Recycling basic materials such as paper, glass, plastic, steel and aluminum saves 20% to 97% of the energy required to produce new materials. In addition, it avoids the need for development of additional landfills, and eliminates pollution from incineration of waste stream materials. There are many obstacles to recycling, most of which are economic.
In discussions with recycling specialists in several jurisdictions, the consensus seems to be that we have, collectively, made the required investment in collection of recyclable materials, but have not made a similar investment in conversion of those materials to new, useful items. The collection process in most urban areas of the Northwest is done by municipalities and regulated transportation carriers as part of the garbage collection process.
The problem in the region lies with processing this recyclable materials. Significant achievements have been made in the paper industry in recent years, partly as a result of the involvement of major paper companies in the recycle paper industry, and Oregon's generous tax credits for investment in recycling equipment. That credit is not as attractive for recycling industries using other material, primarily because they do not have the established market presence, financial capability, or vertical integration of the paper industry.
In discussing this problem with regional recycling experts, we determined that access to capital is the single largest obstacle, followed by an "infant industry" syndrome of not being able to secure sufficient market share to overcome startup problems.
We believe that a recycling investment revolving fund would address the first problem, and that funding for advocacy for mandatory recycled content legislation (similar to that now imposed on the newspaper publishing industry in several states) is the most likely combination of actions which could transform the recycling industry in a short period of time at minimal cost.
The revolving fund could be effective if it were as small as $50 million, and be loaned on semi-commercial terms, providing a reasonable probability that the only cost to the funding entity would be any interest rate concessions, plus a provision for failed investments. The annualized cost of the funds, assuming the funds were made available at market interest rates, would be negligible. The provision for failed investments could be 10-20% of the principal amount, or up to $10 million.
Attached to this page is a breakdown of energy savings by type of recyclable material.