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The main objective of AIRP-SD was to address the urgent need to stimulate innovation in Research, Technological development and Demonstration (RTD) processes in order to enhance the prospects of RTD contributing positively to processes and strategies leading to radical improvements in the sustainability of production-consumption systems. This Milestone One Report was the first of three status reports, summarising the interim findings of the first three work packages since the start of the project in January 2002.
This chapter addresses material leakage as a major problem of international open markets for used goods, in particular for used vehicles. It develops elements of an international metal covenant that should allow for a more sustainable management of global material flows in that area. The arguments in favour of such a proposal are as follows: Any regulation should actively seek for industry participation, taking advantage of business interest in supplying a sufficient amount of materials while lowering materials cost. It should also address public issues such as sustainability of recycling and waste. A first section analyses contracts as a tool to overcome knowledge problems that occur when many actors are involved. A second short section gives empirical evidence for material leakage in the case of used vehicles from Germany. A third section develops elements of an international metal covenant. A fourth section analyses potential impacts and discusses legal and institutional issues. Finally, some conclusions are drawn.