(This letter addresses the author of and concepts presented in the “Source Reduction” article in the April/May issue.) In 1980, when the B.C. Ministry of Environment was calling the tune, Michael J. Hare produced a lengthy report on beverage container waste management. His definition of “source reduction” was “the increased use and reuse of refillable bottles.” He presented masses of data and pronounced beverage container deposit-refund schemes “waste management effective.”
Now, in 1998, when the Canadian Soft Drink Association is paying the piper, Hare is playing in an entirely different key. Suddenly “source reduction” has a new definition: “consumer purchase shifts from refillable glass bottles to the new recyclables.” Again, Hare obligingly presents data that are harmonious with his master’s interests.
Source reduction is a slippery concept. However, the economic concept of “external diseconomy” also presented in Hare’s 1980 report is not.
An external diseconomy is created when the price of a consumer product does not include all of its costs, including those incurred after the product is consumed.
Throwaway beverage packaging, Hare explained, creates such an “externality” because waste collection and disposal costs are not factored into the producer’s cost and the product price. These costs are add-ons, borne by the municipality (i.e., taxpayer) and Mother Nature (pollution and resource depletion). The costs include not only direct costs (garbage, recycling, and litter programs), but also opportunity costs and “social values related to the aesthetic costs of litter and the throwaway society.”
Hare recognized that government action is required to correct market distortions created by externalities and he identified deposit-refund schemes as an “administratively efficient” government tool for the job.
Hare cautioned at the very end of his report: “The waste management externality is not one to be shunned, hidden, or cast aside as a ‘social bad’: it should be brought out into the open and positively addressed and challenged. With wise waste management goals and government planning, it is possible to achieve a type of Pareto optimality which represents the very core of economic efficiency in resource allocation…Our present and future lifestyles will be conditioned by the results.” This is a tune that government, industry, consumers, and the general public can sing together in harmony.
Society Promoting Environmental
Vancouver, British Columbia