In 2022, IBM surveyed CEOs worldwide and found that 83% had invested in sustainability; that same year, a U.S. Census Bureau analysis of state and local government finances proved that public spending to protect the environment increases year over year. However, when it comes to making good on commitments, there are significant roadblocks for private and government sectors pursuing voluntary stewardship initiatives.
EPR can help. These programs and laws create a network of accountability and harness sustainable funding to build supply chains for recycled feedstocks, which are often critical for meeting a company’s sustainability commitments. In 2001, PSI developed the nation’s first Principles of Product Stewardship, which were updated in 2011 and define the terms as:
Product stewardship is the act of minimizing the health, safety, environmental, and social impacts of a product and its packaging throughout all lifecycle stages, while also maximizing economic benefits. The manufacturer, or producer, of the product has the greatest ability to minimize adverse impacts, but other stakeholders, such as suppliers, retailers, and consumers, also play a role. Stewardship can be either voluntary or required by law.
Extended producer responsibility (EPR) is a mandatory type of product stewardship required by law. It includes, at a minimum, the requirement that the manufacturer’s responsibility for its product extends to post-consumer management of that product and its packaging. There are two related features of EPR policy: (1) shifting financial and management responsibility, with government oversight, upstream to the manufacturer and away from the public sector; and (2) providing incentives to manufacturers to incorporate environmental considerations into the design of their products and packaging. EPR levels the playing field among competitors and incentivizes environmentally conscious design.
These definitions were endorsed by businesses, stewardship organizations, nonprofits, academics, and governments and annually adopted by the Environmental Council of the States, most recently in 2021.
Critical to a successful EPR system is legislation, which levels the playing field for producers. There are two main features of effective EPR legislation: It must shift the financial and management responsibility away from the public sector and upstream to the producer, with government oversight; and it must provide incentives for producers to incorporate environmental considerations into product and packaging design.
To address the first, effective EPR legislation builds in government oversight of the producer responsibility organizations (PROs) that manage the collection and recycling of products and packaging. To accomplish the second, it can include set requirements for recycled content, toxics phase-outs, and more; it can also include eco-modulated fees, which incentivize:
• Recycled content by reducing costs for producers that use recycled content and increasing costs for those that don’t.
• A lower carbon footprint by reducing costs for producers that lower greenhouse gas emissions and increasing costs for those that don’t.
• Reusability by exempting or significantly reducing fees for producers that opt for refillable packaging.
• Waste prevention by reducing costs for producers that scale down raw materials.
• Recyclability by reducing costs for products with high recovery and recycling rates and increasing costs for those with damaged or contaminated materials.
Introducing a product-specific EPR bill requires significant research and stakeholder engagement – and that’s before it even reaches a state legislature. With millions of consumer products on the market, achieving EPR programs for each is a monumental task. That’s why PSI spearheaded the concept of EPR framework legislation in the United States in 2008.
Framework legislation establishes a streamlined mechanism for creating and passing new EPR laws, providing business with a more stable regulatory environment. Although different product types require different approaches, framework legislation ensures that all EPR programs in a state follow best practices. These include sustainable program funding, a stewardship plan that is developed by producers and approved by the state government, convenient take-back systems for consumers, and a comprehensive public education and outreach campaign.
EPR framework legislation has been successful in Canada for more than 20 years. It gives each provincial environmental agency the authority to implement product specific EPR regulations without requiring additional legislative approval. In 2010, PSI supported the passage of Maine’s EPR framework law – the first in the nation. It remains the only state to have achieved that distinction, but we continue to support the introduction of new framework bills in other states.
False narratives, often related to discussions of packaging EPR, are perpetuated by those who want the system to remain unchanged. One references a erroneous idea that packaging EPR raises prices for consumers. Typically, naysayers cite a York University study that was not peer reviewed and has been widely critiqued as unsubstantiated.
The truth is that under the current recycling system consumers pay three times – first for the packaging of the products that they buy (included in the cost of goods), and a second time for the collection, recycling, or disposal of that packaging through municipal taxes or private subscription costs. Consumers pay a third time for the indirect costs associated with post-consumer packaging, such as increased health insurance premiums resulting from higher illness and disability caused by pollution.
There is no evidence that consumer prices go up when EPR laws are enacted: In fact, a study conducted by Resource Recycling Systems and funded by the Oregon Department of Environmental Quality analyzed actual prices of products on shelves before and after EPR legislation was passed in Canada and found that they did not increase. In Europe, which has had packaging EPR programs in operation for over 35 years, prices have also remained stable.
“A 2022 global survey of CEOs found that 83% have invested in sustainability in order to improve their businesses.” From IBM Institute for Business Value. https://www.ibm.com/thought-leadership/institute-business-value/c-suite-study/ceo
“According to the U.S. Census Bureau’s Annual Survey of State and Local Government Finances, public spending to protect the nation’s natural resources jumped from $27.7 billion in 2014 to $32.2 billion in 2018.” https://www.census.gov/library/stories/2021/06/public-spending-on-protecting-environment-up.html
York University: Study Examining the Economic Impacts of EPR Legislation for Packaging Waste in New York State https://wastewiki.info.yorku.ca/study-examining-the-economic-impacts-of-epr-legislation-for-packaging-waste-in-new-york-state/
“There is no evidence that EPR for packaging programs have an impact on the price of consumer goods.” https://www.nrcm.org/wp-content/uploads/2021/05/ltrtoENR-re-bunk-study.pdf
“EPR for PPP on Price of Consumer Packaged Goods” https://www.oregon.gov/deq/recycling/Pages/Recycling-Steering-Committee-Resources.aspx