Page 110 - Materials Chemistry, Second Edition

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Sustainable Development and Industrial Ecology
Technology making recovery cheap (or expensive) and assuring high quality
input streams must be followed by encouraging regulations and easy informa-
tional access. Finally a ready market must be present.

Market and informational barriers
These are inseparable from institutional and social strategies. Due to the
absence of direct governmental interference, the markets for waste materi-
als will ultimately rise or fall based on their economic vitality. Markets are
sophisticated information processing machines whose strength resides in a
large part on the richness of the informational feedback available. One option
for waste markets is dedicated “waste exchanges” where brokers trade indus-
trial wastes like other commodities. By using “Internet technology” to facili-
tate the flow of information, the need for centralized physical locations for
either the waste itself or for the traders in waste may be minimal. Research
is needed on waste information systems that could form the basis for waste
exchanges. A stock market can be developed based on waste material.
Systems would need to list available industrial wastes as well as the means
for buyers and sellers to access the information and conduct transactions.
The degree to which such arrangements would allow direct trading or rely
on the brokers to mediate transactions presents a further question. As part
of the market analysis for waste materials, research is needed to understand
past trends regarding the effect of price disparities between virgin and recov-
ered materials, and to assess the effect of other economic factors associated
with waste markets, such as additional processing and transportation costs.
A further matter for investigation concerns whether some threshold level of
industrial agglomeration is necessary to make such markets economically
viable. Progress is already being made on this front.
The Chicago Board of Trade (CBOT), working with several government
agencies and trade associations, has begun a financial exchange for trading
scrap materials. Other exchanges such as the National Materials Exchange
Network (NMEN) and the Global Recycling Network (GRN) facilitate the
exchange of both materials recovered from municipal waste streams and
industrial wastes. Analysts might propose ideas for improving or facilitating
the development of these exchanges. The value of such exchanges as a means
of improving the flow of information depends on the deficiency of the current
information flow, and how much this particular aspect of recycling plays in
its success or failure. The CBOT is different from the other exchanges in
that it is a financial market – starting as a cash exchange with hopes that it
will evolve into a forward and/or futures market.
A simple waste exchange is premised on the notion that opportunities
for exchange are going unrealized. A cash exchange has a related premise that
there is a need for what economists call price discovery. Finally, a futures or
forward market exists to allow the risk associated with price volatility to be
traded independently of the commodity.