Inventory Management

CSAI White Paper
January 2006
The Economics of Aluminum Recycling

A Literature Review and Research Agenda
Glenn Bloomquist and Brandon Koford Department of Economics Gatton College of Business & Economics The University of Kentucky
CSAI White Paper Bloomquist & Koford 2006
The Economics of Aluminum Recycling

A Literature Review and Research Agenda
Purpose and Overview The purpose of this white paper is twofold. One purpose is to summarize and synthesize what is known about the economics of recycling and any special aspects of aluminum recycling. The second purpose is to offer recommendations for research that would further the understanding of aluminum recycling.
A substantial amount of research has been done which is directly or indirectly related to the economics of aluminum recycling. This research deals with the economics of the aluminum industry both domestic and international. It deals with the economics of solid waste disposal and recycling, pricing of garbage, and deposit/bottle bills. This research deals with recycling directly by analyzing curbside recycling, municipal recycling facilities, determinants of recycling, and international experiences with recycling. A major part of this white paper is A Partially Annotated Bibliography for The Economics of Aluminum Recycling: A White Paper, which contains more than 135 sources related to aluminum recycling. The bibliography, which is attached in an appendix, provides the background and reference material for further discussion and research. It provides the depth, breadth, and perspective.
Text of this white paper, in contrast, focuses on households, covers main points about solid waste disposal, and highlights two crucial concepts. The first concept is the price of used aluminum beverage cans relative to the prices of other goods and services. The second
concept is the amount of recycling that is best for society as a whole. Recommendations are for further study of the aluminum market and the role that aluminum prices play in recycling and for research to identify municipalities which have low recycling rates and which are likely to have social benefits of aluminum recycling that are greater than the social costs.
Solid Waste and Recycling
In the U.S. households generate approximately 60% of municipal solid waste. Guidelines for disposal of municipal solid waste are found in Subtitle D of the Resource Conservation and Recovery Act of 1976 and the 1984 amendments. Responsibility for proper disposal is vested with states and localities. This Act induced closure of town dumps and development of modern landfills with liners, covering, and monitoring. Along with more sophisticated waste disposal came fees charged for disposal.1
Landfills, recycling, and incineration account for most waste disposal. According to various issues of Biocycle Magazine, in 1990 the distribution across the three types of disposal was 80% landfill, 10% recycling, and 10% incineration. In 1999 the distribution shifted away substantially from landfills to both recycling and incineration and was 60%, 34%, and 16%. In 2002, the distribution shifted some from recycling back to landfills and was 66%, 27%, and 17%. Figure 1 shows the disposal trends from 1989 to 2002 and reflects the shifts just described.
US Disposal Trends 1989-2002
90 80 70 60 50 40 30 20 10 0 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
MSW Landfilled (%)
MSW Recycled (%)
MSW Incinerated (%)
Figure 1: Trends in US Disposal of Solid Waste by Landfill, Recycling, and Incineration, 1989-2002.
Source: Biocycle Magazine, various issues. The trend in Kentucky was somewhat similar except there is virtually no incineration in Kentucky. Most of the change occurred during the period 1995-1998 when recycling increased from roughly 15% to 32% with the corresponding decrease in landfill from 85% to 68%. More recently the recycling rate began to fall similar to the overall trend in the U.S. Kentuckys Disposal trend is shown in Figure 2.
This information is based on the chapter Solid Waste Policy Molly K. Macauley and Margaret A. Walls in Paul R. Portney and Robert N. Stavins, eds., Public Policies for Environmental Protection (Washington, DC: Resources for the Future, 2000).
Kentucky Disposal Trends 1993-2000

90 80 70 60 50 40 30 20 10 0 1993 1994 1995
MSW Landfilled (%)
1996
1997
1998
1999
2000
MSW Recycled (%)
MSW Incinerated (%)
Figure 2: Trends in Kentucky Disposal of Solid Waste by Landfill, Recycling, and Incineration, 1993-2000. (Incineration is virtually zero.)
Source: Biocycle Magazine, various issues.
Recycling of Aluminum Cans and the Real Price of Used Aluminum Cans
Given this background of recycling activity in the U.S. and Kentucky, it is worthwhile to look at the recycling rate for aluminum cans. According to the Aluminum Association, the recycling rate for aluminum cans was 60-70% during the period 1992-1999, but fell to roughly 50% by 2003 and increased slightly in 2004. The trend is shown in Figure 3.
Figure 3: Trends in the U.S. Aluminum Can Recycling Rate, 1992-2004.

Source: Subodh Das and Jason Liew. Evaluation of Lexington-Fayette Urban County Recycling A presentation to the Aluminum Can Council in Washington, DC on May 25, 2005.
The Aluminum Can Recycling Rate, 1992-2004

70 65 60
%
55 50 45 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year
Why has the recycling rate for aluminum cans decreased? Studies that suggest a variety of factors can be found in our A Partially Annotated Bibliography for The Economics of Aluminum Recycling: A White Paper. A particularly insightful study is The Economics of Residential Solid Waste Management by T. Kinnaman and D. Fullerton.2 They provide an economic framework for thinking about solid waste generation and disposal and a context for thinking about factors that influence recycling rates. In contrast, we emphasize and explore one factor that, we believe might be especially relevant when considering the national recycling rate. That factor is the price of used aluminum cans relative to the prices of other goods and services. Economists call this relative price the real price because it measures what must be given up in terms of other things, not dollars. The real price is like a barter price rather than the more familiar money price. If the purchasing power of the dollar remained constant over time, there would be no need to construct a real price index. With inflation, which is a sustained increase in the general level of prices, changes in real prices can be masked.
The source of data needed to construct real price indexes is the U.S. Bureau of Labor Statistics (BLS). We are interested in the real price of all recyclable materials and even more interested in the real price of used aluminum cans. The BLS reports three relevant series. The first is the price index for all recyclable materials. The second is the price index for used aluminum cans. It is a component of the price index for all recyclable materials. The third is the Consumer Price Index (CPI), which we will use for the price of other goods and services. All data can be retrieved at < http://www.bls.gov/data/ >.
Kinnaman, Thomas C., and Don Fullerton. 1999. The Economics of Residential Solid Waste Management. Working Paper no. 7326 (August). Cambridge, Mass.: National Bureau of Economic Research. Also available in The International Yearbook of Environmental and Resource
(footnote continued)
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We will construct two real price indexes. This first is a real price index for all recyclable materials. It is constructed by taking the price index for all recyclable materials as reported by the BLS and dividing it by the CPI (and, following convention, multiplying by 100) for each year. For example, we can calculate the real price index value for recyclable materials for 1990. In 1990, the index value for recyclable materials was 140.7. In 1990, the index value for the CPI was 130.7. Using these values and the description above, the real price index value for recyclable materials for 1990 is calculated to be (140.7/130.7)100 = 107.7. Using the respective values for 2002, the real price index value for recyclable materials for 2002 is 71.9. Notice that the real price of all recyclable materials decreased substantially from 1990 to 2002. Similar calculations give values of the real price for the years 1987 through 2005. As shown in Figure 4, the real price index value for recyclable materials decreased from 1995 to 2002. It increased from 2002 until 2004 when it reached the same high value as 1995.
Economics 2000/2001, edited by H. Folmer and T. Tietenberg (Cheltenham, UK: Edward Elgar, 2000).
Real Price of Recyclable Materials

140 120 100
Real Price
80 60 40 20 0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Real Recyclable Materials Price
Figure 4: Trends in the Real Price of Recyclable Materials, 1987-2005.
Source: Calculated from U.S. Bureau of Labor Statistics data.
The second index we will calculate is a real price index for used aluminum cans. It is constructed a similar manner as above. For any particular year, the price index value for used aluminum cans is divided by the CPI value for the year and multiplied by 100. Table 1 shows the values for several years from 1988 to 2003.
Real Price Index for Used Aluminum Cans

1988 (189.2/118.3)100 = 159.9 1990 (140.8/130.7)100 = 107.7 1995 (185.0/152.4)100 = 121.4 2002 (133.8/179.9)100 = 74.4 2003 (143.4/184.0)100 = 77.9 (Calculated from US BLS data)
Table 1: The Real Price Index for Used Aluminum Cans for Selected Years, 1988-2003.
A striking result of calculating the real price index is that the values in 2002 and 2003 are noticeably less than the value in 1995 and earlier years. The fact that the real price sellers get for the aluminum cans they sell has fallen might be an important factor in explaining the decrease in the recycling rate. The trend in real price of used aluminum cans is shown in Figure 5 for 1987-2005. While the fall in the real price from 1995 to 2002 probably contributed to the fall in the recycling rate, the recent increase in real price suggests that the recycling rate should increase from the rate of the late 1990s.
Real Used Aluminum Can Price Index

180 160 140
Real Price Index
120 100 80 60 40 20 0
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Year
Real Alum Can Price 100
Figure 5: Trend in the Real Used Aluminum Can Price Index, 1987-2005.
Figure 6 shows both the trend in the real price index of used aluminum cans and the trend in the recycling rate for aluminum cans. They seem to move together and, in fact, the simple correlation is 0.4. Nevertheless, there is probably more going on than simply the influence of the real price.
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Real Can Price & Aluminum Can Recycling Rate

1.4 80
1.2
70
60 A lu m in u m C an R ecyclin g R at e 1 R eal C an P rice In d ex 50 0.8 40 0.6 30 0.4 20
0.2
10
0 1994 1995 1996 1997 1998 1999 2000 Year 2001 2002 2003 2004
Real Can Price
Aluminum Can Recycling Rate
Figure 6: U.S. Trends in the Real Price of Used Aluminum Cans and Recycling Rates, 1992-2004.
Source: Calculations based on U.S. Bureau of Labor Statistics data
Whether the recycling rate will increase likely depends on the real price of used aluminum cans and other factors as well. Higher tipping fees at landfills will increase the incentive for municipalities to offer curbside recycling which increases convenience to residents. The level of curbside recycling is, in turn, influenced by population density which reduces collection costs, fuel prices which increase hauling costs, education and environmental interests of residents which increase interest in recycling.3 While it is useful to determine what influences recycling activity, it is important to think about how much recycling is best for society as a whole.
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The Socially Optimal Rate of Recycling
The recycling rate that is best for all of society is the rate that maximizes the total excess of social benefits over social costs. Social benefits of recycling include less raw material use, less solid waste to be disposed of in landfills or incinerators, and less litter. Social costs of recycling include hauling, storing, handling, separating, and consumer time and convenience. If there are costs of landfills and litter that are not fully taken into account when residents and municipalities decide about recycling, then too little recycling will result. If, on the other hand, consumers time and convenience are highly valued, then mandatory recycling might produce negative net social benefits. The socially optimal recycling rate is the recycling rate that is best for society taken as a whole. Particular groups within society may benefit from recycling rates which are higher or lower than the socially optimal rate. If some groups benefit from a higher than socially optimal rate, the gains come at the expense of others and the benefits to the winning groups are less than the losses to the losing groups.
Economists have given a great deal of thought to solid waste generation and disposal. Two studies are particularly useful. In The Cost of Reducing Municipal Solid Waste deposit/refunds, advance disposal fees, and recycling subsidies are considered as ways to reduce waste. The authors considered the social benefits and costs of these policies and the effects they would have on aluminum and other recyclable materials through recycling and
See Kinnaman and Fullerton (1999).
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source reduction. They find that a deposit/refund system is least costly and that recycling that leads to a reduction of about 8% of waste would be socially optimal.4
Curbside Recycling: Waste Resource or Waste of Resources? is a study funded by the National Science Foundation to estimate the net social benefits of curbside recycling. Costs are compiled from previous studies by the U.S. Environmental Protection Agency and the Institute for Local Self Reliance as well as interviews with recycling coordinators in 40 western cities. The average cost per household per month is about $3. Benefits are estimated using a survey of more than 4,000 households in the Western U.S. They authors find the social net benefits of curbside recycling vary from city to city. In some cities social benefits are greater than social costs, while in others social costs are greater than social benefits. Remarkably the authors find that on average the social net benefits of curbside recycling are zero.5
The message is clear that efforts to increase recycling of aluminum should be directed to cities where both the socially optimal rate of recycling is positive and currently there is little or no curbside recycling. Furthermore, any such efforts must take into account the various factors including the real price of used aluminum cans that directly influence private recycling decisions.
Recommendations for Further Research
See Palmer, Karen, Hilary Sigman, and Margaret Walls. 1997. The Cost of Reducing Municipal Solid Waste Journal of Environmental Economics and Management 33 (June): 128-150. 5 Aadland, David and Arthur J. Caplan. 2005. Curbside Recycling: Waste Resource or Waste of Resources? University of Wyoming Working Paper available at
(footnote continued)
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Based on the above analysis and our extensive literature review, we would recommend that CSAI consider funding two projects that would advance both knowledge of recycling and be of value to the industry: Project 1 Analysis of the aluminum market and the market for used aluminum beverage cans. The real price of used aluminum theoretically should influence recycling rate. Our first look at the relationship suggests that does. Further analysis seems warranted. This research should be coordinated with the research on the marketing of aluminum can recycling.
< http://www.uwyo.edu/aadland/research/recycle/nsfrecycling.pdf >
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Project 2 Develop a method and apply it to identify cities that would be receptive to efforts to increase recycling of used aluminum beverage cans. Cities with characteristics that indicate the socially optimal rate is greater than the current rate would be receptive. The parameters estimated in the study Curbside Recycling: Waste Resource or Waste of Resources by D. Aadland and A. Capland would be used.
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PARTIALLY ANNOTATED BIBLIOGRAPHY Domestic Aluminum in the U.S. Adams, Walter. 1951. The Aluminum Case: Legal VictoryEconomic Defeat. The American Economic Review 41 (December): 915-22. Bingham, Tayler H., Curtis E. Youngblood, and Philip C. Cooley. 1983. Conditionally Predictive Supply Elasticity Estimates: Secondary Material Obtained From Municipal Residuals. Journal of Environmental Economics and Management 10 (June): 166-179. Abstract: New capital-intensive waste processing plants have been developed that can recover secondary materials and energy from the municipal solid waste stream resulting in lower disposal costs than traditional methods. The potential supply of secondary glass, ferrous metals, aluminum, and energy is estimated using an engineering cost model of secondary materials and energy supply under alternative prices for energy and materials. Econometric estimates of the own- and cross-price elasticities of supply for the materials and energy are then estimated from the data set. Significant cross-price effects are shown. Boyd, Roy G. Chulho Jung and Barry J. Seldon. 1995. The Market Structure of the U.S. Aluminum Industry. Journal of Economics and Business 47 (August): 293-301. Notes: The authors find that the primary aluminum industry was competitive for the time period 1965-1968. The authors use this evidence to conclude that the decrease in the price of aluminum in the early 1990s was due to increased competition in the already competitive primary aluminum market. Alumina and electricity account for the lion's share of all smelter operating costs. Even with the entry of new firms after the mid-1950s, one can still think of the industry in the US as being dominated in size by Alcoa, Kaiser, and Reynolds. Froeb and Geweke (1987), however, argue that this triopoly does not seem to have a cost advantage over the smaller firms. Therefore, it is plausible that all the firms price competitively. Collier, James E. 1948. Aluminum Resources of the United States. Economic Geography 24 (January): 74-77. Collier, James E. 1944. The Aluminum Industry of the Western Hemisphere. Economic Geography 20 (October): 229-57. Doyle, Leonard A. 1953. Industrial Economic Problems in the Post-War Aluminum Market in the United States. The Journal of Industrial Economics 1 (July): 212-30. Gagne, Robert, and Carmine Nappi. 2000. The Cost and Technological Structure of Aluminum Smelters Worldwide. Journal of Applied Econometrics 15 (July-August): 415. Abstract: A cost model is developed for the estimation of several technological parameters describing the production process of aluminum smelters worldwide. The model is similar to Baltagi and Griffin's (1988), but, instead of estimating technological change using a panel data set of firms, the vintage effect is estimated, using a cross-section of aluminum smelters in operation throughout 1994. The vintage effect is defined as the variable cost differential
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that may be attributed to the utilization of a specific technical vintage in the production of aluminum in relation to another. Other technological measurements are also discussed: the scale effect or returns to scale and technological characteristic effects, i.e. the variable cost elasticities with respect to pot size and current intensity. The results show that considerable cost reductions may be expected from the change of old technical vintages to more recent ones. Also, results show that for a majority of smelters in the sample, returns to scale seem to be exhausted. Finally, variable costs are very sensitive to pot size in the sense that large cost reductions can be expected from the increase in pot size, an important characteristic of the technology used by smelters. Froeb, Luke, and John Geweke. 1987. Long Run Competition in the U.S. Aluminum Industry. International Journal of Industrial Organization 5 (March): 67-78. Gilbert, Christopher L. 1995. Modelling Market Fundamentals: A Model of the Aluminum Market. Journal of Applied Econometrics 10 (October): 385-410. Abstract: The standard approach to modelling primary commodity markets under rational expectations is to relate the commodity price to the production and consumption `surprises' (i.e. the innovations on the equations). Using the world aluminium market, we show how this approach can be modified so that both the price and stock can be written in terms of one or more market `fundamentals' which reflect the supply-demand balance on the market. This approach allows joint estimation of production, consumption, stock demand and price equations subject to cross-equation restrictions. It may be seen as a formalization of the approach adopted by metals industry analysts. Gillis, Malcolm, and Charles E. McLure Jr. 1975. Incidence of World Taxes on Natural Resources with Special Reference to Bauxite. The American Economic Review 65 (May): 389-396. Holmes, Harry N. 1936. Fifty Years of Industrial Aluminum. The Scientific Monthly 42 (March): 236-39. Lindquist, Kjersti-Gro. 1995. The Existence of Factor Substitution in the Primary Aluminum Industry: A Multivariate Error-Correction Approach Using Norwegian Panel Data. Empirical Economics 20 (March): 361-83. Litvak, Isaiah A., and Christopher J. Maule. 1984. Assessing Industry Concentration: The Case of Aluminum. Journal of International Business Studies 15 (Spring-Summer): 97104. Muller, Charlotte. 1945. The Aluminum Monopoly and the War. Political Science Quarterly 60 (March): 14-43. Perry, Mark K. 1980. Forward Integration by Alcoa: 1888-1930. The Journal of Industrial Economics 29 (September): 37-53. Raymond, John M. 1967. A New Look at the Jurisdiction in ALCOA. The American Journal of International Law 61 (April): 558-70.
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Reynolds, Stanley S. 1986. Strategic Capital Investment in the American Aluminum Industry. The Journal of Industrial Economics 34 (March): 225-45. Ruth, Matthias. 1998. Dematerialization in Five U.S. Metals Sectors: Implications for Energy Use and CO2 Emissions. Resources Policy 24 (March): 1-18. Abstract: The US copper, lead, zinc, aluminum and iron and steel sectors exhibit increasing competition for their products from new materials such as plastics and ceramics. The likely result of that competition and increased recycling is a decline in domestic production from virgin materials. Parallel to these developments are continued strong efforts by industry to improve material handling and energy efficiencies, and to switch towards cleaner fuels. What are implications of these trends for material and energy use and CO2 emissions by the copper, lead, zinc, aluminum and iron and steel sectors? To answer this question, this paper presents a systems view of industrial activity in which the major raw materials and energy flows are traced through the five US metals sectors. Dynamic interrelationships among resource extraction, materials processing, fuel use and technological change are specified on the basis of time series data and engineering information. Projections of material, energy and CO2 emissions profiles are presented for the years 19902020. These projections include energy requirements by the energy sectors to supply various fuels and electricity for the five metals sectors. Schatzberg, Eric. 2003. Symbolic Culture and Technological Change: The Cultural History of Aluminum as an Industrial Material. Enterprise & Society 4 (June): 226-71. Abstract: The history of aluminum illustrates how the concept of symbolic meanings can help connect culture with business history. Aluminum's symbolic meanings played a crucial role in its industrial history, largely through the enthusiasm that greeted the introduction and diffusion of the metal. Symbolic meanings influence technological innovation through their role in shaping expectations, a role understood by the historical actors who engage in struggles over the meanings of competing innovations. For aluminum, this struggle centered on the conflict between the material's two major meanings: aluminum as modern and aluminum as ersatz. This debate over meanings has played out differently in aviation, electric wiring, and automobiles. Smith, Gregory R., Frank Lederman, and Ronald S. Jonash. 1999. Alcoas Technology Change Process. Research Technology Management 4 (July-August): 19-25. Abstract: Alcoa's evolving business strategy has transformed its technology organization to better meet the needs of the company's growing global reach. Technology strategies and program sponsorship are now led by Technology Management Review Boards, composed of business and technology leaders from business units with "like-kind" technologies. Technology strategies for these TMRBs, aligned with business units' needs, have been developed and reviewed with the Alcoa Technology Board. A new operational mode is now underway in which technology is managed globally as a "virtual" enterprise-wide, organization. Engineering-oriented activities have been moved into business units and/or to "development factories," closer to operations. The change process has also brought new, extended responsibilities to the role of Alcoa's chief technology officer. Suslow, Valerie Y. 1986. Estimating Monopoly Behavior with Competitive Recycling: An Application to Alcoa. The RAND Journal of Economics 3 (Autumn): 389-403.
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Yang, Sheng-Ping. 2005. Market Power and Cost Efficiency: The Case of the U.S. Aluminum Industry. Resources Policy (March) Abstract: The purpose of this paper is to construct and empirically test a model designed to determine the link between market concentration and price with separate effects of marketpower and cost-efficiency in change of industrial concentration. The analysis is conducted within the context of a single oligopoly, specifically, the US primary aluminum industry. Using time-series data, the model indicates that both market-power and cost-efficiency effects are significant resulting in unwavering prices despite diminishing market concentration in the industry throughout the sample period. Yang, Sheng-Ping. 2002. Identifying a Dominant Firm's Market Power among Sellers of a Homogeneous Product: An Application to Alcoa. Applied Economics 34 (July): 1411-19. Abstract: This paper measures the extent of Alcoa's (dominant firm) market power in the post-war US aluminum industry. An indirect procedure that combines estimation of the fringe supply elasticity, market demand elasticity, and extant market share data generates the estimate of Alcoa's residual demand elasticity which infers the firm's market power. Results show that Alcoa's market power declines with fringe's expansion. Yang, Sheng-Ping. 2001. Market Power in the U.S. Aluminum Industry: A Residual Demand Approach. Review of Industrial Organization 19 (November): 365-80. Abstract: This paper applies a refined market power test to examine market power in the U.S. aluminum industry. The study conducts a two-step analysis in which the inverse residual demand facing the industry is first estimated to generate the associate elasticity to infer market power, and then the inverse partial residual demand facing the industry is estimated to produce the elasticity to measure the potential effect of inter-industry coordination. The results suggest that only the primary industry attains market power, and the market power can exert even without collusion between the primary and secondary industries. Notes: Despite the presence of a secondary aluminum production, the primary aluminum industry was shown to have market power. It was also shown that the primary aluminum industry did not constrain the production of secondary aluminum. The secondary aluminum industry was shown to have a competitive market structure. The evidence showed that the two sectors were not colluding. Further, the authors suggested the idea that the primary aluminum industry is more concerned with metal industries other than the secondary aluminum industry. International Markets Barham, Bradford L., Jean-Paul Chavas, and Oliver T. Coomes. 1998. Sunk Costs and the Natural Resource Extraction Sector: Analytical Models and Historical Examples of Hysteresis and Strategic Behavior in the Americas. Land Economics 74 (November): 42948 Abstract: Sunk costs play a significant role in shaping industry conduct and development outcomes associated with the resource extraction sector. Their role is explored by: 1. developing analytical models that show specifically how sunk costs influence investment behavior and outcomes, and 2. considering the historical experience during major epochs of two important extractive industries. The models demonstrate how sunk costs, in conjunction with uncertainty or strategic behavior, can severely distort efficiency and equity outcomes.
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The Amazon rubber boom and bust and the Pan-American aluminum industry illustrate the significance of sunk costs in the extractive sector and beyond. Notes: This article offers an extensive definition of sunk costs and employs a model of sunk costs to explain firm behavior in two extractive industries. Many examples are given as to why the model applies to the two industries, but no empirical evidence is offered. Blomberg, Jerry, and Stefan Hellmer. 2000. Short-run Demand and Supply Elasticities in the West European Market for Secondary Aluminum. Resource Policy 26 (March): 39-50. Abstract: As the principal user of old scrap, secondary aluminum smelters and refiners have traditionally played a key role in the recycling of aluminum, producing primarily cast material demanded primarily by the automobile industry. The purpose of this paper is to explore the supplydemand relationships in the market for secondary aluminum alloys. Based on a standard microeconomic model, where the determinants of supply and demand are identified, an econometric model, using data from Germany, France, Italy and the UK for the time period 198397, is estimated. The model is used to assess the relative importance of the factors determining the supply and demand of the European secondary aluminum industry. The results show that both the supply and the derived demand for secondary aluminum is own-price inelastic, which is reasonable given the short-run framework. On the demand side, the level of auto production is found to have a substantial impact on the level of secondary aluminum alloy demand. We conclude that the model describes the market reasonably well. The inelastic supply in combination with the sensitivity to changes in the level of auto production provides a tentative explanation of the observed volatility in secondary aluminum prices. Furthermore, the inelastic supply responses indicate that policies aimed at increasing recycling using price-based incentives will be inefficient. Collier, James E. 1946. Aluminum Industry of Europe. Economic Geography 22 (April): 75-108. Dobozi, Istvan. 1996. Russian Gas and Aluminum: Revisiting the Outlook for Consumption and Exports in a Post-Depression Economy. Resources Policy 22 (MarchJune): 123-31. Abstract: This paper examines the export implications for natural gas and aluminum of Russia's ongoing economic transition. The rapid run-up in aluminum exports and the formation of a large capacity surplus (bubble) in natural gas are seen as a direct result of the drastic shifts in the level and mix of aggregate demand, and the marked rise in the real price of these commodities. Based on a set of macroeconomic, structural and price assumptions, the paper provides a set of quantitative projections for the prospective evolution of Russian domestic demand for aluminum and gas, and draws out the potential implications for the international markets. For natural gas, the capacity hangover is seen to deflate by 2000, in tandem with the buildup of domestic consumption. In the case of aluminum, the recently experienced export bubble is predicted to ease back gradually, and eventually disappear by 2005. Duncan, Craig. 1961. The Aluminum Industry in Australia. Geographical Review 51 (January): 21-46. Lindquist, Kjersti-Gro. 2001. The Response by the Norwegian Aluminum Industry to Changing Market Structure. International Journal of Industrial Organization 19 (January): 79-98.
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Abstract: This paper analyses how changes in market structure have affected the margins (measured by the Lerner index) of Norwegian aluminum plants. Instead of showing the expected negative trend, due to increased competition internationally, the margins are found to move procyclically around a constant that significantly exceeds zero. Three explanations for this stability in the levels of the margins are identified; a better exploitation of scale economies, increased productivity and product specialisation which allows Norwegian producer prices to increase more rapidly than the international reference price. Roberts, Mark C. 1996. Metal Use and the World Economy. Resources Policy 22 (September): 183-96. Abstract: One goal of this paper is to develop a model that explains metal consumption over time by the trends in world economic activity. Two alternative models of this relationship are examined over the 1950 through 1994 period for world consumption of aluminum, copper, lead and zinc. Another goal is to determine if there has been an unusual recent surge in the demand for these metals. Total world metal consumption is well explained by the first model which relates metal use to world activity in a few general macroeconomic sectors. However, in many situations even greater aggregation and simplification is required by the lack of recent economic data, resulting in the second model which is the intensity of use method. Both of these models are used to make metal consumption predictions. Comparing actual metal use against the predictions from the models demonstrates that in 1993 and 1994 there was some degree of unexpected and unusually high levels of demand for copper, lead and zinc, but only slightly so for aluminum. A detailed analysis of the demand for copper in 32 nations shows that there does not appear to be any simple explanation as to why some nations have had unusually high rates of copper use, whereas other nations have had unusually low consumption. Samuels, Richard J. 1983. The Industrial Destructuring of the Japanese Aluminum Industry. Public Affair 56 (Autumn): 495-509. Schwarz, H. G. 2003. Modelling Investment and Implementation of Technological Progress in Metal Industries. Theory and Application to the German Primary Aluminum Industry. Resources Policy 29 (September-December): 99-109. Abstract: Existing approaches to modelling investment and implementation of technological progress in metal industries concentrate, mostly, on the investment process for new plants. Modernisation of existing plants is not modelled with the same degree of care. It is, however, the case that the upgrading of existing plants plays a decisive role in the implementation of technological progress and capacity expansion in metal industries. This paper develops an approach to making investment decisions that considers the upgrading of existing plants, as well as the building of new plants. The capability of the model is illustrated by using the example of the German primary aluminum industry. Tcha, M. and G. Takashina. 2002. Is World Metal Consumption in Disarray? Resources Policy 28 (March-June): 61-74. Abstract: The consumption pattern of seven major metalssteel, aluminum, copper, lead, nickel, tin and zinchas frequently violated the law of demand in the late 20th century. This paper examines the patterns of the major metal consumption in the world and seven particular regions and analyzes the disarray of metals consumption. Divisia pricequantity covariance indexes report that the price and quantity consumed moved frequently in the same direction, and the elasticity approach shows that the own-price elasticities are
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extremely small and insignificant, while income elasticities are significant. However, considering the parameters that are crucial in determining the own-price elasticity, this paper concludes that the apparent disarray in metals consumption is not in fact real. SOLID WASTE DISPOSAL AND RECYCLING The Theory of Disposal and Recycling Anderson, Heln, and Maria Huge Brodin. 2005. The Consumers Changing Role: The case of Recycling. Management of Environmental Quality 16 (1): 77-86. Abstract: The emerging material flows of recycled goods have effects on roles, responsibilities and positions of a range of industrial actors, but also on the consumer as a part of the industrial recycling process. The purpose of the paper is to discuss the changing role and position of the final-product customer, the consumer, as recycling is introduced into the supply chain. Design/methodology/approach - This is a conceptual paper, building on theory and concepts from literature on marketing channels, industrial actors and material flows. Those concepts were developed basically for traditional forward material flows, while recycling complicates their application and further development. Findings - Through recycling the consumer is given a new role; as a supplier, however, not as a seller in traditional terms. This new nature of its role complicates the conception of the consumer's position, vis-a-vis the recycler. It also addresses the consumer seen as an economic entity vis-a-vis other actors. Originality/value - Including recycling in the concept of material flow structures and the consumer as an actor in industrial processes becomes more and more vital; both for theory development where this is still novel, and for practice, as the mechanisms of recycling and consumer behaviour need to be better described and understood for both industry and authorities. Anonymous. 1991. Recycling: How to Throw Things Away. The Economist 319 (April 13): 17-20 Abstract: At present, most recycling is done on a modest scale, and the benefit it brings to the environment is less than the economic cost of turning waste back into something useful. The cost of recycling is decided by the cost of collection and the market for what is collected. Without a market for reused materials, recycling is pointless. The US recycling giant Waste Management finds that the economics of recycling makes sense only where landfill costs are high. In some countries, that may soon change, as governments compete to set ambitious recycling targets for their industries, without clear-headed arguments for the costs those targets impose. A logical policy would be to decide what priority to give to the 2 favorite goals of recycling - saving raw materials and having less rubbish - and then ask whether recycling was the best way to achieve either goal. Bruvoll, Annegrete, and Karine Nyborg. 2004. The Cold Shiver of Not Giving Enough: On the Social Cost of Recycling Campaigns. Land Economics 80 (November): 539. Abstract: Governments sometimes try to increase individuals' contributions to public goods through appeals to consumer responsibility, rather than by economic incentives, for example in recycling campaigns. Using standard consumer theory, one would hardly expect such campaigns to work at all; but if consumers are motivated by norms, appeals may work through changing consumers' perception of the norm requirement. However, increasing voluntary contributions through appeals may come at a social cost. The reason is that appeals
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work through imposing a heavier (perceived) responsibility on consumers. This represents a welfare loss, which is not necessarily outweighed by "warm glow" benefits. Calcott, Paul, and Margaret Walls. 2005. Waste, Recycling, and Design For Environment: Roles for Markets and Policy Instruments. Resource and Energy Economics (April). Abstract: Households sometimes have two recycling options. Curbside recycling collections are convenient, but do not provide payment. Alternatively, payment might be available from reverse vending machines or drop-off centers, but some transaction costs would be incurred. We examine policies to encourage efficient product design and recycling in a setting with these two recycling options plus the option of putting recyclables in the trash. We find value in having two parallel recycling options. Constrained optimal outcomes can be attained by combining a depositrefund with a modest disposal fee. Furthermore, producers should not be permitted to keep deposits, that are not claimed by consumers. Notes: The authors present a theoretical model to derive optimal policy for waste, recycling, and design for environment programs. They argue that mandates for what price recyclers receive is not necessary. Further, they argue that deposit-refunds applied to all products encourage consumers to engage in recycling. Calcott, Paul, and Margaret Walls. 2000. Policies to Encourage Recycling and Design For Environment: What to do when Markets are Missing. Discussion Paper 00-30 (June). Washington D.C. Resources for the Future. Abstract: Several studies have shown the efficiency of both a Pigovian tax on waste disposal and a deposit-refund instrument, that is a combined output tax and recycling subsidy. The efficiency of these instruments, however, critically depends on households being paid for recycling. In reality, although most households have access to curbside recycling services, they are not paid for the items they set out at the curb. All items placed in a recycling bin are thus of equal value to a household, and there is no incentive for producers to make their products any more recyclable than what is necessary to be eligible for the bin. This paper characterizes the constrained (second-best) optimum that exists with the missing recycling market and solves for a modified deposit-refund instrument that will achieve the constrained optimum. Callan, Scott J., and Janet M. Thomas. 1997. The Impact of State and Local Policies on the Recycling Effort. Eastern Economic Journal 23 (Fall): 411-413. Abstract: Massachusetts' Integrated Solid Waste Master Plan sets forth the state's 10-year objectives and its strategic policy to promote source reduction and appropriate waste diversion activities. The effectiveness of the program's initiatives is estimated independently and in combination. Although the knowledge base on municipal solid waste recycling is expanding, many issues remain unsolved. A comprehensive, statewide database is used to estimate the primary determinants of the recycling effort. The empirical model incorporates both state and local policy instruments, including unit pricing, as well as an extensive list of socio-economic attributes. Di Vita, Giuseppe. 2005. Renewable Resources and Waste Recycling. Environmental Modeling & Assessment 9 (January): 159.
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Abstract: In this paper we consider an endogenous growth model involving, among other inputs, a renewable resource and secondary materials. Using this analytical framework we explain the effects of waste recycling on the growth rate of the economy, that we take into account. The effects of secondary materials production on the utility and dynamics of renewable resources are also studied. Furthermore, we consider how taxes and subsidies, levied on natural resources and granted for secondary materials, influence the dynamics of the economy during the transitional phase and the stationary growth path. Finally, the validity of Hotelling's rule and the effects of waste recycling on labor productivity are the conclusive topics of our research. Dobos, Imre, and Knut Richter. 2004. An Extended Production/Recycling Model with Stationary Demand and Return Rates. International Journal of Production Economics 90 (August): 311. Abstract: A production-recycling system is investigated. A constant demand can be satisfied with production and recycling. The used items are bought back and then recycled. The nonrecycled products are disposed of. Two types of models will be analyzed. The first model examines the EOQ-related costs and minimizes the relevant costs. The second model generalizes the first model with the introduction of the cost function with linear waste disposal, recycling, production and buyback costs. It is asked whether the pure (either production or recycling) or mixed strategies are optimal and it will be shown that under these circumstances the mixed strategies are dominated by the pure strategies. The paper generalizes a former model proposed by the authors for the case of one recycling and one production batch to the case of arbitrary batch numbers. Duggal, Vijaya G. , Cynthia Saltzman, and Mary J. Williams. 1991. Recycling: An Economic Analysis. Eastern Economic Journal 17 (3): 351-58. Eicher, Thomas. 2005. Imperfect Competition In the Recycling Industry. Metroeconomica 56 (February): 1 Abstract: We study the market allocation in an economy where material is used for producing a consumption good, then recycled and finally landfilled, and where a recycling firm has market power. The material content constitutes an aspect of green product design and affects the recycling costs. Although the recycling firm's supply of recycling services is inefficiently low, it does not abuse its market power to distort the product design allocation. Different policy schemes are proposed which correct for market failures. One promising candidate is a relative recycling standard combined with a consumption good's tax, a material subsidy and a subsidy on recycling services. Eicher, Thomas, and Rudiger Pethig. 2003. Corrective Taxation for Curbing Pollution and Promotion Green Product Design and Recycling. Environmental and Resource Economics 25 (4): 477. Abstract: In this paper we consider a competitive economy with flows of materials from extraction via recycling to landfilling which exhibits distortions due to pollution, external landfilling costs and inefficient product design. The allocative impact of tax-subsidy policies aiming at internalizing the distortions are analyzed when the pertinent tax-subsidy rates were successively raised from zero toward their efficiency restoring levels. Promoting recyclability by greening the product design stimulates recycling as expected. But it also
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increases primary material extraction and - possibly - the total waste flow, and it reduces the recycling ratio. Fullerton, Don, and Thomas C. Kinnaman. 1995. Garbage, Recycling, and Illicit Burning or Dumping. Journal of Environmental Economics & Management 29 (July): 78-91. Abstract: With garbage and recycling as the only two disposal options, we confirm prior results that the optimal curbside fee for garbage collection equals the direct resource cost plus external environment cost. When illicit burning or dumping is a third disposal option that cannot be taxed directly, the optimal curbside tax on garbage changes sign. The optimal fee structure is a deposit-refund system: a tax on all output plus a rebate on proper disposal through either recycling or garbage collection. The output tax helps achieve the first-best allocation even though it affects the choice between consumption and untaxed leisure. Gaudet, Gerard, and Ngo Van Long. 2003. Recycling Redux: A Nash-Cournot Approach. Japanese Economics Review 54 (December): 409. Abstract: We consider an industry characterized by simultaneous competition between the producer of a primary good, and N recyclers who are Cournot rivals. Two important factors influence the effect of recycling on the equilibrium outcome and on the primary producer's market power: the structure of production costs, and the time lag between primary production and recycling. The presence of the recycling sector may increase the market power of the primary producer, as conventionally measured by the Lerner index. Some of the results raise doubts about the appropriateness of the Lerner measure of market power in certain contexts. Huhtala, Anni. 1999. How Much Do Money, Inconvenience and Pollution Matter? Analysing Households Demand for Large-Scale Recycling and Incineration. Journal of Environmental Management 55 (January): 27-38. Abstract: Dwindling landfill space and environmental problems with old landfills have forced municipalities to search for new methods to handle solid wastes. The contingent valuation method is used to study households choice between two alternative waste disposal services, large-scale recycling and incineration, which differ in convenience and air pollution effects. The present study seeks to evaluate how intense people's preferences are in monetary terms. To capture the benefits of waste management, the willingness-to-pay (WTP) estimates are then included in the comparison of disposal options. The motivation is that if only costs are compared and environmental impacts are neglected in evaluating public provision of waste disposal services, choices which are unfavourable from a social point of view may be made. Huhtala, Anni. 1999. Optimizing Production Technology Choices: Conventional Production vs. Recycling. Resource and Energy Economics 21 (January): 1-18. Abstract: The present study examines the optimal use of renewable resources and how optimality is linked to the accumulation of waste stock. Production technology choices are based on a maximization of a discounted stream of net utility over time with respect to constancy of environmental services. When adopting a socially optimal tax-subsidy scheme to price produced goods, the ultimate utility level is determined by how tax revenues and subsidies compensate each other in monetary terms. Therefore, the constraints imposed on the optimal use of economic instruments in promoting recycling when a government budget
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is balanced are also studied. The materials balance structure of the model yields steady-state comparative statics and dynamic envelope results with interesting policy implications. Kinnaman, Thomas C., and Don Fullerton. 1994. How a Fee Per-Unit Garbage Affects Aggregate Recycling in a Model with Heterogeneous Households. Working Paper no. 4905 (October). Cambridge, Mass.: National Bureau of Economic Research. Abstract: This paper develops a utility maximizing model of household choice among garbage disposal, recycling, and littering. The impact of a user fee for garbage collection is modelled for heterogeneous households with different preferences for recycling. The model explains (1) why some households participate in curbside recycling programs even in the absence of a user fee, (2) why other households do not participate, even in the presence of a user fee, and (3) why some households choose to litter when others do not. Household choices are aggregated to determine the effect of a user fee on the community-wide quantities of garbage, recycling, and litter. We show how an increase in the user fee can decrease aggregate recycling. Kinnaman, Thomas C., and Don Fullerton. 1999. The Economics of Residential Solid Waste Management. Working Paper no. 7326 (August). Cambridge, Mass.: National Bureau of Economic Research. Also available in The International Yearbook of Environmental and Resource Economics 2000/2001, edited by H. Folmer and T. Tietenberg (Cheltenham, UK: Edward Elgar, 2000) Abstract: This paper provides a broad overview of recent trends in solid waste and recycling, related public policy issues, and the economics literature devoted to these topics. Public attention to solid waste and recycling has increased dramatically over the past decade both in the United States and in Europe. In response, economists have developed models to help policy makers choose the efficient mix of policy levers to regulate solid waste and recycling activities. Economists have also employed different kinds of data to estimate the factors that contribute to the generation of residential solid waste and recycling and to estimate the effectiveness of many of the policy options employed. Fullerton, Don and Thomas C. Kinnaman, eds. 2002. The Economics of Household Garbage and Recycling Behavior, (Northampton, MA, Edward Elgar) Mainwaring, Lynn. 1995. Primary Resource Use and Voluntary Recycling Schemes: Dynamic Issues in a Global Context. Resource and Energy Economics 17 (December): 341-356 Abstract: A simple dynamic model is developed to show that recycling schemes dependent on voluntary action may, in the long run, lead to greater use of primary materials. The agents are a primary-materials producer and a materials user (interpreted as global South and North). Northern producers of the final good are effectively subsidised by voluntary recycling efforts and their accumulation intensity rises to a degree which may offset the unit savings on primary materials. The most effective way to conserve primary sources in the long run is to reduce the Northern savings propensity. Martin, Robert E. 1982. Monopoly Power and the Recycling of Raw Materials. The Journal of Industrial Economics 30 (June): 405-419.
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Palmer, Karen, Hilary Sigman, and Margaret Walls. 1997. The Cost of Reducing Municipal Solid Waste. Journal of Environmental Economics and Management 33 (June): 128-150. Abstract: This paper studies three price-based policies for solid waste reduction: (i) deposit/refunds; (ii) advance disposal fees; and (iii) recycling subsidies. We parameterize a simple model of waste disposal using supply and demand elasticities from previous literature and 1990 prices and quantities of aluminum, glass, paper, plastic, and steel. We explore opportunities to reduce these wastes through both recycling and source reduction. The results indicate that the deposit/refund is the least costly of the policies and that a 7.5% reduction of the wastes in the model would have been efficient in 1990. Whereas the deposit/refund creates incentives for both recycling and source reduction, the other two policies take advantage of only source reduction or only recycling as opportunities for disposal reduction. Notes: The authors show that a deposit/refund is costs less than a recycling subsidy or advanced deposit fee system. The cost advantage results because it encourages agents to source reduce and recycle. The authors suggest that under certain conditions it may be advantageous to set a single disposal price for all materials. Further research should investigate the incorporation administrative costs into the model. Podolsky, Michael J., and Menahem Spiegel. 1998. Municipal Waste Disposal: Unit Pricing and Recycling. Public Works Management and Policy 3 (1): 27-39. Saltzman, Cynthia, Vijaya G. Duggal, and Mary L. Williams. 1993. Income and the Recycling Effort: A Maximization Problem. Energy Economics 15 (January): 33-38. Abstract: This paper theoretically derives the impact of changes in the household's income on its trash recycling effort. Comparative statics are developed to derive the expression for the change in the amount recycled with a change in income. Each term in the expression is shown to have an economic interpretation. The magnitude and the likely signs of the terms are discussed in determining the direction of the net effect. Finally, empirical estimates from previous research are evaluated within the context of the implications of the theoretical derivations. Smith, Vernon L. 1972. Dynamics of Waste Accumulation: Disposal Versus Recycling. The Quarterly Journal of Economics 86 (November): 600-616. Thomas, Valerie M. 2003. Product Self-Management: Evolution in Recycling and Reuse. Environmental Science & Technology 37 (December): 5297-5302. Abstract: This paper explores the potential to make product recycling and reuse easier by shifting responsibility for product management toward the product itself. Examples range from barcode-enabled Internet sales of used products to RFID-enabled garbage trucks that identify recyclable items and provide rebates. Initial steps toward product self-management have made opportunistic use of product bar codes and Internet markets. In the United States, Internet markets are driving increased reuse of products. In the European Union, recycling and waste management policy is driving the use of radio electronics in waste management. Prospects for product self-management are assessed from both a technological and an economic perspective. The technological analysis indicates that radio-frequency tags offer
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some advantages over bar codes, but their application to product self-management requires considerable investment in the waste management infrastructure. This suggests that early applications of advanced product tags are most suitable for Germany and other countries where the waste management industry has already integrated information technology into its operations. The economic analysis indicates that increased reuse of products can reduce consumption of new products and materials, although on a less than one-to-one basis, simultaneously reducing costs for consumers and deriving more value from existing products. Tucker, Peter, Grant Murney, and Jacqueline Lamont. 1998. Predicting Recycling Scheme Performance: A Process Simulation Approach. Journal of Environmental Management 53 (May): 31-48. Abstract: One of the key issues facing the environmental manager is the sustainable management of solid waste. Recovery of this waste for recycling often presents the best practical environmental option and companies, industry and Government have set a number of targets for its recycling. A particular challenge is encountered when waste recovery depends on voluntary action. Currently, there is no means of predicting the performance of these voluntary schemes in advance. This paper presents a new mathematical model of waste recovery that can potentially enable these predictions to be made. The model utilizes a process simulation approach to describe the material balance from consumption to discard. Flow partitions within the balance are governed by human decisions. In the model these decisions are represented by probability-distribution functions comprising an explained component and an unexplained random component. The explained component is linked to the demographics of the sample population. The key antecedent factors that affect the human decisions have been delineated from a literature survey of the psychological factors affecting recycling. Their representation in the model is consistent with established theories of recycling behaviour. The new model is able to provide simultaneous time-series predictions of scheme participation rates, total weights of material collected and the composition of this material. The model has been tested on a newspaper kerbside collection scheme and has produced good fits to all measured indicators of recycling performance. The model has additionally predicted the existence and correct scale of observed local variations in recycling behaviours between streets. The potential use of the model as an environmentalmanagement tool is discussed with reference to establishing new collection schemes and to the optimization of the performance of existing schemes. Walls, Margaret. 2005. How Local Governments Structure Contract with Private Firms: Economic Theory and Evidence on Solid Waste and Recycling Contracts. Public Works Management & Policy 9 (3): 206-222. Abstract: Local governments often contract out many public services, including solid waste management. Although waste collection contracting is relatively straightforward, recycling is more complicated. Local governments have to figure out how to achieve multiple objectives: low-cost provision of service and a minimum level of service quality, along with attainment of recycling and waste-reduction goals. Who should own key assets, how fully to specify ex ante the service to be providedincluding exactly what materials to collect what prices to charge households, and how to compensate contractors are but three of the difficult questions they must address. In this study, the author summarizes the economics literature on incomplete contracts to shed light on current waste management practices. She then shows
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results from an International City/County Management Association survey of over 1,000 U.S. communities and a detailed analysis of the structure of contracts in seven communities that have achieved high recycling rates. Pricing of Garbage Dinan, Terry M. 1993. Economic Efficiency Effects of Alternative Policies for Reducing Waste Disposal. Journal of Environmental Economics and Management 25 (November): 242-56. Abstract: Reducing the amount of municipal solid waste that is disposed of has become an important policy goal. Previous research argued that a virgin material tax offered an efficient method of meeting this goal, and it continues to be considered as a policy option today. It is demonstrated, however, that a virgin material tax is not an efficient method of reducing waste, but that an alternative policy - a combined disposal tax and reuse subsidy - is. The combined disposal tax and reuse subsidy is theoretically consistent with unit-based household charges for waste disposal, but may have advantages in some situations. Fullerton, Don, and Thomas C. Kinnaman. 1996. Household Response to Pricing Garbage by the Bag. The American Economic Review 86 (September): 971-84. Hong, Seonghoon, and Richard M. Adams. 1999 Household Responses to Price Incentive for Recycling: Some Further Evidence. Land Economics 75 (4): 505. Abstract: The roles of waste disposal service fees and household characteristics in determining recycling rates and waste generation are determined. Using individual household data from Portland, Oregon, a multi-stage household decision process is modeled regarding waste generation and recycling effort under a block pricing system, including the choice of container size and reduced-form demand equations for recyclables, nonrecyclables, and recycling rate. The choice of container size is not affected by the price of waste disposal services, but within a given container size, households respond to a price increase by increasing recycling to avoid charges for waste generation above contracted volumes. Hong, Seonghoon, Richard M. Adams, and Alan H. Love. 1993. An Economic Analysis of Household Recycling of Solid Wastes: The Case of Portland, Oregon. Journal of Environmental Economics and Management 25 (September): 136 Abstract: Solid waste is one of the residuals generated by economic activities. Faced with rising disposal costs, communities are implementing programs to encourage recycling activities. An investigation is undertaken of the role of price incentives and other socioeconomic factors in household recycling. Participation in recycling is modeled as an ordered probit choice using a large sample of households from the Portland, Oregon, metropolitan area. Demand for solid waste collection is estimated using 2-stage least squares. Results indicate that increases in disposal fees encourage recycling, although demand for solid waste collection services is not reduced substantially.
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Miranda, Marie L., Scott D. Bauer, and Joseph E. Aldy. 1996. Unit Pricing Programs for Residential Municipal Solid Waste: An Assessment of the Literature. Environmental Protection Agency <http://www.epa.gov/epaoswer/non-hw/payt/pdf/swlitrep.pdf> (12 July 2005). Abstract: Residents of the United States generate an enormous amount of solid waste -- in quantities that have risen rapidly in the past several decades. While the absolute amount of waste generated has continued to grow, the rate of growth has started to slow down. The decline in per capita waste generation results in part from a concerted focus on waste reduction measures. One program that may affect both waste generation and materials diversion rates is unit pricing of residential solid waste. Unit pricing programs charge households per unit of waste collected. Today, as many as 2000 communities use some form of unit pricing. Many more communities are considering adopting such systems. This paper analyzes the most significant literature on unit pricing programs to determine the degree to which unit pricing programs meet their stated goals. In doing so, the paper highlights those areas where analysts generally agree on the outcomes associated with unit pricing, as well as those areas where substantial controversy remains. Miranda, Marie L., and Joseph E. Aldy. 1998. Unit pricing of residential municipal solid waste: lessons from nine case study communities. Journal of Environmental Management 52 (January): 79-93 Abstract: Communities across the US have implemented unit pricing of residential solid waste, or pay-as-you-throw programs, as an innovative approach to encourage significant waste reduction and diversion.We find that communities experience decreases in annual residential waste landfilled and incinerated after implementation of unit pricing. The communities with larger decreases tend to have higher unit pricing fees and smaller minimum container sizes for collection. Complementary programs, such as recycling and yard waste collections, benefit under unit pricing, as households increase their diversion behaviour. We consider this immediate diversionary behaviour the first stage in a household's response to a unit pricing program. After several years of experience with unit pricing, households enter a second stage where source reduction behaviour becomes more apparent. Unit pricing programs do appear to encourage source reduction behaviour, and concerns about undesirable diversion do not appear to be well founded. These results may provide guidance in statistical analyses of larger sets of unit pricing communities. Notes: Each communitys recycling program included aluminum (see table 6). The effects of the first stage in a households response to a unit pricing program as it relates to the aluminum recycling rate may be of interest. Also, the article mentions, but does not exploit, the difference in unit-based pricing strategies by region: Eastern and Midwestern communities price by the bag or by the sticker while communities on the West Coast use subscription carts. Reschovsky, James D., and Sarah E. Stone. 1994. Market Incentives to Encourage Household Waste Recycling: Paying for What You Throw Away. Journal of Policy Analysis & Management 13 (Winter): 120. Abstract: The use of market incentives to encourage household waste recycling by pricing waste-disposal services according to the quantity of waste generated was investigated. A natural experiment from a New York county was used.
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U.S. Environmental Protection Agency. Unit-Based Pricing in the United States: A Tally of Communities. July 12, 2005. <http://www.epa.gov/payt/comminfo.htm> (12 July 2005). Van Houtven, George L., and Glenn E. Morris. 1999. Household Behavior Under Alternative Pay-As-You-Throw-Away Systems for Solid Waste Disposal. Land Economics 75 (November): 515. Abstract: In 1994, residents of Marietta, Georgia, participated in a pay-as-you-throw solid waste demonstration project. Rather than pay a fixed monthly fee for collection, half of the residents paid a fee per reusable trash can, and half paid for each nonreusable trash bag collected. Data from both a sample of households and city-wide totals indicate that the programs significantly reduced waste set-outs, even after accounting for increases in (unpriced) recycling. The bag program caused larger reductions (36%) than the subscription can program (14%). Rough estimates of the program indicate both savings for residents and social welfare increases. Deposit/Bottle Bills Forster, Bruce A. 1977. Pollution Control in a Two-Sector Dynamic General Equilibrium Model. Journal of Environmental Economics and Management 4 (December): 305-12. Abstract: This paper examines the problem of pollution control as an economy which produces two commodities which have different polluting characteristics. The model sheds light on the change is the optimal combination of commodities such as public transportation as opposed to private transportation, detergents and soap, returnable and nonreturnable bottles. Porter, Richard C. 1978. A Social Benefit-Cost Analysis of Mandatory Deposits on Beverage Containers. Journal of Environmental Economics and Management 5 (December): 351-75. Abstract: This paper presents a social efficiency analysis of mandatory deposits on beverage containers. Five kinds of resource effects are identified, evaluated and added up: (1) litter (both pickup and "eyesore" costs); (2) solid waste collection; (3) container costs; (4) production and distribution costs; and (5) consumer convenience. It is shown that the desirability, on efficiency grounds alone, of mandatory deposits is not indisputable; it depends critically on one's evaluation of (1) the average value of the time it takes consumers to return empty containers and (2) the average value of the "eyesore" benefit of a dramatically reduced (i.e., by around three-fourths) volume of beverage container litter. RECYCLING Curbside Recycling Aadland, David, and Arthur J. Caplan. 2005. Curbside Recycling: Waste Resource or Waste of Resources. <http://www.uwyo.edu/aadland/research/recycle/nsfrecycling.pdf> (January 4, 2006) Abstract: In this paper, we estimate the social net benefits of curbside recycling. Benefits are estimated using survey data on household willingness to pay (WTP) from over 4,000
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households across 40 western U.S. cities. We calibrate WTP for hypothetical bias using an experimental design that contrasts stated and revealed preferences. Cost estimates are compiled from previous studies by the U.S. Environmental Protection Agency, the Institute for Local Self Reliance, as well as from in-depth interviews with recycling coordinators in our sampled cities. Remarkably, we find that the estimated mean social net benefit of curbside recycling is almost exactly zero. Therefore, the decision of whether to implement or maintain a curbside recycling program (CRP) must be done on a city-by-city basis. Making adjustments for hypothetical bias and sampling error, we find that the average calibrated WTP value across the 40 communities in our sample is $2.92 (see bottom of Table 3) A natural next step would be to extend our research to the eastern U.S. where the constraints on landfill space are more binding, and to obtain more precise CRP cost data across a wider variety of communities Note: The data collected in this paper represent a fairly wide spread of cost of curbside collection per household per month ($1.62-$5.10). Aadland, David M., and Arthur J. Caplan. 2003. Willingness to Pay for Curbside Recycling with Detection and Mitigation of Hypothetical Bias. American Journal of Agricultural Economics 85 (May): 492-502. Abstract: In this article, we estimate willingness to pay for curbside recycling. Using a unique data set, we also test for and detect significant hypothetical bias using stated- and revealed-preference data. A short-scripted "cheap-talk" statement is used to mitigate the bias and provide more efficient estimates of the welfare impacts of curbside recycling programs. Notes: The study indicates the raw, average willingness to pay for curbside recycling is $7.00 per month, higher than many previous studies. Correcting for sample and hypothetical bias, the mean willingness to pay falls $1.00 to $6.00. Aadland, David M., and Arthur J. Caplan. 1999. Household Valuation of Curbside Recycling. Journal of Environmental Planning and Management 42 (November): 781-99. Abstract: This paper looks at the willingness to pay for, and participate in, a curbside recycling programme based on a survey of 401 residents in Ogden, Utah. Modifying the Cameron & James (1987) econometric model to fit ordered-interval data, we estimate that the mean willingness to pay for curbside recycling is US $2.05 per month, and that 72% of the residents would willingly participate in such a programme. Furthermore, females, young people, college-educated, those currently recycling without monetary reward, those regarding recycling as beneficial to the community and nation, and those with relatively high incomes are willing to pay the most for curbside recycling. Blaine, Thomas W., Frank R. Lichtkoppler, Keith R. Jones, and Randall H. Zondag. 2005. An Assessment of Household Willingness to Pay for Curbside Recycling: A Comparison of Payment Card and Referendum Approaches. Journal of Environmental Management 76 (July): 15-22. Abstract: Curbside recycling is a tool that communities use to reduce the need for landfill space. This study provides contingent valuation estimates of household willingness to pay (WTP) to continue a curbside recycling program in the face of budget cuts. Comparisons of two forms of the contingent valuation method (CVM) are provided: a single bounded referendum and a payment card. Neither approach emerges as unambiguously superior. Response rates were virtually identical. Both approaches show that support for curbside
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recycling is highly sensitive to price. Regression results from the payment card provided a more thorough identification of socio-demographic variables associated with WTP than the referendum, but the explanatory power of the two regressions did not differ significantly. The referendum estimates of mean WTP exceed those from the payment card, although the disparities are less than those typically reported in the CVM literature. Local policy makers cited the CVM results as influencing their decisions regarding funding options for the future of the program, and seemed to appreciate the fact that the two approaches provided a fairly narrow range of estimates of WTP. In an era when more of the burden of financing of environmental programs is being shifted to the local level, use of CVM to estimate the WTP of consumers for highly disaggregated goods and services designed to achieve environmental improvement will likely become more relevant to local decision makers who are interested in understanding their constituents' views. Caplan, Arthur J., and Therese Grijalva. Household Valuation of a Curbside Recycling Program in the Presence of Quantity-Based Pricing. Working Paper. Abstract: Quantity-based pricing for garbage collection services and recycling programs are becoming increasingly popular methods of meeting municipal solid waste diversion objectives. This article investigates household valuation of a curbside recycling program (CRP) in the presence of a quantity-based pricing scheme for garbage collection services. We use contingent valuation and behavior data from household surveys in a medium-sized town in northern Utah to estimate willingness to pay (WTP) and expected diversion rates for participants and non-participants in a piloted CRP. We find that participants are more likely to reduce their garbage container size under quantity-based pricing, and that they value the CRP less than those who did not experience it. Overall, we find that WTP for curbside recycling is positively related to the likelihood of the household reducing its garbage container size under quantity-based pricing. We therefore conclude that piloting curbside recycling services, combined with household surveys on recycling behavior, provides valuable insight to (1) the feasibility of meeting community waste-diversion objectives and (2) how participation in the pilot program affects the perceived value of the activity. Notes: Authors estimate the fee that maximizes revenue in a voluntary curbside recycling program to be $4.00. Those who participated in the pilot recycling program were willing to pay $2.07 per month compared to $5.14 for those who did not participate. The difference in willingness to pay could reflect problems encountered in the required separation of fibrous and non-fibrous materials but more likely reflects the ultimate mitigation of hypothetical bias. Caplan, Arthur J., Therese Grijalva, and Paul M. Jakus. 2002. Waste Not or Want Not? A Contingent Ranking Analysis of Curbside Waste Disposal Options. Ecological Economics 43 (December): 185-97. Abstract: Recent growth in the municipal solid waste (MSW) stream nationwide has prompted considerable research into alternative waste management programs that would divert a portion of the MSW stream from landfills. Using a sample of 350 individuals from a random digit-dialed telephone survey, a discrete choice contingent ranking (CR) approach is used to estimate household's willingness-to-pay for various curbside trash-separation services in Ogden, UT. Results indicate that Ogden residents are willing to pay approximately 3.7-4.6 cents per gallon of waste diverted for a curbside service that enables separation of green waste and recyclable material from other solid waste. Relative to costly
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waste diversion experiments conducted by other municipalities, the Ogden experience suggests CR is a cost-effective means for municipalities to evaluate waste disposal options. Notes: During the time of this study, limited landfill space and concerns about future disposal options were often being discussed in the local media. It is suggested that the media coverage helped to inform the public and thus enhance the reliability of the contingent ranking. The final choice of city officials was to implement a curbside recycling program at a cost of $1.85 per month for all residents. Creason, Jared, and Michael J. Podolsky. 2001. Economic Impacts of Municipal Recycling. Review of Regional Studies 31 (Fall): 149-64. Abstract: Recycling efforts recovered about 55 million tons of municipal solid waste through approximately 9,000 curbside recycling programs and about 10,000 drop-off centers in 1996 (U.S. Environmental Protection Agency 1998). We investigate economic impacts of this activity using state-level data wherever possible. Our results indicate that, while recycling tends to increase waste management costs, the spending creates an important economic stimulus for the processing and collection industries. These industries can have a small positive effect on economic development. Local officials should be cognizant of the total economic impact of recycling as well as its consequences for the distribution of income. Jenkins, Robin R., Salvador A. Martinez, Karen Palmer, and Michael J. Podolsky. 2003. The Determinants of Household Recycling: A Material-Specific Analysis of Recycling Program Features and Unit Pricing. Journal of Environmental Economics and Management. 45 (2): 294-318 Abstract: This paper analyzes the impact of two popular solid waste programs on the percent recycled of several different materials found in the residential solid waste stream. We examine a unique, household-level data set representing middle and upper-middle income groups in 20 metropolitan statistical areas across the country and containing information on the percent recycled of five different materials: glass bottles, plastic bottles, aluminum, newspaper, and yard waste. We find that access to curbside recycling has a significant positive effect on the percentage recycled of all five materials and that the level of this effect varies across different materials. The length of the recycling program's life also has a significant positive effect on two materials. Making recycling mandatory has an insignificant effect on all five materials. The level of the unit price is insignificant in our regressions, but the effect of unit pricing on recycling activity remains unclear. Notes: The probability that 95% of aluminum used in the household is recycled increases by 33 percentage points with the introduction of a drop off center and by 40 percentage points with the introduction of curbside recycling. Curbside recycling has a greater effect on recycling rates than drop-off centers; convenience is cited as the explanation. Kinnaman, Thomas C., and Don Fullerton. 2000. Garbage and Recycling with Endogenous Local Policy. Journal of Urban Economics 48 (November): 419-42. Abstract: This paper estimates the impact of garbage fees and curbside recycling programs on garbage and recycling amounts. Without correction for endogenous policy, a price per bag of garbage has a negative effect on garbage and a positive cross-price effect on recycling. Correction for endogenous local policy increases the effect of the user fee on garbage and the effect of curbside recycling collection on recycling. Introducing a fee of $1
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per bag is estimated to reduce garbage by 412 pounds per person per year (44%), but to increase recycling by only 30 pounds per person per year. Notes: The authors find that accounting for local policy increases impact of curbside recycling on recycling rates. Higher tipping fees increase the probability of the adoption of a curbside recycling program while deposit-refund programs reduce the probability. The study suggests that a statewide mandate requiring all communities to implement curbside recycling has no effect of a communitys decision to implement a curbside recycling program. The authors were unable to track the remaining 382 pounds of material. Understanding where the 382 pounds goes will have a large impact for future policy makers. Relative to the results obtained from treating these policies as exogenous, we find that this correction increases the estimate impact of a user fee on garbage quantities, and it increases the effect of curbside recycling on the quantity of recycling. That is, previous studies may have underestimated the effects of these programs on garbage and recycling totals. The higher wage increases the opportunity cost of time spent illegally dumping waste, so the net effect on recycling could depend on which type of disposal is more time-intensive. Lake, Iain R., Ian J. Bateman, and Julian P. Parfitt. 1996. Assessing a Kerbside Recycling Scheme: A Quantitative and Willingness to Pay Case Study. Journal of Environmental Management 46 (March) 239-54. Abstract: This paper reports on the results of a contingent valuation survey of a kerbside recycling scheme in the village of Hethersett, South Norfolk, U.K. A "dichotomous choice" (DC) willingness-to-pay question was applied, the setting of the bid levels being determined from a pilot sample of respondents presented with an open-ended question. The study was unique in that, as the scheme was already operational, the respondents had a high level of information about the good that they were valuing, thus minimising many of the common problems facing contingent valuation studies. The survey was undertaken in conjunction with a recycling survey, allowing responses to be related to the use that people were making of the recycling scheme. It was found that socio-economic factors were important in determining whether or not people said they would pay for the scheme, but that, once they had accepted the payment principle, their response to the DC bid level depended mainly upon its magnitude, and, to a lesser extent, on the amount of recycling that they were already undertaking before the scheme's implementation. Mrozek, Janusz R. 2000. Changes over Time in the Decisions to Adopt Curbside Recycling. Atlantic Economic Journal 28 (June): 239-53 Abstract: This study uses observations on California cities to estimate a model of the municipal decision to adopt curbside recycling. The model is estimated separately for two time periods: before and after a state waste-diversion mandate was imposed (that is, early and later adoption). It finds that citizen preferences matter greatly in early adoption decisions, but does not matter at all after the mandate was imposed. Landfill disposal opportunity costs, operating costs, and competitive disposal outlets are not significant in explaining early or later adoption. This study uses county-level data to confirm the results of the municipal-level analysis. Notes: Preferences/Demographics were the most important variables in explaining early adoption. The results showed that the variables measuring the distance to a recycling market and landfill capacity were insignificant. In the later time period, the state mandateand no other variableprovided explanation for adoption.
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Woodward, R., M. Bench, and M. K. Harder. 2005. The Development of a UK Kerbside Scheme Using Know Practice. Journal of Environmental Management 75 (April): 115-27. Abstract: Local authorities in the UK have been set challenging new targets for recycling household waste for 2003/4. This means many of them are urgently trying to determine which parameters in kerbside schemes are most important for increasing recycling rates. In this work information from previous kerbside schemes was used to plan significant improvements in an existing scheme in Horsham District, UK, and a trial was conducted using 1000 homes including a control group. It used fortnightly collection of residual waste with sets of recyclables collected on alternate weeks. The new scheme resulted in improvements of participation rates from 72 to 84%, and set-out rates from 45 to 59% (falling to 76 and 50% respectively, some months later). Details on participation and set-out for different groups of materials are given, as well as levels of excess waste and participation in the collection of garden waste. Municipal Recycling Facilities Davila, Eric, and, Ni-Bin Chang. 2005. Sustainable Pattern Analysis of Publicly Owned Material Recovery Facility in a Fast-Growing Urban Setting Under Uncertainty. Journal of environmental Management 75 (June): 337-351. Abstract: Sustainable development goals are achievable through the installation of Material Recovery Facilities (MRFs) in certain solid waste management systems, especially those in rapidly expanding multi-district urban areas. MRFs are a cost-effective alternative when curbside recycling does not demonstrate long-term success. Previous capacity planning uses mixed integer programming optimization for the urban center of the city of San Antonio, Texas to establish that a publicly owned material recovery facility is preferable to a privatized facility. As a companion study, this analysis demonstrates that a MRF alleviates economic, political, and social pressures facing solid waste management under uncertainty. It explores the impact of uncertainty in decision alternatives in an urban environmental system. From this unique angle, waste generation, incidence of recyclables in the waste stream, routing distances, recycling participation, and other planning components are taken as intervals to expand upon previous deterministic integer-programming models. The information incorporated into the optimization objectives includes economic impacts for recycling income and cost components in waste management. The constraint set consists of mass balance, capacity limitation, recycling limitation, scale economy, conditionality, and relevant screening restrictions. Due to the fragmented data set, a grey integer programming modeling approach quantifies the consequences of inexact information as it propagates through the final solutions in the optimization process. The grey algorithm screens optimal shipping patterns and an ideal MRF location and capacity. Two case settings compare MRF selection policies where optimal solutions exemplify the value of grey programming in the context of integrated solid waste management. Kinnaman, Thomas C. Explaining the Growth in Municipal Recycling Programs: The Role of Economic and Non-Economic Factors. Public Works Management Policy 5 (July): 37-51.
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Abstract: The implementation of thousands of municipal recycling programs in the United States has increased recycling's portion of solid waste from 10% to 30% over the past decade. But the lack of accurate data has spurred a debate over whether the growth in recycling can be attributed to market or nonmarket factors. To address this issue, this article conducts a benefit-cost analysis of a municipal recycling program. Results suggest recycling is costly. So why, then, does it remain popular? This article suggests that local governments could be responding to households that perceive a benefit from recycling services. These benefits are estimated with a contingent valuation survey. Determinants of Recycling Ando, Amy W., and Anne Y. Gosselin. 2005. Recycling in Multifamily Dwellings: Does Convenience Matter? Economic Inquiry 43 (2): 426. Abstract: Factors that decrease the time cost of recycling have significant positive correlations with recycling rates in multifamily dwellings (MFDs). Waste-management experts have previously used anecdotes to infer a link between convenience and wastediversion rates in MFD recycling programs. This article confirms and quantifies that link by applying probit and double-censored tobit analysis to survey data from 214 households in Urbana, Illinois. We find a strong connection between recycling rates and the perceived presence of adequate interior space for processing recyclables, and distance to recycling bins affects container-recycling intensity. The results have implications for cost-effective design of MFD recycling programs. Notes: The literature, together with this article, suggest that multifamily dwellings tend to recycle more when the transaction costs associated with recycling are reduced. Specifically, this article identifies interior space as a main influence of the multifamily dwelling recycling rate. This paper is particularly applicable to Lexington and its large multifamily dwelling population. Coggins, P. C. 1994. Who is the Recycler? Journal of Waste Management and Resource Recovery 1 (2): 69-75. Dersken, Linda, and John Gartrell. 1993. The Social Context of Recycling. American Sociological Review 58 (June): 434-442. Ewing, Gordon. 2001. Altruistic, Egoistic and Normative Effects on Curbside Recycling. Environment and Behavior 33 (November): 733-764. Abstract: How altruistic, normative, and egoistic factors affect households' participation in curbside recycling is shown to depend on how participation is measured. If expressed as whether a household participated, the importance of 2 normative factors (the expectations of household members and of friends and neighbors), an altruistic factor (that recycling helps protect the environment), and an egoistic factor (that recycling is inconvenient) appears similar. However, the altruistic factor has the greatest impact and the egoistic factor the least, because of strong beliefs in curbside recyclings environmental benefit and weak beliefs in its inconvenience. However, when measured by the proportion of different kinds of material a household recycles, the dominant influences are the expectations of other household
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members and inconvenience. The significance of egoistic concerns, namely, inconvenience and cost, is confirmed by negative attitudes toward user fees for garbage collection and toward drop-off depots as alternatives to curbside pickup. Feiock, Richard C., and Johathan P. West. 1993. Testing Competing Explanations for Policy Adoption: Municipal Solid Waste Recycling Programs. Political Research Quarterly 46 (June): 399-419. Folz, David H. 1999. Recycling Policy and Performance: Trends in Participation, Diversion and Costs. Public Works Management & Policy 4 (2): 131-142. Abstract: This panel study examines trends in recycling participation, diversion, and costs among a national sample of municipal programs in 1989 and 1996 and identifies the recycling policies associated with changes in performance. This study finds that local recycling officials made recycling performance comparisons with other jurisdictions and engaged in a rational process of policy experimentation to fine-tune the performance of their programs during the 1990s. The policies that distinguished higher performing recycling efforts included mandatory recycling, curbside collection and free recycling bins, operating composting programs, and banning disposal of yard wastes. Recycling participation increased about 36% to a mean level of 73% by 1996. Diversion increased by 111% to a mean level of 33% by 1996. The total costs for recycling programs rose an average of 220%, but many cities with curbside collection also improved efficiency to the point where unit recycling costs were competitive with the costs of solid waste collection and disposal. Goldenhar, Linda M., and Cathleen M. Connell. Understanding and Predicting Recycling Behavior: An Application of the Theory of Reasoned Action. Journal of Environmental Systems 22 (1): 9-103. Abstract: Longitudinal data from university students (n = 349) was analyzed to test the predictive power of a modified version of the theory of reasoned action (TRA) in the area of recycling behavior [1]. Additionally, gender differences were examined. Overall, the model was supported. Specifically, the impact of attitudes and norms on recycling behavior was mediated by intentions to recycle. Past experience with recycling was directly related to intent to recycle and to recycling behavior. The relationship between norms and intent to recycle was statistically significantly greater for females than for males. Past experience with recycling was directly related to behavior for males only. The findings suggest that genderspecific interventions may be necessary for influencing recycling behavior among adolescents and young adults. Hornick, Jacob, Joseph Cherian, Michelle Madansky, and Chem Narayana. 1995. Determinants of Recycling Behavior: A Synthesis of Research Results. Journal of SocioEconomics 24 (Spring): 105-127. Abstract: This article classifies variables affecting consumer recycling behavior into four theoretical groups: intrinsic incentives, extrinsic incentives, internal facilitators, and external facilitators. These clusters of variables, taken from 67 empirical studies culled from published and unpublished research, were metanalyzed. Of these sets of variables, the strongest predictors of recycling are internal facilitators: specifically, consumer knowledge and commitment to recycling best predicts propensity to recycle. External incentivesin
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particular, monetary rewards and social influenceare the next best predictors. One external facilitator that significantly relates to recycling is frequency of collection. Finally, these relationships are further examined to isolate the impact of moderator variables. Three variables are shown to have some moderating effects: sample size, when the study was done, and mode of data collection. Based on the results, the authors propose a model and provide practical implications for motivating consumer participation in waste separation programs. Jackson, A. L., J. E. Olsen, K. L. Granzin, and A. C. Burns. 1993. An Investigation of the Determinants of Recycling Consumer Behavior. Advances in Consumer Behavior 20: 481-487. Li, Shichao. 2003. Recycling Behavior Under Chinas Social and Economic Transition: The Case of Metropolitan Wuhan. Environment and Behavior 35 (November): 784-801. Abstract: With the end of top-down recycling campaigns and rising living standards in postMao China, public participation in recycling can no longer be taken for granted. This article examines the differences in recycling behaviors between social groups differentiated by age, gender, education, employment, and level of household incomes in WuhanChinas fifth largest city. Based on the analysis of empirical data, gender, age, and household income were identified as three important factors affecting individual recycling behavior in the city. For economic incentives, households with different incomes did take different actions, and individuals in lower income households were more active in recycling. Females, especially older women, play a crucial role in recycling household waste. Given the gender processes in Chinas households, the domestic division of labor is expected to drive housewives to not only shoulder most of the routine housework duties but also to bear the responsibility for recycling. However, the conservation tradition for recycling from the factor of age will likely disappear in the near future with the passing of the current older generation. McCarty, John. A., and L. J. Shrum. 1994. The Recycling of Solid Wastes: Personal Values, Value Orientations, and Attitudes about Recycling as Antecedents of Recycling Behavior. Journal of Business Research 30 (May): 53-62. Abstract: Using a structural modeling framework, this study investigated the relationships of personal values, value orientations, and attitudes about recycling with the frequency of recycling behaviors. The goals of the study were two-fold: (1) a practical concern of providing further understanding about the antecedents of recycling, and (2) a theoretical interest of testing the value-attitude-behavior hierarchy. Consistent with previous work by Homer and Kahle (1988) on values and health food purchases, it was found that values did not have direct relationships with behaviors. Values did, however, have direct influences on attitudes about the inconvenience of recycling and attitudes about the importance of recycling. As expected, attitudes about the inconvenience of recycling had a negative relationship with recycling behaviors. Discussion centers on the implications of these findings for the design and implementation of persuasive communications aimed at increasing recycling of solid wastes. Nyborg, Karine. 2003. The Impact of Public Policy on Social and Moral Norms: Some Examples. Journal of Consumer Policy 26 (September): 259-77. Abstract: Social and moral norms may be required for a sustainable development of private consumption patterns. But how can public policy influence norm-motivated consumer
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behaviour? Based on a recent research project two possible mechanisms for such influence are outlined. The first focuses on behaviour motivated by social approval or disapproval; in such cases, policy can sometimes lead the economy into, or out of, "good" or "vicious" circles, with potentially dramatic consequences for aggregate behaviour. The second mechanism relates to internalized moral motivation; in this case, policy may affect consumers' perception of what morally responsible behaviour means. Explicit inclusion of such mechanisms can change the predictions from economic models in important ways; however, results may depend crucially on whether norms are enforced by social approval or through internalized self-sanctioning. Survey data on considerate smoking behaviour, recycling of household waste, and voluntary community work support several assumptions and predictions from the theoretical models discussed Oom Do Valle, Partrcia, Efignio Rebelo, Elizabeth Reis, and Joo Menezes. 2005. Combining Behavioral Theories to Predict Recycling Involvement. Environment and Behavior 37 (May): 364-96. Abstract: This study merges insights from two well-known attitude-behavior theoriesthe theory of planned behavior and the model of altruistic behaviorwith elements from two broader models from environmental psychologythe model of environmental behavior and the model of environmental concernto propose a comprehensive structural equation model to explain recycling behavior. The specified model is estimated using data from the most recent national survey performed in Portugal on the subject. In general, results support the use of the theory of planned behavior as a basis for modeling recycling participation. However, the integration of this theory with the Schwartz's model is only partially achieved. Another important finding is that recycling behavior is indirectly determined by personal psychological features, such as social conscience, but not by general ecological attitudes. Porter, B. E., F. C. Leeming, and W. O. Dwyer. 1995. Solid Waste Recovery: A Review of Behavioural Programs to Increase Recycling. Environment and Behavior 2: 122-52. Schultz, P. Wesley, Stuart Oskamp, and Tina Mainieri. 1995. Who Recycles and When? A Review of Personal and Situational Factors. Journal of Environmental Psychology 15 (June): 105-21. Abstract: Despite the societal importance of reusing waste materials, few empirical studies have specifically examined recycling behaviors as differentiated from attitudes and intentions. This paper reviews the empirical studies of recycling, summarizes research findings, and identifies areas for future research. The effects on recycling behavior of both personal variables (personality, demographics, and attitudes of environmental concern) and manipulable situational variables are reviewed. Results indicate that high income is a good predictor of recycling, whereas gender and age are not. General environmental concern appears to be related to recycling only when recycling requires a high degree of effort. However, relevant specific attitudes have consistently been found to correlate with recycling behavior. The seven situational variables reviewed (prompts, public commitment, normative influence, goal setting, removing barriers, providing rewards, and feedback) all produce significant increases in recycling behavior. However, there are several major limitations to the research. Results are based largely on single-variable assessments of recycling, and fail to consider interactions with characteristics of the environment or the population involved.
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Steel, Brent S. 1996. Thinking Globally and Acting Locally?: Environmental Attitudes, Behaviour and Activism. Journal of Environmental Management 47 (May): 27-36. Abstract: Using data gathered from a 1992 national study of American public environmental attitudes and behavior, this paper empirically investigates the link between attitudes and selfreported behaviors regarding the environment. Findings suggest that attitude intensity is correlated with self-reported environmental behavior and political activism in environmental issues, controlling for socio-demographic factors. Respondents with environmentally protective attitudes report they are indeed "thinking globally and acting locally". Additional findings suggest that women are significantly more likely than men to participate in environmentally protective behaviors and policy issues, and the gender difference in behavior appears to be greatest among older adults. Taylor, S., and P. Todd. 1995. An Integrated Model of Waste Management Behavior: A Test of Household Recycling and Composting Intentions. Environment and Behavior 27 (5): 603-30. Tilikidou, Irene, and Antonia Delistavrou. 2004. The Influence of the Materialistic Values On Consumers Pro-Environmental Post-Purchase Behavior. American Marketing Association 15: 42-49. Abstract: This paper presents the examination of pro-environmental post-purchase behaviors such as recycling, petrol conservation, product reuse, second-hand sale, donation, and maintenance. It was found that consumers who hold higher levels of positive recycling attitudes and most notably lower levels of materialistic values are those who enhance proenvironmental post-purchase behavior. Consumers who obtain satisfaction and happiness by material possessions are more likely to be self-centered and are less likely to obtain satisfaction by engaging in pro-environmental activities. These activities benefit society in general and future generations, but do not offer any direct pleasure to the individual performing the behavior. Recycling attitudes were investigated through 15 items, measured on a 7-point Likert scale. Materialism comprised of 27 items in total, 6 adopted from Richins (1987) and 21 adopted from Belk (1995), all measured on a 7-point Likert scale. Tucker, P., J. Lamont, G. Murney, and D. Smith. 1998. Material Capture Rates in Household Waste Recycling Schemes. Environmental and Waste Management 1 (3): 16981. Tucker, P., G. Murney, and J. Lamont. 1997. Participation in Recycling: A Comparative Study of Four Kerbside Collection Schemes. Journal of Waste Management and Resource Recovery 4 (1): 11-26. Walls, Margaret, Molly Macauley, Soren Anderson. 2005. Private Markets, Contracts, and Government Provision: What Explains the Organization of Local Waste and Recycling Markets? Urban Affairs Review 40 (May): 590-613. Abstract: We study determinants of market organization of local public services by an empirical examination of one of the most visible municipal services, residential waste management. Using a multinomial logit model and data for 1,000 U.S. communities, we explore the effect of political influence, voter ideology, environmental constraints, production costs (i.e., economies of density), and contracting transaction costs on a
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communitys choice of market arrangement for waste collection and recycling. We find that cost factors are a significant determinant of service delivery method. In contrast, few of the political variables are statistically significant. These results hold for our models of both waste and recycling, lending further evidence to the conclusion that local governments emphasize costs when choosing between private and public provision. Aluminum Recycling Darren, Grant. 1999. Recycling and Market Power: A More General Model and Reevaluation of the Evidence. International Journal of Industrial Organization 17 (January): 59-80. Abstract: A more general model of the recycling problem is presented and is used to reexamine the Alcoa antitrust case of 1945. There are 3 primary empirical results: 1. In the Alcoa scenario, the recycling problem had been in a steady state since the early 1920s. 2. The primary source of Alcoa's market power, in contrast to previous work, was that most of the aluminum sold by Alcoa was used in goods that were not economical to recycle. 3. The existing, competitive secondary market was welfare-reducing, relative to a monopoly in all aluminum production. Nijhof, G. H. 1994. Aluminum Separation Out of Household Waste Using the Eddy Current Technique and Re-use of the Metal Fraction. Resources, Conservation and Recycling 10 (April): 161-169. Abstract: Secondary aluminium requires only 5% of the energy compared to primary metal. Use of recycled aluminium means energy saving and a better use of resources. Therefore recycling activities are becoming more and more important. The recycling rate of production scrap is high, however, separation of non ferrous materials from other waste streams is difficult, particularly for packaging materials. In different European countries there are large differences in the government legislations for the re-use of packaging materials. Swan, Peter L. 1980. Alcoa: The Influence of Recycling on Monopoly Power. The Journal of Political Economy 88 (February): 76-99. Notes: Under the reasonable assumption of diminish return to effort and hence rising marginal recycling costs, a social loss on the production side is induced in the Alcoa case as competitive recyclers seek the monopoly rent accruing to Alcoa as it raises the price of aluminum above the marginal cost of virgin production. High cost recycled aluminum thus replaces low cost virgin, but there is a possible social gain on the consumption side if the expansion in the secondary aluminum output is not offset, or more than offset, by contraction in Alcoas production of virgin ingot. It is suggested that the existence of the competitive recycling sector has brought a slight gain to consumers compared with the pure monopoly solution. International Experience Alupro. Website of the UK Aluminium Packaging Recycling Organisation. <http://www.alupro.org.uk/> (12 July 2005).
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Chan, Kara. 1998. Mass Communication and Pro-Environmental Behaviour: Waste Recycling in Hong Kong. Journal of Environmental Management 52 (April): 317-25. Abstract: Treatment of domestic waste has been one of the major environmental problems in Hong Kong. The Government has a stated policy to advocate the minimization of waste disposal through the encouragement of waste reduction, re-use and recycling. The current study applies Ajzen's theory of planned behaviour to predict behavioural intention and actual behaviour of voluntary use of waste recycling receptacles. A systematic random sample of 173 household members in a public housing estate were interviewed. The results indicated that attitude was the major factor in predicting behavioural intention, followed by behavioural control and social norms. Attitude, subjective norm and perceived control together explained 44% of the variance of behavioural intention. Perception of mass media as a major source of subjective norm was first introduced and tested. Mass communication stood out as one of the major sources of influence in establishment of subjective norms. The study has the implication that more publicity messages should be put on the mass media to promote green behaviours. Chung, Shan Shan, and Chi Sun Poon. 1996. The Attitudinal Differences in Source Separation and Waste Reduction between the General Public and the Housewives in Hong Kong. Journal of Environmental Management 48 (November): 215-27. Abstract: As in most Western communities, source separation of household waste has gained popularity among the general public in Hong Kong. Despite an increasing number of married women involved in full time paid work, women are most involved in waste management in most Hong Kong families. Thus, the attitude of this social group housewivesis decisive in the success of the source separation of household waste and other recycling related activities. Attitudinal differences between housewives and the general public were found with respect to the amount of avoidable waste, the incentive level of waste collection charges, the acceptable level of a green premium, the support of source separation of household waste and a depositrefund system on beverage containers and cell batteries. Although housewives were also found to support waste recycling and reduction, the intensity of support was more modest in general than in the rest of the Hong Kong population, with the exception of the depositrefund scheme for beverage containers. At the same time, economic incentive is a more powerful drive for housewives than for the general public at large for enhancing waste recycling and reduction. Donnelly, James E. 2002. Numbers Never Lie, But What Do They Say? A Comparative Look at Municipal Solid Waste Recycling in the United States and Germany. Georgetown International Environmental Law Review 15 (Fall): 29-53. Abstract: This paper looks at efforts within the United States to address the issue of municipal solid waste. It briefly explores the history of the law in the United States, some specific strategies used by individual states, and the waste disposal system of Germany, a country often thought of as a world leader in recycling. This paper questions whether any lessons can be learned from the German model. Although the German and American approaches to handling municipal solid waste are very different, they lead to many of the same results. The differences that arise shed little light on the American situation because of a lack of markets for the scrap material. Germany's success, accomplished fairly easily, with transport and secondary packaging, can offer guidance for recycling in the United States. In
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addition, it would be guidance into an area in which industry is already interested. Some experts argue that the take back provisions found in Germany could not work in the U.S. system. While these arguments may work well to counter the wholesale adoption of the German plan, the longstanding practices of recycling waste oil and lead-acid batteries are examples of the take back principle at work. Ferrara, Ida, and Paul Missios. 2005. Recycling and Waste Diversion Effectiveness: Evidence from Canada. Environmental & Resource Economics 30 (February): 221-38. Abstract: In this paper, we investigate the relationship between recycling policy options and recycling behavior to study the most effective methods of diverting post-consumer waste from landfills. We employ data from a unique, micro-data set collected from households in communities across Ontario, Canada. We estimate the relationships between several commonly recycled materials (newsprint, glass, plastics, aluminum cans, tin cans, cardboard, and toxic chemicals) and individual household characteristics, recycling program attributes, and garbage collection financing methods. We find that user fees on garbage collection have significant impacts on recycling levels for all materials except toxic chemicals, and mandatory recycling programs on particular items have significant effects on recycling for almost all materials. Limits on the amount of garbage that can be placed at the curb, and providing free units under user fee systems, however, generally have a negligible or detrimental impact on recycling. Notes: This paper suggests that moving from biweekly recycling collection to weekly recycling collection increases the probability of collecting all eligible recycling material. This information, coupled with other studies, seems to suggest that the optimal collection rate is weekly, with the collection of trash. Contrary to other studies, this one provides evidence that making recycling mandatory will increase the probability that materials will be recycled. Of all public policy variables studied, aluminum recycling is influenced most by user fees for garbage. Gonzlez-Torre, Pilar L., B. Adenso-Daz, and Alex Ruiz-Torres. 2003 Some Comparative Factors Regarding Recycling Collection Systems in Regions of the USA and Europe. Journal of Environmental Management 69 (October): 129-38. Abstract: This paper analyses whether differences in selective waste collection systems used commonly in Europe and America influence people's recycling habits and their opinions about the service they are offered. We study certain characteristics of the collection systems used in two specific areasthe Principality of Asturias (Northern Spain) and El Paso county (USA)with very different practices. It likewise considers the extent to which such differences influence the recycling habits of the public at large, as well as their perceptions of the waste collection services. In order to carry out the research and to compare the influence of the above-mentioned factors in each case, personal interviews were held in the street in the two areas under study (1066 and 1068 interviews, respectively). Austrians needed less time to dispose of waste and separate items, being one of the reasons why this group has developed the habit of selective separation to a greater degree than El Pasoans. Notes: This paper provides some evidence that the higher recycling rate in Asturias is due to lower amount of time required to recycle as compared with El Paso. The results seem to be intuitive rather than demonstrable through the data collected. The stark difference between the two areas studied, both in terms of culture and recycling programs, seems to be
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confounding rather than helpful. This paper has good references on the differences in recycling in different nations. Hambraeus, Tsemave O. Recycling in Sweden: Not Just for Households. May 6, 2005. <http://www.sweden.se/templates/cs/Article____11856.aspx> (12 July 2005). Hong, Seonghoon. 1999. The Effects of Unit Pricing System Upon Household Solid Waste Management: The Korean Experience. Journal of Environmental Management 57 (September): 1-10. Abstract: Initial effects of adoption of a unit pricing system paired with aggressive recycling programmes appear to be substantial. This paper explores the impact of price incentives under the unit pricing system on household solid waste generation and recycling in Korea. We employ a simultaneous equation model considering the feedback effects between total waste generation and recycling. Estimation results using 3017 Korean household survey data indicate that a rise in waste collection fee induces households to recycle more wastes. However, this effect is partially offset by decreases in source-reduction efforts due to the feedback effects, resulting in relatively lower price elasticity of demand for solid waste collection services. This implies that household demand for solid waste collection services will not decrease much with additional increases in the collection fee, unless further recycling incentives such as more frequent recyclable pickup services are accompanied. Hosking, S. 1998. An Economic Case for Regulating against the Use of Non-deposit Carrying Glass Containers of Beverage in South Africa. Journal of Economic and Management Sciences 1 (September): 422-45 Abstract: As a result of minimal private cost many people dispose of non-deposit bearing glass containers in ways which cause glass pollution: hazardous broken bottles and litter. This pollution imposes costs on users of the affected environment and on municipalities, which have most of the responsibility to clean up, although in South Africa the two main glass packaging producers also play a role by operating a recycling system. A case study was carried out in the Port Elizabeth area in which exploration is made of the glass that does not get recycled and an intuitive analysis is made of the costs of different options for managing recyclable glass waste. It is concluded that the case deserves further investigation for introducing legislation in South Africa making bottle deposits mandatory. Martin, Adrian, and Ian Scott. 2003. The Effectiveness of the UK Landfill Tax. Journal of Environmental Planning & Management 46 (September): 673-89. Abstract: This review of the UK's landfill tax generates two main contributions to our understanding of waste management in the UK. First, the review identifies areas in which the tax is least effective and considers policy implications associated with this. In particular, the tax has failed to significantly change the behaviour of domestic waste producers and SMEs. Second, it identifies continued information gaps that might be addressed. In particular, the landfill tax is intended to contribute to a transition away from landfilling of waste, towards recovery, recycling, re-use and waste minimization. This review of available evidence finds that there is reasonable data to monitor progress towards recycling, but not for re-use or waste minimization.
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Mee, Nicky, and Debbie Clewes. 2004. The influence of corporate communications on recycling behaviour. Corporate Communications 9 (4): 265-74. Abstract: This paper is a case study which explores the impact of a variety of communication tools and the way in which they influence the recycling behaviour of residents in Rushcliffe Borough Council. Despite the fact that household waste is growing at a significant rate, very little empirical research has been conducted to explore the role that effective corporate communications can play in influencing attitude change and recycling behaviour or to determine which communication tools are considered to be most effective by local residents. The research reported is longitudinal involving three large-scale surveys assessing attitudes to current refuse collection, the recycling service and the effectiveness of the various communication tools used. Results are presented together with recommendations for improving the effectiveness of any council's corporate communications strategy for increasing recycling rates. Speirs, D., and P. Tucker. 2001. A Profile of Recyclers Making Special Trips to Recycle. Journal of Environmental Management 62 (June): 201-20. Abstract: The aims of the research were to: (1) establish a profile of special recyclers, i.e. those who make special trips by car to recycle their household waste; and (2) establish whether the environmental burden resulting from their activities presents a significant environmental problem than needs pro-active management. The research was undertaken through surveys of recyclers at supermarket recycling centres and at civic amenity sites in Glasgow and across Ayrshire in south-west Scotland. Twenty-two percent of civic amenity recyclers made special trips to recycle, whilst at supermarkets less than 10% made special journeys. Those making special journeys tended to make shorter journeys than those combining recycling with another activity. Special recyclers also tended, on average, to recycle more items and bring greater weights of recyclable material per trip. No demographic difference was found between the special recyclers and the non-specials. The environmental impact of consumer journeys to recycle was estimated from the statistic: The total distance travelled by car by special recyclers/the total weight deposited by all recyclers. For the sites of this survey, this statistic ranged in value from 9 km tonne1to 106 km tonne1. The lowest impacts of 9 km tonne1were at a supermarket site in a small town with a predominantly local catchment. The highest impacts were at a civic amenity site, in a major town, also used by residents from satellite communities. Over 50% of special recyclers cited nearness as their prime reason for choosing a particular site, compared with 32% of non-specials. Although special recyclers in Ayrshire did appear to act reasonably responsibly (environmentally), their activities produced additional environmental burden. Simulation studies demonstrate that up to 34% reduction in this burden may be possible through encouraging longer intervals between recycling trips. Three quarters of the environmental burden was attributable to less than 5% of the overall recycling population. Notes: The authors conclude that the special recycler (one making special trips specifically to recycle) is demographically indistinguishable from other recyclers. The negative environmental impact from making the special trip to recycle is said to be negligible. Special recyclers tend to be motivated by the nearness of the recycling center and the number of materials the center accepts.
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Woodward, R., M. Bench, and M. K. Harder. 2005. The Development of a UK Kerbside Scheme Using Known Practice. Journal of Environmental Management 75 (April): 115-27. Abstract: Local authorities in the UK have been set challenging new targets for recycling household waste for 2003/4. This means many of them are urgently trying to determine which parameters in kerbside schemes are most important for increasing recycling rates. In this work information from previous kerbside schemes was used to plan significant improvements in an existing scheme in Horsham District, UK, and a trial was conducted using 1000 homes including a control group. It used fortnightly collection of residual waste with sets of recyclables collected on alternate weeks. The new scheme resulted in improvements of participation rates from 72 to 84%, and set-out rates from 45 to 59% (falling to 76 and 50% respectively, some months later). Details on participation and set-out for different groups of materials are given, as well as levels of excess waste and participation in the collection of garden waste. Vigso, Dorte. 2004. Deposits on Single Use Containers A Social Cost-Benefit Analysis of the Danish Deposit System for Single Use Containers. Waste Management & Research 22 (December): 477-87. Abstract: This study compares the social costs and environmental benefits of collecting single use drink containers through the Danish deposit system with the social costs and benefits of treating the containers as part of the municipal waste-disposal system. It focuses on single use polyethylene terphthalate and glass bottles, and steel and aluminium cans. The social costs of handling these containers in the deposit system includes the costs of collection, sorting, and transportation, adjusted against the profit from selling the collected material for recycling. The social cost of incinerating these containers as municipal waste consists of the expenses for the collection, incineration of the containers and disposal of ashes. If there is any income from energy generation accompanying incineration, this is adjusted against costs. The main environmental effects related to both strategies are quantified, valuated and included in the assessment. The results of the analysis show that there are significant social costs compared to the benefits connected with the new deposit system. This is true for all four types of single use drink containers examined. All in all, Denmark bears a net social cost of 6.7 to 8.1 million Euros per year compared to a baseline of incineration with energy recovery. APPENDIX Agarwal, Aman, J. H. W. Penm, and R. D. Terrell. 2003. VECM Modeling with Exogenous Variables and Metal Price Formation in Panel Data Using the Example of Aluminum. Finance India 17 (June): 481-94. Abstract: The recent advances in zero-non-zero patterned Vector Error Correction Modelling with Exogenous Variables (VECMX) are utilised to test two hypotheses. These are important for price formation in the world aluminium market. The first hypothesis is the presence of a long-term cointegrating relationship between aluminium production & consumption. We find conclusive support for this hypothesis, and this relationship is significant in explaining the price formation processes. The second hypothesis is the existence of a long-term cointegrating relationship between aluminium consumption and general economic activity. Strong support for this long-term relationship is also found, although its effects on price formation appear to be mostly indirect. The out-of-sample
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forecasting performance of the VECMX is examined against an unrestricted vector autoregressive process, and the outcomes indicate the validity of the VECMX. Blanchard-Gaillard, Denis, Candace Arai Yano, Janny M. Y. Leung, and Mathew J. Brown. 1999. Discrete deterministic and stochastic blending problems with two quality characteristics: Aluminum blending. IIE Transactions 31 (October): 1001 Abstract: This research is motivated by the problem of assigning the output of electrolytic cells to oven batches in the production of aluminum, so as to maximize the expected revenue. Cell output cannot be split between batches, and the batch sizes are constrained. Each batch is classified into a revenue category based on the levels of two impurities. The impurity levels differ from cell to cell and additional random quantities of impurities are added during the oven process. Optimal and heuristic solution approaches are developed for the deterministic version of the problem (known amount of impurities) and they are used as the basis for a heuristic procedure for the stochastic version. Using data from a high-grade aluminum manufacturer, it is demonstrated that the approach finds near-optimal solutions to the stochastic problem, with significant gains over solving deterministic versions in which the stochasticity is modeled only approximately Boon, Jane E., Jacqueline A. Isaacs, and Surendra M. Gupta. 2000. Economic Impact of Aluminum-Intensive Vehicles on the U.S. Automotive Recycling Infrastructure. Journal of Industrial Ecology 4 (Spring): 117-34. Abstract: The use of aluminum alloys in automobile production is growing as automakers strive to lower vehicle fuel consumption and reduce emissions by substituting aluminum for steel. The current recycling infrastructure for end-of-life vehicles is mature, profitable, and well suited to steel-intensive vehicles; increased use of cast and wrought aluminum, however, will present new challenges and opportunities to the disassembler and shredder, who now comprise the first stages of the vehicle recycling infrastructure. Using goal programming techniques, a model of the auto recycling infrastructure is used to assess the materials streams and process profitabilities for several different aluminum-intensive vehicle (AIV) processing scenarios. The first case simulates the processing of an AIV in the current recycling infrastructure. Various changes to the initial case demonstrate the consequences to the disassembler and shredder profitabilities whenever the price of nonferrous metals changes; greater fractions of the vehicle are removed as parts; the parts removed by the disassembler have increased aluminum content; the quantity of polymer removed by the disassembler is increased; the disassembly costs increase; the disposal costs for shredder residue and hazardous materials increase; the shredder processing costs increase; and different AIV designs are considered. These profits are also compared to those achieved for a steel unibody vehicle to highlight the impact of introducing AIVs into the existing infrastructure. Results indicate that the existing infrastructure will be able to accommodate AIVs without economic detriment. Brunetti, Celso, and Christopher L. Gilbert. 1995. Metals price volatility, 19721995. Resource Policy 21 (December): 237-54. Abstract: We use a complete record of daily price quotations from the London Metal Exchange (the LME) to construct a set of monthly volatility measures over the 24-year period 19721995 for the six LME metals-aluminium, copper, nickel, lead, tin and zinc (data
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are from 19831995 for aluminium and nickel). Despite a widely held opinion to the contrary, volatility has shown no tendency to increase over this period. In particular, except in the case of tin, volatility levels were beneath their historic average levels over 19931995, a period of increased speculative interest in the metals markets. Nevertheless, volatility is itself very volatile. We develop a model which relates metals volatility to the metals balance, as manifest in the stock-consumption ratio. This model appears to account for much of the medium-term movement in volatility, in particular in the aluminium, nickel and zinc markets. The model attributes the modest rise in volatilities over 19931995 relative to 19901992 to tighter metals balances. Bureau of International Recycling. July 6, 2005. <http://www.bir.org/> (12 July 2005) Collection Efficiency: Strategies for Success. December 1999. Environmental Protection Agency <http://www.epa.gov/epaoswer/non-hw/muncpl/coll-eff/k99007.pdf> (12 July 2005). Complex Recycling Issues: Strategies for Record-Setting Waste Reduction in Multifamily Dwellings. October 1999. Environmental Protection Agency <http://www.epa.gov/epaoswer/non-hw/reduce/f99022.pdf> (12 July 2005). Container Recycling Institute. 2003. < http://www.container-recycling.org/> (12 July 2005). Illinois Recycling Economic Information Study. December 2001. <http://www.illinoisbiz.biz/com/recycling/pdf/IL%20REI%20study%20DCEO.pdf> (12 July 2005). Measuring Recycling: A Guide for State and Local Governments. September 1997. Environmental Protection Agency <http://www.epa.gov/epaoswer/nonhw/recycle/recmeas/docs/guide.pdf> (12 July 2005). Nestor, Deborah V. 1994. Issues in the Design of Recycling Policy: the Case of Old Newspapers. Journal of Environmental Management 40 (March): 245-56. Abstract: This study investigates key issues in the design of policy to promote recycling of old newspaper (ONP). Empirical evidence that policies to increase supply will not give rise to a large increase in ONP recycling is presented. Also, questions in the design of alternative policy measures are addressed first, by calculating baseline recycling rates for the U.S. newsprint industry. It is found that, all things remaining the same, the newsprint industry will reach a recycling rate of about 40% by the year 2000. This suggests that the legislatively-determined recycling targets are often insufficient to induce levels of ONP recycling beyond those that would occur in the absence of government intervention. This study also includes analysis of other factors that influence the rate of ONP recycling in order to pinpoint the variables that will, if targeted by policy, lead to the largest increase in ONP recycling. Nicholls, Miles G. 1995. Aluminum Production Modeling A Nonlinear Bilevel Programming Approach. Operations Research 43 (March-April): 208-18.
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Abstract: A nonlinear bilevel programming model of an aluminum smelter that is capable of representing all the major production processes is developed. The model encompasses all the areas of the smelter which operates in a multilevel way. However, as shown, it can be reduced quite simply to a bilevel programming problem. The problem specification involves nonlinearities with respect to the variables and the presence of ratios among the constraints. The problem is also characterized by a 2-way material flow in the production process. A relatively simple solution algorithm that facilitates the attainment of the global optimum is developed. While the model developed together with the solution algorithm appear simple, considerable effort was required to identify the fundamental relationships in the aluminum smelting process, quantify them, and then develop appropriate expressions to represent them. It is believed that the solution of this class of nonlinear bilevel programming problems will have implications for other applications. Recycle: You Can Make A Ton of Difference. April 1992. Environmental Protection Agency <http://www.epa.gov/epaoswer/non-hw/recycle/recy-ton.pdf> (12 July 2005). Recycling Means Business. September 1995. Environmental Protection Agency <http://www.epa.gov/epaoswer/non-hw/recycle/business/rmb.pdf> (12 July 2005). Recycling Works: State and Local Solutions to Solid Waste Management Problems. April 1999. Environmental Protection Agency <http://www.epa.gov/epaoswer/nonhw/recycle/recycle.pdf> (12 July 2005). Schmidt, Edie, Maqbool Dada, James Ward, and Duane Adams. 2001. Using Cyclic Planning to Manage Capacity at ALCOA. Interfaces 31 (May-June): 16-27. Abstract: ALCOA makes aluminum-tubing products to order. The product lines' success caused a backlog of customer orders and long customer lead times. This problem was exacerbated by frequent machine breakdowns at a bottleneck operation. ALCOA implemented cyclic planning to improve capacity management. The results were immediate and dramatic. Over eight months, output increased by over 20%, almost eliminating the backlog of customer orders. The cyclic planning implementation resulted in additional benefits throughout the organization, including improved workforce planning and better machine maintenance scheduling. Stein, Steven R. 1999. Municipal Curbside Recycling: Analyzing the Obstacles to Sustainability. State University of New York College of Environmental Science and Forestry 1-56. Abstract: Recycling has evolved from a niche industry into a mainstream approach used by government to achieve environmental goals that have eluded traditional waste management strategies. The 1990s produced an explosion of curbside recycling systems that are achieving significant goals. The advent of a conservative Congress has brought more accountability of government including recycling programs. As these programs deal with budget cuts, recycling faces downsized programs or the search for new revenue. This thesis will identify strategies to deal with this financial urgency. The thesis will focus on the discussion of a mandatory 40% recycled content requirement for newsprint used by publishers in the U.S. An examination of this proposed policy will show why this is a workable method of stabilizing the markets for Old Newspapers and why this can help municipalities plan
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recycling budgets better and fund their programs more predictably and at a lower cost than current circumstances allow. The Swedish Environmental Protection Agency. <www.internat.naturvardsverket.se> (12 July 2005). Waste Prevention, Recycling, and Composting Options: Lessons From 30 Communities. February 1994. Environmental Protection Agency <http://www.epa.gov/epaoswer/nonhw/reduce/recy-com/toc.pdf> (12 July 2005). Watkins, Clinton, and Michael McAleer. 2004. Econometric Modelling of Non-ferrous Metal Prices. Journal of Economic Surveys 18 (December): 651-701. Abstract: This article evaluates the significance of the empirical models and the distributional properties of prices in non-ferrous metal spots and futures markets published in leading refereed economics and finance journals between 1980 and 2002. The survey focuses on econometric analyses of pricing and return models applied to exchange-based spot and futures markets for the main industrially used non-ferrous metals, namely aluminium, copper, lead, nickel, tin and zinc. Published empirical research is evaluated in the light of the type of contract examined, frequency of data used, choice of both dependent and explanatory variables, use of proxy variables, type of model chosen, economic hypotheses tested, methods of estimation and calculation of SEs for inference, reported descriptive statistics, use of diagnostic tests of auxiliary assumptions, use of nested and nonnested tests, use of information criteria and empirical implications for non-ferrous metals. Ye, Meng-Hua, and David I. Rosenbaum. 1994. Stochastic (s, S) pricing and the U.S. Aluminum Industry. Eastern Economic Journal 20 (Winter): 107. Abstract: The original (s,S) pricing models were deterministic models which assumed firms pay a fixed dollar-cost when changing nominal prices. A model extends the literature by: 1. transforming the fixed adjustment cost into an impact on demand, and 2. considering a stochastic inflation process. The theoretical results show that the optimal upper real-price boundary, lower real-price boundary, initial price, and length of time that the nominal price is fixed all depend on the instantaneous mean and variance of the rate of change in the real price. The results also show that for a given instantaneous variance, the boundaries diverge as the instantaneous mean becomes more negative. Data from the US aluminum industry are used for a limited test of the theoretical results. When the instantaneous mean is controlled, an increase in variance tends to increase the distance between the real price boundaries and the sojourn time.
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CSAI White Paper

The Economics of Aluminum Recycling

CSAI White Paper Bloomquist & Koford 2006

The Economics of Aluminum Recycling

CSAI White Paper Bloomquist & Koford 2006

Solid Waste and Recycling

CSAI White Paper Bloomquist & Koford 2006

US Disposal Trends 1989-2002

MSW Landfilled (%)

MSW Recycled (%)

MSW Incinerated (%)

CSAI White Paper Bloomquist & Koford 2006

Kentucky Disposal Trends 1993-2000

MSW Recycled (%)

MSW Incinerated (%)

Source: Biocycle Magazine, various issues.

CSAI White Paper Bloomquist & Koford 2006

Figure 3: Trends in the U.S. Aluminum Can Recycling Rate, 1992-2004.

The Aluminum Can Recycling Rate, 1992-2004

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

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Real Price of Recyclable Materials

Real Recyclable Materials Price

Figure 4: Trends in the Real Price of Recyclable Materials, 1987-2005.

Source: Calculated from U.S. Bureau of Labor Statistics data.

CSAI White Paper Bloomquist & Koford 2006

Real Price Index for Used Aluminum Cans

Source: Calculated from U.S. Bureau of Labor Statistics data.

CSAI White Paper Bloomquist & Koford 2006

Real Used Aluminum Can Price Index

Real Alum Can Price 100

Source: Calculated from U.S. Bureau of Labor Statistics data.

CSAI White Paper Bloomquist & Koford 2006

Real Can Price & Aluminum Can Recycling Rate

60 A lu m in u m C an R ecyclin g R at e 1 R eal C an P rice In d ex 50 0.8 40 0.6 30 0.4 20

Real Can Price

Aluminum Can Recycling Rate

Source: Calculations based on U.S. Bureau of Labor Statistics data

CSAI White Paper Bloomquist & Koford 2006

The Socially Optimal Rate of Recycling

See Kinnaman and Fullerton (1999).

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Recommendations for Further Research

CSAI White Paper Bloomquist & Koford 2006

< http://www.uwyo.edu/aadland/research/recycle/nsfrecycling.pdf >

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CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006

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CSAI White Paper Bloomquist & Koford 2006

CSAI White Paper Bloomquist & Koford 2006