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«KELLY M. BROWN, RONALD CUMMINGS, JANUSZ R. MROZEK, & PETER TERREBONNE* Scrap Tire Disposal: Three Principles for Policy Choice ABSTRACT Scrap tire ...»

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KELLY M. BROWN, RONALD CUMMINGS, JANUSZ R.

MROZEK, & PETER TERREBONNE*

Scrap Tire Disposal: Three Principles

for Policy Choice

ABSTRACT

Scrap tire disposal presents a challenging regulatoryproblem for

many states. Properdisposalof scraptires,either through recycling

or legal landfill disposal, is difficult and costly. In an effort to address this issue, many states have chosen to develop scrap tire policies, often funded by specialfees on the sale of new tires. These fees typically are used to clean up existing scrap tirepiles and/or subsidize the development of marketsfor recycled tires. Currently, many states are in the position of evaluating the efficacy of their policies to determine if, and how, to continuefunding such scrap tire programs.This article develops a set of arguments that results in three principles that can assist states in theirdesign of scrap tire management programs.These principlesgive emphasis to the need for policy makers to fully understandthe economic vulnerabilityof processors,distinguishbetween economic and technologicallimits in the expansion of usesfor recycled rubber, and avoid premature sunsetting of scrap tirefees.

I. INTRODUCTION

The disposal of scrap (used) tires has proven to be a challenging regulatory problem for many U.S. states. Improper disposal, whether in landfills or by abandonment, causes a variety of fire, health, and * Brownis affiliated with the U.S. Environmental Protection Agency, Washington, D.C.;

Cummings and Terrebonne are affiliated with the Andrew Young School of Policy Studies, Georgia State University, Atlanta, Georgia; and Mrozek is affiliated with Charles River Associates, Washington, D.C. Of the many individuals who contributed to this research, we particularly wish to acknowledge the support and assistance given by Deanna Ruffer. Many knowledgeable individuals in the scrap tire processing and end use industries generously shared their knowledge and insights concerning scrap tire management in Georgia and elsewhere. The authors gratefully acknowledge financial support for this research by the Pollution Prevention Assistance Division and the Environmental Protection Division of Georgia's Department of Natural Resources. T-Lynn Smith conducted our survey of 49 states.

In addition, the views in this article represent those of the authors, not necessarily the organizations with which they are affiliated, and the authors are solely responsible for errors of omission and/or commission.

NATURAL RESOURCES JOURNAL [Vol. 41 environmental hazards.' While many alternatives to landfill disposal or abandonment of whole tires exist,2 their economic sustainability is marginal in many cases. Thus, most states have realized the need for programs designed to create incentives for the recycling of scrap tires. Currently, many states are either considering the adoption of a scrap tire management program or are evaluating the efficacy of an existing state program to determine if, and how, to continue the operation?

This article develops a set of arguments that leads to three interrelated principles which states may find useful in their efforts to assess the design of effective scrap tire management programs and policies. First, scrap tire policy must be based on a full appreciation of the reasons, both technological and market-based, that underlie the economic vulnerability of scrap tire processors. Second, in their consideration of state-financed investment programs intended to expand the market for end-users of recycled scrap tire products, policy makers should give particular attention to the vulnerabilities of the processing industry and the implications of such vulnerabilities for the nature of state programs. Finally, and in the light of the above, state policy makers are well advised to rethink the structure of sunset provisions on tire fees that fund most scrap tire management programs.

To develop these three principles, we begin in section II with an overview of scrap tire management and disposal issues in the United States, and common problems encountered in most state-sponsored scrap tire management programs. In section IMwe consider the economics of the scrap tire processing industry, develop reasons underlying the financial vulnerability of scrap tire processors, and suggest the nature of policies that might ameliorate these problems. In section IV we turn our attention to endusers of recycled scrap tire products; here we argue that, in the main, the thinness of end-user markets is more likely caused by product quality (reflecting technological difficulties) than by cost. Thus, the many ongoing, cost-focused, state programs that attempt to expand markets for scrap tire products may be misguided. In section V we argue that states seeking success in scrap tire management programs that will be effective in preventing the future build up of scrap tire piles may need to take a longer view than implied by present sunset provisions on the funding source of

1. See Mark Phillips, California Moves Aggressively in Managing Scrap Tire Problem, RECYCUNG TODAY, Oct. 1998, at 34,36. See generallyJOEL 1.REISMAN, E.H. PECHAN & AssOCs., INC., AIR EMiSSIoNs FROM SCRAP TIRE COMBuSTioN (U.S. EnvtL Protection Agency Pub. No.





EPA-600/R-97-115, 1997).

2. See ScRAP TnME Mr.CouNcIL SCRAPTME UsE/DSoSALSTUDY: 1996 UPDATE 15-48 (1997).

3. See U.S. ENV'r. PROTECTION AGENCY, PuB. No. EPA 530-B-93-001, STATE SCRAP TIRE PRocRAM: A QwacK REFERENCE GumE (1993).

SCRAP TIRE DISPOSAL

Winter 2001] most state programs: the scrap tire fee. We offer our conclusions in section VI.

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In the late 1980s, state and local governments began to recognize the threat to public health, safety, and the environment posed by the accumulation of large piles of scrap tires.4 By 1999 there were almost 200 million scrap tires in hundreds of scrap tire piles in the United States.5 As seen in table 1, the largest known inventories of scrap tires are found in Maine, Michigan, New York, Ohio, and Pennsylvania. These five states alone contain 125 million tires, 63 percent of the total. We emphasize known scrap tire piles for two reasons. First, of the 49 states included in our survey,' 15 were unable to provide an estimate of their inventory of scrap tires in scrap tire piles. Of these 15 states, two did not have a state scrap tire management program (Alabama and Alaska), and three had closed a preexisting program (Connecticut, Texas and Washington). Second, any state, even one with an existing scrap tire program, may not have yet discovered all of the scrap tire piles in the state. For example, although Georgia established an aggressive clean-up program in 1991, its Environmental Protection Division found two previously unknown piles in 1991 containing more than two million tires?

Health, safety, and environmental threats from scrap tire piles derive from several sources. Whole tires can accumulate water from rainfall in their cavities, and these pools of water are prime breeding grounds for mosquitoes." Tire piles can catch fire and can be very difficult to extinguish;

on numerous occasions piles have burned for several months. Open air burning of tires creates dense smoke and releases a variety of pollutants into the air. Liquid by-products of combustion pollute the soil beneath the fire.9

4. See, e.g., Phillips, supranote 1.

5. See table 1, infra. The source of the information in this title is our telephone survey of administrators of state scrap tire programs. See infra note 6.

6. We contacted administrators of state scrap tire programs (or environmental agencies) in a telephone survey conducted during the summer of 1999. All contacts were asked to describe the nature of their program, with specific questions regarding scrap tire fees, sunset provisions for the fees, legal disposal of scrap tires, and characteristics of the scrap tire industry. We were unable to acquire information from the state of Minnesota.

7. Interview with Lon Revall, Scrap Tire Program Director, Georgia Department of Natural Resources, in Atlanta, Ga. (Aug. 30,1999).

8. See Phillips, supranote 1, at 36.

9. See REs4AN, supra note 1.

NATURAL RESOURCES JOURNAL [Vol. 41

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In response to these potential problems, many states have formed scrap tire management programs that are intended to accomplish two primary goals: to clean up existing scrap tire piles, and to assure that scrap tire piles will not accumulate in the future.1" Most states have adopted laws with appropriate sanctions that make the disposal of scrap tires at locations other than at state-approved sites illegal.1" These sites are typically either a

10. For example, Georgia's enabling legislation for a scrap tire management program provides that "It is...the intent of the General Assembly that every effort be undertaken to ensure the proper management of scrap tires from the point of generation to the ultimate point of reuse, recycling, or disposal and that every effort be made to ensure that, where possible, they be reused or recycled rather than being disposed." GA. Cous ANN. § 12-8-21(0 (1996).

11. Information obtained from telephone survey. See supra note 6.

SCRAP TIRE DISPOSAL

Winter 20011 scrap tire processing facility or other collection facilities, such as bins and cages that are provided by state or local governments.

Most concede that landfill disposal of scrap tires is undesirable."

The problem with landfill disposal of whole tires is that they will almost always slowly rise to the surface as the contents of the landfill settle.

Moreover, potentially serious environmental problems can arise as a result of the leaching of toxic residues from tires into the surrounding soil and, ultimately, groundwater. In principle, a properly designed landfill with a double liner and a leachate system will capture these substances, but once captured they in turn must be disposed of.1 Despite these problems, " however, a number of states lack alternatives to landfill disposal, and scrap tires are placed in monofills or mixed-use landfills. Monofills, landfills used exclusively for the disposal of scrap tires, will typically require that tires be shredded or cut into pieces;" some states impose similar requirements for mixed-use landfill disposal. Monofills are generally intended to store tires until such time as recycling becomes economically feasible. Only 14 of the 49 states in our survey allow for unrestricted landfill disposal of scrap tires.' 5 All other states ban landfill disposal of scrap tires, 16 restrict landfill disposal to monofills, 7 or only allow disposal of tires that have been cut into pieces or shredded."' The ban on landfill disposal of tires combined with the efforts to clean up tire piles would seem to suggest a formula for solving a state's scrap tire problem. However, there are three common problems that have been encountered in most state scrap tire management programs that prevent or limit their success. These are high failure rates for new scrap tire processing facilities, reflecting an industry whose economic viability appears to be problematic; a general failure of programs that are designed to expand end-uses of scrap tire products; and state legislators that, seemingly impatient with observed program failures, allow scrap tire fees used to finance scrap tire management programs to sunset over relatively short, five- to six-year periods. 9 These three problems are given detailed attention below.

12. See, e.g., SCRAP TIRE MGMT. COUNCIL, supra note 2, at 8.

13. For related discussions, see Richard Donovan et al., Scrap Tire Utilization in Landfill Applications, in PRocEEDiNGS OF WAS1.CON 1996, at 353, 364-70 (Solid Waste Ass'n of N. Am., Pub. No. GR-G 0034,1996).

14. See, e.g., N.C. DEP'TOF ENV'T & NATURAL REs., SCRAP TRE MANAGEMENT REPORT FY 1996-97, at 17 (1997).

15. See table 2.d, infra.

16. Twelve states. See table 2.a, infra.

17. Eight states. See table 2.b, infra.

18. Fifteen states. See table 2.c, infra.

19. Information obtained from telephone survey. See supra note 6.

NATURAL RESOURCES JOURNAL [Vol. 41

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The initial source of scrap tires is usually the new tire retailer.

Typically, for every new tire that is sold, a used, scrap tire exists that must be disposed. The generator of a scrap tire-the retailer-must pay the

SCRAP TIRE DISPOSAL

Winter 2001] processor to accept his scrap tires; this payment is referred to as a tipping fee. The processor then recycles the scrap tires in one way or another, generally through the production of tire chips (one-inch to two-inch pieces of tire with varying amounts of wire) or crumb rubber (finer, powder-like tire substance, free of wire). The product is then shipped to the end-user, often a user of tire-derived fuel (TDF), an alternative to traditional fuels.



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