by Dominic Hogg5 minute read
If you were asked to design a policy which was named ‘producer responsibility’, what’s the one thing you would try to make sure you did? The clue, I believe, lies in the name.
How is it, then, that UK policy makers have managed so successfully to limit the extent to which producer responsibility requires producers to be ‘responsible’? The framing EU legislation around packaging, ELVs, WEEE and batteries allows for – and encourages to varying degrees – producers to be made fully financially responsible for the recycling and recovery of the targeted waste streams. But in the UK, the way we have transposed the legislation on consumer packaging could barely be less likely to engender ‘producer responsibility’. Instead of the obligation being placed on producers, we make local authorities pick up the tab.
Just not cricket
Whenever a new Defra report emerges on packaging, just for a fleeting moment, I’m like a child at Christmas. I imagine that I might be given that shiny new, dark, cherry red cricket ball that I’ve been hoping for. I can’t help hoping, time after time, that the penny could finally have dropped that we haven’t made producers responsible. I am, of course, routinely disappointed: sometimes, there’s a rudimentary appraisal of some alternatives, but there’s never been much appetite for change, and a nagging doubt remains that the appraisals are set up to maintain the status quo.
The latest annual report from the Advisory Committee on Packaging (ACP) triggered the same reflex reaction. Now, my first degree was in physics and so I’m used to arcane concepts like anti-matter. But whilst I was prepared, yet again, for the ‘no cricket ball’ scenario, the ‘anti-cricket ball’ that ACP sent down came as a complete googly. What our system of producer responsibility urgently required, they said, was a new statutory obligation on local authorities to act as a supplier of materials to the market, to help producers meet their obligation. This seems to demonstrate a complete lack of confidence from ACP that the our system can do what it was designed to – and I suspect not without some reason.
The UK producer responsibility model is in effect a material-by-material system of tradable compliance credits – PRNs and PERNs – whose value in a given year is determined by the level of demand for them relative to their supply. Theoretically, if demand exceeds supply, higher PRN and PERN prices will stimulate additional collection and sorting.
Three key factors have tended to keep supply ahead of demand:
- Local authorities in England striving to meet recycling targets;
- The landfill tax, encouraging recycling of materials across the board; and
- The relatively slow pace at which recycling obligations have increased.
The first two factors have kept the supply of materials increasing, irrespective of the PRN / PERN system; though difficult to demonstrate conclusively, the latter appears to have played only a very limited role. Consequently, for years producers have seen their obligation discharged while paying only a fraction of the cost of collecting and recycling materials. Especially in the case of household waste, it has been local authorities, and hence taxpayers, that have picked up the tab.
Changing the field
The situation starts to look different, however, when recycling targets disappear for local authorities in England and the landfill tax escalator reaches its top level. It seems reasonable to question whether councils will continue the rapid increases we have seen in the separate collection of packaging waste for recycling. Might we at last see the price of PRNs and PERNs rise to a level where they start to do their job?
Perhaps not. The market-driven PRN / PERN system demands a highly flexible reaction from those collecting and recycling. Local authorities are not easily able to react to a change in the market; many contract out waste collection, typically using contracts of seven or more years, and which cannot quickly be adjusted in reaction to an increase in PRN / PERN values.
Furthermore, the PRN / PERN values will drop back to close to zero as soon as supply and demand are in balance, so if an authority were to ramp up its efforts in response, it could be left in the invidious position of running an expanded service it could not afford in the longer term. At a time of heavily constrained budgets, why should they take a risk and pay one additional penny to fund an obligation which is not theirs, but that of producers?
Logically, a more direct and stable system of financial support for local authority services is required. Authorities need predictable funding to cover the costs of (at least) the service enhancements required to meet the targets. So, for example, if producers want to ensure that all local authorities collect a specific range of plastics, then they should simply fund the full implementation of that configuration through a mechanism of direct payments to councils.
This is not a novel suggestion, but it is a blindingly obvious one. It happens in the majority of other EU Member States to a greater or lesser degree, and it is the principal means through which producers are made financially responsible for the collection and recycling of household packaging.
It needn’t be so much revolution as evolution. The logic of the existing system is to fund the marginal increase in packaging collection and recycling required to meet the targets each year. The only difference is that a stable level of support for local authorities, rather than one which disappears as quickly as the required infrastructure comes into being, would be much more effective.
It would not increase the costs of achieving a given target, but would change the way in which those costs are shared. It would require the packaging supply chain (and hence, consumers) to pay more, but offer savings to Council Tax payers. Who knows, if we adopted it, we might even find ourselves moving towards something resembling the polluter pays principle, some fifteen years after producer responsibility was implemented. Perhaps I might get to unwrap my cricket ball at last!