Fashions in the Treatment of Packaging Waste

An Economic Analysis of the Swedish Producer Responsibility Legislation

by Professor Marian Radetzki
published 2000 • ISBN 0 906522 12 9 • £11.25

 

In early 1998, Producer Responsibility Legislation for the treatment of packaging waste was introduced in Germany. The German example has been followed by several other European countries. More recently, the EU authorities have also jumped on the bandwagon. The legislation mandates the original package users to collect the package waste, mainly for reuse or recycling purposes. To facilitate the process, households and other waste generators are forced to sort, clean and transport the waste to special collection centres.

The legislation has been put in place with no economic afterthought, and in the firm, almost religious, belief that large environmental gains will be attained as recycling replaces landfilling and burning of waste.

The present study, commissioned by the Ministry of Finance in Stockholm, is one of the first in Europe, to undertake a penetrating economic analysis of the Producer Responsibility Legislation, as applied in Sweden. Several revealing findings emerge from the investigations.

The legislation necessitates a costly effort to sort massive amounts of municipal waste, to clean particular fractions of the waste flow, and to transport them to especially established collection centres. The expansion of recycling that results from this effort is quite limited, so the cost per ton of additional recycling is huge. The net environmental benefit from the policy is only a small fraction of its cost. Each Euro expended yields a return to society of no more than 5 cents. For some waste fractions, recycling is shown to be clearly detrimental to the environment. Thus, paper burning and glass and metal landfilling are environmentally more benign than recycling.

The study concludes that the Producer Responsibility Legislation should be repealed, if welfare enhancement is the societal goal. Expanded recycling cannot be a social goal per se. If environmental improvements are in the focus of policy concerns, then one must begin by identifying the major environmental harms and the cost effective tools for handling them. Across the board treatment of waste is highly unlikely to address these concerns.

The study should prove an effective tool for convincing politicians across Europe that Producer Responsibility Legislations, as currently designed, involve high costs and small benefits, and require fundamental change.

 

Marian Redetzki, Professor of Economics at Lulea University of Technology, Sweden, has published widely on natural resource issues, particularly those relating to minerals and energy. Recycling became one of his research specialties long before the emergence of the current waste recycling fashion.

 

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