California's Senate Bill 54, also known as the Plastic Pollution Producer Responsibility Act, is the state's latest effort to force its policy preferences on the nation. Using its large population as leverage, the state has already radically changed how pork is produced across the country despite producing very little of its own. Similarly, vehicle manufacturers have to maintain CA emissions standards even for cars sold in other states. Now, California is attempting to alter the production of common plastic by producers and sellers across the country.
SB-54 requires compliance by any company selling covered products in California, regardless of where that company is based. Manufacturers in other states, which may have their own regulatory frameworks and environmental policies, are now subject to California's mandates if they wish to do business in the Golden State.
The law places substantial burdens on plastics producers, wholesalers and retailers, requiring them to reduce the use of plastic packaging, fund recycling programs, radically transform manufacturing methods and pay exorbitant fees for the privilege of selling in the state. For example, the law requires a 65 percent recyclability rate for plastic packaging and other covered products, including food serviceware, by 2032. Never mind that current recycling rates for these products are less than 13 percent.
While lauded as the first law of its kind, SB-54 drastically departs from common industry practices and regulations in the U.S. and will force massive changes to plastics production across the country. Proponents have suggested that the law will shift the costs of plastics waste from consumers to the industry itself. But one of the most immediate and tangible effects of SB-54 will actually be the significant hit to consumers' wallets.
By requiring that all packaging meet strict recyclability standards, companies will be forced to redesign packaging, use more expensive materials and invest in new manufacturing processes. Additionally, they will have to standardize their packaging to avoid the complexities of maintaining separate products and manufacturing methods for different states. These changes are not cheap, and the costs will undoubtedly be passed on to consumers in the form of higher prices.
For families already struggling with the rising cost of living, these price increases will be particularly painful. Essential items stretching household budgets will become more expensive, placing a disproportionate burden on low-income consumers. In the end, the people who can least afford it will be the ones who pay the highest price for California's policy ambitions. And the law may not even reduce plastic waste; similar efforts have backfired in dramatic fashion, leading to even more waste.
Beyond the direct impact on consumers, SB-54 will have a chilling effect on small enterprises that lack the resources to adapt to the new regulations. For many of these companies, the cost of compliance will be prohibitive. They will be forced to exit the California market or pass on costs to their customers. So rather than promoting innovation and environmental stewardship, SB-54 will drive smaller competitors out of the market, eroding consumer choice and consolidating power among large corporations that can absorb compliance costs.
SB-54 is also unconstitutional. By attempting to regulate not just in-state activities but also those that occur beyond its borders, California oversteps its constitutional jurisdiction. One of the primary purposes of ratifying the Constitution was to create a national market without restrictions on trade between states. To this end, the framers included constitutional provisions prohibiting states from regulating interstate commerce.
But under SB-54, an out-of-state company must either change its practices to meet California's standards or face exclusion from one of the nation's largest markets. This effectively forces businesses to comply with California's rules, even if those rules conflict with their home states' regulations. The result is a regulatory patchwork that disrupts the flow of commerce across state lines, precisely what the Constitution was designed to prevent. What follows will be a game of regulatory chicken whereby other states enact their own competitive, extraterritorial regulations to pursue their own policy goals and environmental agendas, further fragmenting the national market.
An Illinois company might have to comply with one set of packaging standards in California, another in Texas, and yet another in New York. Such a scenario would be a direct affront to the constitutional principles forming the cornerstone of American prosperity.
Plastic waste may be a significant challenge that requires thoughtful solutions. However, those solutions must be implemented in a way that does not impose undue burdens on consumers, stifle competition or violate constitutional principles. California should reconsider this law and work toward constitutionally sound solutions that preserve the environment as well as the economic well-being of consumers and producers.
Josh Polk is an attorney at Pacific Legal Foundation, a national public interest group.