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Legislation has also been used to increase and maintain a demand for recycled materials. Four methods of such legislation exist: minimum recycled content mandates, utilization rates, procurement policies, recycled product labeling.

However, comparing the market cost of recyclable material with the cost of new raw materials ignores economic externalities—the costs that are currently not counted by the market. Creating a new piece of plastic, for instance, may cause more pollution and be less sustainable than recycling a similar piece of plastic, but these factors will not be counted in market cost. A life cycle assessment can be used to determine the levels of externalities and decide whether the recycling may be worthwhile despite unfavorable market costs. Alternatively, legal means (such as a carbon tax) can be used to bring externalities into the market, so that the market cost of the material becomes close to the true cost.

The construction industry may recycle concrete and old road surface pavement, selling their waste materials for profit.

Both minimum recycled content mandates and utilization rates increase demand directly by forcing manufacturers to include recycling in their operations. Content mandates specify that a certain percentage of a new product must consist of recycled material. Utilization rates are a more flexible option: industries are permitted to meet the recycling targets at any point of their operation or even contract recycling out in exchange for tradeable credits. Opponents to both of these methods point to the large increase in reporting requirements they impose, and claim that they rob industry of necessary flexibility.

The northwestern United States has difficulty finding markets for recycled newspaper, given the large number of pulp mills in the region as well as the proximity to Asian markets. In other areas of the U.S., however, demand for used newsprint has seen wide fluctuation.

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