Archive for month: September, 2020

Written by Calvin Lakhan, Ph.D, Co-Investigator: “The Waste Wiki” – Faculty of Environmental Studies at York University

For the first time in my career, issues surrounding waste management have now become part of mainstream discussion. Whether it be my neighbors asking me “Can this really be recycled?” to growing concerns surrounding single use plastics, people (both the public and policy makers alike), care now more than ever regarding what is happening to our waste. We as Canadians recognize that issues surrounding waste require our immediate attention, and that our waste disposal behavior (both good and bad) can have significant impacts on the sustainability of our environment.

So with this in mind, I thought it would be prudent to revisit the topic of “What is the goal of our waste management system?” While this is a topic I have written about several times in the past, proposed legislative changes – not only to Ontario’s Blue Box program, but waste management legislation across North America, makes it a timely topic for discussion. Now, more than ever, we need to clearly define what our goals are, and whether our existing approaches are helping move us towards achieving those goals.

So, what is the goal of a waste management system? This seemingly simple question is actually surprisingly difficult to answer, as it depends on who you ask and what is being prioritized. While we may here terms like “Circular Economy” and “Zero waste” banded about, what do they actually mean? Are they intended to be aspirational or achievable goals? What is the time frame and the boundaries we use to define a circular system, and what do we choose to prioritize when different stakeholders have competing objectives? I am reluctant to answer these questions, as I don’t think there is a right or wrong answer other than – “it depends”: On who you ask, what you ask and why you ask. With that in mind, before proceeding with our discussion, I want to remind everyone about the three pillars of sustainability: A sustainable system must consider economic, environmental and social dimensions. By definition, we cannot consider a system sustainable if it does not address these three components. This is a critical consideration when deciding what a goal of a waste management system could (or should) be.

Ontario (and Canada) has a recycling problem

Historically, the emphasis of waste management has been on residential recycling. The Blue Box, a ubiquitous symbol of recycling that has been a fixture in our homes for the better part of four decades in Ontario. In fact, my very first memory as a budding environmentalist was washing out peanut butter jars before putting it in the recycling (less to do with concerns surrounding contamination, and more to do with a fear of attracting insects). For many Ontarians, the Blue Box is symbolic of recycling and sustainability, and it is something that we have been extraordinarily good at – which as it turns out, is actually a really bad thing.

During the summer of 2019, York University conducted a study to gauge what the public thought about various waste management initiatives. Participants were asked to rank, from best to worse, which end of life scenario resulted in the greatest environmental impact (shown in figure 1)

From the above graph, recycling was seen as the most environmentally preferred option, with reuse second and waste reduction a very distant fourth place. Why does this matter? Because reduce, reuse, recycle isn’t just a catchy phrase – it is the order in which we are supposed to things. Recycling is our third most preferred option.

Canada has become a victim of its own success – both households and policy makers now conflate recycling with sustainability. If it can’t be recycled, it is characterized as being “bad”. The “waste” problem is often framed as “We aren’t recycling enough”. Just last year, Deloitte made international headlines when they published a report indicating that Canada was only recycling 9% of its plastics. The response from the public was almost visceral – Households and government demanded change, with consumers even going so far as to say that they would be less likely to buy a product if it could not be recycled at the end of its life. Canadians are voting with their dollars and the message is loud and clear “We want recyclable products”.

While the sentiment and intent is in the right place, the approach is not. Not only is recycling not the most preferred outcome, it can actually have adverse economic, environmental and social impacts. Contrary to intuition – not everything that can be recycled, should be recycled. The decision to recycle everything, everywhere, is actually what is compromising the long term sustainability of the system.

Why the next diverted tonne will not (and should not) come from the Blue Box

As noted earlier, the residential recycling system (for printed paper and packaging) has been enormously successful, so much so that policy makers continue to put all of their eggs in one basket, and attempt to drive future diversion from this waste stream. The proposed Blue Box transition in Ontario, which shifts 100% of the physical/financial responsibility of managing the system on to producers, continues to emphasize and prioritize recycling based outcomes. Why this is problematic is threefold:

1)     We are already doing a great job of capturing the “low hanging fruit”. Recycling rates for core Blue Box materials (newsprint/OBB/OCC etc.) are already well in excess of 80%, and future increases in diversion are not likely to come from these materials

2)     The overall packaging mix is increasingly being made up of composite and light-weight materials that are extremely difficult to recycle given existing technology, infrastructure and end markets. If future increases in diversion come from these materials, the cost of recycling is potentially prohibitive.

3)     The environmental benefits associated with recycling many light weight and composite materials are negligible given existing processing technology.

In short, not all recycling is created equal. Figure 3 below summarizes the amount of money you would have to spend on recycling a given material, to abate one tonne of carbon ($/TCO2e).

Figure 3: 

Using the above example, you would have to spend almost $1500 on recycling to abate one tonne of carbon from plastic film, and only $65 on recycling newsprint to achieve the same result. Let that sink in for a moment – Film is 23 times more expensive than newsprint from a carbon to recycling expenditure ratio.

To further drive home this point, please refer to Figure 4 below:

Figure 4

Figure 4 shows the change in net system costs that results in a 1% change in the recycling rate, on a material by material basis.

If we wanted to increase the overall recycling rate of the Blue Box program by 1%, and we had to achieve it by increasing recycling of plastic laminates, overall system costs would increase by more than 14%.

Why this matters is that (as noted earlier), future increases in recycling rates are not going to come from core Blue Box materials. As a result of the changing nature of packaging over time (also referred to as the evolving tonne), increasing the Blue Box recycling rate will involve trying to collect and recycle materials such as composite and light weight plastics. To increase Ontario’s Blue Box recycling rate to 70% by recycling composite/light weight plastics (which is about 6% higher than our current recycling rate), we would have to spend in excess of $70 million dollars – and that is assuming that we have capacity within the existing system and end markets to accommodate increased recovery.

This is both prohibitively expensive, and has questionable environmental benefits. Once again, we are forced to ask ourselves, what is the goal of our waste management system? Increasingly, that answer is not going to be about increasing recycling rates, particularly for printed paper and packaging.

This begs two questions: 1) If the next diverted tonne shouldn’t come from the Blue Box, where should it come from? And 2)  If light weight and composite packaging is so terrible, why do we continue to use it?

As for where our next diverted tonne will come from, please refer to: https://www.linkedin.com/pulse/where-our-next-diverted-tonne-come-from-diversion-calvin-lakhan-ph-d/

The second question is a bit trickier, as there is a subjective element to how you choose to evaluate the merits of a particular packaging type. Why a producer makes the packaging decisions they do is largely a function of economics and safety – some factors include: Does the packaging I use make it safe to transport materials, protect the product, avoid spoilage or contamination, increase shelf life, increase the number of units I can place on the shelf/in the store, allow for easy brand recognition etc.

The increased adoption of light weight packaging can be attributed to the benefits of durability, transport and ease of consumption, while also allowing for a reduction in overall packaging used. Interestingly, when taking a life cycle approach, the environmental impact of light weight and composite packaging can actually result in superior environmental outcomes when compared to conventional packaging. This may seem counter intuitive, given the relatively low recyclability of these materials, but upstream benefits (packaging reduction, logistical efficiencies when transporting materials, avoided food waste/spoilage, discretionary consumption etc.), actually outweigh whatever you lose from not recycling that material.

All things being equal, the recyclability of a package his historically ranked as a relatively low priority for producers.

In a 2017 study conducted by the university examining the relationship between packaging fee rates, and packaging recycling performance, there was no statistically significant correlation between the two. Even for products such as paper laminates and plastic film, where the corresponding fee was significantly higher than all other materials, recycling rates remained largely unchanged, or did so in response to broader macro market conditions. The price signal sent by the fee, was insufficient to change packaging choices.

With that being said, the optics surrounding whether a package can be recycled (and more broadly, diverted) has now become a key issue for producers, and increasingly, you are seeing brand owners talk about solutions for how to recycle their products. The rise in prominence of organizations such as Terracycle speak to just how important “recyclability” has become for consumers. We have spent the better part of 40 years inundating the public with the message “recycling is good for the environment” and attempting to change that narrative is extraordinarily difficult. This issue is exacerbated by the fact that the government is continuing to develop policy that prioritizes recycling as a preferred end of life option. Between consumer demand and government legislation, producers face the daunting task of trying to recycle the unrecyclable, and in doing so, incurring a bill that is experiencing double digit percentage increases in recycling system costs year over year.

The importance of a socially sustainable waste management system

Historically, waste management (at least in a Canadian context), has not been seen through the lens of social sustainability – somewhat of a surprise, given how socio-economic inequality manifests itself in the form of impeded access, awareness and exposure to waste. Much of the existing academic research on environmental justice has been on the unequal distribution of environmental hazards and benefits along racialized lines, where there are consistent indications that waste facilities and waste related hazards are disproportionally located in lower income areas (or those predominated by minorities).

In all fairness, the connection between waste management and socio-economic inequality is not something that is top of mind for most policy makers. Generally speaking, there is an idea that a municipality will provide waste management services to a particular area, support that initiative through a combination of promotion and education efforts, and hope for sustained public participation. However, the costs of service delivery, the means and mediums of engagement, service accessibility and affordability vary widely, even within the same city.

Economic Exclusion

Taking a step back for a moment, I want to share with you three brief anecdotes that capture how seemingly oblivious our waste management system is with respect to social sustainability. These are actual conversations I have had with people in my day to day life

1)     “Consumers should purchase fewer packaged goods and opt for things like fresh produce instead of getting something shipped to us from half way across the world”.

2)     “We don’t need to use plastic film anymore, consumers can go out and buy reusable beeswax clingwrap”

3)     “Packaging programs focused on reuse (Loop) are going to be revolutionary and cut back on the amount of packaging waste we generate”

All of these are valid observations… but not necessarily ones that are realistic for many households. What people can and choose to purchase is largely a function of economics –those of us that have the luxury of being conscientious consumers, can shop locally and avoid pre-packaged goods. However, it is important to recognize that the ability to do so is a luxury – in a focus group conducted of more than 1800 consumers in the Greater Toronto earlier this year, more than 80% of respondents indicated that price was the primary determinant for making a purchase. If possible, respondents indicated that they would like to make more sustainable purchases, but budgetary restraints largely impeded them from doing so.

More than 60% of respondents also indicated that they did not have the ability to travel outside of a 5km range to make daily purchases, and often shopped at specific retailers because of a mix of multiple factors such as: convenience, price, familiarity and purchasing agglomeration (one stop shopping). In a 2019 analysis of consumer purchasing preferences in the Greater Toronto Area, households characterized as “low income” (household income less than $40,000 per year) consumed 18.4% more pre-packaged goods (namely grains, produce and frozen meats), when compared to families whose household income exceeded $100,000 a year. There is an inverse, statistically significant correlation between household income and % of prepackaged foodstuff of overall weekly purchases.

The expectation that households have the ability to readily switch between products based on packaging type doesn’t appear to be a realistic one. People might like the idea of Loop or beeswax and want to engage in more sustainable consumption, but at present, they are priced out of “taking part”.

A perhaps more insidious impact on consumers is the potential impacts to their cost of living attributable to increases in recycling system costs. As noted above, the costs of operating our recycling system are rapidly increasing, and these costs are ultimately born by consumers. In both late 2019 and early 2020, York University conducted research to better understand the link between an increase in basket of goods costs and increases in the steward obligation. While I have received many critiques and questions pertaining to how prices for packaged goods change in response to changes in the steward obligation (see post script for explanation), our research showed that consumer basket of goods prices increased by 6-12% (depending on locality). The economic and social impacts of this are potentially enormous, as lower income families are disproportionately affected by increases in packaging costs. As stated earlier, they purchase more prepackaged goods as a proportion of their overall purchases when compared to high income families.

While the ultimate intent of producer responsibility is to have the generator bare the financial costs of end of life management, the magnitude of those impacts is relative to the consumer’s ability to absorb them. As such, when we ask ourselves “What should the goal of a waste management system be?”, it is imperative that we also give thought to “How do we account of social sustainability?”. A focus on recycling/diversion based outcomes paints an incomplete picture of a much more complex and nuanced problem. What good is a circular economy if not everyone can participate or benefit from it?

Reduce, Reuse and Rethink

I will go on record and say that I think if we pursue an approach premised on prioritizing recycling above all else, it will be destined for failure. Shifting financial responsibility onto producers will not magically fix what is broken, and I think it naive to assume the financial incentive will result in fundamental shifts in producer behavior.

To echo a position I have shared in the past, the province needs to embrace a “macro approach” when it comes to sustainable materials management – Viewing end of life waste management as separate from other stages of a products life cycle is too myopic in scope.

Past emphasis on recycling rates and the recyclability of materials is no longer compatible with the changing nature of packaging. Recycling should not be the main objective, but rather, emphasis should be placed on promoting sustainable outcomes.

If a particular packaging type cannot be readily recycled, but abates more carbon at a lower cost (i.e. avoided food waste), should that be discouraged? Will forcing producers to pay 100% of the cost of recycling light weight plastics result in technological innovation and new end use applications? Or will it result in a bill in the hundreds of millions for Ontarians?

At present, the way waste management systems and legislation are designed is “siloed” – Blue Box is a distinct entity from the Green Bin, which is a distinct entity from waste electronics etc. While this may be a necessity from an operational perspective, it is imperative to take a step back and look at the entire waste management system. There is an opportunity cost to whatever decision we make – a dollar spent on one end of life management option is a dollar not spent on another. As such, our priorities should be designed to reflect what we want to achieve in waste management as a whole. Policies and legislation need to enable the province to work towards that goal in an economic, environmental and socially sustainable way. Measuring success in terms of diversion or recycling rates is no longer good enough.

APPENDIX (Calculating increases in consumer basket of goods)

As an example, the proposed increase in the steward obligation in Ontario resulting from the transition to full producer responsibility is $135 million dollars (this is a known number). The university’s methodology uses a six step process:

1) Quantify the potential reduction in the municipal tax base resulting from the transfer of recycling and landfilling costs onto producers (if any)

2) Determine how producers respond to the increased obligation. We operate under the assumption that stewards are not going to internalize any of this $135 million dollars, and that it it will either manifest itself in one of two ways a) costs are transferred to consumers (both directly via the fee allocation model and indirectly via increased pricing, b) contraction of the company resulting in job losses etc. (a less likely scenario, but one that does have a precedent – most of our modeling assuming consumers absorb this cost).

3) Examine the existing basket of good costs across localities (basket of goods costs vary significantly depending on whether it is rural/northern community, urban areas etc.) – part of this analysis is to also to determine the relative price elasticity of the consumer good basket within those communities. We calculate relative price elasticities for a range of consumer goods and household services using measured data in dozens of cities across Canada. Elasticity is very much a function of locality – price elasticity in Northern Ontario is sometimes 200% greater than in Southern Ontario, i.e. you increase the transportation costs for 4 litres of milk by 50 cents, the corresponding price increase in Red Lake is more than $2.00. This also explains why our modeling shows that the increase in the price of consumer goods resulting from producer responsibility is more acute in certain communities.

4) Using a logit-loglinear regression model, we adapt an input-output table that has been regionalized for the Ontario market (or whatever province we are examining). A log-linear analysis is necessary to specifically isolate what percentage of the $135m increase in the steward obligation specifically manifests itself with respect to price changes in the consumer basket of goods.

5) As noted in step 3, we know that certain communities are much more sensitive to changes in the prices of goods based on their relative elasticity measure. Using the output of Step 4, we then apply how price changes manifest in specific communities across Ontario (or a given province). This is how we develop a range of estimates for potential increases in the consumption basket.

6) Once we have determined the potential change in the consumer goods basket, we then backout potential savings resulting from a potential decrease in the municipal taxbase (if any) to arrive at our final estimates.

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About the Author

Calvin Lakhan, Ph.D, is currently co-investigator of the “Waste Wiki” project at York University (with Dr. Mark Winfield), a research project devoted to advancing understanding of waste management research and policy in Canada. He holds a Ph.D from the University of Waterloo/Wilfrid Laurier University joint Geography program, and degrees in economics (BA) and environmental economics (MEs) from York University. His research interests and expertise center around evaluating the efficacy of municipal recycling initiatives and identifying determinants of consumer recycling behavior.