Testimony of Jeremiah
Baumann, Environmental Advocate
Oregon’s Bottle Bill is an
important environmental program – not only because of its role as a defining
program for Oregon’s ethic of environmental
responsibility, but also because it is one of Oregon’s most effective and popular
environmental programs. The Bottle Bill is extraordinarily effective – for 30
years it has maintained recycling rates at or exceeding 80%. According to the
U.S. General Accounting Office, the Bottle Bill has reduced litter from covered
containers by 83%, and reduced total litter by 47%.
So the context in which we discuss updating the Bottle Bill
is not that the Bottle Bill is somehow broken or not working – rather that it’s
working extraordinarily well but the market in which it works has changed. The
bottles in which beverages are sold have changed, and the value of the deposit
has declined substantially.
The overall principle I would advise this committee to use
as it approaches updating the Bottle Bill is this: Oregon should prioritize
building on the success of its Bottle Bill to return recycling rates to the
higher level we know Oregonians can meet, and we should achieve equally high
recycling rates for other containers, while keeping the basic principles and
structure of the system intact.
There are some structural reforms that could be justified,
but the Legislature should proceed with extreme caution in considering those
reforms. This testimony covers what I see as the two primary drivers of success
in the Bottle Bill as it currently works, changes in the market that challenge
that success, and OSPIRG’s recommendations for how we update the Bottle Bill to
build on that success. As I discuss these issues, I will also identify what I
see as options and risks in changing the structure of the Bottle Bill.
Drivers for the Bottle
Bill’s Effectiveness
There are two primary reasons that the Bottle Bill is
effective: first, it provides a fully refundable deposit for covered
containers. Second, it provides a very specific form of convenience in allowing
consumers to return to retail.
The Deposit: Its Value and What it Covers
A refundable deposit is a strong incentive for consumers to
return their bottles for recycling. The first challenge to Oregon’s recycling rates is simply that the
value of a nickel has dropped substantially, as the first chart in the
attachments shows. By 2001, a 1971 nickel was worth 1.1 cents. To keep pace with
inflation, the deposit would have to be 22 cents in 2001 dollars.
The proof is in the pudding: as the second chart shows, the
only state with a 10-cent deposit, Michigan,
has extraordinarily high recycling rates – consistently above 90%. Michigan is the only state with a rate of redemption
higher than Oregon’s.
Increasing the deposit is clearly one of the most effective
ways we can further increase recycling rates. OSPIRG supports increasing the
deposit to 10 cents. Given that this is less than half the value that inflation
since 1971 would warrant, we would certainly support a larger increase or at
least a mechanism outside the Legislature to allow for future increases.
The second way in which changes in the market present
challenges to Oregon’s
recycling rates is the issue of what beverages are covered. As the third chart
shows, the 1990s saw a steady increase in the consumption of sales of tea and
sports drink, and a striking increase in sales of bottled water.
So the second common-sense update to the Bottle Bill is to
add containers that are not currently covered: non-carbonated beverages. The
more inclusive this Committee can be, the more effective this update will be.
The last several decades of efforts to update the Bottle Bill are a lesson that
there should probably be an administrative means of adding additional
containers as the market continues to evolve.
Convenience of Recycling
Allowing consumers to return recyclable bottles to grocery
stores is the second pillar of the Bottle Bill’s effectiveness. It is a very
specific form of convenience because it allows consumers to drop off beverage
containers at a place they are already going. It is much less important that
there is a return site within any given distance from where the consumer lives
– whether that’s a mile or a quarter-mile or three blocks – than that consumers
can drop off bottles at a place they are going to be anyway, in fact it is the
place they’re going to buy more bottles of juice, water, pop, or beer.
It is hard to imagine that any move away from this specific
convenience – returning bottles to a place the consumer is going anyway – will
not reduce recycling rates. Avoiding this outcome must be paramount to the
process of updating the Bottle Bill.
Other Reforms
Beyond what I see as the most important principles of
updating the Bottle Bill – increasing the deposit, adding containers, and
maintaining the level of convenience – there are many other ideas for reform
that have been proposed. Many of them are good ones, some might threaten the
Bottle Bill’s effectiveness, and all of them probably add a level of
complication.
Unredeemed Deposits
and Handling Fees
The grocers legitimately would like to be compensated for
the time and money they spend processing them. There are two appropriate ways
that compensation could be funded.
The first way would be to require that a handling fee be
paid to grocers and retailers by the distributors or manufacturers. Many states
have an explicit handling fee, typically between 1 and 3 cents, paid by
distributors to retailers.
The second way would be to provide grocers and retailers
with a portion of the unredeemed deposits. Michigan gives retailers 25% of the
unclaimed deposits as compensation for handling.
The issue of unclaimed deposits has been much debated in Oregon. Many states have
deemed unclaimed deposits to be the property of the state, and courts have
found that since a refundable deposit properly belongs to the consumer,
unredeemed deposits are abandoned property and they escheat to the state. These
states have typically concluded that the combination of selling valuable scrap
materials from recycling and the opportunity to make short-term investments
with deposits means distributors have covered their costs, and therefore the
unredeemed deposits are windfall. If they are retuned to the state they should
either be used to compensate for handling or they should be used for solid
waste programs – for example, doing public education or augmenting curbside
recycling to increase recycling rates for products that are not and will not be
subject to the Bottle Bill.
