Business Excellence Awards
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For Rhode Islanders, marine debris is an environmental problem whose solution has been a long time coming. You may have heard the recent news that the Senate Commission to Study Producer Responsibility Models for Paper and Packaging has been meeting since November, and will soon make a recommendation.
Our hope is that the commission’s recommendations will form the backbone for what we call a uniquely American style of extended producer responsibility, a concept that can improve Rhode Island’s marine-debris problem while also solving a critical business problem – how to increase the supply of recycled paper, metals and plastics for the country’s manufacturers.
Just as Rhode Island’s beautiful coastal waterways are facing a crisis, the nation’s recycling industry is facing a critical supply problem. Most people don’t realize that demand for the stuff we recycle at home is higher than the supply. When local recyclers aren’t able to reclaim enough material, it drives up costs, exacerbates inefficiencies in the current system and makes it more difficult for manufacturers to source enough recycled stock materials to make their goods or packaging. Major consumer brands have committed to using more recycled material in new packaging and paper, but they can’t get enough of it.
According to the shareholder advocacy group, As You Sow, Americans put into landfills or incinerate $11.5 billion in recyclable printed paper and packaging each year. Some of these valuable materials also can end up polluting the state’s coastline and waterways.
One significant barrier to more efficient collection and recovery of valuable resources is that recycling standards and regulations vary by municipality and rely on often-antiquated collection methods or confusing instructions that discourage consumer participation.
Local government did a good job of initially establishing recycling systems, but over time many of those systems have become inefficient. It is not in government’s DNA to adapt to changing market conditions, and it often does not have the resources to meet the rapidly growing demand for recycled stock materials.
That’s where extended producer responsibility (EPR) can help.
EPR is a system in which brand owners work together to create market-driven, recycling solutions. EPR takes advantage of economies of scale and leverages the business community’s experience with distribution networks, supply chains and customers to create more-efficient systems that achieve much higher recycling rates.
It achieves these improvements through better leveraging the existing curbside household collection infrastructure, with no physical take back of any packaging materials at retailers. “Away from home” recycling improvements are achieved through drop-off bins in strategic locations in the community, such as public parks, beaches and gas stations.
Under EPR, government sets a recycling target and creates a level playing field but allows the business community to figure out the most efficient and cost-effective way to meet the goal. Consumer brands would pay for the cost of recycling instead of taxpayers and ratepayers and internalize that cost into new products. Consumers would then pay for recycling according to their consumption rather than paying the same amount by household as they do now.
Local governments would no longer be on the hook to pay for and manage a local recycling effort. Instead, business would determine the true costs, manage the fee structure and direct how to spend the funds in consultation with government. Business would help scale up best practices that are currently done on a city-by-city basis and otherwise bring uniformity to a state’s recycling system.
A strong, supportive business coalition will be necessary to maintain uniformity across the country as other states adopt EPR and to keep states from using EPR as a way to fund government. If business stays on the sidelines on EPR, it just might lead to the problem faced with electronics EPR, in which state legislatures have created 25 different laws to address electronic waste in a compliance nightmare.
Getting back to Rhode Island, the commission’s hearings have shown legislators that establishing an EPR program in which producers manage and pay for the recycling of their packaging would create a new system for managing these materials that costs municipalities less, takes advantage of the best features of the existing system, is fair to all participants and creates value by reclaiming these materials for manufacturing.
EPR can contribute to solving significant environmental concerns, such as the marine-debris issue in Rhode Island, while also solving a significant supply-chain issue for businesses as well. •