The Environmental Protection Agency recently contracted with the Environmental Law Institute for a year-long research project entitled "Federal Tax Policy and Depletable Resources: Impacts and Alternatives for Recycling and Conservation." The project, which will join legal and economic talents, is the Institute's first major interdisciplinary venture.

The purpose of the research is to identify the nature, scope and impact of various special provisions of the tax code that have been applied to the primary production of metals and timber. The study will evaluate the effects of these provisions on the competitive position of scrap industries as compared with primary producers. The historical development of the depletion allowance and its probable effect on primary producers, expensing provisions for exploration and development, and capital gains treatment of iron, coal and timber are being investigated. The probable impact of these tax provisions is a relative benefit to primary producers, a factor which adversely affects incentives to recycle commodities which will compete with the primary products as inputs to various industries. The probable effects are being measured through econometric analysis, a statistical examination of the existing market relationships.

The Institute has added three new staff members for the project. Robert C. Anderson, who obtained his Ph.D. in economics from Claremont, heads the study. Mr. Anderson was formerly an assistant professor at Tufts University. Taylor Durham, a Ph.D. candidate in economics from Cornell, and Richard Spiegelman, an attorney and Ph.D. candidate in economics at the University of Pennsylvania, will assist in the project. Also contributing to the study are Frederick R. Anderson, William A. Irwin, and Alan S. Miller of the ELI staff.