In recent discussions over recycling policy at the state and federal levels, product manufacturers, including those in the plastics industry, have focused on the need for market-based solutions to recycling.
A June 30 Plastics News story, ``Industry groups mull alliance to address recycling mandates,'' noted concerns by the plastics industry about growing interest in programs ``that are not market-based.''
But just what are market-based programs?
To begin, we need to understand the market forces that are at play with recycling. The public's embrace of recycling and government policies to promote it has increased the supply of recycled materials far faster than the demand for those materials. The problem facing increased recycling isn't too much supply, but rather not enough demand.
When beverage producers make 660,000 tons of plastic soft drink bottles with virtually none of them made from plastic collected in community recycling programs, it is no wonder markets for recycled plastics aren't good. When these producers switch from the aluminum can or glass bottle, which contains recycled materials, to the PET plastic bottle, which does not, it is no wonder that the public, local governments, and recyclers are frustrated at how expensive and difficult it is becoming to recycle their soft drink containers.
And that is just one product in a 208 million-ton waste stream in which 77 percent of it is comprised of manufactured products.
So what is a market-based solution to reducing this waste of resources? Industry seems to suggest that a hands-off approach is best for recycling. But if that was the case, why wasn't recycling greater when recycling laws were almost nonexistent just 10 years ago?
If governments feel they must get involved, industry suggests focusing on providing curbside recycling. But as we are seeing now, this simply increases the supply of recyclable materials, without doing anything to stimulate demand. And worse yet, this continues to place the entire economic responsibility of waste management and recycling on the back end with local governments.
The current approach of making local governments and taxpayers pay for waste management and recycling is not a market-based solution, but rather a convenient way of making the cost of disposing of a product external to the cost of producing that product.
Unlike here in the United States, other countries are recognizing that companies manufacturing products and packaging that become waste must share in the responsibility to manage waste. Manufacturers should be utilizing recovered materials and considering the downstream impacts of their product and packaging decisions, yet there is no mechanism that holds them accountable.
Only when producers take responsibility to internalize the full cost of their products will markets function properly and provide an effective economic incentive to not only use recycled materials, but to design products to be more durable and reusable, use less resources and minimize waste.
To be fair, there are firms that are taking responsibility and working to expand markets for recycled materials. Unfortunately, the recent analysis from the Environmental Defense Fund points out the massive increase in virgin plastics production is far outpacing the limited efforts in recycled production — hardly an example of industry taking its responsibility seriously.
Sooner or later, state and federal governments will realize that a market economy must integrate environmental costs in order to be sustainable. How that will be done remains to be determined: industry can either step forward voluntarily to find a solution now or face more drastic approaches in the future. In either case, industry shouldn't hide behind the illusion of its market-based solutions.
Best is policy director for Sacramento, Calif.-based Californians Against Waste.
