Bottle Bill in Oregon and Hawaii: Cost/Benefit Analysis

1. Bottle Bill in Oregon and Hawaii:Cost/Benefit Analysis Team One Brett Baumgartner Lauren Butz Zack DeMar Katherine Hanson Phil Lewis Brian Luevano Penelope Scott Dan Sullivan

2. Problem • The US consumes 1500 plastic water bottles every second • The plastics used degrade very slowly • Cause of the “Great Pacific Garbage Patch” • Plastic can be remolded and formed into new bottles

3. Bottle Bill Background How It Works How It Started • The consumer pays a deposit when purchasing the bottle and gets it back when they recycle it • Empty bottles were littering the streets • Failed attempt in Virginia • First successful bill was passed in Oregon

4. Oregon: Bottle Bill • Established in 1971 known as the “Bottle Bill” • Created friction between large bottle producers • Reduced production costs • Competed with local bottlers

5. Oregon: Bottle Bill Benefits Costs • Energy conservation • A ton of plastic bottles saves approx. 3.8 barrels of oil • Recycled materials uses 2/3 less energy than raw materials • Reduction in costs • In 1971 Marion County spent $20,000 on litter removal • Estimated $100,000 • Inflation • 1971 5¢= 28¢ in 2001 • 18 pack=$5.04 rather than 90¢ • Breakage and contamination • “down cycling”

6. Oregon • Improvements Needed: • Lack of increases in redeemable deposits • Deposits have not taken inflation into effect • Decreasing incentive to return/recycle bottles • Less willing for individuals to participate  possible decreases in the effects of the bill

7. Hawaii: Bottle Bill • Solid Waste Management; Deposit Beverage Container Law (Act 176) • Only state without curbside recycling • Goal: Increase recycling and reduce littering • Implemented on January, 1st 2005 • 5 cents redeemable deposit • Container fee is 1 cent per container • Redemption rate exceeds 70% in a year the fee is raised .5 cents (1.5 cents per container) • Consumer receives 3.5 to 4 cents for that container.

8. Hawaii: Costs and Benefits • Costs • Not efficient due to lack of oversight • Potential Fraud due to over-reliance on self-reporting from distributors and redemption centers • Benefits • +4.7 billion beverage containers recycled • Gives an incentive to recycle • Reduces litter • Hawaii reached a 79% recycling rate (2009)

9. Hawaii • Improvements Needed • Not enough state supervision • Loss of money • Operation issues • Lack of awareness

10. Cost Benefit Analysis Inflation rate = 2.5% Discount rate = 9.5% In 5 years, a total cost savings of $358,366.75

11. Cost-Benefit Analysis: AEM Model Overall environmental quality (benefit) defined: Reduction of litter caused by irresponsible bottle disposal Expressed on x-axis Scale of 1 to 10, 10 being highest environmental quality Cost to consumer Bottle Bill shifts marginal cost curve from MC to MC_New, effectively lowering the cost to consumer and raising environmental quality Example: Instead of bottle exchange, Hawaii decides to implement curb-side recycling because it’s cheaper and more efficient. Also, this would eliminate the problem of fraudulent reporting by businesses.

12. The Future of the Bottle Bill • 11 current bottle bills • Beverage production industry • Retail industry • Deposit law progress • Arizona’s bottle bills • Title: “beverage containers; recycling fund; redemption”

13. Conclusion • Bottle Bills are great ways to reduce waste • Proper incentives to increase recycling • Vulnerable to market inefficiencies • What can you do to encourage recycling laws and their efficacy?

14. Questions??