Who Pays for Product Stewardship?

Below is a blog post by Scott Cassel, Executive Director of the Product Stewardship Institute, in preparation for the PSI Networking Webinar, “Who Pays for EPR? Producers, Consumer Fees, Taxes, and Political Perceptions,” on Wednesday, May 18th (1:00-2:30 p.m. EST). Please join us for the dialogue.

“There is no such thing as a free lunch.” That’s what my environmental science professor told me many years ago. He was referring to the 2nd Law of Thermodynamics which, according to Wikipedia, “…means that the universe as a whole is ultimately a closed system—there is no magic source of matter, energy, light, or indeed lunch—that does not draw resources from something else, and will not eventually be exhausted.”

Ever since being introduced to this phrase, I have found myself repeating it when I want to make a point about not getting something for nothing. Advertisements that promote free vacations and free stuff always come with a hitch…like grabbing your email address for endless promotions, or fine print on forms that sign you up for costs when an initial free promotion runs out.  You know the deal.

So why do some people want a free lunch when it comes to the environment?

These people don’t want their taxes to go up, and they don’t want to pay more for a product at the store, yet they want a clean environment. Why is that?

Here is my understanding. Most people really do want a clean environment. And they want to leave clean air, clean water, healthy land, and lots of other stuff to their kids and grand kids. Unfortunately, no one told them about the true costs for these benefits and, even if they knew those costs, they would need to be convinced that the money they paid was used efficiently and effectively. But here’s the kicker – none of us really knows the true costs of the products we are consuming at a record pace. That beautiful silver cup in your cupboard came from mined materials that have their own impacts on worker safety and health and the environment. That hand-crafted wooden crib for the new baby came from lumber that was certified by some organization whose stamp of approval states that the trees from which it came were harvested with great care. And the jeans you just bought are made from cotton grown somewhere under conditions that required a lot of resources, then dyed with who knows what type of chemicals that were treated in some way that was hopefully protective of the environment and worker safety, and did not use child labor.

Wow! Is it no wonder that we bury our heads in the sand and move on with our lives… making a living, fixing dinner, creating a home, and staying out of debt. And when it comes to paying for the stuff we use, we all want it for the cheapest price.

Remember the credit card bubble, the real estate bubble, and the housing bubble? We are now in the environmental bubble. The real truth is that most of us really don’t have a clue about the environmental and social impacts caused by the products we buy. But we are about to find out, and then we will have burst yet another unsustainable bubble.

Let me pose a hypothetical question. What if you knew that Product A had a negative impact on the water that you and I dearly value, while Product B did not? And what if Product B cost only a few cents more than Product A? Like most people, you would probably choose Product B.

Now what if Product B was more than a little bit more expensive than Product A? Would you choose it anyway? Fewer people would. They will look harder at the trade-off, and wonder whether the negative impact from Product A was really that much worse than Product B. And how would they really know? Who really knows how either Product A or Product B was made? Even if we had some idea, we are all not scientists who can stop in our tracks and calculate the impacts of every purchasing decision we make. And what if Product A performed a lot better than Product B, or you didn’t want to risk the switch and find out? What would you do then?

It’s no wonder that we don’t want to wrap our brains around the full cost of producing the goods we consume. We’d go nuts!

But we have to start somewhere.

Many companies have begun expensive and time-consuming lifecycle assessments to better understand the environmental impacts of their products all along their lifecycle, from mining, to manufacture, to use, and finally disposal. These tools have advanced our understanding of product impacts. But progress has been slow, and these assessments are often best when comparing one variable against another. Taking this information to the public so they can make purchasing decisions is still years away.

What can we do right now?

Pass product stewardship laws of course!

Product stewardship systems hold manufacturers responsible for reducing the impacts of their products. These systems provide a financial incentive for companies to design products so that they use fewer and less toxic materials and choose materials that have a market value and can be processed and re-sold after use. Product stewardship acknowledges that there are no free lunches. There is a cost to the environment when we make and use products, and there is a cost to minimize those impacts.

If we want clean water and air, green jobs, and lower costs to government, the consumer will pay more than what they pay now for many products. While toner cartridges and lead acid car batteries have a value at “end-of-life” that exceeds the cost of collection and processing, carpet, paint, compact fluorescent lamps, most electronics, and many other products don’t. The product stewardship movement has begun to reverse these external costs on the environment.

We all know that the consumer will pay at the end of the day…because there is no such thing as a free lunch…and manufacturers cannot be expected to eat the extra cost. But what if the manufacturer of Product A and the manufacturer of Product B were both required to set up systems to ensure that their products were collected and properly managed when consumers no longer wanted them? And what if these two companies truly included all the lifecycle costs of making and using their products? Only then will you have the real choice between products, since the societal cost of making that product will be included in the price you pay. But how much will you be willing to pay, and for what level of environmental and social benefit? How will you know that the impacts of making that product were truly incorporated in what you paid? And what value do you place on those benefits as compared to your neighbor? This is the bulls-eye for the debate on product stewardship.

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