Eco-Fees: Changing ‘Visibility Concerns’ to ‘Visible Change’
Extended producer responsibility (EPR)âthe practice of requiring the organization that produces a product or material to take responsibility for its end-of-life disposalâhas sparked debate concerning âeco-fees,â a front-end charge for the disposal and recycling of products that take up space in landfills or are potentially harmful if they make their way into the waste stream.
Municipalities historically have borne the burden of proper recycling and disposal costs. Not surprisingly, these entities support EPR programs, which shift the financial responsibility from them to manufacturers. Monies saved can then be used to subsidize municipal budgets.
With municipalitiesâ e-waste programs, consumers directly pay explicit eco-fees to cover the costs of product disposal/recycling. The debate with the concept focuses on whether these fees should be visible to the consumer or concealed within the overall price of each product.
Debating the visibility of payment: The wrong focus for eco-fees
Ultimately, of course, consumers pay the costs of properly disposing of a used computer monitor for example, whether they see a separate charge on a receipt or not. Manufacturers often favor explicit fees because it shifts attention away from the product price to the government-mandated fees. Responsibility for administering these costs, however, typically falls on retailers, who generally oppose visible fees.
The argument against visible fees is that consumers will blame the retailer for the fee, even though, as with sales tax, the retailer has no choice. The argument for visible fees is that consumers should understand the costs involved in disposing of electronic (or other) products, and that these costs should be transparent. In addition, manufacturers may hope that a visible fee may also cause a consumer backlash against poorly designed fees that could curtail or eliminate a program, as was seen in Ontario.
In July 2010, an array of products became part of the Canadian provinceâs product stewardship regimen. An additional point-of-sale charge, ranging from a penny to a few dollars for certain recyclable items, prompted a loud, public outcry over the unexpected fees. The Minister of the Environment ultimately removed the fees for most products, with the exception of electronics and tires. Since then the minister has strongly advocated including EPR fees in the purchase price and has sponsored legislation to formalize this practice into law.
Even an invisible fee, however, may still lead to consumer criticism because the overall price of the product will likely still go up. However, by focusing on the visibility of payment, policymakers are missing the two strongest benefits of eco-fees:
- Influencing consumer behavior
- Encouraging environmentally responsible product design
Influencing consumer behavior
The biggest roadblock to the success of any recycling program is changing consumer behavior in what they buy and how they dispose of products. Great infrastructure and consumer education programs donât necessarily overcome consumer apathy.
Fees and taxes, however, can be powerful tools to change behavior. For example, governments around the world have applied huge excise taxes to dissuade people from purchasing tobacco and alcohol. These fees are not designed to recover the costs of disposing of beer cans, liquor bottles and cigarette packs, but to lower cigarette and alcohol consumption. In Europe, high gasoline taxes encourage alternative transportation (such as mass transit and bicycles) and the purchase of more fuel-efficient vehicles.
Across-the-board fees, which is the approach many programs take, do little to change how people operate. If all computer monitors include the same $25 disposal fee, regardless of the size, construction or environmental attributes, why should a consumer choose one over the other? Why should a manufacturer choose to make a more environmentally responsible product, particularly when they are portrayed the same to consumers? The flat-fee approach simply shifts the cost of disposal and recycling from municipalities to consumers and manufacturers. It does not influence either the consumer or manufacturer to select a more environmentally preferable option. Eco-fees based on product design and the ease or difficulty of recycling, though, can benefit everyone.
Encouraging environmentally friendly product design
What if we looked beyond a productâs end-of-life disposal and based eco-fees on the entire environmental benefit?Â Comprehensive evaluations might consider how much recycled material a product uses or how easy it is to disassemble and recycle. We might even consider the type of fuel used in the manufacturing process. With a structure like this, the fees would reflect not just the average cost of collection and recycling, but the true value of diverting a productâs waste from landfills and lessening its impact on the environment.
In this scenario, fees would reward consumers for selecting more eco-friendly products and encourage manufacturers to use more environmentally responsible resources to create more sustainable products. If consumers demand products made with more recycled material because it saves them money, manufacturers will redesign their products to meet that demand and increase sales and market share.
It isnât logical that a product constructed out of 100% recycled material carries the same environmental impact and eco-fee as a product made out of 50% recycled material, but almost all EPR programs have this fee structure. Similarly, a product whose components are sealed and difficult to recycle is typically treated the same as a product that can be easily disassembled and recycled. Uniform application of eco-fees removes the incentive to design â or purchase â better products.
The debate over the visibility of eco-fees diverts attention from the most important issue: fair, judiciously applied fees can serve as a catalyst for educating consumers and offering more environmentally friendly products. As part of a comprehensive product stewardship strategy, eco-fees can be a valuable tool to help increase responsible product disposal and recycling.
In the end, consumers pay the same amount, whether the charge is added at the point of sale or internalized in the purchase price. Instead of focusing on the public relations aspect of the debate, policymakers should explore implementation of an adjustable fee, based on sustainability. Eco-fees can then move beyond paying for disposal and recycling to influencing environmentally responsible decisions by both manufacturers and consumers.
Carl Smith is CEO and President ofÂ Call2Recycle, North Americaâs first and largest consumer battery stewardship and recycling program. Smith leads the organization in its efforts to help preserve the environment through responsible recycling of batteries. With more than 322 million wireless devices (phones, tablets, and e-readers) in use in the U.S. aloneâall powered by rechargeable batteriesârecycling both the battery and the device are more important than ever before.
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