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Blue box levy's latest evolution


In its submission on proposed 2007 Blue Box Fee Changes (March 1, 2006), the Paper and Paperboard Packaging Environmental Council (PPEC) says it endorses the “major thrust” of the proposed fee changes. PPEC’s letter will be of interest to anyone in Ontario with an interest to the ongoing financing of curbside recycling, and anyone outside Ontario who is interested in the unique experiment underway in that province to measure what materials are collected in the blue box, and to fairly assign separate costs to industry.
It’s a complex story, but the gist is that the blue box used to operate as an entirely municipally-funded system, with some seed funding and other financial injections here and there from industry. Now the “shared model” has become more formalized (industry and municipalities split the net costs of recycling 50/50). Furthermore, detailed information from a muncipal datacall has allowed close scrutiny of what waste volumes are being collected and processed, and at what net cost, for each material. This is a crucial innovation, because in the older version of the blue box, materials cross-subsidized one another. (For instance, high-value aluminum were said to cover the cost of lower-value plastic used beverage containers.) That era is coming to a close as each material “steward”, armed with detailed information, assesses whether or not the net costs for their materials are being assigned fairly.
The PPEC submission is interesting in that regard, and so you have the full benefit of the detailed comments, I’ve placed the file as a pdf for you to download below.
As the PPEC submission states, “Paper materials represent 75 per cent of what’s in the Blue Box; provide 64 per cent of its revenue to Ontario municipalities; have already surpassed the 60 per cent diversion target; and by the end of 2006 will have been paying an unfair portion of industry costs for three years.”
The document provides some comment on, for instance, what it sees as an insufficient contribution from newsprint and glass to the system. PPEC, it should be noted, has joined in the past with packaging organizations in sharp criticism of the older funding model. Its positive response to the latest exercise suggests an evolution is occurring, and in the right direction.
Of course, a cynic like me is going to asl questions about wht might not be addressed in the “inside baseball” of all these negotiations. For example, is activity-based accounting at work in these calculations (i.e., are results skewed by a weight-based approach, whereas volume is a big factor in certain materials)? While this system deals with materials collected via the blue box, what about the material that ends up in landfill? The blue box has limited effectiveness, it seems, in diverting used beverage containers from landfill disposal. After all these years of proslytizing, roughly half the containers are still thrown away, and many still argue that beverage containers made from glass, plastic and aluminum, etc. should be placed on deposit. There’s a trend toward greater use of plastic containers by manufacturers, and away from glass or cans. And many single-serve containers are consumed away from the home, then end up in the IC&I waste stream.
Another aspect is “nexus” — the insider term that stands for fair cost allocation. Because some materials like plastics aren’t recycled beyond a certain level, penalities are applied. The new formula raises the penalties beyond what the Legal Services Branch of Ontario’s environment ministry formerly deemed defensible, so litigation may be in the offing. Various stakeholder groups are said to be weighing their legal options. In other words, paper and paperboard industries might like the developments, but others are not happy and may seek a legal remedy.
In any case, the blue box may be inching its way toward being more of a real producer responsibility scheme than in the past, and the PPEC document sheds interesting insights into why that may be so. You can download it here:
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