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Commission to promptly investigate all freight rate
discriminations against recyclable commodities and
within two years to enter appropriate orders termin-

ating all unreasonable differentials in transportation

rates. Aside from rationalizing the use of raw materi

als, 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 in

efficiencies 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


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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may be a function of the cost of a design, of the

value of the item, of the labor required to recon

dition the item, of product durability and effi


This measure represents a drastic governmental inter

vention 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 dis

tortions caused by the tax and


ion 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


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 subsidies 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 con

taining a minimum percentage of reclaimed raw materials

or a minimum reconditionability. The underlying theory of the surcharge would be that the imposition of an


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 manufac

turer or his recycling agent has succeeded in retrieving


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.

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