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MARK AUSTIN THOMAS: You've probably noticed those new crisp, colorful $10, $20 and $50 bills. Well, a new $5 dollar bill should be ready for circulation in 2008, but there's a drawback. This new paper money is pretty good at stopping counterfeiters, but Nancy Mullane says, the kind of ink that's used is creating a danger to our environment.
NANCY MULLANE: Each day heavily armored trucks pull up to the secured gates of 12 Federal Reserve Banks across the country. They're loaded with more than 35 million notes printed daily at the nations two Bureau of Engraving and Printing or BEP plants in Washington and Forth Worth.
The new bills replace the worn-out currency that's been pulled from circulation. Many new bills come with enhanced security features.
Tom Ballantyne is Director of Cash Services for the Federal Reserve Bank in San Francisco.
TOM BALLANTYNE: "The security features are difficult to counterfeit and many times counterfeiters will just attempt to introduce them without these features in place."
BEP laces these new notes with a plastic security thread, imprints them with a watermark and accents them with seven new colorful inks. While arguably nicer on the eye than the standard green back, the new bills are also creating a problem — pollution.
According to an environmental assessment report prepared by the BEP, the process of creating the new bills is expected to increase the emission of volatile organic compounds by at least 20 percent.
Richard Makdisi is President of Stellar Environmental Solutions.
RICHARD MAKDISI:"Certainly volatile organic compounds are carcinogenic and they are toxic and mutagenic and all those bad things, but that's based on a certain exposure."
While the new bills have been effective in slowing the increase in computer generated counterfeiting, the new printing process has not been as effective in extending the life of a new bill. For $10 dollar bills, it's still about 18 months.
In the basement of the San Francisco Federal Reserve, huge machines inspect new and old bills for flaws. Those determined to be unfit are automatically shredded, compressed into small cubes and hauled to landfills.
In 2004 more than $90 billion in paper notes were destroyed, creating 17 million pounds of solid waste.
Robert Reed is with San Francisco's Golden Gate Recycling. He says individual Americans can do more to slow the printing and eventual disposal of paper money.
ROBERT REED:"You can pay your bills online. You can use credit cards when you go to a market or corner store or even a coffee shop. If people took some small steps to reduce the amount of paper money that they were carrying or needed or used on a weekly basis, I think that would make some measure of difference across the land."
To stay ahead of the increasingly advanced counterfeiters, the BEP will redesign American currency every 7 to 10 years, with new designs the norm rather than the exception.
In San Francisco, I'm Nancy Mullane for Marketplace.