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Industrialization spurred demand for affordable materials; aside from rags, ferrous scrap metals were coveted as they were cheaper to acquire than was virgin ore. Railroads both purchased and sold scrap metal in the 19th century, and the growing steel and automobile industries purchased scrap in the early 20th century. Many secondary goods were collected, processed, and sold by peddlers who combed dumps, city streets, and went door to door looking for discarded machinery, pots, pans, and other sources of metal. By World War I, thousands of such peddlers roamed the streets of American cities, taking advantage of market forces to recycle post-consumer materials back into industrial production.

Fiscal efficiency is separate from economic efficiency. Economic analysis of recycling includes what economists call externalities, which are unpriced costs and benefits that accrue to individuals outside of private transactions. Examples include: decreased air pollution and greenhouse gases from incineration, reduced hazardous waste leaching from landfills, reduced energy consumption, and reduced waste and resource consumption, which leads to a reduction in environmentally damaging mining and timber activity. About 4,000 minerals are known, of these only a few hundred minerals in the world are relatively common. At current rates, current known reserves of phosphorus will be depleted in the next 50 to 100 years. Without mechanisms such as taxes or subsidies to internalize externalities, businesses will ignore them despite the costs imposed on society. To make such nonfiscal benefits economically relevant, advocates have pushed for legislative action to increase the demand for recycled materials. The United States Environmental Protection Agency (EPA) has concluded in favor of recycling, saying that recycling efforts reduced the country's carbon emissions by a net 49 million metric tonnes in 2005. In the United Kingdom, the Waste and Resources Action Programme stated that Great Britain's recycling efforts reduce CO2 emissions by 10–15 million tonnes a year. Recycling is more efficient in densely populated areas, as there are economies of scale involved.

Plastic products are printed with numbers 1–7 depending on the type of resin. Type 1 plastic, PET (or PETE): polyethylene terephthalate, is commonly found in soft drink and water bottles. Type 2, HDPE: high-density polyethylene is found in most hard plastics such as milk jugs, laundry detergent bottles, and some dishware. Type 3, PVC or V (vinyl), includes items like shampoo bottles, shower curtains, hoola hoops, credit cards, wire jacketing, medical equipment, siding, and piping. Type 4, called LDPE, or low-density polyethylene, is found in shopping bags, squeezable bottles, tote bags, clothing, furniture, and carpet. Type 5 is PP which stands for polypropylene and makes up syrup bottles, straws, Tupperware, and some automotive parts. Type 6 is PS: polystyrene and makes up meat trays, egg cartons, clamshell containers and compact disc cases. Type 7 includes all other plastics like bulletproof materials, 3- and 5-gallon water bottles, and sunglasses.Types 1 and 2 are the most commonly recycled.

 

In some cases, the cost of recyclable materials also exceeds the cost of raw materials. Virgin plastic resin costs 40 percent less than recycled resin.[56] Additionally, a United States Environmental Protection Agency (EPA) study that tracked the price of clear glass from July 15 to August 2, 1991, found that the average cost per ton ranged from $40 to $60, while a USGS report shows that the cost per ton of raw silica sand from years 1993 to 1997 fell between $17.33 and $18.10.

The report authors observed that, as metals are inherently recyclable, the metals stocks in society can serve as huge mines above ground. However, they found that the recycling rates of many metals are very low. The report warned that the recycling rates of some rare metals used in applications such as mobile phones, battery packs for hybrid cars and fuel cells, are so low that unless future end-of-life recycling rates are dramatically stepped up these critical metals will become unavailable for use in modern technology.

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