Pareto Policy Solutions, LLC

advancing innovation through smart regulation

Pareto Policy Solutions, LLC is a policy analysis and advocacy firm committed to advancing sustainability through “smart” regulation: regulation that rewards, and does not penalize, superior performance.  Often, such actions leverage advances in science and technology and make the regulatory program itself more effective as well as more efficient.

Why is EPA against recycling?

EPA has long imposed regulatory barriers to recycling, despite a clear statutory mandate to promote resource conservation and recovery. Why? To answer that question, take a look at a recently proposed rule from the Agency. Known as the "definition of solid waste", this proposed rule was published in July 2011. The proposal would require more stringent management of certain hazardous materials destined for recycling. Specifically, the proposal would add requirements for those who wish to recycle materials on-site, for those who wish to transfer material off-site for third-party recycling, and for those who recycle under several legal exclusions to the long-evolving regulations.

EPA says it wants to reduce future "damage cases", instances where recycling activities have caused environmental damage and where the recycler had gone out of business, leaving the government to foot the cleanup bill. The Agency has identified about 200 such cases over the past 30 years. Another aim is to eliminate "sham recycling".

There are three big problems with the proposed rule.

First, EPA doesn’t have the legal authority to impose requirements on material that is not discarded. EPA correctly believes that secondary materials undergoing “sham recycling” are considered “discarded” materials, and therefore solid waste. But EPA is incorrect to assume that ALL recycling is presumptively “sham recycling” and therefore solid waste. This unlawful and unreasonable presumption is the faulty foundation of the proposed rule.

Second, EPA’s proposal won’t solve the problem. The cause-effect relationship between the proposal and future damage cases is extremely weak. The vast majority of the identified damage cases pre-dated the existing regulations, which have worked. Consider the 32 exclusions that EPA wants to change--perhaps two are associated with a subset of the 200+ damage cases.

Third, the proposal will negatively impact legitimate recycling. The majority of the public comments submitted to the Agency make this point. And yet EPA has not considered, let alone quantified, this negative impact. In this type of rulemaking, EPA should balance its desire to prevent future damage cases against its statutory objective of resource conservation and recovery.

The proposal has yet to be finalized, even though the Agency committed to a final rule by December 2012. It will be interesting to see how the EPA responds to significant criticism of its proposed rule. Perhaps the most prudent course of action is to just give up.

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