ADFs AND PRODUCT STEWARDSHIP:

Are there Practical Options for “Hard to Manage” Products at the Local

Level?

2011 Texas Recycling & Sustainability Summit

Lisa A. Skumatz, Ph.D., PrincipalSkumatz Economic Research Associates, Inc. (SERA)

Superior, CO 80027www.serainc.com

© SERA 2011, All Rights reservedMay be used with permission of author

SERA

WHY CONSIDER PRODUCT STEWARDSHIP OPTIONS…? Some products are troublesome:

Difficult or costly to dispose (appliances, tires) Common, quickly used & disposed (newspaper,

disposable diaper, bottles, litter, bags) Hazardous High environmental or health effects

Goals may relate to these issues and beyond… Move costs to proper agent Provide incentives for changes in behavior by

consumer and/or producer Diversify revenues / funding issues / enterprise funds

SERA

VARIATIONS IN OUR CLIENT / COMMUNITY SITUATIONS

Client considerations Next steps, SWM not free / revenues diversification and

appropriateness, direction of costs; incentives Reduction goals, progress / next steps; funding; incentives

Solid waste management not free – Current revenues cover much, but: Don’t cover indirect costs of SWM (health, environmental) Don’t provide sustainable source covering even direct

costs Don’t provide incentives for waste reduction or choosing

less toxic (consumer or manufacturer)

SERA

TYPICAL PROJECT ACTIVITIES

Activities / Research on projects International inventory - Options and Case

studies Assessing product options – needs, precedent,

gap, pros/cons, etc. Demand, elasticity, revenues (net) Administration (city, county, state) Locally-suitable recommendations

SERA

LOCAL ENVIRONMENTAL FEE / INCENTIVE OPTIONS

General /broad environmental fees and taxes* General, per-household, don’t provide product incentives

Product bans Force diversion, reduce improper disposal, reduce use,

encourage use of alternatives

Retailer TakeBack* Product based, incentives for proper disposal, mfg

EPR / Stewardship* Product-based, takeback and ADF-type options

Product-based ADFs Product-based; fee at retail; incorp fees related to mgmt Polluter pay principle (encourage modified behavior by

consumers and manufacturers)

SERA

WHAT’S OUT THERE…Sales Ban Retailer Take-back ADF / Tax / Fee Prod Stew Other

Bags L, P N, L N

Batteries L,S P

Beverage S L, S

Cig/Pkg L

Packaging N N

Takeout L

Merc Lamp L

Merc Therm L N,S

Escrap S N, S

CellPhone/Batt N

Paint L N,S

CDL L

Tires L S

Sharps L

PharmaAg Pestic. N

Toxics S

Asst (appl, Carpet, Bev, Flam, Aerosol) N

SERA

MANY OPTIONS – WHAT ABOUT ADFs? ADF goals:

Change behavior (individual & production) Funding removes materials from disposal stream

ADFs commonly considered on problematic materials: Hazardous Create litter Hard to recycle

SERA

MANY EXAMPLES OF ADFs Quick examples

California Tire Fee and E-waste law (2004) Ireland, Italy, Belgium ADF on plastic single-use bags Broad-based product fees in Ontario, plus blue-box Bottle bills / deposit legislation

Retailer takeback with fees, privately-admin ADFs Particularly batteries, auto products, mercury products,

sharps Bulky and/or HHW Paint Overseas examples of pesticide containers, batteries, cell

phones, aerosol cans, packaging, appliances, mercury products, appliances, pharma, carpet, other

And many others…

SERA

ADF EXAMPLES / DISCUSSION CA DC DE WA SF

SERA

MATERIALS CONSIDERED / ANALYZED FOR ADFS+ Latex Paint Oil based Paint Universal waste /

electronic devices

E-scrap Aerosols Fluorescent

tubes & bulbs Mercury

Thermostats & switches

Propane / Butane cylinders

Batteries - alk & carbon

Batteries - Nicad / NiMetal Hydride

Batteries - Lithium

Automotive fluids Tires Sharps Pharmaceuticals Pesticides Liquid fertilizers Toxics / poisons

CDL / Treated Wood

Untreated wood

Cigarettes Single Use Bags Other Litter Packaging - Fast

Food Takeout Packaging – Product Bottle Bill / Expanded

bottle bill products / liquor

Others suggested over the years: diapers, appliances, furniture, newsprint…

SERA

SELECTING MATERIALS

Looked at: Cost to manage waste (currently & full

recovery, etc.) Demand, supply, elasticities for each product

Revenue potential Sales tax losses

Administration options, costs, practicality Precedent / complexity Behavior change / incentives… Feasibility

SERA

MATERIALS ANALYZED FOR RECENT ADF PROJECTS Fast food takeout packaging* Pesticides, fertilizer, toxics Paint Aerosols Single use bags Cigarettes Fluorescents Hard to recycle containers (combinations of standard

as well as wine, gable, aseptics, spirits) Batteries (multiple types) Universal electronics Rationales: hazardous, litter, costly, environmental

SERA

ESTIMATED REVENUE POTENTIAL (Thousands $)

Thousands of dollars annually, one SERA client

SERA

ESTIMATED LOST SALES TAXES (ONE EXAMPLE)

To get NET revenue, and address tax concerns

SERA

SHARE OF COSTS AT SAMPLE HHW

SERA

HHW FACILITY COSTS BY MATERIAL (thousands)

Total HHW costs – now, later. Costs relative to C/S recy, etc.

SERA

ADF LEVEL NEEDED TO COVER MANAGEMENT COSTS AT 100% FOR ONE CLIENT - EXAMPLES

Reasonable? Political? Change behavior? $?

SERA

ADMINISTRATION DESIGN

Locally appropriate, specific to material City – generally fees / permits, etc. County – generally property tax (generator fee

potential) State Dept of Revenue (or similar)– collects all sales

tax and remits to cities and counties. Investigate level of flexibility in structure of taxes, and “touches”

most businesses in state (exceptions)

Designing… Availability, flexibility, payer population, product

types / defn, who manages, “shared” issue, administration fee, wholesale / retail, economies of scale, enabling, auditability, set-up & on-going costs,...

SERA

ON-GOING ADMINISTRATION COSTS

SERA

PERFORMANCE CRITERIA Revenue potential Consumption incentives Environmental impacts (including tonnages in

litter, disposal, have diversion options) Cost at HHW Admin costs vs. net revenues Complexity (of admin) Likelihood of legislation @ local / state / fed Political considerations Other…

SERA

PERFORMANCE ON CRITERIA

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TOTALFast Food Takeout X X X 3Toxics (all) X X X X X 5Pesticides X X X X X 5Fertilizer X X X 3Paint X X X X 4Single Use Bags X X X 3Cigarettes X X X X 4Packaging X X 2Fluorescents X X X X 4Expanded BB - W+A+G X X X X X 5Expanded BB - Spirits X X X X X X 6Expanded BB - G+A X X X X X X 6Batteries X X 2Univers. Electronics X X X 3Aerosols X X X 3TOTAL 5 6 5 5 3 0 14 11 9 0 0

SERA

CONSIDERATIONS / RESEARCH

Big picture Goals, problems to be solved

Specific problem materials? Priority characteristics Difficult disposal? Common / quick disposal? HHW / enviro / health? Litter?

Goal(s) Change behavior, funding issues / raise funds / reduce recycling costs, reduce waste, signal mfg, litter?

WHICH option? (ADF, enviro fees / taxes, bans, takeback, EPR / PS?) Options analysis - $, costs, potential, impacts,

administration

SERA

CONSIDERATIONS / RESEARCH

Consideration of Context Legislation, budgets, etc.

Priorities / criteria / weights For the fee: political acceptability, sufficiency,

admin efficiency / feasibility; feasibility for modification over time; equity; (neutrality; discrim)

For the incentives: source reduction, diversion, environmental goals, etc.

Recommendation

SERA

SUMMARY AND CONCLUSIONS Costs of proper management rising. Revenue

options limited (enterprise, etc.)… Integrated system Behavior changes / incentives to address?

What is workable at local level? Not EPR. Maybe Bans, enviro fees, ADFs.

ADFs are successful in affecting demand elsewhere, including many materials – pros/cons. Concerns about purchasing across lines… location matters Can raise revenues sufficient to address costs and behavior

incentives (both levels) There are potentially-feasible ways of implementing / admin

SERA

SUMMARY AND CONCLUSIONS Materials and options selection depends on…

Revenue potential, consumption incentives, Rationale, enviro impacts, Mgmt cost (HHW or other), administration feasibility &

admin cost vs. rev potential, complexity, likelihood of legislation (local / state / fed), political will…

Analyzable at local level / local conditions. Clients pursuing several options

Things need to change to achieve goals. These types of options can help turn direction /

longer term for funding and behavior / choices More appropriate funding & behavior (consumer

& manufacturer) Feasible local funding options beyond traditional…

SERA

THANK YOU!

Lisa A. Skumatz, Ph.D.

SERA IncPhone: 303/494-1178; Tollfree: 866-758-6289 email: skumatz@serainc.com; freeman@serainc.comwww.serainc.com