Europe and the United States are beginning to adopt similar strategies for disposing of wastes, spurred by common recognition that there's not enough space to bury it all and burning causes too much pollution. ``For centuries, Western Europeans marveled at the luxury of available land in North America,'' says a report from the non-profit Institute for Local Self-Reliance. ``This luxury allowed for ready access to disposal sites for solid wastes, as well as for a casual disregard of the maintenance of soil fertility for agriculture.'' But as that luxury decreases, new methods are being tried. A company in Oakland, Calif., has long collected wine bottles, washed them and sold them back to vintners at less than the cost of new bottles. Now the practice is spreading to Michigan, Massachusetts and New York. Italy has passed a law that in 1991 will ban all packaging unless it can be recycled or will decompose naturally. The institute report favors recycling, but says little has been invested in it and that some professional planners are skeptical. Neil Seldman, one of the authors, nevertheless sees recycling as the path that must be followed. ``You'll have the bottle manufacturers asking for a national bottle bill because they don't want to have to deal with 50 different bottle bills, so I would say that within a few years we will have that,'' he predicted. State bottle bills typically require consumers to pay a small deposit which is refunded by shops when the empties are returned. The bills have been strongly opposed by business interests, especially container manufacturers. Brenda Platt, the institute's staff engineer, said that some communities, states and governments are now setting a three-tiered set of priorities for disposing of waste: _First, ``source reduction,'' or discouraging the use of materials that become waste. Seldman cited a proposal in Philadelphia that would put one tax on bottles, and a double tax on ``secondary packaging,'' the cardboard or plastic that goes around a six-pack. _``Source separation,'' the separate handling of different kinds of waste in both homes and businesses. Ms. Platt spoke approvingly of a ``three container'' system in some communities of West Germany, with a green container for one type of waste. ``If you don't put your recyclables in the green can, they'll take away the green container and give you maybe a black one, and you're labeled as the slob of the neighborhood,'' she said. ``Peer pressure can do a lot to encourage recycling.'' _Large-scale burning and burial of waste only as a last resort. ``Iowa, New York, the Netherlands, Sweden and Italy have endorsed this hierarchy,'' she said. The report says the average American produces about 1,300 pounds of waste annually, compared with a little over 1,100 pounds for the average West German. The U.S. figure is for 1986, the German figure for 1984. Disposal methods vary widely. The United States burns only about 5 percent of its waste, while Switzerland burns more than 60 percent. The United States still can bury nearly 85 percent, while mountainous Switzerland can find space for less than 20 percent. Switzerland recycles over 20 percent or uses it as compost for farmers, twice the proportion in the United States. The institute is a research organization that serves local governments, citizen groups and industry. The West German government's Marshall Fund of the United States financed the study.