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Can pay-as-you-throw schemes lift America’s metal recycling rate?

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Until now, incentives for the average consumer to recycle have been mostly "pays good" or "feels good." Increasingly, though, we may be moving toward a different approach "Make it increasingly expensive not to."

Two of the influences pushing in that direction are the greenhouse-gas alarm and the shrinkage of local government revenue due to the economic downturn. Offering policy viewpoints in both arenas is Alcoa Inc., Pittsburgh, a founding member of the U.S. Climate Action Partnership, which favors a cap-and-trade program and creating effective technology for carbon capture. Other backers are Rio Tinto Alcan and Chrysler LLC.

The metals-producing sector is divided on cap and trade. Steelmaker Nucor Corp., for example, envisions the consequence as dramatically higher prices for all types of energy and a setback in global competitiveness.

Also on Alcoa's wish list is "pay-as-you-throw"—volume-sensitive fees for trash collection, so less garbage would mean lower payments by a household or business. Faced with such a pocketbook impact, many customers would suddenly feel motivated to maximize the removal of recyclables from trash, and the local agency or company handling garbage pickup would equally as suddenly encounter less trash and more recyclables.

"You know, there's been a long-standing view in the recycling world that if you pay enough money you can get a sufficient supply of recycled material to meet your needs," Alcoa's Greg Wittbecker, director of corporate metal recycling strategy, said during a conference call arranged by brokerage Canaccord Adams Inc. "That theory doesn't seem to be quite working for us in the aluminum industry," he said, referring to the mild impact of the 2007-08 scrap price run-up on beverage can recycling.

In a later conversation, he noted that San Jose, Calif., is one of the largest jurisdictions using "pay-as-you-throw." Homeowners there decide what size garbage container to use, and the city's pickup fee is pegged to the size of the container. The financial incentive to use smaller trash containers has led to a shift of material out of the trash and into the recycling pickup stream.

In a period of economic downturn, of course, pay-as-you-throw has a second virtue. With local government budgets facing great stringency, garbage collection fees are a way to restore lost revenue.

State legislatures could foster pay-as-you-throw, according to Wittbecker, by setting mandatory landfill diversion targets for local government, with specified rewards and penalties.

Another option for state lawmakers is a program of container deposit fees, often labeled "bottle bill" although also covering beverage cans—a strategy that sets a deposit fee on canned and bottled beverages that is refunded when the container is returned for recycling. "Recycling rates in deposit states are 75 percent; in non-deposit states, 35 percent," Wittbecker said, portraying that approach as a worthwhile option although not a cure-all. Deposit systems exist in California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon and Vermont.

Electronics manufacturers are encountering their own special version of pay-as-you-throw. Some states are requiring computer and TV manufacturers to set up their own free takeback programs or else write checks to a broader program not under their control. These are alternate forms of what's called manufacturer responsibility.

Faced with such a choice, some major TV and computer manufacturers have decided that do-it-yourself is better than paying into a statewide recycling structure. And once they have their own structure for manufacturer responsibility under way, they sometimes extend the takeback program into other jurisdictions where their role is voluntary. Such a path has been followed by the Panasonic-backed Electronic Manufacturers Recycling Management Co.

One justification for imposing extra costs on non-recyclers is that recycling momentum has fizzled since the turn of the century, probably because the easy changes were already made. That's the impression left by estimates contained in a report commissioned by the U.S. Environmental Protection Agency.

The major gains in recycling occurred between 1990 and 2000, according to the report, Municipal Solid Waste in the United States. In 1970, 93.4 percent of the garbage and recyclables handled by (or for) local government went to landfill. The following two decades saw declines to 90.4 percent and 83.8 percent, roughly 10 percentage points in 20 years. The century's final decade was impressive, falling more than one percentage point a year to end at 71 percent of the trash and recyclables intake going to landfill. But the pace of diverting stuff from landfill has slowed, with the report putting the most recent landfill figure, for 2007, at 66.6 percent.

The report showed that the best recycling rate in municipal solid waste in 2007 was scored by nonferrous metals other than aluminum, a category including vehicle batteries, with a 69.3 percent ratio. The other scores were 54.5 percent for paper and cardboard, 33.8 percent for steel, 23.7 percent for glass, 21.8 percent for aluminum, 15.9 percent for textiles, 14.7 percent for rubber and leather, 9.3 percent for wood and 6.8 percent for plastics.

PAUL SCHAFFER


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