The proposed legal notice regarding the recovery of beverage containers should be one of those pieces of legislation that is bound to create a great deal of controversy, especially given the stand taken by the GRTU that it shall fight it in its proposed format. It is a piece of legislation whose primary aim is the protection of the environment bit it also has as an economic dimension. In previous contributions, I had stated that this country requires legislation whereby the polluter pays, and companies that adopt policies that protect the environment should be incentivised. Otherwise, we would not be credible as a country.
Where is the genesis of the proposed legislation? It is the 130 million beverage containers that are put on the market annually. In the past, most of these units used to be bottles of locally produced soft drinks, beer and wine, on which the retailer used to charge a refundable nominal deposit. This served as an incentive to consumers to return these bottles and reclaim the deposit. There are people who have made a living out of this activity by going round beaches and public places to collect these bottles and then claiming back the deposit.
However, the market has been shifting gradually but steadily over the years. The refundable deposit became even less cumbersome for the consumer, as it started to represent a lower percentage of the price paid for the product. Thus the incentive to reclaim the deposit became less significant. On the other hand, placing a higher deposit charge could have increased the incentive but would also discourage consumers from purchasing such products.
Moreover, we got an influx of foreign products in glass bottles. These were not re-usable (and therefore not returnable), and thus no deposit was taken. The end result is that these bottles have ended up as waste and hence polluted our environment. The proof of this is the scene after some big public event like a political mass meeting or a concert.
We also got a shift towards more convenience packaging in the form of aluminium cans and plastic (PET) bottles. These have also ended up as waste to further pollute the environment. A look at the scene near traffic lights, situated next to traffic islands, is proof enough of how these forms of packaging are disposed of. The economic cost to the government (and therefore to the taxpayer) to recover waste is no doubt exorbitant... and increasing. It is worth remembering that the cost of waste recovery to the government includes both household and industrial waste collection, waste separation and disposal, and the cleaning of public places such as beaches because of the extensive littering that takes place.
Waste disposal, either in the form of recycling or in the form of dumping, has always to be proved to be very difficult, even though over the last decades there have been numerous education campaigns that promote better environment protection.
Moreover, the small size of the island has prohibited us from finding a location for our waste recycling plant and for our waste landfill that is acceptable to everyone. Wherever they are located, they are bound to be in someone's backyard or front garden. Whoever has criticised the location of the waste recycling plant and of the waste landfill has not provided any credible alternatives. The end result has been the eco-contribution introduced a couple of years ago. No one likes to pay taxes, but the eco-contribution is a system that uses the price mechanism to force the polluter to pay.
Thus, from an economic perspective, the need to reduce waste and have better waste disposal is of paramount importance to divert resources to more fruitful uses. We therefore need a system that is more based on incentives than on education.
The price mechanism comes in handy once more. If all beverage containers (that is not only local ones) were to have a refundable deposit tagged to their price, which is then recoverable once the containers are returned, it would mitigate significantly the burden of waste recovery. If, added to this, there is the exemption from the eco-contribution, then the government would be incentivising the non-polluting producer. It would need to be non-discriminatory in order not to hinder competition.
The proposed legislation on the recovery of beverage containers seems to meet these requirements. As with most legislation that has an economic dimension, it will be seen as an opportunity by some and as a threat by others. On balance, I strongly believe that this legislation is good for the environment but it also makes a great deal of economic sense.