A short-lived Bush administration plan to encourage recycling by taxing manufacturers` use of nonrecycled materials kindled enthusiasm in some industry participants but suspicion and antagonism in others.
And although the plan was withdrawn quickly after being floated last week, many in the recycling industry expect further federal initiatives to spur recycling-measures that may include taxation.
The Bush administration had proposed levying a tax on paper, glass, plastic and metals that are manufactured from so-called ”virgin” materials rather than materials reclaimed through recycling, administration officials said.
The plan was killed by budget director Richard Darman, surprising officials in several government agencies.
While many in the industry expect federal recycling incentives to eventually be added to the variety of state and local initiatives passed in recent months, at least a few are happy the plan was squelched.
”If I wanted to be Machiavellian, I would suspect that the idea was dreamed up to promote plastic packaging,” said Chaz Miller, director of recycling for the Glass Packaging Institute, an organization that represents glass container manufacturers.
The proposed tax, said Miller, ”would clearly discriminate against the glass industry,” because it would ”focus on the weight and not the value of the raw materials.” The sand from which glass is made weighs more than the chemicals from which plastics are made, Miller said.
Such a tax, rather than leading to more recycling, might merely favor the use of one material at the expense of another, Miller said. Such faults, he suggested, may have helped doom the plan.
Miller`s organization ”does not have a position against the use of a tax mechanism,” he said, ”but we would favor one that would put everyone on an equal playing field.”
Loop Recycling Center makes money partly by buying aluminum cans from people who bring them to its yard on South Laflin Avenue and reselling the aluminum to the Reynolds Metals Co. plant in Maywood.
Andrew Lesiecki, supervisor of Loop`s yard, said the tax plan sounded like a good idea. On the other hand, Reynolds Metals, based in Richmond, Va., hates it, said spokesman Andrew Lybrook.
”We`re a strong proponent of recycling, but we would be opposed to any additional tax on basic American industry,” Lybrook said.
Reynolds favors a ”free market” approach, he said, and is opposed to taxes or other economic incentives mandated by some states, such as forcing consumers to pay deposits on drink containers. The deposits are refunded when the containers are returned.
Reynolds began setting up a network of recycling centers in 1968 and now has 1,000, Lybrook said. By recycling cans, the company acquires more aluminum than it needs to make cans, giving it a surplus to use in other products.
”Recycling provides us with an economical source of metal,” Lybrook said. ”It conserves about 95 percent of the energy that`s required to produce aluminum from raw materials. That`s not to mention the relief on the (public) solid waste stream.”
Five years ago, Andrew Stephens and Robert Thompson, former engineering students at Purdue University, began buying and selling used plastic by telephone in an apartment at North Avenue and Wells Street.
Today, their Eaglebrook Plastics Inc. has 60 employees in a 90,000-square-foot plant on West Roosevelt Road. Ground-up plastic bottles are processed into pellets for sale to manufacturers or are made into a plastic lumber called Durawood.
Sales last year were $6 million, said Stephens, president of the firm.
Stephens wants to see an increase in recycling but is not sure that the tax plan would have been effective.
”That tax is only half the battle,” he said. ”If they take the revenue (from the tax) and pour it back into (recycling) infrastructure, then they`re doing something truly positive. The main challenge we have is how do we get the plastic bottle from your house to our plant. That situation will not improve if the containers are taxed and the consumer just winds up having to pay more for his product. The tax will be penalizing the symptom but not addressing the cause.”
Eaglebrook gets most of its recyclable plastic from outside Illinois, Stephens said.
He hopes that a pilot program for garbage recycling initiated last year by the City of Chicago will begin to change that. Residents of 4 of the city`s 50 wards are being asked to separate bottles, cans and plastic jugs from other trash to facilitate recycling.
Michael Finn, vice president of Recycling Services Inc., which has its headquarters on South Morgan Street, was in favor of a tax that would encourage use of recycled paper.
”We go into large companies, universities and other institutions and set up programs to recover wastepaper,” Finn said. ”We package it by type or grade and sell it to paper mills that use it to manufacture new products.”
A ”glut” of newsprint is hurting business now, he said.
Finn would welcome approaches such as Florida`s, in which nonrecycled newsprint is taxed, or California`s, in which at least 40 percent of the newsprint used by large-circulation newspapers must be recycled.
The State of Illinois prefers to encourage a ”market-driven” approach, says David Buckner, deputy director of the Illinois Department of Energy and Natural Resources.
It will use proceeds of a surcharge on landfill fees largely for grants and loans to help local communities and businesses acquire processing facilities or otherwise widen markets for recycled products.
Landfill surcharge fees of $18 million became available in November after settlement of a suit challenging the constitutionality of the fees, which were established under the Illinois Solid Waste Management Act of 1986.
The Bush administration tax plan results from the federal government`s acknowledgment that recycling is more than a local or state issue, says Kenneth Westlake, a Midwest official for the Environmental Protection Agency. ”The idea of using taxation to change the relative competitive positions of virgin and secondary materials is not new,” Westlake said.
”There has been a lot of discussion about whether the tax code discriminates against secondary materials through such things as depletion allowances,” he said. ”This latest Bush proposal would turn that on its ear and say we want the tax code to encourage recycling.”
