Day 3 symposium Simon Upton (OECD), Revisiting oecd policy guidance
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Day 3 symposium Simon Upton (OECD), Revisiting oecd policy guidance
- 1. EXTENDED PRODUCER RESPONSIBILITY: REVISITING OECD POLICY GUIDANCE Simon Upton Director of Environment, OECD www.oecd.org Global Forum on Environment Tokyo, 19 June 2014
- 2. A Story of Industrial Entropy Photo credit: NASA Goddard Center; OECD. Debit 72 Gt RESOURCE STOCKS A Story of Industrial Entropy … Running Against the Earth’s Balance Sheet? SATURATION Atmosphere Aquasphere Litosphere RESERVOIRS 49 Gt of GHG 228 Mt of P ~12 Gt of solid waste Extracted & used 35 Gt (1980) . . . 72 Gt (today) . . > 100 Gt (2030) . . Increasing costs ¥ ¥ ¥ ¥ ¥ ¥ ¥ ¥
- 3. Two related features: • shifting of responsibility upstream to the producer and away from municipalities • to provide incentives to producers to incorporate environmental considerations in th design of their products. Defining Extended Producer Responsibility ..an environmental policy approach in which a producer’s responsibility, physical and/or financial …is extended to the post-consumer stage of a product’s life cycle
- 4. Extended Producer Responsibility by product type and instrument Packaging 17% Electronics 35% Vehicles/auto batteries 12% Tires 18% Other 18% EPR by product type Take-back 70% Deposit/Refund 11% ADF 17% Other 2% EPR by policy
- 5. Guidance on EPR design Guidance on policy instruments, including complementary policies Discussion of roles and responsibilities Discussion of trade and competition aspects 2001 OECD Guidance Manual
- 6. Changing context for EPR since 2001 2014 Rising intrinsic value of some waste streams Increasing pressure on land-fills Further globalisation of value chains and producers Millions more middle-class consumers in developing countries More internet sales and new market opportunities 2001 Increasing trade in waste
- 7. Governance Clear roles and responsibilities Early and full consultations Adequate transparency level Economic Multi-level competition assessment Clear performance targets & defining full costs recovery Encouraging “Design for Environment” and waste prevention Emerging issues Integrating the informal waste sector Anticipating impacts of changing waste value Free riding due to internet sales and new market conditions Overall EPR instruments tailored to specific product and country context Some key areas discussed at the Global Forum
- 8. • Build out guidance on competition concerns to distinguish competition impacts on different levels • Develop guidance on integrating the informal waste sector in EPR policies • Further research to develop guidance on how “Design for Environment” incentives can be more effective • Further research to develop guidance on how to adapt EPR to waste streams with positive value • … and more! 8 Recommendations from the Global Forum relevant for OECD’s review of guidance
- 10. Literature review and typology of EPR schemes Case studies : Australia, Belgium, Canada, Chile, China, Colombia, France, Japan, Korea, Slovakia, United States, and building on EU studies Views exchanged here at the Global Forum in Tokyo Financial support from Japan and EU 10 Towards updating policy guidance
Editor's Notes
- Multiple definitions of EPR. At its core EPR seeks to give producers appropriate incentives concerning gthe life-cycle environmental impacts of their product. It addresses the weakest link in the product responsibility chain – the final disposal of the product. Main objective is to use EPR as a pressure point to drive upstream changes in materials selection and product design.
- Electronics most common EPR product 35% (followed by Tires, Packaging 17-18% each; Vehicles/auto batteries 12%). This corresponds to guidance in 2001 OECD Manual: product groups best suited for EPR: Low residual value High environmental impact Large volume of material Urgency of waste magement problem Take-back most common EPR instrument (73%; followed by ADF 16%; Deposit/refund 10%).
- A wide range of issues related to EPR policy were discussed at the Global Forum. Here I will give just a brief indication of some areas that were discussed. Many of these issues were already covered in the 2001 Guidance, and the guidance remains largely relevant in those areas. In other areas, experience with existing schemes means that we can now go further in how we develop new guidance. One overall theme that was reiterated several times at the forum is that EPR policies cover a remarkable diversity of product types, and policy design should be tailored to the market conditions of particular products and particular countries. What other policy area addresses products as diverse as drinks cans, computers and cars under the same policy umbrella? I have grouped other topics into three broad categories (though this is only possible way of cutting the cake). Governance-related issues included defining clear roles and responsibilities across the supply chain, the need for early and full consultations with all stakeholders and the need for policy to establish an adequate level of transparency among operators. These issues were already well covered by the 2001 Guidance. Economic issues discussed included assessment of the impacts of EPR on competition at multiple levels, the need for clear performance targets that show a clear definition of full cost recovery, and the need for incentives to encourage “design for environment” improvements in products. These issues were broadly covered in the 2001 guidance, but it has become apparent that there is now a need for guidance to go further. Some newer and emerging issues discussed included how EPR policies can integrate the informal waste sector in EPR policies, how EPR can anticipate increases in waste value, and how internet sales poses a challenge to EPR design. These issues were not extensively covered in the 2001 guidance.
- Discussions at the Forum were helpful for informing how OECD will revisit its guidance over the coming months. I will just give you a brief flavour of some of the recommendations for how OECD guidance arising from the Forum. Participants generally agreed that we should build out our guidance on competition concerns arising from EPR. experience has shown that impacts of EPR on competition should be assessed at three levels: impacts and distortion of markets for products themselves; effects of competition between Producer Responsibility Organisations; and impacts on the downstream waste collection, sorting and treatment sectors. There may be trade-offs between high levels of competition and incentives to invest in new technology/facilities that also need to be taken into account. Regulatory vigilance is therefore required to regularly assess competition at these levels, recognising that the most effective level of competition may evolve over time as EPR markets evolve. Participants also generally agreed that we should develop guidance on the informal waste sector. it seems clear that the realities of informal waste collection and treatment in developing countries must be considered in EPR design in those countries. EPR schemes should seek to provide incentives to informal actors that on average exceed the return those actors can get on local materials markets. EPR schemes can build on existing informal networks, in particular in waste collection. However, binding and enforceable regulation remains critical as a means to eliminate harmful dumping and treatment practices and to ensure that even the least valuable waste streams are capture by the programmes. There was less consensus among participants on how we should develop guidance on “Design for Environment” incentives. in cases where EPR can have an effect on product design, views differ on to implement effective DfE incentives. Some of the key questions that have been discussed are: Can DfE incentives be designed that influence product design in sectors with global producers selling products into multiple international markets? Can the end of life costs product by product or to implement individual producer responsibility? Should DfE incentives focus on recyclability or could they be broader (such as focusing on waste minimisation, or even on energy efficiency, water efficiency etc)? There was also less consensus on how we should develop guidance on waste with positive value – there are diverging views about whether waste streams with average positive value should be subjected to an EPR or not. In principle, assuming that waste treatment standards are properly enforced, the market could take care of these waste fractions without imposing EPR. However, there is a risk of fragmenting the waste stream, leading to smaller volumes and parallel waste collection infrastructure, resulting in a loss of network externalities and economies of scale. The total cost of waste treatment needs to be assessed and compared and the answer to this question is likely to differ from one product group to the other.
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