Source Reduction Strategies and Technological ChangeAffecting Demand for Pulp and in North America Thomas C. Marcin, Economist Irene A. Durbak, Research Forester PeterJ. Ince, Research Forester

USDA Forest Service Forest Products Laboratory Madison, Wsconsin

ABSTRACT The implications of source reduction strategies and technological change for pulp and paper demand in North America are described in this report. The report (1) reviews basic definitions and measures of source reduction strategies, (2) examines consumption of various grades of paper and on a per capita basis, (3) estimates potential reductions of paper and paperboard demand for various source reduction strategies, (4) describes alternative technologies related to paper use, and (5) pre­ sents projections of long-term consumption of paper and paperboard. The results indicate that volun­ tary compliance and technological change may result in a decline in paper and paperboard consump­ tion of about 10% by 2040. Imposition of disposal fees would have a similar long-term result.

INTRODUCTION The volume of municipal solid (MSW) in the United States more than doubled during the last 30 years-from85.7 million short tons in 1960 to 197.5 million short tons in 1990. MSW increased over 50% on a per capita basis from 1.22 kg/day per person in 1960 to 1.95 kg in 1990. This is more than three-quarters of a ton per year for every person in the United States. In 1990, almost 40% of the MSW was paper and paperboard (EPA 1992). Therefore, consideration of present and future ways to manage this part of the MSW stream is critically important to an overall management strategy for MSW. The Environmental Protection Agency (EPA) has proposed an inte­ grated system with the following hierarchy of components: (1) source reduction, (2) , (3) waste combustion (with energy recovery), and (4) landfilling. In the United States, landfilling alone is no longer a feasible longterm option for waste management (EPA 1989). The pre­ ferred tool is source reduction, followed by recycling and combustion. We assessed the potential for such reduction in consumption of paper and paperboard commodi­ ties in the United States and the resulting impact on the use of pulpwood and recycled fiber. Two gen­ eral approaches were examined: (1) a voluntary approach that relies on education efforts and techno­ logical change to gradually reduce demand and (2) an approach that relies on a more direct market ac­ tion to decrease demand more rapidly, such as internalizing costs of disposal as added fees to production. These approaches are called Scenario 5A-VoluntaryActions and Scenario 5B-Internaliz­ ing Cost. A third alternative-Mandatory Standards-isdiscussed but not analyzed because it is diffi­ cult to design and unlikely to be implemented. We compared consumption of paper and paperboard on a per capita basis in the United States with that in several other industrialized countries. This provided insight into the range of long-term targets or goals that could be set for U.S. source reduction efforts. We assumed that policies encourag­ ing voluntary efforts would, in time, result in a gradual decrease in demand approaching that in other countries. Policies that include direct market intervention would probably decrease demand more quickly. For each alternative scenario, we estimated the potential decrease in projected demand over the In: What is determining international competitiveness in the global pulp and paper industry?? Proceedings of 3d International symposium; 1994 September 13-14; Seattle, WA. Seattle, WA: Center for International Trade in Forest Products; 1994: 146-164. Marcin, Durbak, and Ince 147

next few decades. This was translated into an annual decrease in the rate of growth in consumption of individual paper and paperboard commodities. This factor was then used to adjust the demand func­ tions in the North American Pulp & Paper (NAPAP) Model, which was then used to develop projec­ tions of potential reductions in the United States to the year 2040 (Ince 1994). The NAPAP Model is an economic model that simulates historical trends in , pro­ duction technology, and pulpwood consumption from the mid-1980s to the present. It projects these trends to the year 2040, based on projected supply and demand conditions and relationships between technological change and market conditions. Results labelled "Base" refer to projections made prior to the adjustments in demand. Results la­ belled "Other Countries" refer to projections estimated for consumption of paper and paperboard commodities in selected foreign countries, taken as an average. The latter projections are used as a comparison, to evaluate the potential for the projections estimated for the United States.

SOURCE REDUCTION STRATEGIES

Background Source reduction is a major tool that individuals, communities, and whole societies can employ as a way to deal with waste management problems. The goal is to reduce the amount of material in the waste stream by decreasing the amount of material used in production or reducing the consumption of intermediate or end-use products. The first is a technological solution, the second is partly a cul­ tural one. The result would be not only less waste material but also less use of raw material. According to Levenson (1993), many problems associated with MSW are political and social; they need to be addressed by changing our thinking about how society uses and disposes of materials and products. One approach considers the entire lifecycle of materials, from original resource acquisition (virgin or recovered) through manufacturing, distribution and marketing, consumption, and residual management. Source reduction strategies often lack the social or economic incentives to be effective. The exter­ nal cost savings of better product design often cannot be recovered by manufacturers after their prod­ uct reaches the market. On the other hand, source reduction activities that improve the internal effi­ ciency of a manufacturing process or the marketability of a product provide businesses with an eco­ nomic incentive. Businesses may, with justification, be reluctant to support source reduction activities that reduce the demand for the goods they produce, even though society may benefit from the re­ duced generation of MSW. The amount of MSW is related to the basic tenants of modem industrial societies-consumer con­ sumption and economic growth (Levenson 1993). Consumers generally do not bear the full cost of MSW disposal or the adverse environmental impacts of modern consumer societies. Consequently, they have little incentive to consider the benefits of cost of reduced MSW generation. In addition, state and local governments have little effective regulation of manufacturing processes and products because of the national nature of most products and the restraints on regulation of interstate com­ merce. In the United States, few states have considered source reduction as a waste management goal. Ac­ cording to a national survey reported in Biocycling magazine, only two states-Massachusettsand Michigan-havespecific goals: a 10% reduction in waste over the next decade. In Europe, Germany and the Netherlands have led the way to specific source-reduction policies for packaging (Glenn 1992). Source reduction strategies need to be sensitive to concerns about loss of business and jobs in the affected industries. The Office of Technology Assessment (OTA) points out that quantity reduction for MSW could affect employment, tax revenues, and economic activity in unpredictable ways. Given these considerations, it is uncertain just how MSW reduction will be achieved in the long run (OTA 1989). It is unlikely that industry would support policies that reduce its markets. Alexander (1993) Marcin, Durbak, and Ince 148

points out some rationales for garbage as a necessary byproduct of a consumer economy and the need for considering the effects of source reduction on economic activity. No generally accepted methodology exists for quantifying and measuring source reduction (EPA 1992). Measurement of source reduction requires further definition. These definitions can be catego­ rized as follows: (1) measurement references, the date or product that serves as the measurement standard for either volume or weight, (2) reduction frequency, and (3) measurement of change or regulation. Additional considerations may include a complete life-cycle analysis of the total environ­ mental or resource impact of alternative materials. For example, a flexible drink pouch compared to a glass provides a 96% reduction in packaging weight and 82% decrease in volume, even though the drink pouch is not recyclable (Dunn 1993). Thus, with better design for performance and effi­ ciency, the flexible packaging industry can use source-reducing flexible packaging systems to replace bulky single-material systems that may be recyclable. The U.S. Post Office announced that it would use plastic pallets instead of wood because they last much longer, thus reducing waste by substituting a longer-lived product.

Paper and Paperboard Commodities When applied to paper and paperboard products, source reduction can mean using less fiber and other materials in the production of intermediate commodities, employing better design and utiliza­ tion in the conversion to end products, and using/needing fewer end products (lower consumption). One indication of source reduction at the level of production is lower basis weight: less weight per unit of paper or paperboard. When the basis weight is lower, it is likely that less fiber and/or other in­ put materials were used in production. The necessary product standards and technology need to be in place to make the lower basis weight possible. [Note: Sources of information on consumption and basis weight are listed after the references.] Examples of possible source reduction at the consumption level include of and , selective buying habits, less use of disposable products, and less use of packaging. Using life-cy­ cle analysis, a recent study by Robert Fenton of the Economics Department of the University of Win­ nipeg demonstrated the advantages of reusable multitrip nylon or plastic grocery bags (Fenton 1992). Alternative technologies can also play a role in source reduction; for example, electronic display of in­ formation rather than use of paper and exact computer design of direct mail advertising to reach spe­ cific audiences rather than blanket mailings or general newspaper advertising. An indication of source reduction at the consumption level is lower per capita consumption of paper products. This means slower growth in demand. Basically, source reduction can be accomplished in three ways: (1) education and voluntary com­ pliance with policies by businesses and consumers, (2) mandatory standards and regulations, and (3) fees and tax incentives to promote market mechanism to effect source reduction (i.e., through inter­ nalizing the true costs of MSW disposal through fees or credits). The effectiveness of various policy alternatives cannot be directly assessed because there is no di­ rect standard to measure changes against. The total volume of wastepaper is subject to statistical er­ rors of estimation and measurement, so specific national goals would be problematic (Levenson 1993). Paper consumption and disposal on an aggregate level vary with trends in market forces and eco­ nomic change. Therefore, it is impossible to separate change resulting from source reduction policies from change caused by economic and market factors. However, a national source reduction goal of 10% has been proposed for reauthorization of the Solid Waste Disposal Act (Loughran and McCarthy 1990). Even if this proposal is not enacted, it may serve as a representative assumption for analysis of source reduction policy relative to long-term paper consumption trends. Therefore, long-term con­ sumption trends for paper and paperboard commodities projected by the NAPAP Model are reduced by 10% uniformly for 1995 to 2040. The most feasible alternative policy consists of a voluntary program of consumer education and business initiatives. For example, Seattle has instituted a program of source reduction through educa- Marcin, Durbak, and Ince 149

tion. The Seattle Solid Waste Utility is relying on its waste reduction efforts to account for 25% of its goal of 60% waste reduction/recycling by 1998. Many major corporations are taking actions to reduce waste. Sears Roebuck and Company has reduced its use of packaging material substantially because of voluntary compliance to waste reduction initiatives. The McDonald Corporation, in partnership with the Environmental Defense Fund, has begun programs of source reduction, reuse, recycling, and composting to reduce waste. Proctor & Gamble has instituted a comprehensive environmental quality policy using life-cycle analysis. The policy states that Proctor & Gamble will continue to assess envi­ ronmental technology and programs, and to monitor progress toward environmental goals. The com­ pany recently introduced a number of worldwide initiatives to reduce for many products (Schmidheiny 1993). Other major corporations have also installed similar programs based on their own self-interest and pressure from consumers for environmental awareness. To increase the use of environmentally preferable paper and paperboard products, the Environmental Defense Fund has established a working group called The Paper Task Force: Building Environmental Criteria into Paper Purchasing. This group includes Duke University, Johnson & Johnson, the McDonald Corpora­ tion, the NationsBank Corporation, the Prudential Insurance Company of America, and Time, Inc. In the Northeastern states, mandatory standards for packaging have been proposed by the CONEG Governor's Source Reduction Taskforce (CONEG 1992). The standards would reduce waste­ ful packaging by regulations proposed in model standards legislation. These types of proposed regu­ lations are likely to promote some voluntary compliance by businesses to help avoid mandatory regu­ lations. Germany has implemented a mandatory recycling program in which, theoretically, the seller of consumer goods must take back all the package waste that is produced. Although the German legisla­ tion stresses recycling and does not have specific source reduction goals, it can result in source reduc­ tion because of the extra costs and inconvenience imposed upon business. Making business responsi­ ble for the waste it generates makes source reduction attractive by internalizing waste management cost, which would otherwise be passed on to the community. The recycling program in Germany has been so successful that it has generated a glut of collectibles, which have proven very costly to man­ age and have disrupted waste material markets in neighboring countries (Fishbein 1992). In the Netherlands, packaging initiatives to reduce waste have emphasized cooperation between business and government rather than regulation. A packaging covenant signed on June 6, 1991 consti­ tutes a binding agreement between the national government and packaging businesses to reduce packaging sent to landfills; the goals are to reduce such packaging to 40% (of 1984 levels) by 1996 and to zero by 2000. The German initiative has pushed the European Community (EC) to establish a waste reduction policy of its own to maintain free trade in the common market. The latest EC version in­ cludes the concept of reusable and recoverable packaging as equally valid ways of reducing waste, provided that this approach is justified by a life-cycle assessment. The European initiatives suggest that waste reduction policies are possible. For example, the con­ cept that the waste-maker pays or retrieves the waste may be a policy to consider in the United States. Use of disposal fees and tax incentives to help "internalize" the cost of waste disposal for various commodities offers an interesting alternative to direct regulation or a simple free-market approach. The cost of collection and disposal of waste is typically borne by the community in which the waste is generated. Usually, neither the business that produces the products that become waste nor the con­ sumer who uses those products has enough incentive to dispose of the products effectively for recy­ cling. By charging for the environmental and economic costs of production and disposal of waste up front, market forces can be employed to improve the efficiency of waste management. Charging com­ modity producers a front-end fee based on disposal cost would raise the cost of end-products. If the cost is passed on to the consumer through higher prices, demand would decrease, as indicated by lower per capita consumption. The source reduction proposals described here are reviewed in a recent article in Garbage (1993) magazine. The article discusses various problems with implementing the proposals and concludes Marcin, Durbak, and Ince 150

that the best hope for waste reduction in packaging is an aware consumer. This suggests that educa­ tion and voluntary action may be a better alternative to source reduction than regulation. Source reduction programs will likely affect the rate of growth in demand for various types of pa­ per and paperboard products. Packaging, in particular, will be affected by efforts to reduce waste. Specific trends in commodity consumption may already be affected by concerns about reducing waste and using resources more efficiently across all grades.

PER CAPITA CONSUMPTION

Current Trends To help assess the potential for reduction of paper and paperboard consumption in the United States, we compared U.S. consumption with that in similarly developed, industrialized countries: Can­ ada, Japan, former West Germany, the United Kingdom, and Sweden. To make the comparison more meaningful, we looked at consumption per capita and consumption per dollar of gross national prod­ uct (GNP) or gross domestic product (GDP). The United States has the highest consumption of paper and paperboard in the world. On a per capita basis, U.S. consumption exceeded 300 kg/person as of 1990 (Fig. 1). Sweden is next in consump­ tion (about 250 kg/person), followed by Canada, Japan, former West Germany, and the United King­ dom. The level of consumption has been increasing slowly in the United States, as in the other coun­ tries, since the recession of the early 1980s. The effect of different levels of national income can be eliminated by examining per capita consumption on a per GNP-dollar or GDP-dollar basis (1985 U.S. dollars). From this perspective, U.S. consumption was relatively constant during the 1980s, at about 17 kg/$, and closer to consumption levels in Sweden, Canada, and the United Kingdom (Fig. 2). In terms of individual paper and paperboard commodities, the United States also has a higher con­ sumption level for most commodities than any other selected industrial country (Table 1). However, this level of consumption maybe distorted by differences among countries in basis weight of con­ sumption or the weight per unit of product. The figures for U.S. consumption may also include differ­ ent proportions of consumption for domestic end-use or for further conversion for export of end-use products. Adjustment for these factors would result in a better comparison of domestic consumption among countries. In general, basis weights in the United States are higher than those in European countries and Ja­ pan, possibly as a result of the historic abundance of fiber in the United States as compared to Europe and (especially) Japan. Assumptions for reduced growth rates in U.S. consumption incorporate reduc­ tions in basis weight, especially for newsprint and containerboard. For other commodities, basis weight may not be as much of a factor, based on current trends. In general, basis weights increase as the amount of recycled fiber content increases. With current technology, this weight increase is needed to maintain strength. Thus, as use of recycled fiber increases in paper and paperboard com­ modities, we can expect consumption levels on a tonnage basis to increase slightly as a result of in­ creased basis weights. When per capita consumption is adjusted for basis weight differences, the resulting consumption levels among countries do not change greatly relative to the United States (see data in parentheses in Table 1). For example, adjusting consumption of newsprint to the U.S. standard basis weight (48.8 g/m2) reduces the difference among countries by a small amount. Still, it should be noted that the av­ erage basis weight of newsprint in the United States decreased slowly during the 1970s and 1980s. To reach the current basis weight in Japan within the next few decades, this rate would have had to be ac­ celerated. Moreover, the basis weight of newsprint in Japan is decreasing toward a rate lower than the U.S. basis weight-from46 to 43 g/m2. Basis weight is a more important factor in containerboard, spe­ cifically linerboard. In the United States, the standard weight for containerboard has been 205 g/m2, in Europe, containerboard weight ranges from 125 to 175 g/m2. Recently, however, the U.S. standard for linerboard has changed to a somewhat lower basis weight. Marcin, Durbak, and Ince 151

In addition to basis weight, another potential need for adjustment of per capita consumption data may be the result of exports of end-use products; not all the consumption of commodities may be for domestic end-use. Some may be consumption in the manufacture of converted products for export. Theoretically, to calculate true domestic consumption as used in this analysis, one would have to sub­ tract exports of converted products, such as , books, and newspapers. Data on exports of converted products are readily available only for the United States. In 1990, such exports ranged from less than 1% of commodity consumption for & Writing to 2.6% for Tissue & Sani­ tary paper. This is a very small proportion relative to the total U.S. domestic market. For this reason, and because similar trade data were not readily available for other countries in the comparison, the U.S. consumption data were not adjusted for exports of converted products.

Potential for Decreased Consumption in the United States To help determine the potential for future decrease in U.S. consumption of paper and paperboard, we compared projected trends in consumption in selected foreign countries with projected U.S. con­ sumption, to the year 2040. For the selected foreign countries, a projection of the average per capita consumption was esti­ mated for 1991-2040, based on the average 20-year trend in consumption in each country during 1970­ 1990. For the United States, a base projection for the same period (the EPA Base ) was developed by the NAPAP Model. Comparison of these projections resulted in the estimated differences in per capita consumption shown in Table 2. Although per capita consumption in the selected group of coun­ tries was much lower than U.S. consumption in 1990, the estimated difference narrows for most com­ modities over time. This is due in large part to reductions in the rate of growth in demand compared to historical trends projected for the United States in the EPA Base Case. This effect is most pro­ nounced for Printing & Writing paper grades. Thus, projected consumption of these grades for the for­ eign countries surpasses projected U.S. consumption after the year 2005. For this analysis, we assumed that one plausible scenario is that overall consumption in the United States could be reduced 10% by the year 2040. This assumption was partly based on the estimated dif­ ference in consumption for total paper and paperboard by the year 2040-11%lower for the group of selected countries, as shown in Table 2. The assumption was also based on recent U.S. proposals call­ ing for 10% overall source reductions. This general reduction in consumption could probably be achieved through public awareness and voluntary efforts, bringing the United States more in line with consumption levels in other countries. We assumed that these source reduction efforts would be directed generally, toward all commodities. Thus, a 10% reduction in consumption by 2040 was as­ sumed for all paper and paperboard commodities. This voluntary reduction is called scenario 5A. To develop the Scenario 5A projections, an annual adjustment was calculated for the rate of growth in demand that would result in a total reduction in demand of 10% by 2040. This adjustment was entered in the NAPAP Model for each commodity. The NAPAP Model then developed the new projections, shown in Figures 3 to 7. Two projections are shown for the United States-theBase projec­ tion, which includes no assumption about source reduction efforts, and the Scenario 5A projection, which includes the above described assumptions about source reduction efforts.

Scenario 5A As expected, Scenario 5A projections were lower than the Base projections and brought future US. consumption gradually closer to consumption in other countries. By the year 2040, per capita con­ sumption of all paper and paperboard commodities in the United States is projected to decrease by 9%, almost equaling projected foreign consumption. Projections for individual commodities also show reductions, although the percentage of reduction varies (see Table 3). Per capita consumption of newsprint is projected to decrease by 11% by the year 2040; for Tissue & Sanitary paper, the decrease is 8%. Both trends are projected to approach those projected for other countries. Per capita consumption of Printing & Writing paper is projected to decrease 8% by 2040, which Marcin, Durbak and Ince 152

will widen the gap between consumption in the United States and other countries unless trends in the latter change in the future. Per capita consumption of Wrapping & Packaging paper and paperboard is projected to decrease by 88, which will lower U.S. consumption, but not to that in other countries. Further efforts, beyond voluntary, would probably be needed to further lower consumption of these paper grades. Reductions in U.S. consumption of paper and paperboard commodities will have the most effect on the use of pulpwood and recycled fiber, the primary raw materials. Consumption of both pulp wood and recycled fiber is projected to decrease gradually, but neither will decrease as much as con­ sumption of paper and paperboard. By the year 2040, pulpwood consumption is projected to decrease 7% and recycled fiber 5.5%, while paper and paperboard is projected to decrease 9%. Thus, source re­ duction efforts will achieve less than a one-to-one reduction in use of pulpwood since some reduction will be in the form of recycled fiber.

Scenario 5B The use of disposal fees and tax incentives to help "internalize" the cost of waste disposal for vari­ ous commodities offers an interesting alternative to direct regulation or a simple free market ap­ proach. Levenson (1993) points out that perhaps the most difficult policy area is determining how to include the external cost associated with waste management in the design and production processes and in the purchasing decision of consumers and businesses. By charging for the environmental and monetary costs both for the production and disposal of waste, market forces can be employed to im­ prove the efficiency of waste management and require that those who create waste pay for it. The Tel­ lus Institute of Boston has estimated costs of disposal for various paper commodities. For example, full disposal costs, in dollars/ton, estimated for the California Integrated Waste Management Board (Tellus Institute 1991), are as follows:

Newspaper $82.24 OCC 118.16 Mixed paper 124.00 High grade paper 81.12 Other paper 130.04

These disposal costs can be added to existing costs of production as fees, thus raising the cost of production of the various grades of paper. The net impact of these fees on source reduction of de­ mand could be assessed using the NAPAP Model since the demand component of the model includes the elasticities of each commodity in the model. The NAPAP review draft (Ince 1993) lists product price elasticities and base prices for individual paper and paperboard commodities in the United States (Table 3). By combining these price elasticities with the increase in production cost associated with the addition of disposal fee, the economic effect of the source reduction can be calculated for a disposal fee alternative. The result is a decrease in demand. The effects of declines in demand by prod­ uct grade was spread over 10 years. The annualized reductions in demand for the 10 years from 1995 to 2004 are shown in Table 3. These demand reductions by product grade were combined in the NA- PAP Model to generate Scenario 5B.

IMPACT OF FEES ON PAPER AND PAPERBOARD CONSUMPTION Projections of paper and paperboard consumption using the demand reduction estimates were made using the NAPAP Model. The impact of the demand reduction was spread over the 10-year pe­ riod from 1995 to 2004 and the model was run to the year 2040. The results of this run were compiled for effects on consumption and production of paper and paperboard products, overall paper recy­ cling rates, gross wastepaper burden, pulpwood consumption, and fiber market trends. The overall ef- Marcin, Durbak, and Ince 153

fect of internalizing disposal fees is a 10.7% reduction in paper and paperboard consumption by the year 2040 for Scenerio 5B. Since the impact of the fees is likely to be effective over the first decade, most of the effect in the fees will occur at this time. Overall consumption will be 8.9% lower in 2005.

COMPARISON OF ALTERNATIVE SOURCE-REDUCTION SCENARIOS The results of our analysis were compared to the Base scenario, the voluntary reduction scenario (Scenario SA), and the scenario for internalizing disposal fees (Scenario 5B). Paper and paperboard production and consumption have increased steadily in the last 40 years as population and economic activity have increased. Consumption rose from about 25 million tons in 1952 to about 80 million tons in 1992. For the Base scenario, paper and paperboard consumption is projected to continue to rise to about 140 million metric tons by 2040 (Fig. 8). Scenario 5A projects a gradual reduction in consumption of about 9% in 2040, while Scenario 5B projects a more immediate impact in the first decade of about 9% and an overall decrease of 11% (Fig. 8). On a per capita basis, Scenario 5B results in a leveling off at about 300 kg per capita, before another rise in the year 2010 (Fig. 9); the Base scenario shows a rise to about 430 kg per capita in 2040. By 2040, Scenario 5A projects a gradual decline in consumption and approaches Scenario 5B in reduction in consumption (9% for Scenario 5A compared to 11% for Scenario 5B). Production follows a similar path to consumption (Fig. 10). The recovered paper utilization rate increased from about 23% in the 1970s and 1980s to 31% in 1992. All three scenarios show dramatic increases in recovered paper utilization rate-tomore than 40% by 2010 and 44% by 2040 (Fig. 11). Scenarios 5A and 5B show a slight advantage over the Base case in 2040. The paper industry has recently announced a goal of 50% paper recovery by 2000. Recovered wastepaper is collected and recycled for paper as well as other purposes, such as cellulose insulation, animal bedding, composite products, and wastepaper export. Correspondingly, the gross wastepaper disposal burden in the United States is projected to decline dramatically, from over 50 million metric tons in 1990 to less than 40 million tons in 2000. Scenario 5B shows an immediate impact on wastepa­ per for disposal-gross wastepaper disposal declines to the year 2010 and then increases. Overall, both Scenario 5A and Scenario 5B substantially reduce the gross wastepaper disposal burden by 2040 as compared to the Base scenario.

TECHNOLOGICAL CHANGE In this report, source reduction refers to activities by manufactures and consumers that reduce the amount of toxicity or the quantity of MSW, resulting in the production and consumption of products. Manufacturers may improve their efficiency in design, durability, and packaging of products. Con­ sumers can modify their purchases or activities toward reusing or repairing products, or buying longer-lasting or more durable products. New technology can reduce the size and amount of materi­ als used to satisfy a need. For example, the trend to miniaturize electronics has greatly reduced the amount of material needed for products. A desktop computer now has more computing power than a whole room of vacuum tubes and is much more reliable. Nowhere is the impact of technological change more evident than in the concept of the electronic highway. The transmission and display of written information on electronic display screens has raised concerns about the viability of printed media, particularly newspapers, as evidenced by the sig­ nificant decline in the number of newspapers. The consumption of newsprint in the United States ulti­ mately depends on the health of the newspaper industry. The level of economic activity and advertis­ ing expenditures is the major determinant of newspaper and newsprint consumption. Since 1988, the advertising industry has been in a severe recession. This is likely a signal of a major change in the structure of advertising itself, which will favor more direct promotion and mail advertising of prod­ ucts. This change will adversely affect all mass media advertising, newspapers in particular (Business Week 1991). As a result of declines in advertising pages, US. newsprint consumption fell from a peak Marcin, Durbak, and Ince 154

of 12,303,000 metric tons in 1987 to 11,702,00 metric tons in 1993. The decline in newsprint consump­ tion is unprecedented in its length (5 years) and in that it has occurred during a period of economic growth. This trend is particularly troublesome because it signals a change in the long-term relation­ ship between newsprint consumption and real GNP (Udell 1990). The current decline of newsprint consumption may signal technological change in the newsprint market, which is marked by lower consumption relative to economic activity. Several factors may con­ tribute to permanent lower newsprint consumption relative to economic activity: (1) competition from other forms of advertising, (2) use of television and electronic media for information, and (3) growing diversity and declining size of U.S. households. In addition, newspapers have been ad­ versely affected by financial problems in industries that have traditionally advertized through news­ papers, such as the retailing, savings and loans, and brokerage industries. Another negative impact has been the change in the composition of economic growth. Particularly troublesome is the slowing of growth in personal expenditures, which are closely related to newspaper advertising. From 1987 to 1990, real personal consumer expenditures rose by only 6% while real expenditures of U.S. exports, government spending, and nonresidential investment rose by 12%. Thus, there is considerable uncer­ tainty about whether the long-term historical growth of newsprint consumption will continue when normal economic growth resumes.

CONCLUSION The goal of reducing municipal solid waste (MSW) is simple, but the policy for achieving this goal is complex. Garbage is a byproduct of the modem consumer-oriented industrial economy. Since waste is an integral part of modem economics and social life, any policy to reduce and dispose of it in­ volves everyone. In addition to voluntary source-reduction efforts, a more comprehensive front-end approach might help alleviate some problems associated with the economics of waste disposal, Dis­ posal fees would provide not only an economic incentive to reduce waste and thus improve the effi­ ciency of material use but also a funding source for market incentives for recycling or for construction of incinerators or landfills.

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Levenson, Howard. 1993. Municipal solid waste reduction and recycling: Implications for federal policymakers. Re­ sources, Conservation and Recycling, pp. 21-37. Loughran, David S. and James E. McCarthy. 1990. Solid waste disposal act: Comparison of reauthorization bills. 90­ 48 EM. Congressional Research Service, Library of Congress, Washington, D.C. 65 p. Schmidheiny, Stephan. 1993. Changing course: A global business perspective on development and the environment. MIT Press, Cambridge, MA. 374 p. Tellus Institute. 1991. Disposal fee study. Final report. Prepared for: California Integrated Waste Management Board. Tellus Institute, Boston, MA. OTA. 1989. Facing America's trash: What next for municipal solid waste. U.S. Congress, Office of Technology Assess­ ment, Washington, D.C. 378 p. Udell, Jon C. 1990. U.S. newspaper and newsprint consumption in the new decade. American Newspaper Publisher Association, Washington, D.C. 24 p.

ADDITIONAL SOURCES American Paper Institute. 1992.1992 Statistics of paper paperboard & wood pulp. New York, 80 p. Canadian Pulp and Paper Association. 1990. Reference tables 1990. 44th edition. Montreal, Quebec, Canada, Decem­ ber 1990, 38 p. Canadian Pulp and Paper Association 1993. Personal communication. Average basis weights for newsprint in the U.S. and Canada, and U.S. consumption of newsprint. Pulp & Paper International. 1988. lnternational Fact and Price Book. Miller Freeman Publications Inc. San Francisco, CA. 148 p. Takeyama, Saburo. 1993. Japan: Land of rising recycling levels. Pulp & Paper lnternational. 35(2), 34. Pulp & Paper International.1992. Japan-addsOji coaters at Tomakomai mill. Pulp & Paper International 34(12), 11. Benn Business Information Services Ltd. 1990, 1992. Paper European Data Book 1991,1993. Tonbridge, Kent, U.K. Food and Agriculture Organization of the United Nations. 1983,1985, and 1990 Yearbook of Forest Products. Rome, It­ aly. International Monetary Fund. 1991. International Financial Statistics Yearbook. Washington, D.C. 799 p. Marcin, Durbak, and Ince 156

Table 1. Per capita consumption (kg) of paper and board commodities in the United States and selected countries, 1990a United West United Commodity States Canada Japan Germany Kingdom Sweden Paper 179.3 130.7 142.2 109.9 148.9 (142.2) (116.3) (150.2) Newsprint 48.4 43.3 30.7 30.4 32.4 38.9 (48.7) (44.0) (32.6) (31.6) (35.5) (41.4) Printing & writing 92.4 58.8 73.7 843 56.6 (83.1) (59.9) (73.9) Uncoated 57.1 53.2 34.1 50.7 (50.8) (35.1) (48.9) Groundwood 135 26.4 10.4 26.2b (22.5) (9.0) (22.5) Freesheet 43.6 26.8 23.6 24.5 (28.3) (26.1) (26.4) coated 29.9 31.0 225 23.4 (32.3) (24.8) (25.0) Groundwood 105 5.8 Freesheet 12.0 17.5 Other 5.3 Tissue & sanitary 21.4 17.1 11.0 13.4 10.0 16.6 Packaging & industrial 17.1 14.1 10.9 18.3 Kraft paper 9.1 11.5 10.6 85 8.6 Special industrial 8.0 35 2.4 9.7 Paperboard 132.2 84.7 862 573 80.4 (103.2) (70.5) (100.6) Containerboard 85.1 53.2 46.4 35.9 55.3 (63.4) (49.1) (75.5) Liner 64.5 Medium 20.6 Boxboard 33.8 31.5 17.9 12.3 15.3 Other 13.3 21.9 9.1 9.8 Construction paper & board 6.2 13.0 Total all grades 317.7 228.4 228.9 2285 167.2 229.3 (245.4) (186.8) (250.8) aNumbers highlighted in parentheses represent per capita consumption adjusted to U.S. estimated basis weights. Sources of data: American Paper Institute, 1992 Statistics of Paper Paperboard & Wood Pulp; Canadian Pulp and Paper Association, Reference Tables 1990; International Monetary Fund, International Financial Statistics Yearbook 1991 (population data); Food and Agriculture Organization, UN, FAO Yearbook of Forest Products 1990; Benn Business Information Services Ltd, Paper European Data Book 1993. bForest Products Laboratory estimate. Marcin, Durbak, and Ince 157

Table 2. Differences in per capita consumption of paper and board between the United States and selected foreign countries Actual 1990 2010 2040 Commodity (percent) (percent) (percent) Newsprint -12 -14 -16 Printing & writing paper -18 (a) (a) Tissue & sanitary paper -28 -11 -9 Wrapping & packaging -34 -24 -23 paper & board Total paper & board -26 -15 -11 aNo difference in the year 2005.

Table 3. Price elasticities and base prices for various U.S. commodities Own price Base price Annual demand Commodity elasticity ($1986) reduction (%) Newsprint -0.54 472.00 0.77 Coated freesheet -1.16 955.00 0.96 Uncoated freesheet -1.05 825.00 0.96 Coated groundwood -0.54 730.00 0.68 Uncoated groundwood -0.53 620.00 0.68 Tissue & sanitary -0.26 1,015.00 0.30 Specialty packaging & industrial -1.18 700.00 1.14 Kraft packaging & industrial -1.01 460.00 2.01 Linerboard -0.31 325.00 1.05 Corrugated medium -0.18 290.00 0.77 Solid bleached board -0.33 550.00 0.77 Recycled board -0.40 300.00 1.50 Construction paper & board -0.58 275.00 2.42 Dissolving & special alpha pulp -0.73 600.00 0.58 Marcin, Durbak, and Ince 158

Table 4. Projections of per capita consumption of paper and board commodities U.S. per capita consumption (kg) Projectiona Actual EPA Base Scenario5 Change (%) Commodity 1990 2010 2040 2010 2040 2010 2040 Paper 179 187 242 179 220 -4 -9 Newsprint 48 47 61 44 54 -6 -11 Printing & writing 92 103 133 100 122 -3 -8 Uncoated grades 62 71 94 69 86 -3 -8 Coated grades 30 32 39 31 36 -3 -8 Tissue & sanitary 21 24 33 22 30 -8 -9 Packaging & industrial 17 14 14 13 13 -7 -7 Paperboard 132 135 181 133 167 -1 -11 Linerboard 64 70 95 71 89 +1 -6 Corrugated medium 20 28 38 27 37 -4 -3 Recycled 13 23 29 21 24 -9 -17 Solid bleached 34 14 19 14 17 -11 Construction paper & board 6 7 5 6 4 Total paper & board 318 329 429 318 391 -3 -9 aProjections developed using North American Pulp & Paper (NAPAP) Model 11. Marcin, Dubak, and Ince 159

Fig. 1--Consumption of Paper & Board Per Capita

Fig. 2--Consumption of Paper & Board Per GNP$ or GDP$ Marcin, Durbak and Ince 160

Fig. 3--Per Capita Paper & Board Consumption in the United States

Fig. 4- -Per Capita Newsprint Consumption in the United States Marcin, Durbak, and Ince 161

Fig. 5- -Per Capita Tissue & Sanitary Consumption in the United States

Fig. 6--Per Capita Printing &Writing Consumption in the United States Marcin, Durbak, and Ince 162

Fig. 7--PerCapitaWrapping & PackagingPaper & Board Consumption in the United States Marcin, Durbak, and Ince 163

Fig. 8- -Paper & Board Consumption in the United States

Fig. 9- -Per Capita Paper & Board Consumption in the United States Fig. 10-Production of Paper and Board in the United States

Fig. 11-Recovered Paper Utilization Rate in the United States