The Impacts of the California Beverage Container Recycling and LITTER Reduction Act on Consumers

By Naughton, Michael; Sebold, Frederick et al. | The Journal of Consumer Affairs, Summer 1990 | Go to article overview

The Impacts of the California Beverage Container Recycling and LITTER Reduction Act on Consumers


Naughton, Michael, Sebold, Frederick, Mayer, Thomas, The Journal of Consumer Affairs


The Impacts of the California Beverage Container Recycling and Litter Reduction Act on Consumers

By the end of 1983, nine states had passed mandatory beverage deposit legislation or "bottle bills." Numerous other states are considering similar legislation. Bottle bills require a deposit, typically of five or ten cents, on beer and soft drink containers. Usually retailers are responsible for handling both the deposits and the returned containers. The two primary goals of these bills are to reduce litter and to enhance resource recovery.

In 1986, California passed the Beverage Container Recycling and Litter Reduction Act (AB2020). AB2020 represents a compromise among environmental and public interest groups, the legislature, and the various industry interest groups such as beverage manufacturers and distributors and container manufacturers and recyclers. As such, it is very different from the traditional bottle bill. In particular, AB2020 attempts to promote container returns with much lower redemption values (currently one cent) using more state intervention. The outcome of AB2020 may have important implications for national recycling policies. Given that California contains about ten percent of the nation's population, a large increase in recycling would be important in and of itself. Further, California is sometimes a trend setter in state legislative initiatives, as in the case of the Proposition 13 "tax revolt." Is this Act an example of things to come in other states considering bottle bills, or is it an aberration? In part, the answer to this question depends on the success of AB2020 in achieving its redemption rate targets and on the costs and benefits of doing so relative to traditional bottle bills.

The purpose of this paper is to present a methodology for analyzing the impacts of beverage container recycling legislation on consumers. AB2020 will be used to illustrate this methodology. A number of articles have been written on the economic and environmental impacts of bottle bills. (1) These articles generally conclude that the costs are high and the benefits are difficult to quantify, but these bills are publicly popular. The two most immediate costs consumers face are the burden of higher prices and the inconvenience of redemption versus at home disposal. On the benefit side, there are the direct cost savings and intangible benefits of reduced litter and municipal solid waste.

The following section provides an overview of the legislation and contrasts it to traditional bottle bills. Section two presents a methodology for analyzing the costs to consumers using AB2020 as an application and presents the linkages among inconvenience costs, return values, and return rates. This section uses evidence from California and other bottle bill states to illustrate these linkages. The third section describes how the methodology can be used to estimate the costs of beverage container recycling legislation to consumers and uses AB2020 to illustrate the approach. A methodology for estimating the effects of beverage container recycling legislation on litter and municipal solid waste is presented in section four. The final section presents an overall evaluation of the methodology and its application.

The stated goal of AB2020 is the achievement of an overall recycling rate of 80 percent on all beverage containers. To achieve this goal, AB2020 established a redemption value of one cent on every nonrefillable beverage container sold after September 1987. For any container type not achieving a 65 percent redemption rate target by 1989, the redemption value increases to two cents. A redemption value of three cents is then levied on any container not achieving 65 percent redemption by 1992. These redemption values are much lower than the five to ten cent deposits typically found in bottle bill states.

Redemption rates and recycling rates have specific legal definitions within the context of AB2020. …

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