While waste diversion may or may not be a worthy environmental objective in itself, environmental protection surely is. In a life-cycle approach (which considers factors such as resource and energy use and air, water, and solid waste emissions), waste diversion becomes merely one byproduct of a systematic approach to increasing the environmental and economic efficiency of the delivery of products or services.
While few North American jurisdictions have taken such a rigorous life-cycle approach to the management of solid waste, the Western Canadian provinces continue to “close-the-loop” for a wide variety of packages and products as a first step in attaining producer responsibility. Most notably, British Columbia has addressed the management of beverage containers, paint, used motor oil, lead acid and nickel-cadmium batteries, pharmaceuticals, and tires. Contrast Ontario, with its heavy political and economic investment in one method of diversion (the Blue Box) and consideration of only one (relatively meaningless) environmental indicator related to aggregate reduction of waste mass sent to landfill. Instead of moving toward producer responsibility, Ontario’s waste management policy has had remarkable and wholly unintended impacts on producers’ packaging choices.
Consider the relationship between packaging choices made by the province’s soft drink producers and Blue Box program. Soft drink consumers are encouraged (through pricing and availability) to buy more of their soft drinks in cans. As a result, Ontario reportedly has the world’s highest market share of aluminum soft drink cans. More aluminum (with its high recyclable market value) enters municipal recycling programs, and results in reduced net municipal recycling costs. (The Association of Municipal Recycling
Coordinators reports that 1997 can recovery rates in Ontario were down even though there were 0.5 per cent more soft drink cans sold.) Through this form of “shared producer responsibility,” soft drink producers and retailers hope to avoid what they believe to be more intrusive regulatory measures such as deposit-return systems.
The use of aluminum cans to prop up municipal recycling programs dates back to the conception of the Blue Box. The choices soft drink producers have had to make in the context of supporting the Blue Box is reflected by the changes in can sales over the ten-year period between 1987 and 1997.
Figure 1 provides a ten-year time series showing Ontario soft drink sales in litres and can sales in number of units. The first can sales “spike,” in 1988, corresponds with the ongoing expansion of Ontario’s Blue Box program, the phase-out of refillable containers, and the growth of soft drink sales volumes which resulted from the discount of product in one-way packaging. While 1992 soft drink sales suffered from poor summer weather, the moderate increase in soft drink can use was the result of the extensive price discount of cans (a result of intense competition between name brand and house brand soft drinks).
The second spike, in 1994, coincided with negotiations over the Canadian Packaging Stewardship Initiative (CIPSI) proposal. The promotion of CIPSI precipitated a one-year, 26.8 per cent (or 473-million can) increase in the number of soft drink cans in the Ontario market–an 8.8 per cent increase in soft drink can market share unprecedented throughout the 1987 to 1997 decade.
While it’s difficult to determine the specific causes of the sharp increase in can consumption in 1994, it seems that something more than conventional market forces was at work. The injection of 473-million cans into the market meant an additional $11-million in aluminum would enter the waste stream. With an influx of even a minority portion (about 30 to 40 per cent given current Ontario soft drink can recovery rates) of these cans into municipal recycling programs, Blue Box recycling costs would have been driven down. This would have led to a reduction in the “fair share” that industry funding groups would have had to pay to municipalities as part of the CIPSI stewardship proposals.
In any case, Ontario municipalities have become dependent on aluminum to the extent that discussions related to product stewardship and curbside recycling have devolved to figuring out how to inject more aluminum cans into the waste stream and then extract them through the Blue Box. As an example of the provincial fixation with aluminum cans, CSR: Corporations Supporting Recycling (usually a strong proponent of a “basket of goods” approach that avoids singling out materials, especially problematic ones like glass and plastic), took the unusual step of ignoring soft drink PET bottles and focused its public relations efforts solely on increasing the recovery of soft drink aluminum cans.
PET plastic displaces cans in the rest of North America, but the use of PET in Ontario is limited to the growth segment of the market. While soft drink volume increased by 2.1 per cent from 1996 to 1997, can units increased by only 0.5 per cent with the bulk of market growth in PET.
The cost associated with the disparity between soft drink packaging in Ontario and other jurisdictions is significant. Substitution of part of the current aluminum can market with PET bottles and a switch to steel cans for the remainder could save Ontario’s soft drink industry an estimated one-cent per single serving package or about $15 to 20-million annually. Additionally, a greater PET market share would provide consumers with more flexible, resealable, and convenient packaging (as suggested by recent industry advertisements for six-packs of PET bottles). Ontario producers would also benefit from increased product differentiation, better margins, and increased sales volumes. (Ontario currently ranks seventh out of the ten provinces in terms of per capita soft drink consumption.)
However, the attendant loss of revenue in the Blue Box would drive municipalities to push much harder for a provincial deposit-return system. To counter this, it seems that Ontario’s environment minister is considering a Manitoba-style consumer packaging tax that would presumably address the loss of aluminum revenue and the increase in municipal waste management costs associated with a higher PET market share.
“Audited data from Alberta suggests that the cost of recovering 80 per cent of beverage containers through a deposit-refund system are as low as eight-tenths of a cent per container.”
But there’s another way. Audited data from Alberta suggests that the cost of recovering 80 per cent of beverage containers through a deposit-refund system are as low as eight-tenths of a cent per container. (See sidebar, page 16). Ontario soft drink sales approached 2.3-billion containers in 1997. Given these economies of scale, dense urban populations, and unredeemed deposits from the 20 per cent of containers not refunded (a 5-cent deposit per container), soft drinks alone would generate $22.5-million in unredeemed deposits. Therefore, it’s likely that an Ontario based deposit-refund system would generate a net revenue, not a loss.
At 80 per cent, Ontario enjoys the world’s highest market share of low density polyethylene (LDPE) film milk pouches. Once again, the prevalence of the film milk pouch in the marketplace is the result of public waste management policy.
Since 1972, Ontario regulations have mandated refillable containers for the sale of milk in quantities of four litres or more. Amendments to the regulations allowed the sale of milk in quantities of greater than four litres in film pouches. Subsequently, the ministry gave Silcorp (owners of Becker’s convenience stores) permission to sell milk in four-litre rigid high density polyethylene (HDPE) containers as long as those containers were sold under deposit. Silcorp claims that their deposit-return system for milk jugs provides them with a competitive advantage in which consumers must make another trip to a Becker’s store to return the milk jugs.
The current “milk regulations” effectively mandate either refillable co
ntainers, containers of minimal mass and material (e.g., polyethylene film pouches), or rigid containers recovered under deposit and managed by the brand owner for volumes of four litres or greater. However, recent changes proposed under the ministry’s regulatory review process would have seen the milk regulations eliminated. Producers of the film pouch argued that elimination of the regulations would open up the market to any container and large HDPE milk jugs would end up in the Blue Box. (HDPE, like most plastics, is a material with high collection costs and low market value). The ministry is considering this argument and a new regulation may be forthcoming which may limit the sale of four litres or more of milk to either film pouches or other rigid containers only as long as those containers are recovered and managed by the brand owner.
When brand owners don’t rely on municipal waste management programs, and instead take responsibility for their own packaging, they’re able to choose more profitable packaging and their own (often less costly) waste management solutions.
Such an approach has been recently adopted in British Columbia for a wide variety of beverage containers. Brand owners there are required to submit stewardship plans for their packaging and participate in a privately-operated beverage recovery system. By putting the onus on brand owners to manage their packaging, government extracts itself from micro waste management. More importantly, brand owners are then at liberty to market whatever package they want and both bear the full costs and enjoy the significant benefits of free choice. u
Usman Valiante is a consultant with General Science Works in Toronto, Ontario.