Groups of charging for packaging waste. Are product-linked waste fees a more efficient way to reduce waste?


Term Paper (Advanced seminar), 2003

13 Pages, Grade: 1,5


Excerpt


EC 368 A – Environmental Economics

Three groups of charging for packaging waste in overview – Are product-linked waste fees a more efficient way to reduce waste? – essay based on experiences of the German Duales System (Green DOT).

By Michael A. Braun – EEM/3 (ERASMUS)

When consumers buy vegetables on a street market things are normally wrapped in some newspapers. But if they are bought instead from a supermarket next door they are at least covered by some plastic packaging. No wonder people think things are over packaged. (Lascelles, 1996) This essay is going to outline these issues. After a general introduction it focuses on three groups (pre-paid, traditional and innovative)[1] of charging for (mainly packaging) waste that include collection and processing. There will be an evaluation of implications that come up with each method as well. But the emphasis of the essay is on product-linked charging where, as an example, the German Duales System with its Green Dot, is presented more in depth. This method is widely seen as helpful for the environment because it caused both significant reductions of the quantities but also innovations within the manufacturing and packaging sector as well. Therefore product-linked charging might be seen as an efficient way to less waste. For further reading and a clear structure of the essay a short view on references and appendixes in the end is recommended.

Talking about packaging waste (plastics, glass, papers, metals, …) society is facing a tricky problem. (Tietenberg, 1998) Because it is not clear whether this kind of waste is useless or useful in the end of the day. In other words whether it is an economic good or bad. Of course packaging waste can be seen as positive. It keeps diverse goods clean and safe, so they are ready for transport and sale. After having done its task packaging can be a huge generator of new raw materials within the recycling process. Therefore it is necessary to collect, sort and process it. And this task needs a lot of employees and opens up new markets with all supporting industries. In this line of argument, waste coming from packaging can try to solve its own market failure. (Bastian, 2001) On the other hand waste always has something negative on it. Pollution costs that are not included in its price are hard to manage and expensive for society. Also the use and finiteness of resources has to be taken into account as well as problems coming up with scare disposal capacities. For these reasons politics try to come to a reduction of packaging quantity. By giving incentives both customers and producers are forced to change their behaviour significantly. One should act in a more innovative way that saves money in the long-run. And the other one should have a stronger look for products that are more environmental friendly.

Because it is not clear which side weights more, politics do have a massive problem to deal with. Of course sustainability and environmental factors have to be taken into account[2] but on the other side this market failure generates problems to consumers and manufacturers or generally spoken the society. Question is how to act with a good in the end that does neither have a real use nor a scarceness as well. And, if there is none who wants to benefit from it, who is responsible for it? Who takes care about all consequences coming up – consumers, enterprises or society? This essay is not going to solve such questions but tries to give a general idea about different ways of charging for packaging waste. Therefore it seems to be necessary to have a better understanding about the topic first.

According to Bates & Phillips (1998; B&P) or Tietenberg (1998; the three ‘R’) waste management could be divided into a clear hierarchy. The priority (1) always should lay on reduction of the quantity of waste at source. Then (2) follows the reuse of materials and objects. This means putting them back so they do not enter the waste stream at all. Later (3) recovery of value or energy from waste materials is recommended. Only as a last option (4) disposal (landfill or incineration) can be seen as an option. But nowadays incineration is not very unpopular; the method is linked to health problems and does hardly improve society’s environmental responsibility. And traditionally, a lot of the waste quantities have been land filled. However, this procedure is getting more and more expensive for several reasons. On one hand, landfill capacities are closed for environmental reasons and on the other hand, the left capacities are becoming seriously scarce. Further on current legislation all over Europe forces the waste management process outlined above in terms of the given hierarchy. Legal obligations such as landfill taxes are introduced and will become probably much more relevant in future as well. One of their aims is always to reduce the final quantity of waste for disposal and to increase recycling and reuse rates significantly. Because it is mostly believed that waste reduction and recycling are the only sustainable solutions, they also should encourage a waste minimisation in general. (McGurty, 1994) Therefore enterprises, households and public institutions should try to reduce their quantities on the long-run. For enterprises it can be assumed that a clear environmental management strategy can cause high financial savings as well as it gives a environmental friendly image in customers view.

Moreover, costs (not only monetary) caused by waste are much higher than usually assumed. They are not only the price that has to be paid to get rid of it. Again, B&P (1998; according to MCG, 1997) say costs can generally be split into two main parts: the visible and the hidden costs. In the first section solid, liquid and special waste, gaseous emissions and by-products to tackle with can be found. These are the most obvious costs. But hidden costs are high and relevant as well. They cover energy and processing inefficiencies, unrealised production capacities and re-work, lost revenue and reduced profits as well as purchase costs of materials. When all these factors are taken into consideration it becomes clear that disposal costs are only one part of the bill. On the other hand costs for waste management itself should be separated into two parts as well. They do not only cover the process of collection but also further tasks. These could be the preparation for reuse or recycling (cleaning, sorting, transportation, …) as well as disposal affairs.

But how could the government handle these problems? How can innovative ideas for waste management, that are not always easy to accept, be introduced successfully? It is widely agreed (different references) that only strong political support as well as education and information campaigns can do this. And the system has to have a high degree of reliability and cost-effectiveness. To gain stable acceptance political forces should provide benefits for both consumers and manufacturers to reduce the quantity of waste. Directly and clear linked fees can help to get into the right direction. As outlined earlier the strategy according to B&P and Tietenberg should be a clear hierarchy. Therefore most of the charging systems that are discussed following (N.N., 2000) do force consumers and producers to reduce the quantity of waste as well as they try to solve the problem of disposal. Nevertheless there can be found a wide range of charging schemes[3]. Most surprising in this context might be the fact that they are running successfully in a lot of different countries within different cultures and under different local conditions. Sometimes they are designed to cover costs and sometimes only for partial cost recovery.

When it comes to the introduction of any new waste management system Jenkins (1993) recommends to be tolerant with several challenges coming up in this period of time. There might be a adverse reaction of the target group (consumers of the waste management service) because of a lack of understanding. Sometimes some behavioural changes can be seen as well and, mostly only for a short period of time, an increase of illegal waste tipping is reported. In general it is necessary to have a high degree of participation within the relevant group but this often can lead to a significant reduction of the quantity of waste.

The first group (N.N., 2000; appendix 2) of charging for waste to mention is the ‘pre-paid section’ that contains two different schemes, waste bags and tags or stickers. In the waste bag scheme the waste collector picks up only special bags that were purchased earlier from the council or dedicated retailers. A problem within this scheme might be the matter of the bags that become part of the waste stream, and bags normally might be not strong enough to prevent serious damages (kids, animals, accidents,…). The tag or sticker scheme works nearly the same way. However, here customers have got their own bins. To be emptied a special purchased tag or sticker has to be bought and pressed on the bin. The problem is that this sign could be lost or stolen. Charging within the pre-paid group is easy to introduce and therefore the scheme is mostly used in the U.S. where it is often combined with a frequency-based collection. The advantage for councils might be the purchase up-front which creates a significant time gap, this means money comes in today but is paid for future services. Therefore customers are really aware of waste (volume) reduction for which they have got a clear incentive - to save their own money. Within this scheme it is very easy to be flexible. For a higher amount of waste customers only have to buy more pre-paid colleting signs.

[...]


[1] There is a range of different points of view. This grouping is not widely agreed. Moreover, it is a very individual idea of an solution.

[2] Often they are not that relevant within the process of decision-making. Also a lack of information and time lags in adoption of new technologies do cause serious problems of waste. Or in other words there might be too much packaging. (Lascelles, 1996)

[3] A general differentiation might be the way of payment. Some (flat annual fees, volume-based, frequency-based, waste bag, tag or sticker, product-linked) have to be paid up-front. But others (weight-based, volume-based, frequency-based) do charge afterwards.

Excerpt out of 13 pages

Details

Title
Groups of charging for packaging waste. Are product-linked waste fees a more efficient way to reduce waste?
College
University of Abertay Dundee
Grade
1,5
Author
Year
2003
Pages
13
Catalog Number
V42775
ISBN (eBook)
9783638407274
ISBN (Book)
9783640184231
File size
724 KB
Language
English
Keywords
Three, German, Duales, System, grüner punkt, duales system
Quote paper
Michael A. Braun (Author), 2003, Groups of charging for packaging waste. Are product-linked waste fees a more efficient way to reduce waste?, Munich, GRIN Verlag, https://www.grin.com/document/42775

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