Right: A pile of bottles collected by Boy Scouts in the 1950s. The bottles were a lucrative source of funds for the scouts - and anyone else who took bottles down to the nearest bottle depot.
.Arguments against a container deposit and refund scheme
1. It will increase the cost of products
It has been argued that requiring consumers to pay a deposit on cans and bottles will increase the cost of many packaged goods.
Australian Food and Grocery Council Chief Executive, Kate Carnell, has said that introducing container deposit systems would mean that consumers would have to pay more for their products.'
Ms Carnell has further claimed, 'It's not just the deposit that would add costs there's also the handling fees. Based on a 10 cent deposit and a four cent handling fee, the cost of a carton of beer would increase by $4 to $5.'
Ms Carnell has further stated, 'Environment Minsters must once and for all reject the expensive CDL (container deposit levy) scheme which we believe will cost Australians a whopping $500 million a year compared to the current affordable and effective model.'
EPA Victoria recently released an analysis of the cost of running a container deposit system in parallel with kerbside recycling which found that such a system nationally would cost around $1 billion per year.
The study, conducted on behalf of the EPA by Nolan-ITU, showed that the introduction of a deposit system would result in the retail cost of beverages rising between 13.4 and 14.6 cents per pack. This would result in increases in household expenditure of between $181 and $219 per annum, which would be slightly offset by a reduction in recycling costs.
Taking all factors into account, the study found the net average cost per household would be $157 per annum, which, if implemented nationally, would result in the annual cost of $1 billion to be carried by the nation's households. The EPA study assumed a 10 cent deposit and the return of containers to retailers. The policy paper was peer reviewed by Perchards, a London-based consultancy, which agreed with the cost findings.
2. A container deposit and refund scheme may actually increase littering
It has been argued that a container deposit scheme may actually increase the consumer's readiness to litter.
The Keep Australia Beautiful Council of New South Wales has claimed that there is evidence to suggest that littering behaviour is actually negatively affected by Container Deposit Legislation as consumers can be 'swayed into believing that since they have been charged a deposit for the container, then they have a right to litter and leave it for someone else to clean it up'.
Those who hold this view argue that a deposit scheme could actually undermine efforts to educate the public to dispose of litter thoughtfully. If the issue ceases to be one of community responsibility and becomes one of simple economics, then consumers may feel under no obligation to behave in an environmentally sensitive manner.
3. A deposit and refund scheme is not necessary
It has been claimed that there are a variety of other means that can be used to encourage responsible waste disposal. One of these is simply the ready availability of waste disposal facilities.
The packaging Council of New Zealand has noted, 'Today over 95% of New Zealanders have access to facilities to recycle packaging, that is, paper, glass, cans and plastics 1 and 2. Seventy-seven percent of New Zealand councils offer households a kerbside recycling service. Beverage containers can therefore be easily recycled, which makes a container deposit system unnecessary.'
The Transpacific Industries Group made the following claim in a submission to a 2009 Senate Committee, 'Kerbside recycling has excellent coverage in Australia. Imposing a deposit on containers will result in households not putting such containers in their kerbside recycling bins. The cost of kerbside recyclable collection and processing will stay the same; however, the economics will be undermined by removing potentially high value commodities. Depending on the nature of the contracts between Councils and their kerbside recyclables collector/processor, one or both parties will be significantly impacted financially; such new legislation would lead to commercial disputes on who will bear the cost. Kerbside recycling performs very well (and its coverage is continually expanding) and there is simply no problem that needs to be solved with containers from households.'
4. It will expensive to establish and not cost-effective
It has been noted that establishing such a system would involve significant initial costs.
A report completed in May by BDA Group and Wright Corporate Strategy found a national container deposit scheme would be relatively expensive at about $492 million a year, with cost-effectiveness of $1500 an additional tonne recycled.
According to the recent BDA report, the primary costs of a container deposit scheme are:
a) system operating costs (including the capital costs of establishing collection centres and costs of container handling, transport and administration),
b) costs of commercial collection and
c) the inconvenience costs associated with redemption of deposits.
The report concludes a container deposit scheme could result in a 6 per cent reduction in litter, or 19 per cent by volume, greater than any other new recycling options. However, it adds the high associated costs may make the scheme economically undesirable.
The BDA and Wright report estimates kerbside collection recovers about 78 per cent of beverage containers in Australia at a cost of $300 a tonne, while SA's container deposit scheme recovers 6 per cent of the national total at close to double the cost a tonne.
Dick Wells, Australian Food and Grocery Council (AFGC) chief executive, has said that a national container deposit legislation scheme would cost Australian consumers at least $400 million every year in addition to the $1 billion in deposits they would have to pay up front at the check-out.
Mr Wells stated, 'Calls for extra costs are out of step with the community when they are already paying for kerbside recycling through their council rates.'
5. There are other means of encouraging responsible litter disposal
It has been argued that there are a variety of other means to bring about a reduction in the amount of container litter.
Australian Food and Grocery Council Chief Executive, Kate Carnell, has said 'The AFGC through the Packaging Stewardship Forum is already working on improving recycling from workplaces, the hospitality sector and shopping centres. With the National Packaging Covenant (NPC), we have a range of projects are underway to recycle an extra 60,000 tonnes of packaging each year and that includes beverage containers.'
Ms Carnell has explained that the AFGC is a signatory to the NPC, which is supported by industry and all levels of government to reduce the environmental impact of packaging waste. The NPC has made significant progress towards meeting the 65 per cent packaging recycling rate target by 2010.
The AFG has further claimed that the National Packaging Covenant - which has been operating for the past 10 years - has the capacity to divert an additional 500,000 tonnes of packaging from landfill each year.
Coca-Cola Amatil Managing Director of Australia, Warwick White, believes that the National Packaging Covenant is working and any changes will prove costly to business and actually divert it from its efforts to encourage recycling by other means.
Mr White has claimed, 'Australian companies want to be focussing on investing in innovative solutions for environmental problems, not suffering huge additional costs from a 1970s regulatory approach.'
The 2006 Productivity Commission Report No. 38 on Waste Management found, 'Deposit-refund schemes are typically costly and would only be justified for products that have a very high cost of illegal disposal. Container deposit legislation is unlikely to be the most cost-effective mechanism for achieving its objectives of recovering resources and reducing litter.
Kerbside recycling is a less costly option for recovering resources, while general anti-litter programs are likely to be a more cost-effective way of pursuing overall litter reduction.'
Jennifer Pickles of the Australian Food and Grocery Council has stated, 'Holistic approaches to the management of packaging waste can work better, and that evidence of Victoria's recycling rates being significantly greater across the whole packaging stream bears that out. The industry supports holistic approaches to how we manage our packaging waste, rather than narrow approaches such as container deposits.'
6. It will decrease the returns from kerbside litter collection and increase litter collection costs for municipal councils
The garbage collection and recycling industry is concerned that the economics of the kerbside system will be undermined by the removal of high value recycling items.
Veolia Environmental Services, Transpacific Industries Group and the Waste Contractors and Recyclers Association of New South Wales have all argued that the imposition of a deposit on beverage containers would cause households to stop placing beverage containers in their kerbside recycling bins (currently around 25 percent of kerbside recyclables are containers) in favour of redeeming the deposit.
This would mean that high value commodities like aluminium would be removed from the system despite the cost of collection remaining unchanged.
Municipal councils pay contractors a fee per tonne to sort and process recyclables from kerbside collection. The more the council collects, the more it pays for that component of the contract. However, contractors use the income from the sale of the recyclables to offset the operational costs and therefore offer council a competitive net price to receive and sort the recyclables.
If households reduce the amount of valuable recyclables they put out for kerbside collection then the cost of collection to councils and thus ratepayers is likely to rise. It is also possible that collections might occur less regularly because councils would no longer be able to afford to fund them at the current rate.