Gold amidst the rubbish.

• Author: Gordon, Dianna
• Position: US states offer tax incentives to recycling businesses

States link recycling to economic development in an attempt to enhance markets and lure industry.

It's a state economic director's golden dream: An estimated $1.7 billion in new industry. And it can all be built on trash.

That's what Arizona is finding after the Legislature passed an environmental technology act this year that provides financial incentives f or recycling businesses to locate in the Grand Canyon State.

Nibbling at the new law's hook of various state tax reductions, exemptions and credits are Fort Howard Corporation of Wisconsin, Fletcher Challenge Canada, North Star Steel of Minnesota and Evergreen Oil Company of California.

Fort Howard officials may build a $1 billion waste paper recycling and manufacturing plant in the state that could create up to 1,000 full-time jobs. The Canadian enterprise is suggesting a $400 million newspaper recycling mill that would create 160 to 170 jobs. North Star is looking at an $80 million steel recycling plant, and Evergreen Oil at a $25 million facility to recycle used oil.

"We are now ahead of the curve in working with this 21st century industry," said James Marsh, director of the Arizona Department of Commerce.

"The new law eliminates tax barriers to capital intensive investment and makes Arizona competitive with other states in vying for new industry," said Don DeMeuse, chairman and chief executive officer of Fort Howard Corporation.

Legislation that ties economic development incentives to the environment may be a way to strengthen one of the weakest links in the recycling chain, especially for small businesses - markets for recycled goods. Consumers have taken the giant first step in the cycle by sorting and transporting a mountain of stuff to collection centers, but prices for the materials are at an all-time low, and markets are glutted. The second step has only just been initiated - creating markets for the materials, as well as for goods made from recycled materials. The third step needed to complete the recycling circle will be consumer purchases of goods made from recycled materials to drive the entire market.

At the moment, the second and third phases are fledgling at best - and the first stage of consumer enthusiasm has created heaps of trash with nowhere to go but to landfills.

Sorting and recycling bottles? It's cheaper to make new glass from silica sand. And green bottles are a special problem. European bottlers like them; American recyclers don't. So they lie in piles...