The State of Maine has stood out as a leader in the U.S. product stewardship movement, passing the country’s first extended producer responsibility (EPR) laws on electronics, thermostats, fluorescent lamps, and comprehensive framework. It also passed laws on automobile switches and batteries. In the U.S., there are now more than 70 EPR laws in 32 states on 10 products. These laws have begun to change the wasteful ways of our society by requiring manufacturers to internalize product lifecycle costs that are otherwise imposed on the public – from manufacture to ultimate recycling or disposal. By recovering valuable materials, these laws are also the backbone of a vision for more recycling jobs and greater national security by controlling the source of materials for use in new products. Maine exhibited an elegant pragmatism in passing its EPR laws. The Maine State Legislature and Department of Environmental Protection (DEP) carefully considered well formed options, made clear decisions, and achieved results.
In a crushing turn for the product stewardship movement, Maine Governor Paul LePage sought to reverse these laws since taking office in 2011, threatening to nullify significant economic and environmental progress in the state. It appears that the Governor has chosen to listen only to those who oppose Maine’s EPR laws, and shut out the viewpoints of important stakeholders such as Maine’s local governments, businesses, environmental groups, and others in the state who might disagree with his preconceived notion that government regulation equals economic stagnation.
To be sure, there are many businesses that support EPR, particularly product recyclers, which create up to ten times the number of jobs as those working in the waste disposal business. Although there are several business groups opposing Maine’s EPR programs, including those that manufacture carpet, mattresses, fluorescent lights, thermostats, and toys, one company – Honeywell – has stood out as an example of why the public interest can only be served by including the viewpoints of all stakeholders. Honeywell has manufactured and sold more mercury thermostats than any other company, and for this reason it is on the hook to pay more money than any other to safely collect and recycle those mercury thermostats removed from walls and replaced with newer models. Honeywell is also the majority player in the Thermostat Recycling Corporation, which has collected only 5 percent of the mercury thermostats sold into the market. Yet, through its industry lobbying organization, the National Electrical Manufacturers Association, Honeywell opposes legislation that would require the company to collect and safely recycle its fair share of mercury thermostats manufactured and installed in homes and businesses over the past 50 years.
According to the U.S. Environmental Protection Agency, mercury exposure can lead to memory loss, complications related to attention and language, inhibit motor and coordination skills, and negatively impact many other areas of neurological development. Mercury pollution is also responsible for warnings in Maine and across the country that alert consumers to limit their consumption of certain types of fish that contain high levels of mercury. Fish and Maine have always had a strong relationship. But over 67 tons of mercury have been emitted into the environment since 1998 as a result of thermostat manufacturers failing to meet their social responsibility to safely collect and recycle mercury thermostats. It is truly shocking that this staggering statistic was not a sufficient reason for the Governor to seek out other perspectives. Even more baffling is the fact that Honeywell sought PSI’s assistance in 2006 to pass the original thermostat legislation in Maine, consented to an agreement that PSI mediated with company executives, Maine DEP, and state environmental groups, and then proceeded to spend the next 6 years fighting the same law it had initially supported.
On January 16, public comments were due to the Maine DEP on the agency’s second report issued under its 2010 EPR framework law. This report, released in December, was supposed to evaluate the thermostat recycling law and the five other state EPR laws. PSI joined more than 150 Maine citizens and other state and national organizations when it submitted comments. While PSI supports the effort to evaluate these EPR programs, we found the report to be truly unworthy of being called an evaluation, let alone a “cost-benefit analysis,” which implies rigorous analysis. This report is merely a biased tool that disparages EPR programs while using incorrect or incomplete information. It even denigrated the state’s EPR program staff by leaving the strong impression that they took inappropriate actions, without providing any justification for these statements. PSI strongly believes that this report should be redone with greater competency and wider stakeholder input.
Governor LePage seems to have created a culture of fear in his own environmental agency, where thoughtful discussion is unwelcome and strict adherence to his perspective is required. He seems to believe that laws pertaining to environmental issues have no connection to improving the economy, and fails to understand that EPR laws foster the healthy environment that is so crucial to Maine’s tourism, fishing, hunting, and way of life. His black-and-white, us-versus-them ideology makes him incapable of partnering even with industry groups at the forefront of the environmental movement that want to sponsor stewardship legislation in Maine to create more jobs, save money for local governments, and protect the environment.
Good government policies can lead to private sector innovation by creating a level playing field and, at the same time, reduce the external costs imposed on society by actions of powerful corporations. America is a democracy. We need state leaders who listen to all its citizens and seek to balance government regulation and free market enterprise so that innovation is unleashed while public interests are protected. This balance has been horribly upset in Maine. We hope for its return.
“EPR’s Broken Promises” — Bah Humbug!
Government is so easy to rail against. How great it is to lambast those faceless time-sucking bureaucrats that don’t care anything about Me. How fun to stomp around, spit into the wind, and swear about all that they do wrong.
In the latest edition of E-Scrap News (December 2011), the Director of Corporate Environmental Affairs for Sony Electronics, Doug Smith, kicked a lot of dust onto the EPR bandwagon. He waived his arms madly and decried all the failed promises and half-eaten logic of pointy-headed pension-brained cubicle lifers. But by the end of his article, entitled “EPR’s Broken Promises,” Doug was onto something. He was asking us all to consider the programs in Canada and Europe, which resulted in “rational laws” and “protected the current economic markets and developed fair market financing.” Doug is rightly concerned about how government policies can best accomplish laudable goals, as well as to encourage product design changes by individual producers managing their own products.
Sure, there is much you might disagree with in Doug’s article. The claim that “[EPR has] no influence on product design” is as unsubstantiated as the definitive statement that it does have influence. Nor does the article fully explore that there are many other reasons why government pursues EPR laws – among them fairness to taxpayers, lowering government costs, environmental benefits, and recycling jobs. It also does not mention that many of the problems with the current laws were caused by electronics manufacturers failing to agree among themselves about what is best policy. Also, the statement that EPR is a “hidden tax” mixes up what is paid for by taxes (most government programs) and what is a consumer product fee (EPR). And the “regressive ripple effect of cost internalization” is a real mind bender. Oh, and my favorite – that no EPR electronics laws except CA’s ARF can claim to create jobs because there is no way to ensure that the jobs stay in the state.
But all the hand waving aside, Doug is pointing out the real need to take an honest assessment of the 25 U.S. EPR electronics laws. Which work, and which don’t, and why? What can we learn from laws in other countries? How have these laws performed relative to lowering costs, saving governments money, increasing recycling, creating jobs, and creating a level playing field? What are the policy best practices, and should these be woven into a new federal law that covers all the states?
Emotions can often run high with EPR. After all, the movement has created a paradigm shift of tectonic proportions that has changed the dynamic of how waste in the U.S. and globally is managed. For electronics EPR in the U.S., it is time to step back and assess the situation in a balanced manner – with all the stakeholders at the table.
Real Product Sustainability Requires a Lifecycle Approach
Every two weeks, PSI members and partners receive updates on product stewardship news from around the world. A recent NY Times article on battery recycling caught my attention because it illustrated how product sustainability requires a full lifecycle perspective — not only a focus on end of life. The December 8 front-page story described how processing methods used at a Mexican plant for recycling vehicle and industrial batteries from the U.S. are poisoning workers and citizens. The batteries are recovered — mostly voluntarily — at a very high rate in the U.S., without the need for an extended producer responsibility system, because there is great demand for the lead in the batteries. However, those collecting the batteries are skirting U.S. laws by shipping the batteries to poorly run facilities in Mexico. The money saved by companies is at the expense of the health of workers, citizens, and the environment. It is also at the expense of U.S. companies that are abiding by more protective standards in the U.S. There is truly no such thing as a free lunch. We need to level the global playing field so that U.S. companies do not lose business to companies operating abroad under insufficient standards. We should require U.S. companies to certify that they are using material processors that truly protect the environment all throughout the product lifecycle. This is real product sustainability. It is time for U.S. citizens to demand global environmental and social standards of protection for the products they consume.
In Search of Honest Dialogue: Six Stages of Industry Grief
The Product Stewardship Institute was founded in 2000 to establish cooperative agreements with stakeholders to reduce the lifecycle health and environmental impacts from consumer products. Most advocates at the time pointed their fingers only at producers, suggesting that the responsibility was solely theirs. Instead, PSI said the responsibility was shared among all stakeholders, but that producers had primary responsibility for financing and managing the system. This nuanced framing of the product stewardship movement as having a lead actor with a strong supporting cast helped the movement take hold in the U.S.
Over the past decade, PSI has knocked on the proverbial door of over 15 industry sectors and offered to work collaboratively to reduce the unintended lifecycle impacts resulting from their products. Companies, like the people who run them, have responded in a variety of ways. These responses usually fit within a trajectory of perspectives that reflects the culture of the industry sector and the individuals who lead them. Whether and how these perspectives change through discourse is also a reflection of the industry, its leadership, and external influence and circumstances. In general, PSI’s experience is that the perspective of most industry sectors proceeds along the following path during the course of a dialogue: (1) there is no problem; (2) government should do more to address the problem; (3) more funding is not needed; (4) government programs should be paid for through a visible consumer fee; (5) industry programs are more efficient so the private sector should take programmatic control; (6) don’t hold us responsible for meeting performance goals.
Of the industries we work with, only two manufacturers – paint and rechargeable batteries – have fully engaged government, and both were responding to the threat of legislation. Perhaps the paint industry learned from previous legislative battles on lead paint and volatile organic compounds and saw how it could benefit from the unified national process that PSI offered. Maybe the rechargeable battery industry learned that collaboration with governments was needed to implement its own voluntary producer responsibility program. Whatever the case, the rest of the industries have either refused to engage in a constructive dialogue about the problems caused by their products or they engaged for a period of time, sometimes up to six years, before digging in against further discussion.
The six phases above have been called Industry Stages of Grief by my colleagues in the British Columbia Ministry of the Environment. These phases represent the progression of perspectives that most corporate executives go through when they are confronted with problems caused by their products. No company likes to be told that their products cause pollution and add to the financial strain of governments. None wants to be asked to change its business practices, since change will always mean an investment of resources. The key is whether a company or an industry sector is willing to learn, and also believes it can convince other stakeholders of its viewpoint. I have found that all stakeholders have the potential to change their positions once they engage in dialogue. This change of perspectives happened at every one of PSI’s dialogues, no matter which industry sector we engaged. Government officials learned as much as their industry colleagues, and all positions were influenced as a result.
Unfortunately, what we are seeing now is a merging of companies into Corporate America that believes that it doesn’t need to engage, doesn’t need to listen, and doesn’t need to do very much of anything it doesn’t want to do. And this is a very dangerous place for them to be. Remember the car companies that fought against fuel efficiency standards for so long and so hard that they lost out to foreign auto makers that figured out how to make high quality fuel efficient vehicles? That is what is taking place right before our eyes with regard to the use of natural resources in consumer products. Our industries are saying Hell No to any regulation, even if it means a level playing field for each one of them to compete for recovering valuable materials. If they keep up their antics, they are destined to end up in the auto junkyard and waste yet another opportunity. And guess who will be clamoring for a government bailout when they wake up?
To be sure, there are companies that are engaging with external stakeholders and have figured out how to make social and environmental sustainability a key component of their business models. For many others, it is difficult to break from the pack.
The Industry Stages of Grief outlined above is a general guide. Manufacturers enter at different places along this trajectory, and proceed at different speeds. All stakeholder viewpoints must evolve to some degree for negotiations to be successful. It takes a commitment of resources for groups of individuals who represent divergent viewpoints to jointly embrace a common idea. There is a dynamic tension that occurs in negotiations. For the dialogue to succeed, the pace of change must meet the expectations of the stakeholders, particularly the governments that now pay a huge cost to manage waste. Progress must be fast enough to keep them from unilaterally legislating. On the other hand, if these regulators proceed too quickly, before strong coalitions can be formed to support the desired changes, they risk not only alienating the industry groups they want to engage but other key stakeholders as well.
Gilles Goddard, an industry representative from Canada, uses the following phrase to capture the delicate dance of negotiations: “You can’t pull a flower to make it grow.” Negotiations take time, perseverance, and the right individuals who want to reach an agreement. Timing is a key element. If government pushes too hard or pulls too fast, it can ruin the chance for success. But if industry moves too slowly, it can also sour the opportunity for an agreement, and result in unilateral government legislation.
Honest dialogue anyone? Is there anybody out there?
That Used to Be Us. The title of Thomas Friedman’s latest book sounds like a deep dark downer. Instead it is a wonderful framing of problems we face as a nation and the steps we must take to get back in the driver’s seat. As with many large macro-scale issues affecting our nation, we can also see them reflected at a micro-scale, in this case in the product stewardship movement. And, not surprisingly, the authors plead for producer responsibility policies in the U.S. to capture lost jobs to China, highlighting the plight of one California-based electronics recycler, Mike Biddle of MBA Polymers.
Written with Michael Mandelbaum, the book’s thesis is “…that China’s educational successes, industrial might, and technological prowess remind us of the ways” we used to be as a nation. Friedman and Mandelbaum focus on four challenges that we must address as a nation – globalization, the revolution in information technology, the nation’s chronic deficits, and our pattern of excessive energy consumption. The book also highlights one common theme that undercuts the malaise that runs across our country’s attempts at problem solving – a disdain for government and a firm belief in the myth of absolute free markets. To me, this is one of the biggest hurdles we need to overcome.
One of my first jobs out of college was with the New Jersey Department of Environmental Protection. I was hired to write permits for companies discharging effluent to groundwater and surface water. I had little educational training, and was not provided training on the job. I arrived at the industrial facilities with a checklist of To Dos, with little knowledge of what I was doing. I was matched with engineers and scientists with years of experience that dwarfed my understanding. And yet I was required to write a certain number of permits each week. When I asked policy questions of my management, I was told to keep writing permits. If I was one of the companies I regulated, I would be tempted to think that all government officials were losers. This is the attitude that grew among businesses in the 1980s and has gained steam over the past 30 years. Ronald Reagan made a career of denigrating government officials, and the Tea Party considers it hallowed ground.
But I didn’t jump on the pile of government bashing. Instead, I quit my job, went back to school, and sought to become a different kind of government official, one that fostered free market competition with sensible rules. There are many of that type of government official out there, and they are now in the majority. But no one wants to notice. Instead, we continue to hear uncompromising anti-regulatory dogma. I yearn for a more healthy balance. Just as jobs and the environment go hand-in-hand, so do regulations and the free market economy. In fact, without this balance, regulations will choke progress and the free market will result in corporate excesses requiring government bail-outs. Again.
That Used to Be Us recounts how Theodore Roosevelt’s experience “…taught him that for business to thrive it required consistent and transparent rules, as well as regulators authorized to prevent abuses and hold businesses accountable.” It mentions that “His [Roosevelt’s] concept of the vital role government had to play to regulate markets, as well as to protect public health and safety, not to mention to safeguard our nation’s wilderness, laid the basis for America’s Progressive era.”
Here are a few more tidbits to ponder from Friedman/Mandelbaum: “Markets are not just wild gardens that can be left untended. They need to be shaped by regulations that promote risk-taking but prevent recklessness on a scale that can harm everyone. The need for regulations arises from an unavoidable feature of any free-market economy, one that economists call ‘externalities.’ These are the costs of free-market activities that are not captured by prices, for which, therefore, nobody pays, and that can injure the society as a whole. To correct this market failure, government has to step in to make sure that something closer to the full costs of the activity do somehow get paid.”
These concepts are not new. In fact, they are basic economic principles. In his November 6 New York Times column, Paul Krugman wrote about the true costs of hydraulic fracking, saying “…special treatment for fracking makes a mockery of free-market principles. Pro-fracking politicians claim to be against subsidies, yet letting an industry impose costs without paying compensation is in effect a huge subsidy.”
Why is it that the government we rely on to correct market failures is so criticized for its attempts to tame the beast? And why is it that those whose products cause external costs on our society believe that voluntary solutions are the only solutions that exist, and that government should back off and let industry police itself, even when the evidence suggests over and over that this is not possible?
The balance between government regulation and the free market economy has gotten horribly out of whack in the U.S. The Product Stewardship Institute was founded on the principle of collaboration with industry. We spent countless hours explaining the concept of externalities, documenting actual costs to government and the lost jobs owing to pure waste of valuable materials. We jointly identified common goals, uncovered barriers to reaching those goals, and explored possible solutions. Data prove that product stewardship systems reduce external costs and turn wasted materials into jobs and economic value. Only a few U.S. industries are willing to accept this truth. Others fight.
The more we have succeeded in passing EPR laws, the more that companies have placed their bets on the corporate wheel of fortune. They have slowed legislation through lobbying, reducing their own corporate costs while imposing continued costs on the environment and government. There is no doubt that corporate change is hard to achieve, especially when those with the power are benefiting unfairly. If this sounds familiar, it is no wonder that Occupy Wall Street has struck a chord with Middle America. While those in tents plead to remedy a range of inequalities, those promoting product stewardship can rest assured that their micro-issue has resonated with the macro-issues facing our nation.
It is time for balance and time for change. That really can be us.
Why We Need Regulation for Fair and Effective Stewardship Programs and Why Voluntary Systems are not the Answer
Last month, as the Product Stewardship Institute celebrated its 10th Anniversary at our national forum, a new coalition of manufacturers seeking voluntary programs announced its creation. The Product Management Alliance (PMA) launched a press release stating that it seeks to “…support voluntary market-based extended producer responsibility efforts and voluntary incentives for increased recovery and sustainable product and package design.” PMA is comprised of manufacturers of carpet, electronics, toys, paper, packaging and transportation materials, mattresses, plastics, personal goods, and pharmaceuticals. But while voluntary programs have a definite role in reducing the health and environmental impact from consumer products, they are no substitute for balanced regulation, which is often a better way to foster innovative market-based solutions.
One good place to start is with the facts. Voluntary, market-based approaches will result in high collection rates only when a product has value at the end of its useful life greater than the cost to collect and transport that product to a secondary market. For example, many retailers collect toner cartridges because they can refill and sell them at a profit. No regulations are needed because the value of the used cartridge is greater than the cost to collect, transport, refurbish, and resell the refurbished cartridge. Retailers have the incentive to heavily market the return of those cartridges. In another example, a car battery left on the curbside will magically disappear because some enterprising scrap dealer will always pick it up and bring it to market for the value of the lead. Unfortunately, though, the cost to properly manage many other consumer products – including carpet, mattresses, electronics, toys, and all the other products whose manufacturers have formed the Product Management Alliance – is much greater than the market value of the used product.
After nine years and a signed agreement, the carpet industry’s best efforts to put in place a voluntary collection and recycling system has resulted in the recycling of only 4.5 percent of all the carpet available for recycling in 2010. The rest of that carpet material – more than 95 percent, or nearly 2.9 million tons – was disposed of in landfills and incinerators. Not only was this material wasted, but it causes operational problems at these disposal facilities, resulting in extra costs. The 13-year old voluntary industry thermostat recycling program reached only a 5 percent recycling rate before governments started to regulate. And the voluntary industry recycling program run by the rechargeable battery recycling industry for the past 17 years has posted only a 10-12 percent rate.
Wasted resources result in lost jobs and economic value. This is not a band wagon to hop on and emulate.
Don’t get me wrong. PSI supports voluntary programs under certain circumstances. Voluntary programs work well as a ramp up to regulated programs. They can grease the wheels so that, when a regulated system kicks in, the players know what they are supposed to do. These programs can also allow an industry leader to spark an innovative program. PSI worked with Staples in 2004 to develop the country’s first computer take-back program, which was piloted, then scaled nationally after two years. This voluntary program is available to everyone, and it resulted in innovative programs by others in the office supply sector, such as Office Depot and Office Max, as well as Best Buy. And voluntary programs can operate in areas where no laws, or weak laws, are in place.
But relying on manufacturers to voluntarily collect their products is like trusting that people will stop at intersections with no stop lights or signs…and no threat of enforcement.
Some people will have the sense to do it, but most will not. This is why the environmental movement was born nearly 50 years ago. It was because the market cannot police itself, resulting in environmental externalities in the form of pollution that impacts all of society. Do we really have to explain this concept all over again? Have we regressed this much?
Imagine a professional ballgame with minimal rules, no common goals, and no referee, where each player performs according to his own definition of success, and where there is no penalty for not playing. Like this imaginary game, voluntary product stewardship programs create a competitive advantage for those companies that will not act unless forced to do so. And, in every case, there will be a significant number of those companies. This reticence is unfair to those corporate leaders that know what is needed, have the ability to reach high performance, but get dragged down to the least common denominator.
The buzz among the product stewardship community is that the formation of the PMA is an indication that the product stewardship movement has gained steam, attention, and credibility. There is an interest in finding ways for voluntary industry initiatives to integrate with regulated programs. But there is also a concern that PMA is promoting voluntary programs to block sensible laws that will require them to take greater responsibility, even if the results will be better for the common good. There are other concerns about voluntary programs. Since they rely on the good will of companies, they could be here today but gone tomorrow. And it is often hard to know how effective they are since program operations are often not transparent, and companies selectively report data.
For the past 30 or 40 years, there has been a creeping sense among some in politics that all government officials are inept bureaucrats tying companies in knots, preventing job growth, and wasting investment dollars for little benefit. To be sure, those officials exist. But most officials I know are interested in using their authority to create a level playing field for fair competition that will result in more recycling jobs from materials that previously polluted the environment. They want to set broad performance targets and allow companies the flexibility they need to innovate and reach the targets at minimum cost. That is the type of balanced regulation and progress we need.
Government product stewardship regulations will result in fair and effective systems. Voluntary actions will not.
EPR for Packaging in the U.S. – the Landscape
It is widely known that the route to producer responsibility in the U.S. has been markedly different from the route taken in Europe and, to a degree, Canada. In the U.S., issues were prioritized based largely on toxicity. When the Product Stewardship Institute (PSI) held its first national product stewardship forum in 2000, we asked state and local solid waste management officials across the country what they considered their biggest waste management problems. By far, the number one issue was electronics, followed by mercury products and paint. For this reason, in the U.S., we focused on these products as the top issues.
Europe, however, started with Germany’s packaging law in 1990. Over the past 20 years, more than 30 European countries have adopted extended producer responsibility (EPR) programs for packaging. Four Canadian provinces have now enacted packaging EPR laws. And the U.S. is still building the groundwork for action.
Here is how the landscape is shaping up for EPR for packaging in the U.S. Proponents of EPR include, not surprisingly, state and local government agencies that started the U.S. product stewardship movement. However, all governments are interested, not just those in progressive states. The cost of managing waste has become a big issue for government, and they are ready to act. Governments are interested in saving money, but are also concerned about the loss of control over the collection of recyclables from households. PSI has been convening its state and local government members to figure out the type of EPR system they want as a model in the U.S. Other EPR supporters are, also not surprisingly, environmental groups. And that is where the current support for EPR for packaging and printed materials stands at the moment.
There are some exceptions among industry. Nestle Waters North America (NWNA) has stepped out as a major proponent of EPR, and PSI is working with them, among many others. NWNA wants to show that EPR can result in increased supply of recycled materials on par with the rates achieved by beverage deposit laws. This position is not to be confused with the position of others in the beverage industry that developed the EPR packaging bill in Vermont in 2010 that included EPR only if the state’s 40-year old container deposit law was repealed. That strategic misstep has confused many people into believing that EPR is synonymous with a repeal of the bottle bill, and has created great animosity among stakeholders. But it has gotten people talking.
“If success is measured by the achieved recycling levels, then member states with strong producer responsibility systems have successfully increased overall rates.” 2005 European Commission Study on Packaging Waste and Options to Strengthen Prevention and Re-use of Packaging
Consumer packaged goods (CPG) companies have, for the most part, been uninterested in engaging in a discussion about EPR for packaging in the U.S., even though their counterparts are operating under the exact same systems in Europe and Canada. Sierra Fletcher, our Director of Policy and Programs and I spent four meetings over nine months with representatives from P&G, Kraft, Unilever, Colgate-Palmolive, ConAgra, and other CPG companies in meetings held by the U.S. Environmental Protection Agency. These companies, in general, believe that we can increase recycling significantly solely by optimizing the current system. In my ten years of engaging brand owners in EPR, we know that this is a necessary step in the process because the existing system can always be made more efficient, and that reduces cost. But it is always only a stage in the process of moving toward an understanding that EPR, and perhaps other systems, are also needed. Only two CPG companies – Estee Lauder and SC Johnson – have engaged PSI in a real discussion on EPR. Estee Lauder is a big fan. SC Johnson does not believe it is the right solution.
The rest of the stakeholder groups are in learning mode, and this is who PSI is talking to.
End users of glass, plastic, paper, aluminum, and other metals – so called commodities – have started to warm to the idea of learning about EPR. The Association of Post-Consumer Plastics Recyclers invited me to speak at its annual meeting in June. I found an engaged and interested group of plastics recyclers that were desperate for ways to increase the recycling of plastics. They want more supply of high quality recycled plastics at the best possible price. They are looking at all solutions, and their staff and policy committee smartly have begun to learn about EPR and how it can help them. Have they embraced EPR whole-hog? No. But do they think EPR might be part of the solution for more business and more jobs. Absolutely.
Plastics recyclers are leading the commodity groups in understanding that quantity, quality, and price can possibly be achieved by EPR. But aluminum is not far behind. I just got back from a trip to Chicago where the Aluminum Association had its annual meeting. I spoke to aluminum industry executives about what EPR is and isn’t, and how EPR and the bottle bill can live together or apart but that the decision should be up to the brand owner as to how they will meet aggressive performance goals. Aluminum industry representatives asked all the right questions, and we have begun a healthy discussion.
Representatives of glass and paper commodities are still warming to the idea of even having an in-depth discussion about EPR. But PSI is talking to them as well. A key concern of the paper industry is why they should face the potential transactional costs of a shift to EPR when their material is already recycled at a high rate.
We are also having discussions with waste management companies, which view EPR as a potential threat to their business models. These companies have invested in recycling and waste disposal trucks and facilities, and in a business strategy that will need to be flexible to respond to the changes ahead with EPR.
Other groups are pushing the conversation as well. The newly formed PAC-NEXT, based in Canada but working with retailers, CPG companies, and related businesses that operate across North America, has invited PSI to engage with its corporate members with the goal of helping the packaging industry transition toward a world without packaging waste. PSI is co-chairing a PAC-NEXT project to develop best practices for post-consumer material recovery, including EPR, which will lead toward harmonization of programs in North America. And Future 500 out of San Francisco is selectively engaging stakeholders on EPR in the U.S.
Packaging and printed materials is a product area that is much different from others we have tackled in the U.S. – yet at the same time it shares with other products the fact that our traditional waste management system has relied on the patchwork of local and state governments to clean up after us. A solution will not be achieved overnight, but we are starting to build it. There are many stakeholders with multiple interests that need to be melded into a cohesive agreement that is sustainable. These stakeholders are not at the same place in their interest and willingness to develop a model EPR bill in the U.S. But these discussions are taking place, and coalitions are forming.
But the first thing that needs to happen is that people learn the facts, and that is where PSI is spending its time – educating all stakeholders about EPR so that they understand how EPR will result in less waste, more recycling, more jobs for the recycling industry, and lower costs for government. This is all about how good government and the right regulations CREATE jobs. It is time for this reality to be heard loud and clear in America.
Check out the article in Plastics News reporting on my presentation to the plastics recycling industry. Although there are a few factual errors in the article, it will give you a good sense of what I said, and about how EPR can increase material supply and quality, and lower costs.
Phone Book Action
PSI recently launched a 30-second video on the problems associated with unwanted phone books, asking citizens around the country to take a stand for consumer choice and waste reduction. The video directs individuals to a Phone Books Action Page that provides action steps citizens can take, including opting out of receiving phone books and signing a petition in support of legislation. Please distribute these links to your contacts to encourage others to help reduce the proliferation of unwanted phone books, conserve natural resources, reduce greenhouse gas emissions, and stop the use of taxpayer dollars to manage an industry problem.
The Infamous Light Bulb Law: What the Tea Party, Environmentalists, Government, and Manufacturers Have in Common
While a light bulb may seem like a trivial item, it has incited momentous debate. To energy efficiency advocates, the light bulb symbolizes the opportunity to upgrade an Edison-era technology, save money, and reduce greenhouse gases and other environmental impacts. In the Tea Party’s eyes, the light bulb is a prime example of an overly pervasive government dictating what items we can install in our private homes. To me, many actors – Republicans and Democrats, environmental groups and anti-government cheerleaders – have turned the lights out on the public, muddling and oversimplifying a complex issue.
In 2007, President George W. Bush, signed into law the Energy Independence and Security Act, which requires light bulb manufacturers to improve household bulb efficiency by 30 percent and phase-out 100- and 40-watt bulbs between 2012 to 2014. The law exempts “specialty bulbs” like those for chandeliers, and does not mandate using any particular type of energy-efficient bulb.
Not only was the federal bill signed into law by a staunch Republican, but it also had overwhelming bipartisan support. The House passed the bill 314-100 following its 86-8 passage in the Senate. Lighting manufacturers and retailers also heavily favored passage of the bill. “We support the notion that efficiency is a desirable thing, and this type of standard has been a part of our body politic for a long time,” said Randall Moorhead, vice president of government affairs at Philips, earlier this year.
The Energy Independence and Security Act was also touted as a way to lower our foreign oil dependency. Although many of us have warmed to the glow of incandescent bulbs, the U.S. EPA notes that 90 percent of an incandescent bulb’s required energy is wasted as heat, meaning increased use of scarce and highly polluting natural resources such as oil and coal. The Natural Resources Defense Council also predicted annual savings of $13 billion in energy costs and a yearly reduction of 100 million tons of carbon dioxide emissions.
Before the bill was introduced, technology gurus were at work developing energy-efficient alternatives. According to the U.S. Environmental Protection Agency, one such alternative – compact fluorescent lamps (CFLs) – use 75 percent less energy and last 10 times longer than traditional incandescents. The U.S. Department of Energy asserts that, over its lifetime, a 25-watt CFL actually costs a consumer $105 less than a 100-watt incandescent, factoring in the cost of the bulb and energy usage.
Manufacturers began rolling out CFLs in bundles, large retailers marketed energy-efficient bulbs to the masses with huge discounts, and 
consumers switched to CFLs and light emitting diodes (LEDs). Unfortunately, supporters of this well-intended light bulb law did not finish their homework. Many consumers are dissatisfied with the performance of the alternative bulbs. And worse, no one mentioned that CFLs contain small amounts of mercury and, therefore, need to be recycled once they burn out. In addition, no one explained that CFLs can break, although not nearly as easily as their well-known cousins, the linear fluorescent lamp known worldwide by anyone who works in an office or does home improvement projects. The fact that breakup cleanup is easy and not particularly hazardous (but needs to be done right) further botched communication with the public.
Does the Tea Party have something to howl about? Yes it does. But they are howling at the wrong moon, missing a golden opportunity to help the public by meaningfully addressing the real issues. To this day, lighting manufacturers are fighting legislation that would require them to create recycling programs for their product. They want taxpayers, not consumers, to cover the cost.
What does this all mean? The adoption of the Energy Independence and Security Act has certainly created chaos. Proper planning for the law’s implementation was bungled by government, manufacturers, retailers, and environmental groups. Was it well intended? Absolutely. Should we roll back the clock? No. The potential for energy savings, pollution reduction, and cost savings for consumers in the long-run are too great to sacrifice for Tea Party enthusiasts who want to shrink government into nonexistence.
What do we do now? One solution is to make sure that manufacturers of these mercury products take responsibility for recycling burned out bulbs. Also, retailers promoting the sale of the bulbs must be part of the solution, collecting bulbs voluntarily and/or alerting consumers that the bulbs must be recycled and directing consumers to convenient drop-off locations. We must also learn from this mistake on a larger scale. Manufacturers of products should account for the product’s full lifecycle impact and factor the ultimate fate of a product’s materials into a plan for recycling or proper disposal.
Government officials, environmental groups, and PSI have all succeeded in Maine, Washington, and Vermont in mandating that fluorescent lamp manufacturers pay for recycling spent mercury lamps. We hoped that this industry would recognize the need for leadership without our persuasion. But all involved parties must now roll up their sleeves and find joint solutions to past mistakes. One thing we don’t need, however, is the drone of anti-government accusations taking the spotlight off more significant issues.
Last month I was fortunate to have been asked to present at the Northeast Resource Recovery Association’s 30th anniversary conference. One of my assigned topics was “Product Stewardship in 30 years.” Initially, this task seemed daunting…until I realized that I could say almost anything since no one knows exactly what will and won’t happen 30 years from now.
As I combed through my litany of what-could-bes, I considered the notion that 10 years of U.S. product stewardship might have finally positioned us to reach far upstream to reduce product impacts, and set us on the path to true sustainability. I even went so far as to say that the current conservative Congressional winds might just open the door to the removal of subsidies underpinning product un-sustainability.
During the question-and-answer period, one of our friendly participants asked me if my cause for optimism was justified. After all, many conservative politicians don’t give a hoot about environmental protection if it means that industry and consumers must pay for added social and environmental protections. Yet members on both sides of the political firestorm are increasingly focused on eliminating subsidies (tax breaks) due to a panic-inducing budget deficit.
First on the chopping block are ethanol subsidies.
Some thirty years ago, when a confluence of circumstances pushed the concept of alternative fuels to the forefront of Congressional consciousness, those growing corn for use in ethanol production received handsome federal subsidies. No thoughtful lifecycle assessment determined if this industry was sustainable. And there was no widespread public debate on the various potential alternative fuel opportunities. But in the heartland there was a focused political interest feeding off homegrown corn that couldn’t be eaten. Age-old ag subsidies, totaling $30 billion over the next decade, are now under attack as anti-subsidy proponents point to biofuel mandates that preempt the need for ethanol subsidies.
The political equation is fraught with fretting, yet the slash-and-burn, subsidy-removing, equalizer sword that conservatives wield at the peril of losing the Iowa primary could effectively level the playing field for sustainable energy as well as sustainable products. And many appear eager to use it.
I am fully supportive of the strong backlash against subsidies. The Product Stewardship Institute’s main objective is to level the playing field for products. Focusing on a product’s end-of-life management is a huge task. But let’s face it, that movement started over 20 years ago in Europe and Canada, and spread to the U.S. 10 years ago. That movement is in full swing. The movement begging for attention relates to the unequal playing field created by subsidies, which causes truly “green” products to be at a competitive disadvantage to those products that only claim to be green, or products that cut consumer price tags but raise societal costs.
This is the next phase of the product stewardship movement.
One of PSI’s goals is to encourage consumers to choose products based on their environmental and social attributes. That is a huge endeavor, considering those attributes often fall behind in product effectiveness, price, and availability. We are still unable to thoroughly and accurately compare the environmental and social attributes of different products. PSI’s green washing webinar highlighted the plethora of environmental claims, certification companies, and public confusion over which products are truly environmentally preferable.
But if we look behind this external curtain, we begin to understand that the product manufacturing system must be challenged. Mining subsidies (150 years old) give millions of dollars each year to companies that extract raw materials from the earth at a time when we are desperately trying to promote the use of recycled materials. Additionally the lack of company requirements for clean-up operations has left 500,000 abandoned mines, polluted 40 percent of western watersheds, and racked up a bill estimated between $32 and $72 billion (not including currently operating mines). We know similar subsidies occur in other sectors like the timber and virgin paper production industry, which allows special tax rates costing taxpayers $440 million a year. Another recent PSI webinar, on mining subsidies, captured these excesses.
If we look closely, there are subsidies everywhere, particularly if that term encompasses society’s subsidization of companies that do not internalize the true costs of their products. And that is the heart of product stewardship. Our movement, across the entire product lifecycle, seeks to require companies to assume the full costs of making products. I do not want to subsidize corn growers for making ethanol, thermostat manufacturers for making sure their mercury thermostats get collected, mining companies for extracting gold to be used in electronics, or any company for costs that society must bear because of that company’s business decisions.
That is a long way of saying that, yes, I am optimistic that now is the time to sound the subsidy issue alarm, and to level the playing field for those businesses truly seeking environmental and social equity. I have no illusions that those rallying for subsidies will stop, or that others will join the effort. But the time is ripe to bring these issues into greater focus and educate ourselves and the public about what we really mean by product sustainability.
