A penny for your Cotts
I am struck once again by the misleading way in which beverage container deposit systems are costed. In this case, the system in Nova Scotia, as presented in the February/March issue (“A Penny For Your Cotts,” by Clarissa Morawski) is costed at 0.77 cents per container recovered. By my calculations, this is only a small fraction of the real cost.
First, by adding up the expenses for running the system and subtracting that from the revenue from the sale of recyclable materials (but not including the unredeemed deposits and the half of the deposits retained by the system, both of which are paid by the consumer), the actual system cost is much higher–at 3.6 cents per container recovered.
To me, the important cost is the total cost to the consumer. Since this is a half-back system, the total cost to the consumer is 5 cents per container for those who return the container and redeem half their deposit, and 10 cents per container for those who do not return their container.
Using the numbers from the table in the article, for the gross revenue from deposits less the deposits returned to consumers, the average consumer cost is about 7 cents per container recovered (or almost ten times the system cost quoted in the article). In addition, beverage container deposits cause the cost of managing the rest of the recylables through curbside and depot programs to rise, because losses in economy of scale occur. Two infrastructures are more costly than one good one.
While I don’t have the exact recycling cost figures for Nova Scotia, the consumer costs for efficient multi-material curbside recycling programs in areas of Canada that don’t have beverage container deposits are frequently less than one cent per container recovered. Also, where there are curbside mechanisms (e.g., bag limits and pay-by-the-bag) that favour recycling/diversion over garbage, curbside recovery rates for beverage containers match deposit return systems.
In the end, the choice of systems is up to local interests to determine and pay for. As a resident with access to a good multi-material curbside recycling system, I am happy to pay less to recycle and divert more conveniently at the curb.
Joseph P. Hruska
Vice President Municipal Development
CSR: Corporations Supporting Recycling,
The author replies: The financial data associated with each province’s system are as provided by either the province itself, or, in most cases, by the system operators (e.g., RRFB in Nova Scotia, SARCAN in Saskatchewan, ABCRC in Alberta, MPSC in Manitoba etc.). The data are presented in a transparent manner with each cost and revenue provided as a separate line item. Furthermore, I try to consider three distinct parameters with respect to each province I report on:
The per container net system cost–This is the cost of recovering, handling, processing and marketing containers for recycling minus the revenues from the sale of recyclable materials and the revenues associated with unredeemed deposits (i.e., the revenues generated by polluters that choose to pay rather than return containers for reuse and recycling). Factoring revenues from unredeemed deposits into net system cost calculations is consistent with how most program operators calculate their cost of service fees.
The return rate–Assessing the net system cost in context of the return rate provides a measure of the system’s cost effectiveness. In other words, what recovery rate do we get for what it costs us to recover and process each container?
Cost to consumers–The cost to the consumer is the per container net system cost plus additional taxes and levies that are used to fund other recycling initiatives. It’s really the cost of the public policy approach to managing waste. As an example, consumers in Alberta pay about 0.8 cents for an 80 per cent beverage container recovery rate but are not levied any additional per container fees to fund broader recycling initiatives. On the other hand, consumers in Manitoba pay a 2-cent per container fee which funds municipal curbside programs that recover about 31-41 per cent of the beverage containers (plus other materials) sold.
As a third and final example, Nova Scotia combines both approaches in its half-back deposit program. After only 2 years of operation, it operates at a net system cost of 0.77 cents per container, achieves a 76 per cent beverage container recovery rate and provides about 2.6 cents per non-refillable container to curbside recycling programs and to market development programs.
It’s meaningless to compare the system costs of recovering beverage containers through a curbside collection system vs. a deposit-refund system without considering relative province-wide recovery rates. A comparison of the costs to recover 75 to 98 per cent of beverage containers province-wide through a deposit-refund system vs. an alternative non-deposit-refund based system (such as curbside) would be more useful.
The ONP truth
I just read Guy Crittenden’s editorial (“Fox and Hen House”) in the April/May issue in which he noted that “newsprint generally pays its own way.” The idea that old newsprint (ONP) is paying its own way in the Blue Box program is taking on the mantle of an urban myth. Readers should know the reality.
The gross average municipal collection and processing cost in Ontario for Blue Box materials is approximately $150 per tonne. In Essex-Windsor, the 1999 gross collection and processing cost is $184 per tonne. Over 65 per cent of the total tonnage of Blue Box materials collected in the province is old newsprint, so that average collection and processing cost would apply.
In order for newsprint to “pay its own way” we would need market prices for ONP to be about $150 per tonne. We only saw that kind of market for about six months in 1995. Since then, and before then, ONP has drifted between $30-50 per tonne.
Todd R. Pepper
Solid Waste Authority