(Page 4 of 6)
In some cases, the laws seek to create bigger markets for all the near-worthless stuff collected. Old newspapers—which make up about 7 percent of a typical city’s solid-waste stream—are a particular problem. They would be cheaper to dump. But to build a resale market, California, Connecticut, Maryland, Missouri, and Wisconsin have passed laws requiring publishers to increase their use of recycled newsprint. Similar laws have been proposed in Illinois, New Jersey, and New York.
Beginning January 1, 1994, the District of Columbia will require anyone who distributes within the district a publication with a circulation of more than 30,000 or who sells more than 500 tons or $100,000 of paper a year to use only recycled paper. Only if the company can prove that using recycled paper would increase its paper costs more than 10 percent over virgin stock can it apply for an exemption. In deeming a 10-percent higher price “competitive” with virgin paper, “They don’t understand that huge newspaper deals are made on the basis of a fraction of a percent,” says Jack Schafer, editor of the weekly City Paper; which has a circulation of 89,000. The penalty for law breaking: a 15-percent “recycling surcharge” over the price of the illegal paper.
The law also specifies just how much recycled material different kinds of paper must contain: 50 percent for high-grade printing and writing paper; 40 percent for newsprint; 5 percent for facial tissues; 20 percent for toilet paper; 30 percent for paper napkins; 40 percent for paper towels; even 40 percent for doilies. In many cases, the recycled material must be “post-consumer,” meaning that reusing factory scrap doesn’t count.
The ordinance’s content requirements “will stifle rather than encourage recycling,” says Carol Melamed, director of government affairs and associate counsel for The Washington Post. The reason lies in the technical and economic limits of paper making. The mills that can produce recycled paper with 40-percent old newspaper stock are mills that were built originally to make recycled paper. But more and more virgin-paper mills want to get into the recycled-paper business. Rather than build an entirely new plant, at a cost of some $400 million, they add a deinking line, which costs $30 million to $50 million; this retrofitting lets them make paper with between 15 percent and 25 percent recycled content. That may not meet D.C.’s lofty goals, but its impact on the waste stream is significant.
Before the law passed, the Bear Island mill in Virginia which produces paper for the Post, The Washington Times, and other local newspapers—had plans to add a deinking line that would have absorbed 60,000 tons of old newsprint a year. But the recycled paper produced at Bear Island would have contained only 20 percent recycled content. Since the D.C. ordinance would wipe out the market for its recycled paper, the mill has indefinitely postponed adding the new capacity.
Both content mandates and product bans can become vehicles for favoring some corporations or industries over others. Diaper services have lobbied heavily for bans on disposables. And paper interests have had some notable successes in their decades—long struggle to beat out plastic—McDonald’s switch, for instance, and a Maine law requiring retailers to use paper bags unless the customer requests a plastic bag. “Within a week of passage of that law, virtually all the orders for retail-store plastic bags were canceled if they were active, and if they were under consideration, they were rejected,” says George A. Makrauer, president and chief executive of Amko Plastics Inc., a bag manufacturer.
Oddly enough, one way for plastics makers to fight back is to support content requirements like D.C.’s. With their emphasis on “post-consumer’’ content, such requirements raise paper costs. They also strip the “recycled” label from paper that contains factory scrap. Like orange-juice makers selling peels, both paper and plastic makers reuse their wastes-usually by putting them back through the production process. Paper manufacturers have long touted such paper as “recycled,” while plastic makers haven’t capitalized on the label.
Even within a single industry, bans and mandates get tangled up with corporate opportunism. Conservatree Paper Co., a distributor of post-consumer recycled paper, is a prominent lobbyist for laws that would mandate recycled content and forbid using the term “recycled” to describe paper made with factory scrap. Laws like D.C.’s increase the market for the paper Conservatree distributes. Mandates that lead paper manufacturers to invest in more recycling capacity should increase Conservatree’s supplies—and the competition for its business—and lower its costs.
Although the company maintains its innocence—“once the E.P.A. or Congress adopts our proposal, we will no longer have a comer on the market of selling honest-to-goodness recycled paper”—it’s hard to believe that it doesn’t recognize the advantages of having already established a beachhead in the market. None of this is to say that Conservatree’s managers aren’t motivated by a zeal for recycling, only that they also stand to gain financially by seeing their ideas made law.
Similarly, paper companies that invest in deinking plants and other recycling facilities develop a vested interest in recycled paper. Despite a virgin-paper glut, Champion International, for instance, is pouring some $80 million into new plant capacity—to make recycled paper. Behind this curious investment: the company’s expectation of more laws mandating recycled paper content and recycled-paper use. If it guesses right, Champion will have a jump on the competition. If the mandate mania fades, we may find Champion lobbying for new laws to protect its investment.
The most grandiose plans to regulate materials involve something called “advance disposal fees.” Although these fees would require central planning on a scale unknown in this country since World War II, their proponents speak the language of markets, and some of them probably believe their own rhetoric.
The idea behind ADFs is that garbage represents a market failure. Manufacturers don’t consider the costs of disposal when they make products. In theory, then, the government could charge manufacturers ADFs that would take into account such factors as: the actual collection and disposal costs of each product type or material; the actual collection and disposal costs in each different jurisdiction where a product is thrown away; current recycling rates; the actual length of product use per household; the actual consumption and disposal path of each product by household; recycling and other behavior in response to new charges, which would change the cost picture over time. One ADF scheme envisions using bar-coded information on each product to create a national database that would be used to regulate charges.
So far, such an elaborate system has yet to become a bill, much less a law. But more-stylized ADFs have been enacted. In late 1992, Florida will begin imposing fees on packaging materials that aren’t recycled at a 50-percent rate. Rhode Island has introduced ADFs on items, such as tires and motor oil, that are difficult to dispose of. And in New Jersey, the governor’s Solid Waste Task Force has recommended a pre-disposal fee to be assessed on manufacturers when they use virgin materials.
California Assemblyman Byron Sher has introduced a bill to tax materials used for packaging and nondurable goods unless their scrap values cover recycling costs. The bill draws its raison d’être from the 1989 law—also sponsored by Sher that created the mandatory waste-reduction targets: “The costs of implementing the Act to local government, waste haulers and others are significant and should be borne by generators and disposers of solid waste.”
Under the Sher bill, the California Integrated Waste Management Board would levy “recycling incentive fees” equal to at least the difference between the scrap value of an item and the average cost of collection and processing it for recycling, plus a “reasonable return” to the companies that do the work. Suppose it costs an average of $100 a ton to run curbside recycling for newspapers, and the newspapers fetch $10 a ton on the resale market. Allowing for a 5-percent markup on the $90 net cost, the advance disposal fee would be $94.50 a ton—or 2.4 cents for a half-pound Los Angeles Times. If that tax isn’t high enough to cut down on newspaper production, the board is supposed to raise it.