How Extended Producer Responsibility Can Boost Recycling Rates

 By Alok Disa, Stakeholder Engagement Manager at Future 500

About three years ago, recycling rates were stagnant and pressure to boost them became increasingly fervent. While various groups had long been clamoring for an overhaul of our country’s recycling infrastructure, this recent push has been driven primarily by a small group of companies: domestic manufacturers faced critical shortages of metals, glass, plastics, and paper.

Over the past two years Future 500 – a stakeholder engagement group – has facilitated dialogues with many organizations in order to achieve buy-in around specific policy mechanisms that would boost recycling performance. From these, a series of options have emerged, from strictly voluntary measures to deposit systems and now to Extended Producer Responsibility (EPR). Through these discussions, we have found that EPR satisfies the broadest set of stakeholder interests, and has now gained sufficient traction and support to take legislative form.

Here's why we have to continue working towards a comprehensive approach that meets the needs of a broad set of stakeholders.

Internalize externalities
Recycling rates in the U.S. are embarrassingly low and stagnant. There are strong drivers to improve these rates, including: demand from domestic manufacturers for more high-quality recycled raw materials like plastic, paper, metal, and glass; shrinking budgets at the local government level, which compel local public administrators to reduce waste management costs; and a larger trend to shift certain responsibilities from the public to the private sector by privatizing externalities.

At present, the marketplace benefits of packaging are privatized, but the back-end costs are socialized, picked up by local government and ratepayers with little control over the design or generation of the waste. EPR shifts the costs and benefits of recycling to producers, who can realize savings by making design changes that either reduce the weight or increase the recycling value of their packages.

Key stakeholders
Among major brands, Nestle Waters North America has been a key advocate for EPR. They look at the risks from long-term supply chain volatility and see EPR as a mechanism to ensure a robust supply of high-quality, low-cost material for their packaging.

As You Sow is the leading shareholder advocate on waste issues and is the leading voice urging companies to take responsibility for their post-consumer packaging and waste. They believe EPR is a proven policy that is effective at pushing up recovery and recycling rates. They are looking to build increased corporate support for EPR. Key recycling advocates such as the Cradle 2 coalition, Product Stewardship Institute, state Product Stewardship Council and several others are also doing excellent work in this arena. Many municipalities and local governments are actively seeking relief from the burdens of managing the increasingly complex infrastructure around waste diversion.

The trend toward producer responsibility
EPR is an established policy instrument in Europe and Canada. Since the implementation of EPR, recycling rates have gone up and costs have gone down, which is encouraging for EPR advocates in the U.S. That said, it is important not to place too much emphasis on success in other countries. American politics is like nothing else in the world. Plus, each state's recycling system differs from the next in significant ways, and it will take a lot of hard work to find the ideal policy for each context. However, it is hard to ignore the growing trend in favor of product stewardship and producer responsibility here in the U.S., as seen with the passing of e-waste and other product take back legislation in several states.

The dialogue
Over the past 18 months, we have convened four Dialogues on recycling, and the group has coalesced around a strategy to develop and promote model EPR policy that would cover multi-material packaging and paper. From this process, the stakeholders have identified key barriers and opportunities, found alignment among key interests, identified prospective states, created a roadmap for those states, and developed model policy and a white paper on EPR. Legislation will be introduced in 2013 and 2014 in selected states. Compared to 18 months ago, there is undeniable forward momentum to improve the U.S. recycling infrastructure. There is noticeable buzz behind EPR, for which both support and opposition is solidifying. What is less clear is what people are supporting or opposing. EPR is a set of three letters. The precise meaning often depends on which stakeholders you ask.

Most important is to focus on three core principles on which there is broad consensus both inside and outside our dialogue: internalized costs, producer responsibility, and producer management.

The question is not whether EPR will be adopted, but what it is, what it will cover, and when it will happen. To assure that there is movement in a two-to three-year time frame, some of our Dialogue process stakeholders will be pushing for active legislation in 2013 and 2014. While our formal dialogues may be over, the constructive phase of the conversation is just beginning.

Photo credit: Recycling Bins, Capitol Hill