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Understanding extended producer responsibility


With the introduction of product stewardship programs across Canada (and to a lesser extent the United States) it’s worth reminding ourselves about their ultimate purpose, which often gets lost in discussions over specific policy details.

With the introduction of its draft Waste Reduction Act, 2013, the Province of Ontario is the latest jurisdiction to bring in aggressive legislation to divert more material from disposal, and to change who does what in collecting and paying for it.

Ontario’s draft rules attempt to achieve certain things, and discourage others. If introduced and implemented, the new regimen could make Ontario the most progressive jurisdiction in North America in terms of extended producer responsibility (EPR).

But let’s not get bogged down in details; rather, let’s consider “the view from 10,000 feet.”

As many environmental activists will tell you, modern municipal waste management states back to the early 20th century when the idea of collecting household garbage became part of the “sanitation” movement of the time.

The sanitation movement focused on things like the provision of clean drinking water and treatment of sewage to North American cities that at one time did a pretty poor job of it. Inner city slums were crowded, building construction was often haphazard and dangerous, and more boatloads of immigrants were arriving each year than could easily be accommodated in already-crowded cities. Cholera and other outbreaks occurred.

So, engineered solutions were introduced that, in the case of municipal waterworks, required the installation of pipes, pumps, filters and in many cases elegant buildings to house the large equipment. Many “collegiate gothic” buildings may be seen to this day that house functioning waterworks infrastructure.

“Garbage” collection was initially a simpler affair. Where trash had once been tossed on the street or in parks, or collected by men in carts (“carters”) and hauled to simple tips at the edge of town, a new infrastructure sprang up of municipal collection crews driving purpose-built trucks, hauling refuse to special dumps, where the material was placed and covered over with soil each day to discourage rats, seagulls and other vectors.

This simple system persisted well into the 1970s (and in some places well beyond, especially in rural places). Initially, the system was acceptable because (a) it was better than what existed before and (b) because the waste in the early days was relatively benign (consisting mostly of items like kitchen scraps, discarded rags and the ash from coal furnaces). Remember, too, that frugal Depression-era folk reused as many items as possible and were reluctant to throw things away.

Things changed in the 1950s with advent of the modern chemical industry and the introduction of products advertised on television whose main benefit was convenience. The “throwaway” society was born, along with items made of plastic that were formerly made from glass, wood or metal.

By the 1970s a new environmental consciousness was born in response to the amount of litter visible everywhere and pollution form untreated effluent. Soda pop cans quickly became a target. Around the time of the first Earth Day in 1970, British Columbia passed the first mandatory deposit-refund laws for used beverage containers, an early form of extended producer responsibility to manage a material stream that had previously been managed in an industry-led deposit system.

Over time, however, the number of products and packaging made from plastic, or designed for short-term use and discarding, grew; at the same time, existing landfills began to fill up and new ones became more difficult to site (due to local opposition).

In the 1980s the whole business of municipal waste collection and disposal became more complicated. It was discovered that leachate from the unlined dump sites of yesteryear had polluted ground and surface waterways. Modern landfills with caps, liners and gas collection systems became standard.

A new era of municipal recycling started with the introduction of the famous “blue box” in the Province of Ontario. The idea of hauling various recyclable materials from the curbside and on to transfer stations and processing plants was embraced by municipalities across North America; blue box-style programs became ubiquitous.

Curbside recycling met the expectations of a variety of stakeholders.

Municipalities wanted to appear “green” and preserve their valuable landfill space by diverting material. Consumers guilt was assuaged over their ever-growing consumptive patterns: they could shop till they dropped, and still feel they were doing right by the environment by sorting their aluminum pie plates, newspapers, corrugated boxes and other packaging into their recycling bins.

Importantly, a commercial agenda was also fulfilled: the major soft-drink companies were able to rebrand their containers “recyclable” and close down the continent-wide refillable bottle system and its related bottling plants. In the decades that followed the companies switched to cans and plastic bottles; this allowed the three major soft drink companies to force out competition from the small mom-and-pop bottlers who could compete with them in local refilling markets.

The blue box concept was sold to municipalities as a “basket of goods” that would practically pay for itself. Soft drink companies agreed to switch to aluminum in order to salt the value of the blue box contents and offset losses from other materials (such as their own plastic beverage containers). Paper and paperboard was one material that always made economic sense to recycle, as mills were hungry for recycled content. In fact, newspaper and magazine curbside collection pre-dated the blue box, without regulatory requirement.

Overall, however, recycling turned out to be an expensive proposition; municipalities had to invest in trucks and recycling equipment, and the value of materials fluctuated wildly. Many municipal managers complained they’d become price takers in an unwelcome game of commodity markets. Some years the programs incurred huge losses. Many municipalities raise taxes or introduced “pay as you throw” (PAYT) bag tag fee programs to cover costs. In Ontario, industry agreed to pay half the net costs of the program, which still constituted a bargain and allowed business as usual.

By the late 1990s and early 2000s the municipal waste system had changed dramatically from the one that existed only a few decades prior.

In addition to the blue box, some jurisdictions introduced programs to manage and divert organics (kitchen scraps, yard trimmings, etc.), usually collected in green bins or wheelie-carts. Whole industries sprang up to serve the needs of this system, including manufacturers of bins, carts, and special trucks with multiple compartments. A great investment was made in plants and equipment to process the increasingly large tide of recyclable or organic material.

However, around this time many environmental activists began to question the wisdom of all this. First, study after study showed that people’s consumption and waste generation patterns — how much they bought and threw away — continued to rise year after year. The high-tech municipal waste system had effectively trained citizens to consume and throw away more — the very opposite goal of the 3Rs waste management hierarchy.

Yet this was perfectly rational behavior. Build a box store on every corner and lower the cost of goods in general by shipping production offshore (e.g., China), then make it easy to throw stuff out in a robust system of “guilt free” recycling and organics processing, and what do you expect people will do?

Activists and policy analysts began to ask some difficult questions. Perhaps, they said, we’ve been providing the right answer to the wrong question. Instead of asking, “How can we recycle more?” we should ask “What would a sustainable economy look like?” Instead of asking “How can we raise more funds to pay for recycling?” we should take a look at who’s paying for the system (ratepayers) and who’s getting a free ride (industry).

Enter extended producer responsibility, an idea conceived and first introduced in Europe. The core idea with EPR is that producers are in the best position to design products that last longer, can be reused, or (at least) can easily be recycled after their useful life ends. The cost of “end-of-life management” for products and packaging became a theme in policy thinking, and the term “product waste” was coined to distinguish materials from the post-1950s chemical and consumer convenience era from less-avoidable “old fashioned” waste like paper, cloth and kitchen scraps.

In various provinces (most notably BC) and a few states, “product stewardship” programs were introduced for a variety of materials. Items traditionally managed via the blue box tended to be left alone: the stewardship programs started out with programs for difficult or toxic materials such as scrap tires, used oil and household hazardous waste, and were eventually extended to items such as batteries and waste electronics and electrical equipment (WEEE).

These programs were initially welcome and had some success, especially in places where nothing effective existed before. Certainly, the “first generation” programs can be credited with keeping a lot of used motor oil out of sewers, rivers and lakes. Many piles of flammable and mosquito-attracting scrap tires disappeared as programs paid for their conversion into truck mats, animal beds and various consumer products. (Many found their way to cement kilns).

However, as the programs extended to things like waste electronics, they ran into problems. First off, when legislation came in, individual companies formed collective stewardship agencies for their specific materials (e.g., tire stewardship). They then slapped an “eco fee” on their products, which was visible to consumers at the cash register, and appeared to consumers as a kind of tax.

This sounds fine at first blush: the materials are being collected separately from the municipal system, the problem is being looked after, and the cost is visible (“transparent”) to consumers. What’s the matter with that?

It turns out, a lot.

One problem is that the stewardship agencies tend to act like monopolies, using only certain contractors to collect and recycled their materials. This is disruptive and unfair to existing recycling companies, and discourages competition and innovation in these services.

But what should concern consumers and environmentalists is that when companies simply contract out their environmental responsibilities to a stewardship agency, with its activities paid for by an advanced recycling fee, companies have no incentive to change how they produce their goods and packaging in the first place. It’s “business as usual” (except that materials are collected in a separate system).

Some argue that such “first gen” programs are acceptable for simple materials like scrap tires or used oil.

But when it comes to more complicated materials like waste electronics, this disincentive to change is problematic. Indeed, simple stewardship programs have unintentionally caused massive amounts of heavy-metal and plastics laden WEEE to be shipped to the Third World where it’s taken apart or burned in unsafe and environmentally damaging ways.

And then there’s that ever-increasing mountain of “product waste” and packaging…

Fast forward to today, and environmental activists and policy designers are moving toward a new model — one that more closely aligns with the goals of EPR.

In this model system, individual companies would be made legally accountable for end-of-life management of their products and packaging. So-called “individual extended producer responsibility” (IPR) would still allow companies to coalesce and form groups to manage their materials, but, since they’d be on the hook individually, the companies would be less inclined to just contract out their responsibilities and forget about it. government sets standards and provides oversight and enforcement, but leaves it up to companies to figure out the best way to meet targets and goals (e.g., zero waste to landfill).

Done right, IPR should cause companies to look closely at their raw materials, opportunities for reuse, and the recyclability of their products and packaging.

It’s easy to imagine some companies creating programs in which consumers would return their products and packaging to designated retail outlets or depots. Others might create mail-in rebate programs. Some companies might set up deposit-refund programs for their materials. Others might continue to contract municipalities to collect and recycle their wastes, since the infrastructure and expertise is there. But, no doubt, when they’re paying the full costs, companies will want the systems to be effective and efficient.

In an IPR world, municipalities would still be charged with collecting certain materials, namely organics. Organic waste (“compostables”) have never lent themselves to being easily managed in an EPR/IPR system (although who knows, maybe supermarkets and grocery stores could be tasked with this in future).

For now, the vision is one in which municipalities collect and process organic wastes (into compost or energy) and landfill or incinerate a limited category of wastes that never make their way into stewardship programs. Municipalities will no doubt continue to operate blue box recycling programs, but the contents may change as some materials are added and others move into separate systems. In any event, they will be service providers with “clients” in regulated industry, not simply removers of waste from the homes of residential ratepayers.

The idea of EPR is, ideally, to cause industry to change the way it produces and distributes goods, and lower the environmental footprint of the consumer society generally. At a minimum, it seeks to force industry to internalize its costs, rather than “externalize” them onto ratepayers (and the environment, in the form of litter and pollution). Such cost internalization would end the “subsidy” that ratepayers and local governments have provided to industry for decades.

Indeed, it was activist lawyer Robert F. Kennedy who once said, “Show me a polluter and I’ll show you a subsidy.”

Hence the requirement in true EPR that no visible fee (“eco fee”) be allowed. Visible fees encourage the out-of-sight, out-of-mind mentality in companies that form monopoly collectives and continue with business as usual.

Disallowing visible fees is one of the most difficult aspects of EPR program design for members of the public to understand, especially when industry rather disingenuously calls for programs that are “open” and “transparent.”

It’s worth noting in this regard that visible fees must not be confused with items sold on deposit. Charging a deposit follows the “polluter pays” principle when it rewards people for returning their empties (or spent batteries or whatever) to a store or collection depot. Such a system exists in Ontario in the case of the Beer Store, which operates one of the world’s most successful programs to recover and recycle used beverage containers for beer, wine and spirits, and their associated packaging.

So now you understand a bit about EPR, why it’s important, and where it’s headed. Whether or not the new legislation in Ontario (and other jurisdictions) will trigger the broad changes the policymakers hope remains to be seen. But it’s a major trend and one that everyone needs to understand. We must not be thrown off by misleading statements about the particular details of any one program.

For an excellent online article about visible fees, written by one of our contributing editors, click here:

http://blog.solidwastemag.com/where-do-eco-fees-come-from-and-why-it-makes-sense-to-create-systems-without-them/


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2 Comments » for Understanding extended producer responsibility
  1. kate bailey says:

    This is a great explanation of how the first generation EPR programs are really just industry-sponsored take-back programs with no effects on product redesign or resource efficiency. IPR certainly holds more promise to change how products are designed. But the system doesn’t work with the participation of the consumer. The curbside blue box is highly convenient for the consumer, even though it still has its struggles with participation. An IPR system where every container has its own recycling system doesn’t sound user friendly. How can the government leverage the marketing power of industry to convince consumers to recycle when it sets performance standards? Where is the emphasis on participation and convenience to drive up recovery rates? After all, it was the creative genius of industry telling us to buy, buy, buy that dramatically changed consumption patterns, not the recycling sector. Recycling may be guilty of enabling people to feel less bad about it, but it was not the mastermind behind the rise of the consumer culture.

  2. Gary LeRoux says:

    The paint and coatings industry in Ontario exceeded program targets for post-consumer paint recycling in Ontario since the inception of MHSW and should be applauded for embracing sustainablity and getting results! The industry looks forward to a new Industry Stewardship Plan to continue the success well into the future. Visible fees are just a political football and for some reason Ontario stakeholders and media continue to focus on visible fees – for whatever reason – to perpetuate and distract from the real focus … waste diversion and recycling. This has not been the case in any other Province and all need to move past it Ontario.

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