Capitalism is incredibly effective because it makes all decisions based on one quantifiable measurement: The dollar cost of an action and potential return. Nothing else matters.
In my lifetime this hyper-focused approach has overwhelmed all competing economic systems and produced what we Americans like to call The Highest Standard of Living in the World. Great!
But it did this by ignoring everything that doesn’t have a price tag. Not so great.
Case in point: pollution, which grows as economies grow because it carries no immediate dollar cost, even though its long-term dollar cost is huge.
Many attempts to tackle ecological disasters like the climate emergency, plastic pollution and ecosystem collapse want to change this by attaching a cost, giving the corporate world an incentive to turn their unequaled powers of innovation into solutions. Putting a fee on carbon emissions is the most obvious example but there’s another case happening over the border in Maine.
The Pine Tree State is in the midst of rolling out a biggest-in-the-nation (but not in the world) program called EPR, or Extended Producer Responsibility. It shifts the cost of disposing of most packaging material away from taxpayer-funded programs and volunteer efforts, where it has been ever since the “crying Indian” commercial started guilt-tripping us about litter in the 1970s, and hands it to those who can actually fix it: The companies that sold the litter in the first place.
This isn’t a new concept, as deposit laws on bottles and cans take the same approach. But EPR is much more extensive.
Roughly speaking, in two years under the new law companies that sell products in Maine will pay into a fund based on how much of the packaging on their product ends up in landfills. That money will be distributed to Maine communities to cover costs of recycling or trash disposal that are currently only a burden on taxpayers.
The key point is that companies can reduce this cost by reducing packaging waste. They can figure out ways to wrap their product in less stuff, or recycle that packaging better, or do something completely innovative. If they think outside that box they’ll get more profit, which is exactly the scenario that has created most of the industrial revolution.
“This allows any producer that feels they have an efficient or better way to manage their packaging, as opposed through municipal collection program, they can opt to do that,” said Rep. Nicole Grohoski, D-Ellsworth and Trenton, the main sponsor of the law (LD 1541).
I like this a lot. Environmentalists often gleefully depict EPR laws as overdue punishment for waste-making companies but we want those companies to fix the problem of trash ending up everywhere, not just get whacked on the knuckles for causing it. Putting the cost of pollution on producers rather than consumers is an intelligent way to make that fix happen.
This EPR approach sounds radical to those of us in a state that thinks instituting a plain old bottle bill would move us halfway to dictatorship of the proletariat. But ERP programs of various types have been around for a while, including a more limited one in Oregon, a number in Europe, and a sweeping one just over our northern border.
“This is based in part on what’s working in Quebec, for instance – we have a lot of communication with them,” said Grohoski. “Hundreds of brands that sell here and in Quebec already do this.”
All this global experience makes supporters confident that the new law won’t raise consumer prices very much or drive products out of Maine, which are two legitimate concerns. Another concern is that it will be an oversized burden on small companies who can’t afford to change packaging. Smaller firms (less than $2 million gross revenue) are being exempted but that will generate the edge-case problem: firms selling $1.99 million worth of stuff might find that further growth will actually cost them money.
One amusing aspect of a well-designed EPR is that it uses capitalism’s competitive drive as an enforcement tool. To a certain extent it will be a zero-sum game for companies: They have to cover the total costs of waste disposal from participating communities (participation is optional), which means if Company XYZ isn’t paying into the pot then other firms make up the difference. You can be sure those other firms will let Maine know about Company XYZ’s tricks.
Right now Maine’s Department of Environmental Protection is creating standards that will be used in a Request for Proposals released May 1 that companies will use to bid on running what is called the Packaging Stewardship Program. The whole project will kick in the following year.
I’m excited by this, but let’s not get carried away. The fact that ERP programs already exist and we’re still wallowing in crud shows that they’re no panacea. You and I and everybody else still need to think hard about what we buy and use and discard, which adds effort and might add cost, and we need to support politicians who will think about it and pursue policies to make the world better.
But it’s encouraging to see governments pursuing different ways of tackling problems. We need a lot more of that.
Companies will pay. Won’t they just pass the increase on to consumers? So the CONSUMERS will still pay another tax.
But they’ll pay less tax for town trash/recycling – and companies have an incentive to lower the cost, which is the whole point.