Product Stewardship and Extended Producer Responsibility (EPR)
Economic Impacts of EPR Programs
As EPR continues to gain momentum, product-specific and framework EPR legislation continues to be introduced in California and across the United States. Identifying and quantifying the economic, social, and environmental impacts of existing EPR programs allows decision makers to apply those lessons learned when considering new programs. This page contains information on the economic, social, and environmental impacts of EPR or product stewardship programs.
- Government-run vs. Industry-run Program Comparisons
- Economic Reports
This section contains product-specific case studies or reports that highlight impacts of product stewardship programs. Examples include both voluntary and mandatory programs.
CalRecycle's report (a contractor report prepared for the California Department of Conservation, Division of Recycling) titled, "Evaluating End-of-Life Beverage Container Management Systems for California" (PDF, 6 MB) 2009, contains case studies that discuss program costs, impacts, and other outcomes. For example, the industry-run British Columbia beverage container recycling program has achieved an overall recovery rate of 80 percent, and includes difficult-to-recycle items such as gable tops and aseptic containers, and all beverage containers besides milk.
Carpet America Recovery Effort (CARE) is a voluntary carpet recycling program in the United States. CARE annual reports provide in-depth information about issues concerning carpet recycling. CARE reports that in 2008 4.3 percent of carpet discards were recycled nationally.
Also see CalRecycle-related documents about carpet.
Washington State Electronics Law (PDF, 823 KB). A PowerPoint presentation by Sego Jackson and Walter Alcorn at the April 28, 2008 CIWMB workshop titled, " EPR in Action: Program Design and Implementation." This case study of the Washington e-waste producer responsibility law explains background on the law, some notes on implementation, and lessons learned.
Electronics Stewardship in Hennepin and St. Louis Counties, Minnesota (PDF,168 KB). This case study by the Product Stewardship Institute found that Hennepin and St. Louis Counties realized cost savings of $680,000 and $90,000, respectively, during the first year of the producer-run programs.
Electronics Stewardship in Snohomish County, Washington (PDF,168 KB). This case study by the Product Stewardship Institute shows that a significant collection and recycling infrastructure can be attained with or without local government participation. When the economic recession forced Snohomish County to stop collecting electronic waste at its three transfer stations, the robust private collection infrastructure allowed for continued service to the county's residents.
Preliminary Analysis of E-Cycle Programs in Washington and Oregon (PDF,2.7 MB). This 2010 report provides an assessment of the first 10 months of the Washington and Oregon electronics product stewardship programs, a comparison of program similarities and differences, and a summary of lessons learned to-date. Among the findings was that the statewide systems created program efficiencies and drove pricing for services lower. Also see Program Comparisons.
Belgium Packaging Program Fost. Plus packaging program in Belgium represents a successful product stewardship approach to addressing consumer packaging. This program is noted for its very high 93 percent recovery rate of packaging.
Germany Green Dot Program. This is one of the older household packaging recycling programs that initially experienced very high costs and high recovery rates. Recent changes to the program have resulted in higher competition among recyclers, lowering cost, but also resulted in lower quality recyclables. An OECD report states that 1.8 million tons of packaging material was avoided through the program from 1991 to 2000 (18 percent less).
Ontario, Canada Blue Box Program. This program offers a curbside approach to collecting many recyclables, including household packaging. A 2009 report (PDF, 317 KB) by Ontario's Minister of Environment describes changes needed to Ontario's waste management system to move from shared costs between government and producers to full producer financing to expand its 50 percent recovery.
Mercury Thermostat Stewardship in Maine (PDF,168 KB). This case study by the Product Stewardship Institute details Maine's local government cost savings of more than $28,000 over two years as a result of implementation of a stewardship program for mercury thermostats.
One way to evaluate EPR programs and their impacts is to compare them to existing government-run programs. By using common metrics such as cost per capita and diversion rates based on amount of product available for recycling, apples-to-apples comparisons of these different product management approaches can be made. This section contains comparisons of government-run versus industry-run product stewardship programs.
CalRecycle staff compared California's individual, government-run approach to leftover paint management to that of British Columbia, Canada, which uses a product stewardship approach. The resulting staff analysis indicated that, based on experience in other jurisdictions, a shift from individual government-run paint collection programs to an industry-run product stewardship approach would lead to benefits such as total system cost savings, an increase in diversion rate, and an overall increase in jobs.
- Summary of Findings: Comparison of California and British Columbia Paint Management Programs (2009) (PDF, 445 KB)
- Case Study: Leftover Paint Management in California, United States of America (2009) (PDF, 583 KB)
- Case Study: Leftover Paint Management in British Columbia, Canada (2009) (PDF, 714 KB)
The reports in this section cover multiple product categories and highlight the economic impacts associated with product stewardship programs. These programs expand recycling. In turn, recycling creates jobs and offers significant benefits by reducing the costs associated with raw material inputs in the manufacturing process.
- Western Product Stewardship Collaborative (PDF, 449 KB): Overview of stewardship and extended producer responsibility job and economic impact studies, 2012. This report provides an overview, analysis, and summary of key findings of ten studies which provided analyses of the jobs and economic impacts of product stewardship and EPR programs. Only studies conducted since 2008 were reviewed.
- British Columbia: Economic Impacts of the BC Recycling Regulation (PDF, 2.5 MB), 2008. This report examines economic impacts of product stewardship programs regulated within British Columbia, Canada. Highlights include an increase in employment and proper management of hazardous and other discarded materials, and reductions in energy and associated greenhouse gas emissions.
- Analytical Framework for Evaluating the Costs and Benefits of Extended Producer Responsibility Programmes (PDF, 331 KB), 2005. Organisation for Economic Co-operation and Development, Environment Policy Committee, Working Group on Waste Prevention and Recycling. The purpose of the evaluation framework set out in this report is to provide a suggested methodology which could be used by individual countries as a starting point for ex- post evaluation of particular EPR programs.
- Economic Aspects of Extended Producer Responsibility (2004). Organization for Economic Co-operation and Development (OECD). This book contains selected papers presented at a December 2002 workshop organized by OECD, including evaluations of EPR programs in Japan, Germany, Canada, and elsewhere.
- Identifying Opportunity in the Green Economy--Waste Industry (PDF, 382 KB), 2010. This report, prepared for Zero Waste Simcoe (Ontario, Canada) by Lura Consulting, states that, "The greatest potential for short-term job creation lies in building upon provincial EPR programs and capturing construction and demolition waste. New jobs created could also strengthen the potential for further economic spin-offs and medium- to long-term job creation."
The reports below are more general in nature but provide useful approaches to analyzing the economic and other impacts of a product management system.
- California Recycling Economic Information Study (PDF, 1.3 MB), 2001. The goal of this study was to document the size of the recycling and reuse industry in California. Among this study's findings were that the recycling and reuse industry is a significant industry as compared to other major California industries, and that recycling and reuse are inherently value-adding, whereas disposal is not, and value-adding processes support jobs and economic activity. Data from this study was incorporated into the National Recycling Coalition's U.S. Recycling Economic Information Study.
- Economic Impact of Waste Disposal and Diversion in California (PDF, 1.3 MB), 2001. This report found that when material is diverted rather than disposed in California, total sales and value-added impacts more than double; output impacts and total income impacts nearly double; and the jobs impact nearly doubles.
- The Environmental Value of Metro Region Recycling for 2007, (PDF, 210 KB), 2009. This report measures the environmental benefits, using values assigned to specific environmental impacts, of solid waste management practices in Oregon's Metro region. Using an environmental benefits calculator developed by Sound Resource Management Group, Inc., the study concluded that the average ton of material diverted to recycling and composting from Metro region solid wastes in 2007 had an estimated environmental value of $120.
- Economic and Environmental Benefits of a Deposit System for Beverage Containers in the State of Washington (PDF, 86 KB), 2005. This report provides a useful approach to cost/benefit analysis for a product management system. Quantifiable benefits of instituting a beverage container law in Washington included $28.1 million in revenues from selling recovered beverage containers to recycling markets; $10.4 million from reduced litter and waste management costs; $11.3 million in reduced greenhouse gas emissions; and $9.6 million in reduced public health and environmental costs. Overall benefits would be realized by utilizing either a redemption center or stewardship organization approach.
- New Policy Directions for Nova Scotia, Using the Genuine Progress Index to count what matters (PDF, 1.2 KB), 2009. Using a set of genuine progress indicators and accounts for 20 key social, economic, and environmental dimensions of wellbeing, GPI Atlantic found that, "Despite increased operating and amortized capital costs, the new system provided a net savings of between $31.2 million and $167.7 million compared to the operating and amortized capital costs of the old system."
The information below includes reported job impact estimates for product stewardship programs as available.
- Austria. Altstoff Recycling Packaging EPR Program. According to a 2004 OECD report, approximately 1,500 jobs have been created.
- Belgium. Fost Plus Packaging EPR Program. Reports creation of 2,600 jobs (Fost Plus employees and in other sectors).
- British Columbia, Canada. According to Economic Impacts of the B.C. Recycling Regulation (PDF,2.5 MB), 2008, the total employment generated directly by stewardship management, including recycling activities, is estimated to be about 1,600 full-time equivalents (FTEs). That number grows to about 2,100 FTEs when indirect job creation associated with the stewardship and recycling activities is included.
- France. According to a 2004 OECD report, France employs 10,000 people for their packaging program.
- Germany. Dual System (packaging). According to a 2004 OECD report, 17,000 people are employed in this system.
- Washington and Oregon E-Cycling Programs, U.S. Dual System (packaging). Approximately 140 net new jobs were created across Washington and Oregon for program start-up: 79 in Washington and 61 in Oregon. Approximately 360 ongoing jobs at these facilities are reported attributable to the Washington and/or Oregon E-Cycle programs.
In an effort to prepare relatively quick, staff-level evaluation of the economic, social, and environmental impacts of EPR and government-run programs, CalRecycle staff worked informally with a group of state government, local government, environmental advocacy, and private industry representatives to prepare the following tools:
- CalRecyce Sample Metrics Table (PDF, 271 KB). This table, which is also contained within the Case Study Template (below), provides a set of metrics which cover program cost, environmental management and impacts, program effectiveness, and job impacts. These metrics represent the kind of data necessary to measure, evaluate, compare, and track effectiveness of EPR or other programs.
- CalRecycle Case Study Template (PDF, 796 KB). This document provides a format to compile the program information and data necessary to systematically evaluate and compare programs. Currently, information on existing program is not consistently tracked and evaluated. Anyone developing a product recycling program is encouraged to review the template for ideas on information to collect to track program performance.
- Jobs Analysis Template (Excel 2007, 110 KB). This document represents an approach that can be used to estimate the actual or anticipated job impacts of product management programs by sector (public/private), then by job category. The tool is designed to allow the user to enter actual or known numbers, or, as is commonly the case, estimates, based on clearly-stated assumptions. Please see the tab labeled "Instructions" to learn how to use this tool most effectively.
- PSI's Cost Savings and Expanded Service Calculator (Excel,26 KB). The Product Stewardship Institute (PSI) developed a Cost Savings and Expanded Service Calculator that can be used by local governments to compute direct cost savings and potential cost avoidances of undertaking similar programs. Other tools and resources can be found at PSI's Financial Benefits from Product Stewardship website.