Should we charge a virgin tax?
Brazil, beyond Carnaval and its taste for open source software, is doing something we should all pay attention to: Its National Policy on Solid Waste was passed last year, and has laid out an extensive range of measures to better address the disposal, recycling and reuse of waste material.
Of most interest to the Packaging Digest community is this paragraph:
“The National Solid Waste Policy provides for Reverse Logistics, a set of actions, procedures, and means aimed at facilitating the collection and return of solid wastes to their original producers, so that they can be treated and reused in new products–in the form of new inputs–either in their cycle or in new production cycles, so as to prevent the generation of rejects, i.e., the return of wastes (pesticides, batteries, tires, lubricating oils, and plastic bags, among others) in the post-sale and post-consumption phases.”
From what I gather, this program looks to meet or exceed other similar private/public waste reduction efforts like in Europe, encompassing everything from individuals to the largest companies.
These country’s examples got me thinking: What if we began taxing all use of virgin material in products as a way to increase the pace of upping the percentage of recycled and reused materials faster? It could be on the producer, the retailer or the consumer.
Aside from the sky falling, as I’m sure many businesses would cry, this would encourage a broader based use of existing recycled, upcycled and directly reused components happening, and fast.
Or would it?
It’s possible that companies, rather than move the needle on increasing the inclusion of non-virgin materials in their products, could just find a way to pass on the cost to consumers. To do so would be an unwise move, as competitors who do jump in with both legs will be offering consumers a better product at a similar or lower price in comparison. So while businesses with a near term, narrow focus on their costs may attempt this short sighted route, it will hurt them in the end.
What if retailers were the ones taxed?
This would be a whole different story. There would be an instant incentive to find comparable, consumer attractive products that cost less for them to stock. It could prove tricky, as consumers can be deeply attached to certain brands, certain products.
If consumers were the ones taxed, I hate to say it, but I don’t think any substantial difference would be made in their buying habits, other than perhaps buying less. Look at the recent ruckus being made over gas prices. Many green pundits predict this will be what, um, drives people to get more fuel-efficient cars, investigate other modes of transit, etc.
Rewind back a few years ago when prices did the same. How much difference did it make, beyond the already green inclined? Not much that lasted beyond the eventual decline of prices. Unless prices go much higher, and people get that they’re not going lower, mainstream America won’t budge from their comfortable, familiar options.
Some may argue, is subsidizing the use of eco-preferable materials a sustainable way to go? The often cited example is the rapid decline in solar sales when it’s no longer backed with rebates and tax incentives. To that I say, look at oil, corn and all the other subsidy-addicted industries that spend tons of money ensuring their cash injections keep on coming. Most industries of a certain scale need some sort of external push/boost to become/stay viable.
But this is not a subsidy I am talking about here. This is an incentive program, for companies to stop defaulting to virgin material, and start investigating what other ways they can make their products, both reducing the company’s impact and ensuring that available resources last that much longer for us all.
Call me crazy (I’ve been called worse!) but some creative, assertive actions need to be taken to accelerate the use of non-virgin materials in as many products as possible.
What are some ideas you have for achieving such a goal?
Robert commented:
Though it’s a bit more of a socialist idea, Germany passed legislation about 20 years ago which stated that anything you made or sold, you had to take back and take responsibility for disposal thereof.
This was particularly effective: it introduced design-for-disassembly (manufacturers had to think about how to take apart components they put together). It meant retailers needed to get really organized about how to sort/recycle stuff they sold, and distribute it back to the manufacturers.
In the short term, such legislation introduces new costs. In the long term, there is significant economic and ecologic benefit to the country.
Those who think we’ll solve everything through short-term economic benefits are being naive. Personal and private gain is not the same as societal gain.
This type of thinking is why we bailed out banks, but didn’t build infrastructure.
We didn’t always think that way. Our National Park system is the best in the world, not because someone was ‘privatizing’ it or looking for ‘economic gain’ but because far-sighted and courageous individuals saw the long-term benefit to our nation of preserving Yellowstone and the Grand Canyon and many other beautiful places.
While recycled materials are a type of ‘resource’ which need to be addressed like any other ‘resource’, they’re not always pure and inert materials, like glass. And the systems we have in place to ‘mine’ recycled materials are terribly inconsistent. Each community is different. A lot of packaging put into recycling facilities ends up in the landfill simply because it can’t be sorted well.
We need to start thinking long-term about the problem.
Sparky commented:
Good intention, promoting the use of non-virgin, i.e. recycled raw materials, but the knee-jerk reaction (I'm giving you the benefit that you didn't think this through...) of reaching for the "make it a tax" lever is a very Liberal (read "Progressive") reaction, and is why this country is in an economic mess. This outcome can be achieved by other means, including education and consumer exercising choice, if 1) the argument is strong and 2) is clearly presented to the public. We are big boys and girls, and will do the right thing when given a choice. NO MORE TAXES!!!
jeff commented:
Keep the government out of it. Plastic recycling needs to be addressed from a BTU basis and not a feel good re-use of the material. Incineration with modern NOX controls will result in less oil coming out of the ground to produce plastics. This has been a known scientific fact for over 30 years but our government is not run by facts only lobbyist.
Marcio commented:
Keep in mind that a National Materials Trust Fund was proposed by major brand owners in the late 80’s, trying to propose something more palatable than deposits, quotas and bans or prohibitions.
Thanks for promoting this debate! We are really short of ideas, sometimes because we are lazy, sometimes shut down by short-sighted lobbyists from the virgin materials industry…
The best solutions are ALWAYS based on economic instruments, ideally on a voluntary basis and not managed by governments.
Marcio commented:
Something you have to keep in mind about Brazil and its taxes, positive or negative (subsidies): the country exports commodities and incentives pile up along the supply chain of virgin materials and goods made with them. Recyclers on the other hand, despite the fact that they work for the domestic market, solving a multitude of social and environmental problems, receive no incentive. Actually they pay taxes one more time and this double taxation makes their product not competitive. The solution is quite simple: stop penalizing the recyclers and they will thrive! There is never going to be a shortage of post-consumer recyclables.
Terry Bedell commented:
The way to stimulate the use of recycled materials is to make them available at a lower cost than virgin. This has worked for paper, aluminum, steel, and glass for decades. Snce the cost of collecting materials is critically important, that cost must be reduced. RecycleBank is addressing this challenge quite well and provides an incentive to consumers in precisely the right way. More taxes which always carry a heavy cost of bureaucracy are a poor choice. The same applies to subsidies.
Gary commented:
Hmmm… More taxes? Just what we all need (I don’t think so). The government actually needs to play a larger role in subsidizing the Recycling Facilities to aid them in accommodating improved collection of recyclable materials from the consumers and sorting operations as well as improved methods of processing the materials to regain the physical properties lost after recycling it.
Most manufacturers are willing to utilize PCR materials in their products, but too many constraints are put on them all the way from regulatory to process ability. The focus needs to be on making the PCR materials more readily available and compatible to the manufacturability/functionality of the product and still maintain the cost effectiveness.
The consumer will use it if the option exists without sacrificing the expected/perceived quality or having to pay more for it!
Chad commented:
Many materials can only be recycled a finite number of times before they disintegrate (paper) or become so highly processed the molecules mutate (some plastics).
Chad commented:
Taxes are a disincentive for consumption.
When I was growing up, I collected coke bottles, cashed them in, and purchased a candy bar. All parties benefited –less litter/landfill, increased reuse/recycle, and a good reward/snick for me.
Bob commented:
I don’t think additional taxes are a good incentive. As mentioned, the costs will just be passed on to consumers no matter what you say or think. Let’s not even go there. Besides, I don’t think it’s the government’s place to “punish” a company for using certain materials. Let the people decide what they want to use. If they feel it’s important to use products made from recycled material, they will choose those companies and products.
Billy commented:
Why not give a rebate to the consumer at the cash register? That way people will buy recycled products more willingly. It also keeps the government’s hands off the money. Because for every dollar private industry collects for them only a fraction gets back to the consumer.
