International Review of Waste Management Policy - Department of ...

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that firms may still need to be made to pay the full marginal external damages
of disposal, and that if this cost is internalised, they will then have the correct
incentives, with no need for subsidies for ‘green design’ of products and
packaging.
OECD 54 identifies a range of external costs and benefits associated with
different waste management options. While landfilling has a negative benefit
(i.e. a cost) ranging from -€9.61 to -€44.75 per tonne, recycling of paper/card
has an external benefit of €45.86 to €94.17 per tonne. Thus a tonne of
paper/card that is recycled rather than being landfilled has an external benefit
ranging from around €55 per tonne to €138 per tonne.
Indeed in many cases it is clear that producers involved in such schemes still
do not pay the full marginal private cost of disposal, let alone the full marginal
social cost. Current levels of payments from producers to PROs often simply
cover a typical cost of collecting and transporting material to a recycler, thus
not meeting other private costs of landfill such as gate fees. Basing fees on
marginal social costs of disposal would allow for a greater incentive for the
collection of products for recycling, with subsequent higher payment for
collectors more accurately reflecting the benefits of avoiding disposal via
landfill.
On a wider scale, where municipalities still undertake the collection of
packaging materials for recycling in countries where producer responsibility
schemes operate, the private costs have certainly not been fully internalised 55.
� Product take-back mandate and recycling rate targets with a tradable recycling
credit scheme – The same as outlined above except that targets apply not to
each individual producer but to the industry as a whole; tradable credits are
issued with firms trading among themselves. An industry wide recycling rate
target can therefore be met with some producers exceeding the target and
some failing to meet it. Tradable credit schemes can be set up in various ways.
One example is the UK’s packaging recovery system. Reprocessors of
packaging materials issue “packaging waste recovery notes”, or PRNs, which
firms and PROs can trade with one another to meet their recycling obligations;
� Voluntary product take-back with recycling rate targets – In such an approach,
firms within an industry agree to organise a take-back system for their
products and set recycling goals. There are no government regulations or laws
mandating compliance, and no penalties for not meeting the goals. In the US,
voluntary take-back programs of this type include the Rechargeable Battery
Recycling Corporation (RBRC), which represents manufacturers of
rechargeable batteries, who pay a fee to operate a collection and recycling
54 D. Hogg (2006) Impact of Unit-based Waste Collection Charges,
ENV/EPOC/WGWPR(2005)10/FINAL, Paris: OECD.
55 Perchards (2005) Study on the Progress of the Implementation and Impact of Directive 94/62/EC
on the Functioning of the Internal Market, Final Report; Eunomia et al (2007) Household Waste
Prevention Policy Side Research Programme, Final Report for Defra, May 2007
International Review of Waste Policy: Annexes