recycling resources

OMEGA, The Int. Jl of Mgmt Sci., Vol. 1, No. 1, 1973

Recycling Resources ROGER BETTS

Imperial College, London

The current rate of depletion of non-renewable resources and of the generation of waste for disposal have prompted the call for waste to be reclaimed and re-used.

This paper describes the general forms which such recycling presently takes and identified the factors which bear upon the amount and nature of recycling. Some of these factors are seen to be economic, others technological and behavioural. Although a private enterprise economy will automatically recycle resources in some degree, the author concludes that the analysis presented here of the relevant determinants of recycling suggests that conscious intervention of some kind is desirable.

INTRODUCTION

PRESSURE for greater efforts to recover and re-use resources which are currently discarded as waste arises in three forms.

(a) The belief that world stocks of many essential materials are being depleted at rates which indicate unacceptable scarcity at dates early enough for concern in the present;

(b) Concern arising from what are believed to be the damaging effects on ecological systems and on amenity of the amount and methods of disposal of waste;

(c) The belief that disposal of some resources as waste is even now uneconomic even in a narrow sense.

The first of these is based on projections which suggest the exhaustion of minerals and fossil fuels at dates which many see as being suflSciently early for this to enter into present utilities [9, 16]. Some of these projections are based on unrealistic static assumptions but even the dynamic indices of resource life suggest insignificantly different, and frequently more pessimistic, conclusions [I].

The second form of pressure sees recycling as a means of reducing the volume of ultimate waste and hence as a means of reducing the degree of pollution of air, water and land as the sinks to which waste is ultimately consigned.

39

Betts--Recycling Resources

Considerations of public health and amenity have imposed historically tightening constraints on the form and location of waste disposal. Even with existing standards in this respect, many responsible authorities foresee severe problems in the future disposal of their refuse. Predictably, perhaps, New York City is among those for whom the problem is most severe and most imme- diate [12]. There, sanitary land fill disposal facilities are expected to be exhausted by 1975-1976 and, as will be seen later, the New York City Environmental Protection Agency has also been among the most active authorities in research into methods of recycling municipal waste.

These first two forms of pressure see recycling as a potential adaptive process in relation to the problems created by an exponentially growing rate of total throughput of resources. Other such adaptive processes have also been identified e.g. as diminishing resources increase in price, the economic system will respond by way of substitution of inputs, substitution of products of low material intensity for those of high material intensity, an increased rate of discovery of new deposits, acceleration of progress in techniques of extraction and concentration of resources, etc. [8, Chap. 3, 4].

Whilst there is general agreement that these processes will take place, there is considerable disagreement about the efficacy of these processes and the extent of conscious intervention their operation will require.

The third category of pressure for recycling suggests that the market mechanism is failing, with respect to some resources, to allocate primary (newly extracted) and secondary (recycled) resources optimally. This is seen, then, as an instance in which an important adaptive mechanism (the market) is not fully functioning automatically. Resources, on this view, are being wasted even in the traditional economic sense that a required level of service could be obtained more cheaply if secondary resources were substituted for primary resources. It is suggested, moreover, that the number of instances in which this is true is much greater when the cost of disposal as the alternative to recycling is reckoned in the balance.

In 1969 the Director of the U.S. Bureau of Mines observed that the average city dump (in America) contained half-a-dozen metals in concentrations greater than in many minable ores [6]. Some of the general reasons why market forces may fail to produce a cost-minimizing level of recycling will be examined later, some of these reasons being economic and some institutional in character.

A CLASSIFICATION OF RECYCLING ACTIVITIES

At this stage, it will be useful to clarify what is meant by the term "recycling" and to examine the various forms which it can take. Strictly, "recycling" implies the continual re-use of a given resource as, for example, water may be con- tinually re-used in a cooling system. But in terms of the problems for which

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Omega, 1Ioi. 1, No. 1

recycling is proposed as a partial solution, namely resource depletion and waste disposal, a wider concept of recycling is justifiable. Even where a waste resource is used only once then for a given level of productive service a worthwhile contribution to some of the relevant problems has been made, although, as will be shown, it is necessary to distinguish between recycling on the one hand, and the use of waste on the other. In identifying different forms of recycling, use will be made of the concept of a "system" and three kinds of system relating to recycling are distinguished.

Production-consumption system This is defined by a class of final products and takes in the processes of

production and consumption of that class of products from the manufacture of the basic materials of which it is predominantly comprised to its final consumption. Such a system is distinguished from an "industry" as conventionally defined in that it is identified by a class only of final products and its vertical structure may thus take in several industries.

Material/energy system This is defined by the production and consumption processes which use a

significant proportion of the total supply of a given material or energy source together with those processes which deal with the retrieval and reprocessing of used material. A material/energy system may therefore cover more than one production--consumption system and a single production-consumption system may draw from several material/energy systems.

Disposal system

This is defined by function, i.e. to dispose of what is regarded by the production-consumption systems as ultimate waste. Such a system may consist partly of processes instituted by human agencies and partly of natural processes such as biological degradation and naturally occurring inputs such as water courses and the atmosphere.

The different production--consumption systems within a single material/energy system diverge from the stage of basic material extraction or manufacture. The function of effective recovery processes after the material is expelled as waste may be seen as bringing about a convergence of the production-consumption systems. The difficulty of bringing about such a convergence is related to the thermodynamic concept of entropy; the significance of this concept for resource flows and in particular for recycling is developed later in this paper.

If now a production-consumption system is seen as a set of sequentially related processes through which resources flow, then recycling can take any of several forms:

41


(a) Where resources flow back along a loop from some point in the production-consumption system to one or more points higher upstream in the same system.

(b) Where resources flow from a point in one production-consumption system to a point or points in a different production-consumption system, but within the same materials/energy system, and where at that point or a subse- quent point they pass through a process similar to one already passed through in the previous system. More loosely, the resource here flows upstream to the second system.

Thus, used wool from garments may be shredded and respun to make, e.g. blankets or carpets. As in this example, it is common for such re-use to involve a quality degradation as the material moves through successive production- consumption systems.

(c) Where resources flow from a point in one production-consumption system to a point in another such system which fails mainly within a different materials/energy system. Where such a flow takes place from a point before consumption then this is usually described as a producer by-product. Where the flow takes place from a point after consumption then this may be seen more usually as an instance of recycling. Clearly, the definition used here of a material/energy system necessarily means that this kind of recycling is insignificant in scale in relation to the total output of the waste material involved. The use of fly-ash in building materials or glass cullet in road surfacing provide examples of this category. Figure 1 summarizes these possible resource flows.

Material/energy system

[ Ex#raction ,]

Production-consumption Production -consumption sys'i'em A sys'~em B !

[ Producf,on [.,m-~ J ~'~---1 Producfion I

lc ..... P"°nl i ..... ° " ° ° 1 i

Land, sea, at-mosphere

FIG. ]. Summary o f resource flows within, into, and out o f a hypothetical materia//energ 2 system.

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Omega, Vol. I, No. 1

As has already been shown, a single production--consumption system may take in several industries in the sense that several divisions may exist in the vertical structure of the system. This is recognized in the terminology which is used to describe different sources from which waste for re-use may arise. The steel industry, e.g., distinguishes the following:

Circulating scrap This arises in the manufacture of the steel itself or in the manufacture of

semi-fabricated products. Circulating scrap arises in the steel mill and is normally fed back into the smelting process as a matter of course.

Process scrap This is produced by the user of the basic material in, for example, machining.

Capital scrap This arises after consumption of the products incorporating the material has

taken place.

The last two categories of scrap arise, of course, in a large number of production-consumption systems and each material system will have counterpart categories.

Frequently, the producer of process-type waste will not also produce the basic material and perhaps only exceptionally will the producer of capital waste also be the manufacturer who will re-use it. Hence recycling may involve two or more organizationally distinct systems which have no effective interface. The important difficulties for recycling which occur in situations of this kind are examined in the section The Determinants of Recycling Activity, page 45.

WHAT CONTRIBUTION CAN RECYCLING MAKE?

Before going on to examine the factors which bear upon the amount and location of recycling it is worth examining the extent of the potential contribution which it can make to the two main problems which have been identified.

The dynamic model developed by the Systems Dynamics Group of M.I.T. [13] was used to simulate the effect of policies designed to stimulate greater recycling. The policies tested included a 50 per cent tax on primary extraction, a 50 per cent subsidy on recycling, and finally the combination of tax and subsidy. All policies assumed that waste is generated in a form which is amenable to recycling. The results of the simulation suggested that the combination of tax and subsidies was required for sustained benefit to the problems of both resource depletion and generation of ultimate waste. However, as the M.I.T. group is aware, the significance of the potential benefits of recycling is crucially dependent on two particular parameters (leaving aside factors relating to the

43

Bet t s - -Recyc l ing Resources

means by which that potential itself can be realized, which will be examined later). The first of these two parameters is the rate at which the total demand for the resource is growing and the second is the length of the lifetime of the products which incorporate the resource.

Where total demand is growing through time then the supply of the resource recovered as waste from the output of previous periods can never be more than a fraction of the currently required supply even where the resource is fully recovered. For a given rate of growth this fraction is smaller the longer the period for which the resource is locked into products in use. For example, steel has on average a product life of 15-20 years in the production-consumption process. With an annual rate of growth of steel output of 5 per cent, this would imply that steel scrap could supply only around 40-50 per cent of current ferrous needs. A more general representation of the relationship between product life, demand growth rate, and the fraction of demand represented by currently available waste, is shown in Fig. 2.

I0 C

sc .~ Growfh r a ~ e ~

g z0

i I0

g o5 o o

o 0.2

o oJ

= 005 -o

2 Q.

0 O2

oor I I i ] I o 5 io 15 20 z5 3 0

Produc't lifet"ime, yr

FIG. 2. Available waste fraction and product hfetime for variolcs indttstry growth rates.

Furthermore it is obvious that even with static demand, recycling cannot prevent resource depletion. The processes which are available for retrieval and reprocessing of waste themselves make demands on non-renewable resources, in particular on resources of energy. These energy demands per unit of recovered

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Omega, Vol. 1, No. 1

material may be expected to grow as successively smaller concentrations of waste are tapped for recycling. In addition, it is necessary in this context to distinguish between recycling on the one hand and the use of waste on the other.

It was suggested earlier that even once-for-all use of waste was a worthwhile contribution to depletion and disposal problems. However this takes the level and nature of productive services obtained from resources as a whole as given. Where recovered wastes are used to produce additional goods then the depletion problem is unaffected and unless the recycling involved is perpetual, the waste disposal problem is merely deferred.

In order to clarify this, we should examine a further classification of recycling activities which becomes especially significant later in our discussion of the determinants of recycling activity. We can distinguish:

(a) Recovered waste which is an identical substitute for primary materials, i.e. where the two are sequentially related. Within certain limits, scrap iron substitutes for pig, waste paper for pulp, etc. Here the service level can be taken as common and the choice between the two inputs is taken on a cost and availability basis;

(b) Recovered waste which is not identical to a primary material but offers a comparable productive service. Thus recovered waste paper may be made into cardboard which may then compete with plastics in packaging;

(c) Recovered waste which offers formerly unavailable productive services and which then makes available additional kinds of final goods, or which so reduces the price of existing final goods as to boost their demand.

In this last case, "recycling" in the sense merely of reusing waste may make no significant contribution to either depletion or disposal problems.

THE DETERMINANTS OF RECYCLING ACTIVITY

Factors which bear on the amount and location of recycling activity are not in every case economic. As might be expected, some of the factors are institutional and others technical though, undoubtedly, some of the difficulties in recycling which are described as technical are in reality economic in that they could be overcome if it were judged economically worthwhile to do so.

In considering the factors at work here it would be instructive to use as a control the supply of fresh water for domestic and industrial uses. This may then bring out the important determining factors in recycling in general. Water is an economic resource which is perhaps recycled to a greater extent than any other and the reasons for this seem to be the following:

(a) It is seen to be in inelastic supply depending ultimately on natural precipi- tation which, given present technology, man cannot influence.

(b) It is easily reconstituted after use. Many contaminants are diluted to a level of insignificance by the overall amount and nature of the material. More-

45


over a combination of biological processes and low-level technology is able to break down many contaminants into harmless residuals.

Since the condition of the water courses which carry away sewage inevitably has implications for public health, other and historically stronger imperatives for purified sewage than the scarcities of fresh water have produced re-usable water supplies.

(c) It has a wide range of uses requiring widely differing levels of quality. This implies that many uses have a wide tolerance of contaminants picked up in previous uses.

(d) In terms of increments in the usable supply, recycled water compares favourably on a cost basis with additional "virgin" water made available, e.g. through reservoir construction. This is partly because water is cheaply trans- portable much transport being through "cost free" natural water movements.

(e) The responsibility for its supply is under a set of closely integrated authorities from "raw material" source through to the consumer. The controlling authorities therefore are likely to view comprehensively the alternative sources of additional supplies.

(f) There is a regional division of responsibility for supply rather than compe- tition among suppliers. Hence the distinction between short and long term acquisition and marketing policies does not arise. In competitive conditions suppliers may tend to move along short rather than long run supply curves where these are different.

(g) Since water is an amenity good as well as a raw material and a food, the cost of cleansing it can be spread over a broad range of values.

(h) Being a public utility, water supply is not subject to discriminatory taxation as between recycled and "virgin" water.

Some of these factors have an obvious relevance to the general case of recycling and the more important of these will now be examined.

1. The relative price of primary and secondary resources Undoubtedly, one of the most pervasive reasons which users have for

preferring primary resources to equivalent recycled ones derives from the relative costs involved. It is important to bear in mind, however, that what is crucial is the relative costs of the overall technologies which characterize the use of the two kinds of resources, rather than of the two resources as individual inputs. Whilst the price of steel scrap in 1971 was considerably lower at the then current demand level than that of iron the technology of steel-making, based on overall costs, was locked into a certain proportion of scrap to iron. The electric arc process can be based entirely on scrap but the Bessemer process uses only about 30 per cent scrap in its ferrous needs. The demand for recycled steel is thus dependent on the balance of processes used [3].

However, in the general case, it is significant that the relative price of primary and recycled resources is heavily influenced by an implicit value judgement

46


which balances future claims on resources against present claims. This balance is reflected in the determination of the price of a resource as a function of expected future supply elasticities. All mineral resources are essentially supplied from a geologically determined stock but in economic terms the size of stock is a positive function of the market price of the mineral. Thus the tar sands are not normally computed as part of the world's oil reserves but they would be so computed should the price of oil rise sufficiently to cover the costs of making oil available from this source, or should the costs of extraction fall sufficiently to do so. Hence, although minerals are supplied in general from a finitely expansible stock characterized by decreasing elasticity of supply, the market values those minerals as a flow available for purchase in a market period determined by the time horizon of the seller. Stock depletion is seen as a problem of replacement within that time horizon and the current supply price reflects, in addition to current costs of production and distribution, replacement costs so perceived.

However, the supply price must also reflect the rate of discount which sellers apply to their expected future utilities. Given rising supply inelasticities, the higher the discount rate applied the lower will be the current supply price. This is also true, of course, of the buyers who with a zero discount rate would stock, at some rate depending on the costs of stock holding, against future higher prices. In so doing they would tend to raise present prices and depress future prices. A monopoly seller could be expected to distribute over time the flow of resources from his "stock" such that the present worth of the net profit from a unit of stock sold has to him an equal value through time given his discount rate. Such a seller would be likely to spread his stock more evenly over time than would an industry of competitive sellers each facing similar supply conditions, since any single seller would be compelled to set a current price determined by the discount rate of the seller whose discount rate was highest or to withhold his supply until the price rose to an acceptable level.

Hence it can be seen that a crucial factor in the determination of the current price of primary resources given present and future production costs is the discount rate that society applies, through its economic institutions, to the utilities derived from such resources. In as much as these utilities are partly those of future generations then this discount rate implies a value judgement which balances the claims of future generations against those of the present. Alternatively, we might view this discounting procedure not as representing a time discount and competing interpersonal comparisons of utility but as an allowance for the probability that resource saving innovations will make good current depletion. Many writers see technology as an endogenous variable in this system, i.e. that depletion and such innovations are complementary by way of technical progress generated by resource usage (see, e.g. [8, Chap. 7, 9]). It is certainly not beyond dispute that supply inelasticities will increase through time at a much more rapid rate than in the recent past. In contrast to the

47


implied catastrophic exhaustion of mineral reserves occurring at specified dates in the crude projections used by some writers, many others have pointed to the possibilities of substitution, and of improved exploration and extraction techniques which can be expected to offset at least partially, the generally declining quality and accessibility of oil reserves and ore bodies. Others have suggested that increases in "costs" of extraction of many minerals will be environmental rather than directly economic. Mechanization of extraction on an increased scale will permit, technically, the excavation and processing of volumes of material which would have been economically impossible in the past. However, that society will allow such "external" costs to remain external in the future seems unlikely even if amenity considerations do not rule out many such operations altogether. In addition, the volume of material to be processed to extract a given unit of a desired metal is in an inverse constant relationship to the percentage concentration of the ore. Similarly, in the U.S., 9 cu. ft of overburden had to be removed for each ton of coal mined by the opencast method in 1946, whereas by 1965 the figure had risen to 13 cu. ft [14]. In many areas where metal deposits occur, environmental considerations are, of course, likely to be insignificant but in more sensitive regions growing amenity pressures seem likely to coincide with the need for increasingly dis- ruptive extraction methods.

Additionally, Smith and Kneese suggest that an impoltant factor holding down the prices of minerals in the past has been the generally increasing efficiency in energy conversion from which, in common with other forms of energy usage, the extraction processes have benefited. They foresee a halt to this trend in that further increments in conversion efficiency will require much larger inputs of capital. Wherever the balance of the argument about the future falls, the essential point for price determination in the present is that the market does not yet generally acknowledge serious future reductions in the elasticity of supply of commonly used materials.

2. Costs of collection and reclamation In considering the factors which made water a flow rather than a stock

resource we saw that one important factor was that supply was perceived as being inelastic at current demand levels, this being in contrast to attitudes relating to many mineral stocks. However, in addition we saw that used water was easily collected and reclaimed. It is cheaply, and sometimes freely, trans- portable into usable concentrations, is easily decontaminated and has, in any case, many uses which are tolerant of most common contaminants. Again this is in contrast with many other resources. In relation to the location of reclamation processes the use of resources involves physical dispersal and, where transport costs are significant, recycling is favoured by physical concentration and favourable location of those concentrations. Whereas a large proportion of steel scrap, especially capital scrap, is produced in the South-East and the

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Omega, Vol. 1. No, 1

West Midlands of the U.K., the scrap-using industries are located in other parts of the country. Similarly, scrap of all kinds produced by discarded consumer goods and packaging is thinly dispersed throughout the country in processes of disposal which also create other conditions inimicable to reclamation.

One such condition relates to the nature and level of contamination of the desired material. Some contamination arises in the production of the resource- using products and some in the disposal processes.

The fundamental characteristic here is the reversibility of the mixing processes to which the materials making up waste have been subjected [2]. Mixing increases the level of entropy of the materials system where entropy expresses the degree of irreversibility which occurs when the system undergoes a transition from one state to another. The entropy which the system accumulates during the production, consumption and disposal processes is positively related to the energy required within the materials system to reverse the mixing processes. The cost of recovering the materials in a usable form will reflect that energy requirement. Moreover, in most examples the recovery process is still largely labour intensive and the energy is therefore required in a particularly expensive form. In the example of water recovery, the required energy was available in a low or zero cost form.

In those cases where the product itself is re-used, as with returnable bottles, then apart from dirt and bacteria, contamination is negligible. At the other extreme metal additives in paint are irretrievably contaminated after use. The various metals contained in a scrapped motor car, usually iron and steel, copper, zinc, aluminium and lead, are individually valuable but together in a single car they "contaminate" each other such that their separation yields a minimal profit. Nor are the problems of contamination and dispersal separate in practice. Thus a separation process under study in America would require, for acceptable profitability at current prices, a throughput of scrapped cars normally produced by an American city of 300,000 people [15]. Similarly, the economics of the reclamation of wool textiles is crucially dependent on the mixture of materials presented for recovery. If different types of woollens are mixed then the entire mixture is worth less than the value of the least valuable component type alone [17].

Moreover, unless cost savings in recovery arising from a lower level of mixing in production are available to the producer, then there is no economic incentive for a resource user to minimize mixing. A single producer in a typical material system is most unlikely to influence significantly his own input costs in this way. Hence costs arising from mixing in production are seen as external, i.e. outside the accounting system which concerns the producer. These and other institutional factors in recycling are explored in the section Institutional Factors in Recycling, page 52.

Needless to say, at the disposal level the processes used by municipal authorities for household waste have a further mixing effect precisely contrary to the

49 D


needs of recycling. In addition, because of the fragmentation of responsibility for waste collection and disposal together with the unsophisticated nature and widespread availability of disposal facilities, as typified by landfill, geographical dispersal has been combined with physical contamination of technically re- usable resources.

Concentration of secondary materials is desirable for precisely the same factors which make high concentrations of primary ores desirable and low concentrations will be overcome by analogous processes where and when the relative cost figures favour it. The admixture of wastes has been and still is crucial largely because sorting is a labour intensive process. However, mechanical means of sorting are being developed where the prospect of profitable use is foreseen. One process for the separation of metals in scrapped cars has already been referred to but technically and economically the most difficult area is that of municipal waste. Even here means of mechanical sorting are being developed [5, 11]. Some of these means use liquid media of varying densities, some involve floating on a jet of air, some use high temperature incineration, and optical and magnetic processes are being developed for the sorting of glass cullet.

3. Price instability Consideration of the factors which encourage the development of recovery

systems, whether by local authorities or by other bodies emphasizes the particular problems which the secondary nature of recycled inputs creates.

Where the bulk of a required input is obtained from primary sources then this supply will often be subject to long-term contract and any remaining input required will be satisfied from available recycled supplies. Recycled material here acts as a buffer between short-term demand fluctuations and primary supplies. Where demand is unstable and the supply of waste for reclamation is inelastic, as it frequently is, then the price offered for such waste fluctuates widely.

The mechanism is well illustrated by the paper and board manufacturing industry in the U.K. Normally, about 30 per cent of paper and board is made from waste paper but 85 per cent of the remaining requirement is supplied from abroad on long-term contract. The market for paper and board is sensitive to general economic conditions but is not in phase with the demand for waste supplies by manufacturers and for obvious reasons is insensitive to changes in the price offered for waste. The consequence is that the profitability of waste recovery fluctuates widely and acts as a disincentive to the establishment of continuous recovery mechanisms. This in turn makes some sources of waste supply unreliable and leads waste merchants to confine themselves mainly to the larger waste supplies.

4. The pressure of disposal costs Although Kretchmer and Harris [7] estimate the annual value of scrap in New

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Omega, 11"ol. 1, No. 1

York City's municipal solid wastes at $34m (excluding the value of cars and other large durables), the main impetus for recycling may come not from the positive economic value of recovered materials but from the alternative expense of waste disposal. Even without the much more restrictive controls on waste disposal which have been announced in recent years in the U.S. and the similar, though probably less drastic, measures which seem probable elsewhere, the exhaustion of cheap landfill sites would have radically changed the economics of disposal. In a statement in November 1971, Jeffrey Padnos of the New York City Environmental Protection Administration predicted that New York's sanitary landfill space would be exhausted by 1975. Thereafter disposal costs per ton are expected to quadruple and in various ways the Environmental Protection Administration is using its economic and legislative powers to reduce the disposal load by encouraging recycling of some of the wastes.

The ultimate disposal of many industrial wastes has been, and continues to be, a "free good" since discharge into the air or into water courses and lakes has involved common property resources whose costs are external to the producer though, above certain levels of usage set by natural renewal processes, eventually a charge in some form on the community as a whole [10]. The probability is that these costs will be increasingly "internalized" as legislation confines permissable wastes, their level of discharge and/or the site of their disposal. Where recovery of wastes is technically feasible any saving in the cost of required treatment or disposal methods is essentially deductible from the cost of reclamation. This is true, of course, whether the organization involved re-uses its own waste in production or sells it to some other organization for re-use. It is also true of an organization concerned solely with disposal, as in the case of a local authority, but in this case particularly, inhibitions may limit the nature and scope of reclamation as will be shown below. It would, in any case, be unrealistic to expect substantial savings in disposal costs from reclamation for a municipal authority responsible for the collection and disposal of a very large number of different categories of waste. Any single waste component bears a very heavy overhead cost but frequently negligible traceable cost. This seems to be true even of waste paper which in the U.K. makes up about 40 per cent by weight of all municipal waste. For an industrial producer of a small number of waste products reclamation would, of course, offer much more significant savings.

Hence although a simple comparison of the relative costs of reclaimed and virgin materials may typically favour the latter, consideration of waste disposal costs incurred when suitable resources are not reclaimed might in some cases change the relationship. In which cases this is true remains to be discovered but undoubtedly the number of such instances can be expected to increase as disposal becomes more expensive.

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INSTITUTIONAL FACTORS IN RECYCLING

In looking at the circumstances which have led to a high level of recycling in the case of water it was suggested that the vertically integrated nature of the industry was significant. The larger the number of processes in the production- consumption system which fall under a single authority, the less the likelihood that the resource flows in the system will be impeded by organizational barriers and the greater the likelihood of recycling flows being generated by economic pressures where these are in themselves sufficiently strong.

There will be many production--consumption systems in which organizational barriers are likely to be particularly high. When, for example, the system's waste forms part of the solid waste collected by municipal authorities in their responsibility for disposal then to the extent that such authorities are not commercially oriented towards or are not equipped for reclamation activities, a "non-return valve" is interposed between the disposal system and the production--consumption systems. This valve allows resources to flow out of the production--consumption system as waste but prevents them from flowing back in again as recovered resources as they might if free to respond to economic pressures.

In the absence of an existing two-way interface between the two systems, recycling will be made easier by the creation of specialized overlapping reclamation systems. An example of conscious intervention to create such overlapping systems is provided by the encouragement given by New York City Environ- mental Protection Agency to the establishment of reclamation industries. There are, of course, many other instances in which such specialist activities have arisen spontaneously, i.e. where the economic prospects in themselves have already been sufficiently inviting.

Development of effective recovery

~echnology

r----I mot,,,o,s, L i i / ! ~ ' mot,r,o,s, Out00~, . . . . 1

E , ~ i : t

a t t i t u d e s | I . . . . . . t of J ~_ . . . . . . . . . . ~ r e c o v e r y T o t o l inpu~-

J syst en,s j requirement

F I G . 3 . Summary of recycling determinants.

52


Figure 3 summarizes the important relationships in the determination of the proportion of a given material which is recycled in time period t. Here, as in the example of paper and board, the price of primary supplies is treated as exogenous. The important determinant then is the supply rather than the price of primary materials. In the longer term, price would have to be treated as endogenous even in the paper industry model and it may be that more flexible conditions of supply in the case of other materials would require endogenous treatment of price even in the short term.

CONCLUSIONS

It was suggested at the onset that recycling is advocated largely for its expected contribution to problems arising from resource depletion and waste generation.

Given the reality of these problems, it is clear that the contribution which recycling can make is heavily dependent on the context in which it is required to operate. Aspects of that context which are of particular importance include"

(a) The degree of entropic change induced in materials by production technology, packaging, consumption and disposal;

(b) The perceived r61e and responsibility ascribed to waste collection and disposal agencies;

(c) The rate of growth of total demand for resources; (d) The value system which implicitly allocates resources over time. Whilst recycling, even in the contemporary context, is a partially automatic

adaptive mechanism it is unlikely that its automatic operation alone can be relied upon to maximize its contribution to the solution of problems arising from resource depletion and waste generation. Automatic operation seems likely to require a level of pressure arising only when these problems have reached a severity which should be unacceptable in the present, given a reasonable time horizon for the collective management of resources.

Deliberate intervention might include measures to make recycling less costly by reducing contamination of materials in production and packaging, incentives to establish reclamation systems and processes which use reclaimed resources, and restrictions or penalties imposed on the disposal of reclaimable resources. Intervention might also include measures to discourage the exploitation of primary resources or to remove some of the present fiscal subsidies on extraction.

Measures of this kind require dauntingly complex research and involve dauntingly fundamental aspects of economic systems, institutions, and technology. But accepting the reality of the problems which have provoked the call for deliberate measures to promote recycling, we will be unable to escape the need for fundamental action of many kinds.

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REFERENCES

1. BEHRENS WW (1971) The Dynamics of Natural Resource Utilization. System Dynamics Group, M.I.T.

2. BEN~,~T DG (1972) Recovery and reuse of resources. MSc. Thesis, Imperial College of Science and Technology, London.

3. BOUGHEY EPF (1968) The place of scrap in steelmaking. British Steel, No. 3, pp. 26-3 I. 4. COMMON M and PEARCE DW (1972) Markets, mechanisms and the depletion of natural

resources. Discussion Paper 7210, University of Southampton. May. 5. Glass (1971) Reclamation of glass bottles, 48 (2), 3941. 6. GREENFIELD SN (1971) Quoted in Technology Rev., 73 (9), 57-58. 7. KRETCnMER J (1971) Paper to the American Chemical Society. 8. MADDOX J (1972) The Doomsday Syndrome. Macmillan, London. 9. MEADOWS DE, RANDERS J and BmtRENS WW (1972) The Limits to Growth. Universe

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