Eco-Fees: Changing ‘Visibility Concerns’ to ‘Visible Change’ – Environmental Leader

Carl E. Smith, President and CEO of Call2Recycle

Carl E. Smith, President and CEO of Call2Recycle

Extended producer responsibility (EPR)—the practice of requiring the organization that produces a product or material to take responsibility for its end-of-life disposal—has sparked debate concerning “eco-fees,” a front-end charge for the disposal and recycling of products that take up space in landfills or are potentially harmful if they make their way into the waste stream.

Municipalities historically have borne the burden of proper recycling and disposal costs. Not surprisingly, these entities support EPR programs, which shift the financial responsibility from them to manufacturers. Monies saved can then be used to subsidize municipal budgets.

With municipalities’ e-waste programs, consumers directly pay explicit eco-fees to cover the costs of product disposal/recycling. The debate with the concept focuses on whether these fees should be visible to the consumer or concealed within the overall price of each product.

Debating the visibility of payment: The wrong focus for eco-fees

Ultimately, of course, consumers pay the costs of properly disposing of a used computer monitor for example, whether they see a separate charge on a receipt or not. Manufacturers often favor explicit fees because it shifts attention away from the product price to the government-mandated fees. Responsibility for administering these costs, however, typically falls on retailers, who generally oppose visible fees.

The argument against visible fees is that consumers will blame the retailer for the fee, even though, as with sales tax, the retailer has no choice. The argument for visible fees is that consumers should understand the costs involved in disposing of electronic (or other) products, and that these costs should be transparent. In addition, manufacturers may hope that a visible fee may also cause a consumer backlash against poorly designed fees that could curtail or eliminate a program, as was seen in Ontario.

In July 2010, an array of products became part of the Canadian province’s product stewardship regimen. An additional point-of-sale charge, ranging from a penny to a few dollars for certain recyclable items, prompted a loud, public outcry over the unexpected fees. The Minister of the Environment ultimately removed the fees for most products, with the exception of electronics and tires. Since then the minister has strongly advocated including EPR fees in the purchase price and has sponsored legislation to formalize this practice into law.

Even an invisible fee, however, may still lead to consumer criticism because the overall price of the product will likely still go up. However, by focusing on the visibility of payment, policymakers are missing the two strongest benefits of eco-fees:

  • Influencing consumer behavior
  • Encouraging environmentally responsible product design
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