How Could Local Governments Miss out on Product Stewardship?
Posted by GlobalPSC on Guest Blogs at 11:06 am, September 3rd, 2012Comments1
By Russ Martin, Global Product Stewardship Council President
Russ blogs regularly on product stewardship for the Business Environment Network (BEN). This blog originally appeared on BEN and has been reposted with permission of BEN publishers.
Extended producer responsibility (EPR) and product stewardship have long had as a fundamental purpose the shifting of physical and financial responsibility for products away from local waste management and recycling programs back to producers and consumers.
Some of our colleagues in the U.S., the Product Stewardship Institute, have estimated the potential benefits to local programs of producer responsibility at over U.S. $2 billion. These benefits include actual costs, which would be the direct financial savings to a local government of implementing an EPR program and service benefits, which is the value of the added benefits a municipality would receive if EPR were to take hold. For example, many local governments in the U.S. dry and dispose of latex paint because it is a lower priority than other household hazardous waste products. If they had the money, they would collect it for recycling.
So if benefits are supposed to accrue mainly to local programs, how might local governments miss out on EPR and product stewardship? Simply by not understanding product stewardship, how it’s intended to work or how to make the most of it. Or, they could fail to engage effectively with other stakeholders.
First, some basics. Most consumers want products to be responsibly managed when they reach end-of-life. More product stewardship schemes across a broader range of items are likely.
Businesses will want to leverage existing resources, including local government collections and infrastructure, rather than start new programs completely from scratch. Local governments that engage industry can reduce their infrastructure and consumer education costs. Transparency and accountability of services provided will be an important issue.
Recent discussions with a variety of local government officials have shown that many still don’t seem to understand some of these basics. The idea is not to get grants from the government for collecting additional products. Nor to invite product stewardship organisations to tender for collection / recycling contracts of particular products. Rather it’s about councils forming partnerships with product stewardship organisations to provide certain services. Strong standards will be necessary, and these will affect expectations and costs for all stakeholders. Collections should be free to consumers, and in some cases this may be regulated as in the new national TV and computer recycling scheme (NB: in Australia).
In addition, the targets for the TV and computer scheme will not necessarily match up to likely volumes of materials available for collection. The first annual recycling target is 30 per cent in 2012–13, increasing progressively each year to reach 80 per cent in 2021–22.
However, we can expect a great deal of collections initially, especially with the digital switchover and a backlog of end-of-life TVs and computers spread across Australia. Then the pendulum is likely to swing back the other way before eventually stabilising in say 5-6 years. As the targets start to really kick in, industry will then be scouring for TVs and computers in order to meet their targets. The characteristics of the products in and materials out of the scheme will vary significantly during this time, which will further complicate planning, implementation and basic commercial viability.
Liable parties under the scheme are paying co-regulatory arrangements to meet their target obligations in a cost-effective way. Once the arrangements meet their liable parties’ targets, recycling above and beyond that point simply represents a cost for which funding from liable parties cannot readily be sought. Yet the scheme’s first collections in the ACT exceeded the arrangement’s annual target for that region in one month.
Public interest and engagement cannot readily be turned on and off like a tap. Industry and local governments will need to collaborate with State and Commonwealth governments on how best to manage consumer expectations while delivering meaningful outcomes.
Consistency and reliability of service to customers is important. Yet, existing co-regulatory arrangements already diverge on whether they will cover the costs for collecting and processing TVs and computers beyond their target volumes. Councils will not be able to charge consumers for TV and computer recycling, then return those products through an approved arrangement.
This means that the cost for any excess collections beyond target volumes would need to be covered by councils, state or federal governments to maintain free collections to the consumer and avoid discouraging an engaged public. This is a transitional, yet very important, issue that will need to be managed carefully as we move towards fuller industry funding of programs.
So, if you’re a local government, how do you go about making the most of product stewardship?
First, know where you stand. What items have the greatest impacts (in terms of toxicity/hazard, volumes and public concern)? What are your costs for managing end-of-life products responsibly (including education, collections, recycling, disposal of residuals, externality costs, insurance and illegal dumping clean-up costs)?
Second, know where others stand and understand their needs. What programs are already in existence? What programs are planned or could potentially be implemented?
Third, actively engage with industries, state governments and other stakeholders. Seek agreement on program details and funding for issues such as collection types, frequency and accessibility for consumers; how best to promote returns and manage community expectations; how to address material quality/contamination; education; risks, roles and responsibilities; cost allocation (and neutrality?); auditing/verification and public reporting.
The local governments that understand these factors are in a much stronger position to truly benefit from product stewardship, especially if product stewardship expands to other items such as paints, pharmaceuticals and other e-waste beyond what we’re already seeing.
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