsidies, including
the percentage depletion allowance for minerals and capital gains treatment for
timber. H.R. 10612, the Tax Reform Act of 1976, as reported by the Senate Finance
Committee, would have alloWed a taxpayer, as a credit against tax, a percentage of the
qualifying amount of recyclable solid waste material which he purchases and recycles
in the U.S.; the amount of purchases Which qualifies would be the amount which
exceeds 75% of annual average purchases in the preceding three years; the
percentage allowed would equal Vz of the percent of the depletion allowance for
metals (precious metals are excluded), 10% for textile and paper waste, and 5% for
glass and plastics; recyclable solid waste materials would be defined as postconsumer
solid waste and purchased scrap (if the latter is from fabricators who do not produce
their own feed material). The full Senate deleted this provision. A similar tax credit,
proposed by the House Ways and Means Committee, in the Resource Conservation
and Conversion Act of 1975, was defeated last year.
160
-------
The Federal Government gives tax subsidies to the consumption of
virgin materials both by allowing the deduction from income of a fixed
percentage of the value of mineral production* and by allowing capital
gains treatment of income derived from the increase in the' value of
standing timber.
Minerals—The percentage depletion allowance in particular has been
the subject of extensive study. The Treasury Department has estimated
that, largely as a result of this tax subsidy, mineral industries have an
effective tax rate of about 25 percent of total net income, compared
with 43 percent for other manufacturing industries.13
Percentage depletion has encouraged the growth of large vertically-
integrated materials companies which shelter their income by maintain-
ing high prices for their virgin material input and allocating their
profits to virgin material production.14 The dominant materials compa-
nies are structured, both physically and institutionally, to use wholly-
owned virgin materials as their primary feed. They also make routine
use of high-grade scrap produced in their own plants and the
manufacturing and fabricating processes of their customers. But usually
they purchase postconsumer scrap only to respond to peaks in the
demand for their product; accordingly, their demand for recycled
material fluctuates over a wide range. Physical reasons alone do not
account for such a structure: postconsumer scrap has the advantage
over virgin materials of being found in bulk at the point of ultimate
consumption; there are certainly substantial problems in preparing
lower grades of scrap for industrial use, but there are also substantial
problems in preparing lower grades of virgin materials. However,
industry has devoted great effort to beneficiating low-grade ores and
little or no effort to recovering resources in postconsumer waste.
The American steel industry, for example, is dominated by eight
vertically-integrated companies which accounted for 75 percent of
production in 1974; more than 85 percent of the ore which they
consumed came from company-owned sources.15 The industry has
consistently raised the price at which it sells itself ore, regardless of
fluctuations in the demand for steel; on the other hand, the price of
scrap purchased has fluctuated sharply with demand (see Table 17). In
recent years, the export price of No. 1 heavy melting scrap has
regularly exceeded the domestic price; since foreign purchasers must
bear transportation charges as well, it is probable that the domestic steel
industry substantially under-values scrap. It has been estimated that in
the United States the effect of tax preferences more than accounts for
*Mineral companies have the option of using the same type of cost depletion
which is available to other industries—i.e., they may divide the original cost of
developing the mineral deposit by the number of tons to be produced, and deduct
this amount as part of the cost of each ton mined. In 1960, cost depletion accounted
for less than l()'/f of the depletion taken by the minerals industry. Miller, "Percentage
Depletion and the Level of Domestic Mineral Production," 15 Natural Resources]. 242
(1975).
Ifil
-------
TABLE \~7-Steel Production and Ore and Scrap Prices, 1950-1975
Year
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
I960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
Sources: Figures lor steel
Hr{it,il. The price ol ore rel
Steel Produced
(millions of tons)
72
79
68
80
63
85
83
80
60
69
71
66
71
76
85
93
90
84
92
93
91
87
92
111
110
80
produced are those ol shipments in Ame
Price of Ore
($/ton)
4.99
5.46
6.09
6.76
6.99
7.12
7.75
8.33
8.39
8.69
8.79
8.99
8.84
9.22
9.52
9.33
9.49
9.92
10.21
10.341
10.80
11.55
12.20
12.84
16.34
21.41
rican Iron £ Steel
presents the average value ol domestic ore at the mine, per
Composite Price
of No. 1 Heavy
Melting Scrap
($/ton)
35
43
42
40
29
40
53
47
38
38
33
36
28
27
36
34
31
28
26
31
45
35
37
58
109
72
Institute, .-tiinnnl MdlHlifrtl
KI-OSS ton: this price and
the difference between the cost of producing a ton of steel from scrap,
and the lower cost of producing it from virgin material.*
Econometric studies (performed for EPA) have concluded that the
repeal of tax subsidies for the consumption of virgin materials would
increase the current price of virgin materials only slightly; the resulting
increases in rates of recycling were estimated at about 1 to 5 percent."1
However, these studies of marginal price effects are based on an
historical record which reveals that there is relatively little price elasticity
of demand for postconsumer scrap.** Thus, they assume the continued
. *See EPA, Second Report to Congress: Resource Recovery mid Source Reduction 35 (1974).
The cost of a ton of steel using pig iron was estimated to be $40.50; the cost of a ton
of steel using scrap was $43.00; the tax benefits to virgin iron ore and coal exceed
$2.50. This calculation is confirmed by more recent cost estimates in Cosman, "Studies
of Recycling Problems in Selected Industries," in Commission Document, Additional
Background Studies.
**See, e.g., Charles River Associates, Inc. A Study of Ihe Ferrous Scrap Market -Diiring
tin- Shortage Period o/ 1973-1974 (June 1976)", p. 7-4. While the demand for
162 *
-------
existence of an historical industry structure based at least in part upon
the same tax subsidies. Only time can tell the extent to which repeal of
these subsidies would change industry structure. Recently, materials
companies have demonstrated that they will integrate vertically into
scrap sources of supply, given the right economic circumstances.17
The argument that repeal of tax subsidies will increase the rate of
recycling is supported by incomplete evidence. But the evidence to
support continuation of such tax subsidies is even weaker.
In the past it has been politically difficult to repeal existing tax
subsidies, such as the percentage depletion allowance for minerals. In
spite of this history, the Congress terminated the percentage depletion
allowance for major oil companies in 1975. (The House voted, 248-163,
to repeal the entire allowance; the Senate, by a vote of 47-41, retained
the allowance for independent producers.)*
Repeal of the percentage depletion allowance for minerals would
probably make little difference in the near-term availability of virgin
materials: the allowance may only be taken on one-half of profits; thus,
if a mineral deposit is not very profitable, the allowance affords little
incentive to produce. It now appears that most depletion is taken at the
full statutory rate; i.e., on non-marginal deposits which would be mined
without regard to any tax subsidy. (For example, if depletion is taken
on a copper mine at the full statutory rate [15 percent], then the profit
on the mine must be equal to at least 30 percent of the value of
production.)18
Repeal of tax subsidies could affect the long-term availability of
domestic minerals by lowering the after-tax return on capital from
domestic mineral exploitation. Lowering the return on capital of the
mineral industries relative to other industries would not be entirely
negative: the percentage depletion allowance for minerals currently
distorts resource allocation toward capital- (and energy-) intensive
exploitation of lower-grade domestic ore. Federal Trade Commission
figures suggest that in recent years before- and after-tax rates of profit
postconsumer scrap is relatively inelastic, the supply of postconsumer scrap is highly
price-elastic. Ibid. The Treasury Department has concluded that:
most scrap or waste that can be economically used is already collected. The cost
of substantially expanding collection is prohibitive. Therefore, an increase in
recycling is not prevented by any tax incentive-induced reduction in the sale price
of competitive virgin materials, but by the costs of collection. Administration
Position, Hearings on Certain Provisions of the Tax Reform Bill (H.R. 10612)
before the Senate Committee on Finance, July 20, 1976.
The premise of the Treasury Department argument is not supported by the evidence.
Industry has historically been capable of recycling far higher percentages of
aluminum and paper scrap, for example. See Table 1. An industry-sponsored study
estimates that scrap dealers now have in-place capacity to process more than twice the
previous record annual demand for ferrous scrap. See Battelle Columbus Laborato-
ries, The Prncewing Capacity of the Ferrous Scrap Industry (August 10, 1976).
*C/. The National Democratic Plat/arm 1976, p. 48: "Economic inequities created by
subsidies for virgin materials to the disadvantage of recycled materials must be
eliminated. Depletion allowances and unequal freight rates serve to discourage the
growing numbers of businesses engaged in recycling efforts."
163
-------
on stockholders' equity for corporations in the mining industry have
been substantially greater than the rate of profit for all manufacturing
corporations.1" The mining industry has urged in defense of the
mineral depletion allowance that it will need to raise vast amounts of
capital over the coming years.2" But the industry has made no attempt
to demonstrate that the (Government should favor its efforts to raise
capital over the efforts of other industries. Tax equity and economic
efficiency would be better served if the Federal (Government considered
the needs of the mineral industry for tax relief in raising capital*
together with the needs of other industries, and not as a class apart.
If tax subsidies were repealed, prices would bear the full burden of
stimulating virgin mineral production. Congressional opponents of
percentage depletion for oil and gas argued that prices rather than
subsidies are the appropriate method of stimulating production.21
The mining industry has also urged that the continuation of tax
subsidies protects the national interest in an assured supply of
minerals.22 But the cost of tax subsidies is substantial: it has been
estimated that the revenue loss from the percentage depletion allow-
ance for minerals will exceed $850 million in fiscal year 1977.2"
Because the percentage depletion allowance for minerals offers the least
incentive to the exploitation of marginal deposits, it is not well designed
to increase mineral supplies. The Treasury Department estimated in
1969 that the percentage depletion allowance for oil and gas cost about
' $1.6 billion in tax revenue for additional reserves worth only $0.15
billion."4 The cost of tax subsidies as a method of protecting the
national interest in an assured supply of minerals should be measured
against costs of other methods of preventing disruption of foreign
supply—such as stockpiling. The latter method may be many times
cheaper.**
In sum, the cost of the percentage depletion allowance for minerals is
substantial in terms of lost revenue. While the marginal price effect of
this tax subsidy appears to be negligible, it is a strong incentive to an
industry structure which is inimical to the use of resources in
postconsumer waste. The benefits derived from the percentage deple-
tion allowance do not appear to be proportionate to the cost.
Timber—The consequences of capital gains treatment for timber have
been studied less thoroughly than the consequences of percentage
*COMMISSIONER WEINBERG: If the public is to provide capital for private
firms through tax subsidies, it (i.e., the government as the representative of the
public) should obtain an equity interest in the firm in return for its capital
contribution. (See colloquy on this point between Mr. Charles Carlisle, Vice President,
St. Joe Mineral Company and myself, Commission Document, Public Hearings on
Problems oj Supplies and Shortages.)
**The Commission has sought the views of the Department of the Interior and the
Bureau of Mines on this subject. The Assistant Secretary of the Interior for Energy
and Minerals has informed the Commission that "quantitative answers will be
exceedingly difficult to derive. It is my firm judgment that the depletion allowance is
fully justified, notwithstanding the present difficulty in quantitative justification." See
letter of November 8, 1976 from Dr. William L. Fisher to Dr. George C. Eads in
Commission Document, Public Hearing on Problems of Materials Supplies and Shortages.
164 »
-------
depletion for minerals. There are some similarities. The Treasury
Department has estimated that the lumber industry has a tax rate of
only 30 percent, largely as a result of capital gains treatment for
timber;25 the revenue loss from this tax subsidy will be about $200
million in fiscal year 1977.2li Treasury has identified capital gains
treatment for timber as a cause of the shift in ownership of timberland
toward large, vertically-integrated corporations which shelter their
income by maintaining high timber prices.27 The twenty largest paper
companies accounted for 65 percent of all the paper and paperboard
made in the United States during 1974; eighteen of these companies
had Umber holdings totalling 37 million acres in the United States and
4 million acres in Canada.28 The Treasury Department reported in
1969 that:
The tax advantage of capital gains treatment of timber accrues
mainly to large corporations and high-income individuals. Small
corporations with taxable income less than $25,000 do not benefit
from the capital gains provision. In 1965 there were 13,251
corporate returns filed in the lumber and paper industries. Of
these, five companies reported 51.3 percent of the long-term
capital gains.2"
Although it is difficult to assign a causal relationship on the present
evidence, the rate of paper recycling in the United States has declined
from 35 percent to 21 percent since capital gains treatment for timber
was enacted (over President Roosevelt's veto) in 1944.3" The major
consumers of recycled paper are, for the most part, not the largest
paper companies but a handful of companies without major timber
holdings.31 The industry's demand for recycled paper is so unstable
that waste paper prices fell during 1974 from $60 to $5 per ton;
sometimes a buyer could not be found at any price.
However, there are complicating factors in assessing the conse-
quences of capital gains treatment for timber, such as industry's
extensive cutting of Umber from public lands.32 The matter is further
complicated by the fact that capital gains treatment for timber is an
extension of a more general provision of the tax code applicable to
other long-lived assets; the Commission has not examined the question
of equitable application of the capital gains provisions to timber versus
other assets. Nonetheless, the Congress should require a thorough
justification of this tax subsidy, before determining to continue it.
Countervailing Tax Proposal—During the 94th Congress, the House
Ways and Means Committee and the Senate Finance Committee each
reported proposals to create a countervailing tax subsidy in the form of
a tax credit for purchase of recyclable solid waste materials. These
proposals would have substantially increased, rather than reduced, the
subsidy of materials consumption by the general tax rolls. It has been
estimated that the Senate Finance Committee bill would have reduced
budget receipts by an estimated $345 million in fiscal 1981.33 According
to past estimates, tax subsidies for virgin material consumption are an
inefficient means of expanding the supply of minerals; there is no
reason to suppose that a tax credit for the purchase of recycled
materials would be a more efficient expenditure of tax dollars. Apart
165
-------
from these general considerations, both proposals would have allowed
substantial windfalls in the form of credits for the recycling of high-
grade purchased industrial scrap.
In the absence of compelling evidence for its continuation, the
Commission recommends the repeal of the percentage depletion
allowance for minerals; the Commission opposes the creation of
new tax subsidies for the consumption of recycled materials.*
Internalizing Disposal Costs
Governments discourage the recycling of containers and paper
products by assessing the cost of discarding such materials against
general revenues rather than against the price of the containers and
paper products. As recently as 1960, 95 percent of the soft drinks and
50 percent of the beer were sold in returnable containers; the price of
the beverage included the cost of distributing containers, collecting
them after use, cleaning them and placing them back in service.34 Now
the most common form of beverage container is the no deposit-no
return bottle or can; the price does not reflect collection and disposal
costs, which are borne not by the consumer but by society at large.
The 94th Congress considered legislation requiring EPA to establish
standards of control for products which "may use an unreasonable
amount of energy or of materials identified by the President as critical
to national security or in short supply." Another bill would have
imposed a schedule of national solid waste disposal charges on the sale
or transfer, at the bulk production level, of rigid consumer containers
(at 0.50 per container), and of flexible consumer packaging and paper
(at 1.30 per lb.); the charge would have been introduced over a ten-
year period, starting at zero and increasing by 10 percent per year; it
would have been reduced by the percent of secondary materials content
in the product. A third bill would have required a refundable deposit
of at least five cents on carbonated beverage containers, to take effect in
five years.
COMMISSIONERS GREENSPAN, HOUTHAKKER, LYNN, SEIDMAN, AND
SIMON: Repeal of the percentage depletion allowance would improve economic
efficiency by eliminating an artificial bias toward virgin material use, but would raise
the effective corporation income tax rate. Repeal of percentage depletion should be
accompanied by a compensating reduction in general corporation income tax rates
sufficient to offset the revenue effect of removing the depletion allowance. However,
this does not imply that we believe the present level of corporate taxation to be
appropriate.
COMMISSIONER WEINBERG: This recommendation should have included a call
for ending the capital gains tax subsidy for standing timber. The only significant
argument advanced against such a recommendation was that since capital gains
treatment applies generally, timber should not be singled out for its elimination. In
my view, favoritism to capital gains income over earned income should be ended
across the board. In any event, timber harvesting has never been eligible for capital
gains treatment under general provisions of the tax code. Congress singled out timber
to receive-special capital gains treatment in the Revenue Act of 1943. In his veto
message, Franklin Roosevelt (himself a tree farmer) argued that timber should
continue to be treated as a crop and its sale treated as ordinary income. I believe he
was right, even though his veto was overridden.
166
-------
The first bill is inconsistent with the general principle that the rate of
recycling should reflect the true costs of materials; the bill proposes a
regulatory approach similar to that of the Clean Air Act or the Federal
Water Pollution Control Act. These acts establish regulatory schemes
which require businesses to install the best demonstrated or available
control technology. The definition of such technology for a multiplicity
of industries and plants has proved a difficult regulatory task.
Businesses have delayed substantial costs by engaging in protracted
litigation against regulations.35 Perhaps such an approach should be
reserved for those situations where it is difficult, if not impossible, to
estimate external costs. It is relatively easy to estimate disposal costs.
The second bill would incorporate disposal costs into the prices of
products. It would leave to individual businesses the decision on how to
increase recycling or reduce waste in order to obtain the greatest
progress at the least cost. Accumulating tax liability would eliminate an
incentive to use litigation as a delaying tactic. The bill would cover
packaging and paper products which make up almost one-half of the
total waste stream and 80 percent of all product-type wastes. A study
prepared for EPA suggests that such a system of product charges could
double present rates of paper recycling and provide a marginal
incentive for more efficient use of materials in production.3" Adminis-
tration costs have been projected at about one-half of 1 percent of the
revenue raised.37 Gradual imposition of a disposal charge would allow
time for implementing regulations embodying suggested "fine-tunirifg"
changes, such as adding the costs of complying with environmental
controls on disposal to the base cost, or establishing a separate rate of
charge for plastic containers, such as that proposed by the City of New
York. It would also be appropriate to exempt consumer packaging
which carried a refundable deposit from such a disposal charge.
A mandatory deposit on carbonated beverage containers, proposed in
the third bill, would also internalize external costs. Such a deposit has
been tested in the State of Oregon where it has greatly stimulated
recycling and reduced the amount of roadside litter while leaving
beverage prices essentially unchanged.:)H Detailed projections of the
national impact of a mandatory deposit system have been made by the
Department of Commerce (which is opposed to such a system), by the
Federal Energy Administration (which has not taken a position) and by
the Environmental Protection Agency (which favors such a system). The
average of capital cost estimates by Commerce and by FEA is $l-$4
billion; all three agencies predict a modest net gain in employment, but
with a shift of 40,000 to 80,000 jobs from container industries to
retailing and distribution. Given a 90 percent return rate (not
unrealistic in light of Oregon's experience), all three agencies predict
energy savings of 150-200 billion Btu per year, somewhat less than one
day's national energy consumption; EPA predicts savings of about 13
billion pounds of raw materials. Commerce predicts a reduction in
municipal solid waste of slightly less than 5 percent by weight; EPA
predicts a reduction of about 20 percent by volume in municipal solid
waste; FEA predicts that the value of materials thus removed from the
waste stream would have no substantial effect on municipal decisions to
167
-------
landfill or to recover resources.3!i Sweden is putting into effect a similar
mandatory deposit system for automobiles: there is a tax of SwKr 300
($65) on the purchase of a car; the tax is refundable when the car is
turned in to a scrap yard. This system merits further study in the
United States.*
The Commission recommends that the Government take steps to
internalize the cost of disposing of materials; means of accomplish-
ing this include mandatory deposits on beverage containers, excise
taxes on non-returnable containers, and product disposal charges
on other consumer packaging and on paper.
Freight Rates
Discriminatory freight rates have been cited as a factor depressing
the demand for recycled materials. The evidence supporting this
assertion is mixed, at best. A 1973'study concluded that freight rates
represented a substantial fraction of the cost of using scrap iron and
wastepaper, but not of aluminum scrap; and that the ratio of railroad
revenue to variable costs was higher for scrap iron than for iron ore,
but lower for aluminum scrap than ingots and for wastepaper than
woodpulp.40 A 1974 study concluded that, when directly compared,
rates for transporting scrap iron were higher than for iron ore, and
rates for wastepaper higher than for wood chips; however, rates were
lower for wastepaper and scrap iron when compared on a chemically
equivalent basis (i.e., comparing the cost of transporting enough virgin
materials to make one ton of steel or paperboard against the costs of
transporting enough secondary materials to make the same ton).41
The Railroad Revitalization and Regulatory Reform Act of 1976
(together with the prior Regional Railroad Reorganization Act) requires
the Interstate Commerce Commission to investigate the rate structure
for transporting recyclable materials and competing virgin materials: in
this investigation the burden of proof is upon the railroads to show that
any rate structure is just, reasonable, and non-discriminatory; the ICC
must issue orders requiring the removal of any unreasonable or
unjustly discriminatory rate; EPA is authorized to participate as a party
in such an investigation. The mandated ICC investigation is under way.
The draft Environmental Impact Statement of the ICC staff dismisses
as insignificant the effects of freight rate changes on recycling.
Proposals for further action should await conclusion of the current
investigation.
Procurement Specifications
Government procurement specifications can reduce the demand for
recycled materials by discriminating against them. For example, the
"COMMISSIONER WEINBERG: The logic of the refundable Swedish tax On
automobiles is so obvious and compelling that it is not enough to say merely that it
"merits further study." Adoption of a similar system in the United States should have
been recommended to facilitate recycling, to eliminate the eyesores represented by cars
abandoned on the streets and to spare public authorities the cost tof,hauling them to
junkyards.
-------
Department of the Army recently cited its procurement specifications to
justify rejection of a recommendation by its Audit Agency that it
purchase retreaded rather than new tires for its commercial vehicles.42
GSA (which purchases $1.2 billion in supplies annually) has already
made some progress in eliminating such discrimination. However, DoD
(which purchases $32.6 billion in supplies annually) has indicated that it
would give low priority to anti-discrimination arguments so long as
action was discretionary and not mandatory.43 There is some evidence
that the purchasing specifications of private industry also discriminate
unnecessarily against recycled materials.44
The Resource Conservation and Recovery Act of 1976 addresses the
problem of discriminatory procurement specifications. It requires that
each agency shall procure items composed of the highest practicable
percentage of recovered materials consistent with maintaining a satisfac-
tory level of competition. The decision not to procure such items must
be based on a determination that such items (1) are not reasonably
available, (2) fail to meet performance standards set forth in specifica-
tions based on guidelines to be issued by the Department of Commerce
through the National Bureau of Standards, or (3) are only available at
unreasonable prices. Agencies which generate heat or energy from
fossil fuels must, to the greatest practicable extent, use any capability
for burning recovered material or fuel derived from recovered
material. All federal agencies must review and revise procurement
specifications to eliminate any exclusion of recovered materials or
requirement that an item be manufactured from virgin materials, and
to require use of reclaimed materials to the greatest possible extent
without jeopardizing the intended end use of the item. EPA must
prepare guidelines for the use of procuring agencies in complying with
the requirements of the section. The Office of Procurement Policy is to
implement the policy of the Act and report annually to Congress on
actions taken.
Under this Act, the Department of Commerce (through the National
Bureau of Standards) must do more than develop specifications that
define the ability of recycled materials to replace virgin materials in
various industrial, commercial, and governmental uses. It must also
identify potential markets for recycled materials, identify barriers to
their use, and encourage the development of new uses for recycled
materials. The Department is also authorized to evaluate the commer-
cial feasibility of resource recovery systems, publish the results, and
develop a data base to assist persons in choosing such a system. Given
the Department's expressed lack of enthusiam for this legislation, and
given the history of inattention to similar legislation (the Mining and
Minerals Policy Act) by the Department of the Interior, it is not
unreasonable to fear that these provisions of the Act may become a.
dead letter. A specific dollar authorization for the Department of
Commerce to carry out these duties, along with continuing Congres-
sional oversight, are possible remedies. The Government should
consider a variety of arrangements to disseminate information to
industry. One such promising arrangement is the Industrial Waste
Exchange of the St. Louis Regional Commerce and Growth Association,
which has just completed its first listing.44
169
-------
Institutional Barriers
Institutional barriers prevent increased recycling of municipal solid
wastes. The solid waste of a single metropolitan area is often handled
by a number of jurisdictions with conflicting interests. Many cities lack
the power to contract for long-term delivery of waste; such contracts
are often a precondition to private investment in recycling. Even where
cities do have the necessary legal authority and where they face
increasing costs for the disposal of waste (especially in the Northeast),
they miss opportunities to recycle waste because of the inertia of their
solid waste management bureaucracies.*
Widespread awareness of opportunities for resource recovery is the
first step toward overcoming \bureaucratic inertia and institutional
barriers in this field. The ResouVce Conservation and Recovery Act of
1976 is a promising beginning. The Act directs EPA to provide
financial assistance and technical assistance (through teams of experts in
finance, marketing, technology, and law) to the States in developing
and carrying out plans for solid waste disposal and resource recovery
that will identify sources and markets. In order to qualify for assistance,
a State plan must identify appropriate regional organizations authorized
to deal with common solid waste disposal and resource recovery
problems. The plan also must remove provisions prohibiting any local
governments from entering into long-term contracts to supply solid
waste to resource recovery facilities.
The Nation's supply of materials will be used most efficiently when
decisions about the use of materials are based upon their true costs.
Although the recycling of waste material has often been treated as a
good per se, the Commission believes that the principle of determining
use by true costs applies just as fully to the resources contained in waste
material as it does to the resources contained in virgin material. The
Congress has already taken a number of commendable steps in the
direction of implementing this principle. The Commission urges that it
continue in this direction.
REFERENCES
1 National Commission on Materials Policy, Final Report 4D-8 (1973), and Cosman,
"Studies of Recycling Problems in Selected Industries," in Commission Document,
Additional Background Studies.
*For example, it costs Washington, D, C. $15 per ton to dispose of its municipal
solid waste after collection. The city had an opportunity to sell collected waste to the
Potomac Electric Power Company, where it would have been burned as fuel on a pilot
plant scale and its energy value recovered. The city missed this opportunity in large
part because no one was willing to contend with bureaucratic obstacles to the
proposal; the city is now attempting to negotiate a larger regional energy recovery
agreement with PEPCO. "Interviews, Dr. James G. Abert, National Center for
Resource Recovery, Inc.; J. Robert Holloway, Resource Recovery Division, Office of
Solid Waste Management Programs, Environmental Protection Agency. For a more
general assessment of bureaucratic inertia in the solid waste field, see the address of
Dr. E. S. Savas in House Committee on Interstate and Foreign Commerce, Symposium
on Resource Conservation and Recovery, Comm. Print, 94th Cong., 2d Sess., 9-12 (1976).
170
-------
2 Kirby and Prokopovitsh, "Technological Insurance Against Shortages in Minerals
and Metals," 191 Science 719 (February 20, 1976).
" EPA, Third Report to Congress: Resource Recovery and Waste Reduction 10 (1975).
4 See Cosman, op. cit.
'' House Committee on Foreign and Interstate Commerce, Materials Relating to the
Resource Consen>ation and Recovery Act of 1976, 94th Congress, 2d Session, Comm.
Print 64 (1976).
" 41 Fed. Reg. 2362 (January 15, 1976)
7 See National Environment Policy Act of 1969, Pub. Law 91-190 (January 1, 1970),
42 USC §§ 4341 et seq.; Mining and Minerals Policy Act of 1970, Pub. Law 91-631
(December 31, 1970), 30 USC §219; Solid Waste Disposal Act, as amended by
Resource Recovery Act of 1970, Pub. Law 89-272 (October 20, 1965), Pub. Law
91-312 (October 16, 1970), 42 USC §§3251 et seq.; Federal Nonnuclear Energy
and Development Act of 1974, Pub. Law 93-577 (December 31, 1974), 42 USC
§§ 5905-5906.
" House Committee on Government Operation, Report No. 94-1319, 94th Congress,
2d Session 12 (1976). See also Blum, "Tapping Resources in Municipal Solid
Waste," 191 Science 674 (February 20, 1976), and Spendlove, Recycling Trend.': in the
United States: A Revim* 20 (Bureau of Mines Information Circular/1976).
11 See Statement by Talbot Page in Hearings, U.S. Senate Committee on Public
Works, Panel on Materials Policy, 94th Congress, 2d Sess., 6 (May 20, 1976) (cited
hereafter as Hearing), and Statement of Richard B. Scudder in House Committee
on Interstate and Foreign Commerce, Symposium on Resource Conservation and
Recovery, Comm. Print, 94th Cong., 2d Sess. 83 (1976).
111 Baer, Johnson and Morrow, Analysis of Federally Funded Demonstration Projects,
Experimental Technology Incentives Program, U.S. Department of Commerce,
National Bureau of Standards, Vol. 1, iv-v (April 1976).
" House Committee on Interstate and Foreign Commerce, Materials Relating to the
Resource Conservation and Recovery Act of 1976, 94th Congress, 2d Sess., Comm. Print
70-71 (1976); House Committee on Government Operations, Report No. 94-1319,
94th Congress, 2d Sess. 12 (1976).
12 House Committee on Government Operations, Report No. 94—1319, 94th Con-
gress, 2d Sess. 6 (1976).
13 U.S. Treasury Department, Tax Reform Studies and Proposals, House Committee on
Ways and Means and U.S. Senate Committee on Finance, 91st Congress, 1st
Session, Comm. Print 99-100 (1969) (cited hereafter as Treasury Tax Reform
Studies).
14 See, e.g., Miller, "Percentage Depletion and the Level of Domestic Mineral
Production" 15 Natural Resources]. 248(1975).
15 Interview, Richard Johnson, Federal Trade Commission; also Cosman, "The
Threat of an Iron Ore Cartel" (unpublished).
16 See Booz-Allen and Hamilton, An Evaluation o] the Impact of Discriminatory Taxation
on the Use q/ Primary and Secondary Raw Material, (1975), and Environmental Law
Institute, Federal Tax Policy and Depletahle Resources: Impacts and Alternatives for
Recycling and Conservation (Draft, 1976).
17 See, e.g., Charles River Associates, Inc. "A Study of the Ferrous Scrap Market
During the Shortage Period of 1973-1974" in National Commission Supplies and
Shortages, The Commodities Shortages of 1973-74: Case Studies.
18 Miller, op.cit. 243-245. See also Mancke, The Failure of U.S. Energy Policy 85-87
(1974).
111 See Federal Trade Commission, Quarterly Financial Reports for Manufacturing,
Mining and Trade Corporations, 1973-1976. FTC reported figures for the lumber
industry only 1972-1974, and for the mining industry 1974-1976.
211 J. Allen Overton, President, American Mining Congress, letter to Dr. Eads, with
enclosures, August 20, 1976; Simon D. Strauss, Executive Vice President,
ASARCO, Inc., letter to Dr. Eads, October 5, 1976.
21 121 Cong. Record H.I 163, 1187-1189 (February 27, 1975), S.4233 (March 18,
1975).
22 Simon D. Strauss, Executive Vice President, ASARCO, Inc., letter to Dr. Eads,
October5, 1976.
23 Budget of the United States Government, Fiscal Year 1977, Special Analysis F, 123;
interview, Cynthia Wallace, Office of Tax Analysis, Treasury Department.
171
-------
24 Treasury Tax Reform Studies 428.
25 Ibid.
2li Budget of the United States Government, Fiscal Year 1977, Special Analysis F, 123.
27 Treasury Tax Reform Studies, 435-438.
28 Arthur D. Little, Inc., Analysis of Demand and Supply for Secondary Fiber in the U.S.
Paper and Paperboard Industry IV-7 (1975).
29 Treasury Tax Reform Studies 434-435.
311 American Paper Institute, Statistics of Paper and Paperboard.
31 Arthur D. Little, Inc., op. at. 111-49.
32 See, Greenfield "The National Forest Service and the Forest and Rangetand Renewable
Resources Planning Act oyf 1974" 15 Natural Resources J, 605-606 (1975).
33 U.S. Senate Committee on Finance, Report No. 94-938, 94th Congress, 2d Session
578(1976).
34 122 Cong. Record S.I 1073 (June 30, 1976).
35 See statements of William J. Baumol and Leonard Lee Lane, Hearing.
3li Research Triangle Institute, An Evaluation of the Effectiveness and Costs of Regulatory
and Fiscal Policy Instruments on Product Packaging, Environmental Protection Agency
(March 1974).
37 Statement of Sheldon Meyers, Hearing.
38 Gudger and Walters "Beverage Container Regulation" 5 Ecology L.Q. 265 (1976).
3!< U.S. Department of Commerce, Bureau of Domestic Commerce Staff Study, The
Impacts of National Beverage Container Legislation (October 1975); FEA, Energy and
Economic Impacts of Mandatory Deposits: Executive Summary (Sept. 1976); EPA, Third
Report to Congress: Resource Recovery and Waste Reduction, 29-30 (1975).
411 See EPA, Second Report to Congress: Resource Recovery and Source Reduction 19—24
(1974).
41 Resources Planning Institute, Raw Materials Transportation Costs and Their Influence
on the Use of Wastepaper and Scrap Iron and Steel, Environmental Protection Agency
(April 1974).
42 General Accounting Office, Report to the Congress: Policies and Programs Being
Developed to Expand Procurement oj Products Containing Recycled Materials 12 (May 18,
1976).
43 Ibid. 1,22-23.
44 Interview, Henri-Claude Bailly, Resource Planning Associates, Inc.
45 7 Solid Waste Report 76 (May 10, 1976).
SW-601
172
------- |