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Cost of recycling municipal solid waste with and without a concurrent beverage container deposit law.

After World War II there was a tremendous growth in the use of non-refillable (disposable) containers for beer and soft drinks. By 1985, nearly 80 percent of packaged soft drinks and 70 percent of packaged beer were sold in one-way bottles and cans (General Accounting Office 1990). During this period, the public reacted against littering of these containers and several states passed laws requiring a deposit on each container. These laws were intended to encourage return and reuse of bottles. Oregon passed the first law in 1972. Since then, Connecticut, Delaware, Iowa, Maine, Massachusetts, Michigan, New York, and Vermont similarly require a deposit of five cents on each container. Michigan has a ten-cents deposit on large containers. A California law provides for buy-back of containers, instead of a deposit, through a complex system that scales both a fee paid to the state by manufacturers and the buy-back price paid to consumers to the fraction of containers returned (Naughton, Sebold, and Mayer 1990). Many other states have considered deposit legislation and bills have been introduced in every Congress since 1970 (General Accounting Office 1990).(1) Although the initial purpose of beverage container deposit laws and bills was to control litter, purposes now stated include conservation of energy and resources and reduction of municipal solid waste.

A great deal has been written about the pros and cons of beverage container deposit laws (BCDL): scholarly analyses (Moore and Scott 1983), federal reports (General Accounting Office 1977, 1980), and a variety of industry reports, state analyses, and public interest advocacy group papers too numerous to cite. There have been analyses (and advocacy) whether BCDL reduces litter, energy consumption, other resource inputs, and solid waste by moving the market to refillable containers for beer and soft drinks. For many reasons, there has not been a switch back to a refillable system, and deposits now apply to non-refillable (one-way) containers as well. For this reason, a large part of current advocacy for BCDL is to promote recycling and reduce municipal solid waste. New attention has been drawn to the relation between BCDL and recycling by issuance of another federal report. It includes discussion of the potential effects of BCDL on household, curbside recycling (General Accounting Office 1990).

BCDL and recycling household waste are two systems with overlapping goals, yet the systems may be in conflict. Each by itself returns high value beverage containers (steel, aluminum, glass, and plastic) to the resource stream. Household recycling returns these and nonbeverage containers plus some grades of paper. One potential conflict is economic, because with concurrent systems BCDL removes the most valuable scrap from the household recycling system. Another conflict is whether a single system or a concurrent system is capable of diverting more material from disposal.

Recycling of municipal solid waste (MSW) is growing rapidly. Although no authoritative figures exist for the start and stop of such programs, it is safe to estimate that more than 1,000 communities in the United States have some sort of recycling. There are several types of MSW(2) recycling systems (Office of Technology Assessment 1989). Those in most widespread use are drop-off centers (people place recyclable materials in bins) and curbside collection of materials separated by householders.

The purposes of this article are to contribute to the literature on the effect of BCDL on the cost and amount of the household portion of municipal solid waste recycled and to present a discussion of potential conflicts between the two. This is accomplished by examining the conclusions of the 1990 General Accounting Office (GAO) report and related literature. Analysis and discussion are centered on the conclusions of the GAO report because of its possible influence on federal and state policymakers.

This article is restricted to recycling and solid waste management issues related to beverage container deposit systems. The focus is on the differences in recycling costs and efficiencies (i.e., amount of waste diverted from disposal) comparing curbside recycling with and without a concurrent BCDL. Other issues, as the effects of BCDL on litter and resource use, seem adequately covered in other literature.

The 1990 GAO report states in summary:

Although deposit systems can divert potential revenue away from curbside recycling programs, most states with a deposit law have found the local curbside programs can coexist with deposit systems. Curbside and deposit systems in combination are more costly than either is alone, but deposit systems' costs are borne primarily by the beverage industry while curbside program costs are borne by municipalities. If curbside and deposit systems in combination continue to divert a greater amount of solid waste away from landfills, as landfill disposal costs increase, a dual curbside/deposit system becomes more cost-effective for municipalities. (1990, 1)

Two key conclusions are that the two systems in combination are more costly than either alone, and, if the combination diverts a greater amount of solid waste from landfills as disposal costs increase, a dual system becomes more cost-effective for municipalities. The questions are how much more expensive are dual systems than either single system and when does the dual system become more cost-effective.(3)

BCDL AND SOLID WASTE MANAGEMENT: MACRO CONSIDERATIONS

The recycling industry generally recognizes that, as stated by the TABULAR DATA OMITTED GAO (1990), deposit systems divert valuable materials and revenues away from curbside recycling programs. However, these revenues, even without deposit systems, do not fully offset curbside program operating costs. One reason is that collection is the largest element of cost of solid waste management.(4) Collection of "recyclables" adds another, separate layer of costs, whether the materials are collected curbside, at drop-off centers, or are returned to retail stores.(5) Net revenues from the sale of returned materials vary widely depending on distance to markets and costs of processing that must assure separated materials meet the buyers' specifications (Alter and Dunn 1980).

Composition and Quantity of Municipal Solid Waste

The composition and quantity of municipal solid waste (MSW) in the United States were determined by Franklin (1990) by computation (input-output analyses) and sampling. Results include the quantities of several types of beverage containers. Using this source, Table 1 lists weight and volume percentages of beer and soft drink containers in the total MSW generated in 1988 (most recent year for which figures are available).

Table 2 lists materials likely to be targeted in a comprehensive household, curbside collection or community drop-off program, quantities (in percentage by weight) in MSW, and revenues likely to be received (1991) from sale of materials prepared to meet users' specifications.(6) The revenues listed are gross of the cost of collecting, processing, and shipping but are not exact because of variations within markets for secondary materials. Revenues listed in Table 2 are from another Franklin report (1989) except for using a higher price for steel cans ($50/ton instead of $35/ton) and including a small amount of corrugated board from households. The higher price for steel reflects East Coast experience. The basis for including the indicated amount of corrugated is a 1989 detailed analysis of the composition of household waste in one city determined by handpicking (Rathje, Wilson, and Hughes 1989). Franklin (1990) indicates there is much more corrugated than this in MSW. However, most of it is from sources other than households and much of this is recycled.
TABLE 2
Baseline Parameters for Composition of MSW(a) and Likely
Revenues(b) from Recycled Materials
 Weight Percent
Material in MSW Revenue $/Ton
Old Newsprint 7.4 35
Corrugated 1.6 25
Steel Cans 1.5 50
Aluminum Cans 0.8 1,200
Glass Containers 6.3 35
Plastic Containers 1.4 100
a Source: Franklin Associates, Ltd. (1990). Data are for 1988.
b Probable revenue from old newsprint, aluminum cans, glass
containers, and plastic containers are from Franklin (1989).
See text for caveats.


The revenue figure for aluminum is high (in 1991). Revenue from old newsprint may vary from -$15/ton (pay to have it recycled) in the Northeast to perhaps $35/ton in the Southwest and West, depending on market fluctuations (1991). Selling prices in Table 2 are starting points for analysis. They may err on the high side, which would prejudice the discussion toward a positive cost-effective conclusion of dual systems. Sensitivity of the cost of recycling to revenues is discussed later.

Changes in Beverage Container Consumption

The success of recycling programs depends on the willing participation of consumers. Relatedly, the mix of beverage containers discarded has an effect on consumers' behavior in that the number and types of containers used in the home are indicators of the need (or urgency) to recycle this portion of waste.

Figure 1 shows changes in the weight of beverage containers of various kinds discarded per capita if no recycling occurs (computed from Franklin 1990). Total weight is decreasing, driven by decreases in the number (hence weight) of steel and glass containers used and discarded. These containers are being replaced in the market with lighter weight aluminum and plastic. Figure 2 shows changes in the number of beverage containers discarded per capita with no recycling, based on data in Figure 1 and average weights for containers; data sources cited elsewhere (Alter 1991).(7) Plastic containers are generally two-liter capacity; as their number increases, the number of smaller capacity types decreases.

Changes in mix of containers discarded are expected to affect consumers' recycling behavior. De Young (1990) examined consumer survey data in Michigan (a dual recycling-BCDL state) and concluded that people are more likely to participate in recycling programs when they believe they are making a contribution in return for their effort. This is important because beverage containers constitute a significant portion of recyclable material in household waste. As numbers of containers decrease, especially if there is concurrent BCDL, consumers may not think that they are making much of a contribution by separating the remaining recyclable materials. A result could be that householders diminish or stop participating in the recycling program. In this way, BCDL may reduce household recycling in communities with dual systems. (As use of two-liter or larger plastic containers in homes grows, total number of containers decreases. This may also reduce participation in recycling programs without concurrent BCDL.)

Cost of Recycling Through BCDL

Tables 1 and 2 can be used to compute likely gross revenues per ton of recycled materials collected from either curbside recycling programs or beverage container deposit programs.(8) The result is revenue from recycling through a beverage container deposit program is a maximum of $266/ton of returned containers for full (100 percent) participation in BCDL. Revenue from a household recycling program, if all listed materials are collected and sold, would be $89/ton of material collected. The reduction is because the mix of recyclable materials collected contain lower value components (such as newsprint) than the mix from BCDL.

Both revenue numbers have to be reduced because not all materials are captured. The "capture" for a recycling program is the product of the fractions of participation by householders, of material in the waste put out for collection, and yield on processing. Actual revenue may be less than half of the $89/ton of materials collected because of low capture.(9)

If curbside household recycling is conducted in a BCDL state, full participation in the deposit system lowers the recycling revenues from the $89/ton of materials collected to $41/ton, assuming that people continue to participate fully in both programs.

Costs per ton of beverage containers recycled either through a household recycling system or a deposit system have been estimated. In 1987, total cost of a national deposit system (without any other recycling activity) was computed to be about $3.1 billion (Lesser and Madhavan 1987) net of revenues from selling collected containers. Table 1 indicates that 4.1 percent by weight of the MSW generated in 1988 was from beverage containers. The total amount of MSW generated was 179.6 million tons (Franklin 1990). Thus, in that year, a national system would have cost $421/ton of solid waste recycled (actually diverted from disposal and presumed recycled) assuming all beverage containers were included in the deposit system.(10) Recycling costs (including separate collection) have been estimated for several models (Office of Technology Assessment 1989; Franklin 1989) to be less than $100/ton, perhaps closer to half this for some of the scenarios analyzed, and $80/ton for two specific communities (Skumatz and Breckinridge 1990). Thus, in a community with dual systems, the household consumer of beverages is paying for curbside collection and recycling (about $80/ton less $41/ton revenue) and for BCDL recycling (about $421/ton net of revenues).

These results are qualitatively supported by the Office of Technology Assessment (1989). It gave a summary of a model used to examine the costs of recycling programs; with the conclusion that on a system cost basis, a deposit system increases overall costs per ton by three percent for curbside recycling. The increase in costs arises from separate collection, less efficient use of processing equipment, and decreased revenues.

RESULTS OF AVAILABLE STUDIES

The GAO (1990) found three studies of the costs of dual BCDL and other recycling systems. They reviewed these briefly, noting a general disagreement about the magnitude of costs and benefits of a dual BCDL-recycling system. The GAO review was so cursory as to warrant this reexamination as a contribution to public policy development. Before so doing, note that studies of recycling commonly employ a credit for what is termed "avoided cost of disposal." This term must be explained.

Avoided Cost of Disposal

A method of accounting for the benefit of diverting recyclable materials from disposal is to credit the solid waste management system with the cost avoided by not having to dispose of materials destined for recycling. Sometimes the credit applied is the average cost of disposal. For reasons explained below, this is wrong. The correct credit is the marginal cost avoided.

The quantity of MSW collected in a community over the course of a year may vary |+ or -~ 25 percent (Even et al. 1981; Russell, Brickner, and Peterson 1986). The fixed costs of disposal facilities cover their design and operation to accommodate these wide fluctuations in quantity sent for disposal. These costs continue whether recycling occurs or not. As the amount of material diverted through recycling or BCDL increases, average cost of disposal can increase. Avoided cost of disposal for recycling materials is the marginal cost which conceivably could vary from the average cost to zero.

Avoided costs were used in two of the three studies cited by the General Accounting Office (1990) in reaching their conclusions. The studies are discussed here; each is referred to by its author's name.

Clapham Study

Clapham (1984-1985) stated, "Recycling seldom, if ever, makes money. It can save meaningful amounts of money for a city, but sales of recycled materials alone will seldom result in a net profit" (emphasis in original). The study is based on establishing a pro forma statement of costs and revenues for curbside recycling alone and curbside recycling with a deposit system.

The composition of MSW used by Clapham is not the same as the national average (Franklin 1990) or other reported compositions.(11) No plastic beverage containers are included. Clapham's baseline figures are glass 6.0, aluminum 0.5, and ferrous metals 1.5 weight percent of the MSW, which may be compared to Table 1. His container mix is 46:50:12, glass:aluminum:ferrous metals, which does not match U.S. sales figures (Copperthite 1989). The composition of MSW used by Clapham was determined by sampling (no details given) at a transfer station (where neighborhood collection trucks are unloaded onto larger trucks which take waste to the landfill), with no mention whether the composition was household waste only or other sources of MSW as well.

The assumed cost of collecting, hauling, and transfer was $90/ton, which is reasonable (Office of Technology Assessment 1989). The landfill disposal cost was assumed to be $10/ton, which is low in many parts of the country. It was assumed that basic processing machinery and some other services for recycling centers were free. The revenues Clapham used were slightly lower than in Table 2; no plastic recycling was included. Comparison of recycling with and without deposit legislation assumed 90 percent return of beverage containers. It is not evident how the capture of materials for recycling was computed.

Clapham analyzed a curbside pickup program recycling 3,455 tons/year, 7.6 percent of the MSW generated in a community of 100,000 residents. The pro forma statement for recycling was credited with an avoided cost of $30/ton, representing disposal fees and hauling costs not paid for by diverted materials. (There is no explanation where the $30/ton came from, compared to the $100/ton for the hauling, transfer, and landfill. Avoided costs should be from transfer and disposal but not from collection.) The labor cost debited for recycling ($10,429/year) does not seem sufficient to pay a full-time employee to process 3,455 tons/year. There is no accounting for supervision or overhead and the budget for space and equipment was $1,800, which intuitively is low. The conclusion was that recycling alone in this community would save $136,653/year, most coming from the $30/ton avoided cost, compared to no recycling.

Results for recycling were then adjusted for the case of a concurrent BCDL system. The credit for avoided cost was raised to $37/ton, without explanation. Sales revenues from the beverage containers recovered by the deposit system (not going to the recycling center) were credited in the calculation. This is incorrect for a pro forma statement of a solid waste management system, but does apply to a tally of total social costs and benefits. This point is elaborated later. With this, saving from the dual system was reported as $191,258.

Clapham's assumptions about the composition of the waste and his incomplete explanations of costs and credits are reasons to question his conclusion that a dual system costs less than recycling alone.

Tellus Study

The second analysis reviewed by the GAO (1990) was referred to as the Tellus study (Schatzki and Ackerman 1989). No explanation of this model is given in the original except that it is directed at including all solid waste management costs, including collection. In this aspect, it is more comprehensive than the analysis by Franklin discussed later. The base case is a community of 500,000 people living in suburban, single-family homes, generating only residential waste. The waste stream composition is the same as used by Franklin (1989).

The Tellus model credits an avoided cost to recycling and BCDL of the average solid waste management fee ($50/ton in the base case). Applying an avoided cost credit to a deposit system credits an exogenous operation with a potential savings from the solid waste management system. Crediting an avoided cost to a municipal recycling system often involves a cash flow because householders continue to pay a user fee or taxes for solid waste management. Crediting an avoided cost to a disposal system does not lower user fees or taxes so the community is paying more for the dual system.(12)

The Tellus report offers several scenarios, starting with a restatement of the case for New York and Vermont (Franklin 1989), which is discussed later, as a base case. The base case was used as a starting point for analyses of sensitivity of final cost to materials flow and revenue changes in a number of scenarios. For each, costs of recycling and disposal were calculated, with and without deposit legislation, and from this incremental costs or savings from concurrent recycling and deposit legislation were computed. The Tellus results are summarized in Table 3 and show that incremental costs/savings of concurrent systems range from an additional cost of $237,000 for the base case to a savings of $173,000 for either lower participation(13) or an increased tip fee (and credited avoided cost) of $75/ton.

Average maximum savings reported by Tellus can be computed per household for a community of 500,000. If the average household size is the national average of 2.64 (U.S. Bureau of the Census 1990), TABULAR DATA OMITTED maximum savings is about $0.90 per household per year and maximum additional cost is about $1.25 per household per year.

If the full tip fee is credited to the BCDL system as an avoided cost, as the Tellus analysis does, this would have to be through payment by the community to the BCDL system (e.g., to retailers or distributors). If so, there are no solid waste management cost savings and the Tellus conclusions are overturned. This can be shown by a recalculation for the case of no avoided cost credit to a BCDL system. Table 3 shows results under the heading "Adjusted." Under these circumstances, there is an additional cost for concurrent systems, from $390,000 to $912,000, or a maximum additional average cost of $4.82 per household per year for curbside recycling in addition to BCDL. These additional costs would be reduced by any marginal cost savings for the solid waste management system as a result of not having to dispose of diverted materials. However, as explained earlier, because of high fixed costs, any savings from avoided costs may be nil.

Franklin Report

Franklin (1989) computed that in Vermont and New York curbside recycling and deposit legislation together cost more than curbside recycling alone. The computations were based on a highly detailed reckoning of solid waste management costs in communities of different sizes in the two states.

The GAO (1990) and Tellus (Schatzki and Ackerman 1989) criticized the Franklin analysis because it used a high participation rate of 80 to 90 percent. The GAO says a Research Triangle Institute report (no citation given by the GAO) estimates that from 40 to 90 percent of households participate in mandatory programs. However, the critics seemed to miss that Franklin (1989) adjusted the 80 to 90 percent participation to a lower capture to account for yield and fraction of available materials separated and placed for collection by participating households. At 90 percent participation, an average of 70 percent of the material was assumed captured; at 80 percent participation, an average of 47 percent.(14) (Also, see footnote 8.)

Assumptions used were that in a mandatory recycling state, 90 percent of households participate overall and 50 percent of participants (45 percent of all households) set out materials each week. Only single-family dwellings were considered. Assumptions of high participation or capture overestimate revenues from a recycling program, hence underestimate the cost of the program and minimize extra cost of a dual system.

Table 4 lists Franklin (1989) annual curbside recycling costs and revenues for communities of 500,000 population, slightly changed in that cost per household is recomputed based on average household size in 1989 (U.S. Bureau of the Census 1990), which is slightly smaller than used by Franklin. (This makes the cost-savings per household comparable to the discussion of the Tellus results.) The costs are for recycling programs only, not for other costs associated with BCDL. Figure 3 examines criticism of the capture by showing the changes in the cost per ton of material recycled for different multiples of the amount of material recycled. The cost does not change greatly over the range of multipliers of the amount of waste recycled TABULAR DATA OMITTED from about 0.6 to 1.2, weakening the criticism of the Franklin participation figures.(15)
TABLE 5
Ratio of Costs per Ton of Material Recycled With BCDL-Without
BCDL
 Cost Ratio
Population New York Vermont
10,000 1.4 1.5
100,000 1.3 1.6
500,000 1.5 2.3
Source: Franklin Associates, Ltd. (1989).


Using data in Table 4, Figure 4 shows the changes in net cost of recycling with changes in revenues. The abscissa plots multiples of the revenue reported by Franklin (1989) for the four cases in Table 4. The sensitivity (slope) of the recycling cost is higher for no BCDL, where net cost relies more on revenues than does the BCDL case. Sensitivity ranges from -$39.08 to -$89.21 per ton recycled per unit (1.0) change in revenues for the no BCDL case. With BCDL, the sensitivity is about -$40/ton for a similar change in revenues.(16) The importance of this result is that the economics of a dual system are more subject to fluctuations in recovered materials' selling prices than for the BCDL system alone.

The Franklin results for three different size communities in the two states are summarized in Table 5 as the ratio of cost per ton of material recycled for the dual curbside-BCDL system to the cost of curbside system alone. From the viewpoint of waste management, deposit containers have "free" collection. Retail handling and wholesale processing operations do not generate net revenue, even with unredeemed deposits (Franklin 1989).

DISCUSSION AND CONCLUSIONS

The first conclusion from the GAO (1990) was that curbside and deposit systems in combination are more costly than either alone. This conclusion is supported by the discussion of macro considerations and review of the Franklin and recalculated Tellus results. The contrary view from Clapham is questioned because of unsubstantiated or inconsistent assumptions and figures in the analysis.

The second conclusion of the GAO was that if the combination of recycling and deposit legislation continues to divert a greater amount of solid waste from landfills, then as landfill disposal costs increase, a dual system becomes more cost-effective. This is not supported by examination of the three studies and associated literature. Given the high cost of recycling through BCDL (more than $420/ton net of revenues), avoided cost of disposal (marginal cost saving) would have to exceed this figure, which is far from likely.

The Office of Technology Assessment (1989) came to the same conclusion. Because deposit systems reduce the amount of materials collected for recycling, cost efficiency of other recycling programs diminishes. Collection cost per ton of recyclable materials collected increases and processing costs increase as a result of both decreased efficiency of equipment used and decreased revenues.

BCDL diverts from disposal the amount of materials multiplied by the participation in the deposit system. The midpoint of the latter is 85 percent, according to the GAO (1990). Therefore, a deposit system diverts either 85 percent of 4.1 percent of MSW generated or 85 percent of 3.0 percent of MSW discarded using the 1988 national recycling rate. Taking the higher number, a deposit system would divert 3.4 percent of the MSW. A curbside recycling system, even with a relatively low capture, diverts a larger amount of waste because newspapers are collected.(17) Because 19 percent of the MSW is potentially and readily available for household separation for recycling (Table 2),(18) a capture of 18 percent in a household recycling program would divert as much waste as BCDL. If the household waste composition used in both the Franklin and Tellus analyses is considered, then capture need be only 12 percent to divert as much material as BCDL. Capture higher than this can be expected (Alter 1991) and was used by Franklin (1989). Thus, the lower cost curbside program diverts more material from disposal than BCDL.

Recycling and BCDL programs operating concurrently could divert more material than either alone if BCDL participation is about 85 percent and the recycling capture is greater than about 20 percent, which is far below expectation. Consumers would have to pay the additional costs discussed here to support both systems. However, operating dual systems places the curbside program in jeopardy; people are not likely to continue to participate if the amounts of material decrease to the point where they do not believe it is worth their effort to contribute to the recycling goals (De Young 1990).(19)

The discussion presented has been for curbside collection, which is used mostly in communities with single-family homes. In communities with higher density housing (more multifamily dwellings), recycling programs are not likely to be extant and are more expensive (Yuhas and Hyde 1991). Recycling is also more expensive with lower participation in small rural communities (Deyle and Schade 1991; Environmental Protection Agency 1989; Hirschman, Conn, and Owens 1990). In neighborhoods with low participation or no recycling program, BCDL diverts more material from disposal. However, a BCDL program in some neighborhoods of a city and not others is unrealistic.

This article highlights differences in costs between two systems, using published analyses that credited an avoided cost of solid waste disposal to the exogenous deposit system. The analyses are cost-revenue models or pro forma statements of solid waste management costs, which do not have exogenous cash transfers. However, from the perspective of social costs and benefits, it does not matter who gains if costs are reduced. This is a transfer issue and it is only important when real resource costs are lower. When considering the cost of specific systems, as solid waste management or beverage container deposits, consumers are being asked to pay more for the systems' services.

There is the persistent issue of equity. Some literature cited on dual systems, especially GAO (1990), stressed that the municipality pays for curbside recycling but not for BCDL. This is "true" only when MSW management costs are paid from general revenues, not from user fees to either a municipality or a private contractor. Even then, the consumer pays for the increased cost of a dual system, whether through user fees, taxes, or higher prices for beverages.

Recycling of household waste is a self-gratifying exercise of environmental responsibility. There are few other opportunities for most people to contribute directly to environmental improvement. However, political enthusiasm for recycling, especially in combination with beverage container deposit laws, should be tempered by a full understanding of consumer costs. Clearly, a community may choose one or the other system or both, but should do so only after the full costs are displayed. Afterwards, consumers may not receive the lowest cost system, but citizens will be able to choose the system they want.

1 A national deposit bill was defeated in the Senate Environment and Public Works Committee in May 1992.

2 Municipal solid waste consists of discards from households, institutions, commercial and light industrial activities, and a few minor miscellaneous sources (Alter 1982).

3 "|C~ost-effective for municipalities" obviously is not necessarily equivalent to being cost-effective for payers of solid waste management services. The latter clientele is considered here.

4 This holds true in virtually all jurisdictions. Exceptions are where long hauling and disposal costs are near $100/ton.

5 This does not exclude the buy-back system in California, which similarly adds another cost for the consumer. See Naughton, Sebold, and Mayer (1990).

6 Such specifications are published by ASTM (1991), among others.

7 The weights per container used here are not necessarily the industry averages for the years in question (e.g., as new designs are phased in) but are slightly higher. This should not materially affect the shape or conclusions of Figure 2.

8 Not all MSW is from household sources. The likely range of the fraction of household waste is from about 0.3 to 0.8 (Office of Technology Assessment 1989). Some portion of the beverage containers have to come from other sources. It is not known how many of these other sources participate in either deposit-return or recycling systems.

9 There are anecdotal reports of participation as high as 90 percent, but few studies have been conducted over a reasonable period. One, conducted over four months, reports participation ranged from 11 to 49 percent of buildings (less per housing unit), depending on demographic factors of income and housing density (Sudol and Zach 1991).

10 The GAO (1990) reports the middle range of capture of deposit containers is 85 percent, based on reports from some of the states that have BCDL. If this is the case, the cost is raised to $495/ton.

11 For a summary of several reports of the composition of MSW over the years, see Alter (1989) or Office of Technology Assessment (1989).

12 The related issue of transfer of total social costs and benefits is discussed later.

13 Reasons for a savings with lower participation are not clear. Lower participation would decrease the yield of recycled materials, resultant revenues, and any avoided cost credit. Cost of collection of recyclable materials does not decrease with lower participation because collection costs are determined by the length of routes more than by amount of material collected.

14 Franklin (1989), Table 4-6, page 58.

15 For completeness, it must be pointed out that Franklin (1989), hence Schatzki and Ackerman (1989), understate operating costs by considering public sector ownership and operation only. They make no provisions for taxes or profit.

16 Sensitivity may be better understood for a 0.1 unit change in revenues, roughly from -$3.90 to -$8.90.

17 The newspaper market is global and cyclical, hence there are times when it is difficult to sell old newsprint for a positive exchange price. A community must determine if it is better selling at a negative price (i.e., paying to have it removed). As disposal costs increase, it is less expensive to do the latter than to dispose of the waste paper.

18 Many programs are targeting lawn and yard waste, as well. These materials would not necessarily be collected with materials in Table 2 so are not included in this discussion.

19 Risk of nonparticipation could be averted somewhat through a mandated separate collection program vigorously enforced. This presents a political challenge to elected officials who would have to provide "garbage cops" to enforce separation, which is being done in a few communities (e.g., Takoma Park, MD).

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Harvey Alter is Manager, Resources Policy Department, U.S. Chamber of Commerce, Washington, DC.
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Author:Alter, Harvey
Publication:Journal of Consumer Affairs
Date:Jun 22, 1993
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