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Commission to promptly investigate all freight rate discriminations against recyclable commodities and within two years to enter appropriate orders terminating all unreasonable differentials in transportation rates. Aside from rationalizing the use of raw materials, the measure should have a multiplier effect in stimulating the level of traffic on the rail and ocean transport system.

3.5 Administrative Alternatives

The following alternatives generally provide for governmental intervention through administrative means in the actual structure and workings of the market system. To the extent that this intervention is intended to compensate and substitute for inefficiencies in the system which are the result of large-scale market distortions, the alternatives will, by and large, be treating symptoms rather than causes.

3.5.1 Federal Design Standards for Minimum Reclaimed Raw

Material Content, or for Miminum Product Recondition-
ability

This measure would attempt to raise salvage values by
increasing the demand either for reclaimed raw materials
or for items that can be reconditioned. The measure

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would increase the demand by requiring that:

each product contain a minimum percentage of re

cycled raw material. This percentage may be a function of technological feasibility, product quality or available supplies or reclaimed materials.

the design of items be such that they are easily and economically reconditioned. These standards may be a function of the cost of a design, of the value of the item, of the labor required to recondition the item, of product durability and efficiency.

This measure represents a drastic governmental intervention in the design, production and distribution processes of the economy, and one that would reflect a lack of confidence in the ability of the market to act rationally. It is a measure intended to compensate for inefficiencies resulting from the gross distortions caused by the tax and transportation policies alluded to above, and if considered for adoption should be analyzed in this respect.

Federal design standards for raw material content or

reconditionability would, however, likely result in

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inflationary price increases and in inefficiencies

in economy. It is not certain, moreover, that the
solid waste stream would be lessened. This is prob-
ably the case because the underlying causes (the
economics of transportation, the unavailability of
skilled repair labor or spare parts, and the tax sub-
sidies to virgin materials) will continue to operate.
It is unlikely that standards of sufficient clarity
and flexibility could be developed for a broad range
of products. It is likely that any such standards
would lead to some amount of confusion, and to a vast
increase in the complexity of transactions undertaken
in the production, distribution and marketing of items.

3.5.2 Federal Surcharge or Tax on Items Not Containing A Minimum Percentage of Recycled Materials, or Minimum Product Reconditionability

This measure would attempt to accomplish the purposes sought above through the imposition of a sliding scale surcharge or tax on the manufacture of items not containing a minimum percentage of reclaimed raw materials or a minimum reconditionability. The underlying theory of the surcharge would be that the imposition of an

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additional cost on an item roughly equivalent to
the social cost of the use of virgin materials will
permit the price mechanism to lower the demand for
a charged item, and to force a shift by manufacturers
to conforming items. Thus a measure of flexibility
and freedom is left in the economy. Many of the policy
objections presented above, however remain. The under-
lying causes of market distortion would remain, as
would the difficulty of constructing sensible per-
centage content and reconditionable design standards.
If nothing else, it would be extremely difficult to
provide for unforseen technological innovation.

3.5.3 Imposition of a Surcharge or Mandatory Deposit to Facilitate the Separation and Collection of Reclaimed Raw Materials and Items.

This measure may provide for the imposition of a mandatory deposit on the sale of items, returnable at the time of disposition of the item to a retail outlet or other designated disposition center. The measure may also provide for a tax on items at the manufacturing level, with a system of tax credits where the manufacturer or his recycling agent has succeeded in retrieving

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discarded items. Again, the effectiveness of the

measure will be limited if no action is taken with

regard to transportation and tax subsidies.

3.5.4 Development and Enforcement of Federal Regulations
to Maximize Procurement of Reclaimed Materials and
Reconditioned Items

The Resource Recovery Act of 1970 (Section 205(a))
directs the rationalization of Federal procurement
policies in order to develop markets for reclaimed
raw materials. With the exception of paper, there
does not appear to be evidence of a substantial

effort in this regard.

3.5.5 Elimination of Unnecessary State and Local Regulations Restricting Transactions Involving Reclaimed Materials Many municipal and State regulations operate so as to unreasonably and unjustifiably interfere with the development of a functioning reclaimed raw materials market. These may be in the nature of obsolete licensing, zoning, record-keeping or restrictive standard laws, regulations or codes. Federal review and

recommendations could provide a basis for the orderly change in these legal constraints.