New research recommends introduction of a UK-wide deposit refund scheme

The Campaign to Protect Rural England (CPRE) has today (Thursday, 16th September 2010) published new research that clearly demonstrates a drinks container deposit refund scheme (DRS, covering glass bottles, plastic bottles and cans) would cost little to set up, and would generate revenue to support most of its own running costs.

The research demonstrates how the scheme would help the Government achieve a ‘Zero Waste’ economy by increasing recycling rates, and reducing litter as promised in the Coalition’s ‘Programme for Government’. HM Government (2010) The Coalition: Our Programme for Government published in May stated:

We will work towards a ‘zero waste’ economy, encourage councils to pay people to recycle, and work to reduce littering.

LetsRecycle is reporting that Prime Minister David Cameron has said the government will look into bottle deposit and refund schemes as new research was published highlighting the “huge benefits” that such schemes can produce. The report was flagged up to Mr Cameron in the House of Commons by Liberal Democrat MP Martin Horwood, prompting Mr Cameron to say:

I will certainly ask his right hon. Friend the Energy and Climate Change Secretary [Chris Huhne] to look at this issue and see if we can take it forward.

Critically, at a time of public spending restraint, the report highlights how the scheme would reduce costs to the public sector by £160 million per year (or £7 per household), whilst also securing significant benefits in reducing litter. Last year the cost of clearing litter in England increased by 10 percent to £858 million a year. The actual figure of £858.514 million is taken from the Local Government Financial Statistics England No.20, DCLG (2010) and is the total street cleansing cost for England for the period from April 2008 to March 2009. It is known that high-volume and high-visibility drinks container litter is found at the majority of littered sights. Non-alcoholic drinks related litter found at 51 per cent of sites surveyed for litter. Keep Britain Tidy (2010), ‘The State of England’s local environment 2008/2009.

Bill Bryson, CPRE President, says:

These findings throw rational and informed light on an issue that is nonsensically contentious in the UK. What sensible nation would not want to capture and recycle its precious and finite resources? What discerning people would not want to enjoy a litter-free environment? CPRE has published this research to reignite the debate, so that an effective mechanism which delivers environmental and social benefits in many other countries can be given its proper consideration in the UK.

The new research report, ‘Have we got the bottle? Implementing a deposit refund scheme in the UK,’ was prepared by respected research consultants, Eunomia Research & Consulting. It shows that a sensibly implemented DRS would deliver environmental benefits well in excess of the costs of implementation. The report suggests a deposit of 15p for containers smaller than 500ml and 30p for those larger would generate return rates of around 90 per cent.

Samantha Harding, CPRE Stop the Drop Campaign Manager, says:

The UK has a serious litter problem and the year on year increase in the cost of clearing it up has become unsustainable. We need to look at new ways of tackling litter and changing behaviours. Our research shows that a deposit refund scheme would reduce litter and increase rates of recycling, while at the same time reducing public sector spending on waste. A deposit refund scheme supports anti-litter messages with sound financial incentives. The principle behind this idea is that the polluter pays. The small minority of people who drop litter or can’t be bothered to recycle, will end up footing the bill. Under this proposal, the Government does not pay and responsible consumers do not pay.

There are huge potential benefits to introducing a deposit refund scheme. We have modelled a scheme that is easy and convenient to use – and cost effective to deliver for both Government and consumers.

Notes on costs and implementation:

How a DRS would work:
The scheme proposed by CPRE works by including a small deposit for the cost of drinks containers (15p for containers smaller than 500ml and 30p for those larger). This deposit is then refunded to consumers when they return the container to a retailer or other designated collection point.

What a DRS would cost:
Researchers found that to set up such a scheme would take an initial £84 million investment, spread over one or two years. In total, the running costs of the scheme – approximately £700 million per year – would be met by unclaimed deposits and by the drinks industry. At 90 per cent return rates or 24 billion returned containers (achieved in some EU deposit schemes) there would remain £491 million in unclaimed deposits to support the running costs. The remaining £212 million would be met by drinks manufacturers. Should producers decide to pass this cost on to consumers, this would mean a 0.7p rise in the unit retail price. The success of the scheme would depend on high recycling targets being set by Government to ensure the scheme was not merely used to generate revenue.

This has been a key criticism of previous attempts to initiate a UK DRS. However, if deposits were not easily reclaimed consumers would be likely to ‘internalise’ lost deposits in the price of the beverage, more so then where the deposit can easily be recouped. This might, in turn, depress demand for the beverage itself – as in a standard cost/demand relationship.

Environmental Benefits:
When the researchers took into account the net environmental costs of not introducing such a scheme, the disamenity costs associated with litter, and the long term benefits of increased recycling, they found potential net savings to the environment of £1.2 billion a year. The report recommends further research into the scale of these significant, associated benefits.

For a full description of the cost/benefit analysis for a complementary Deposit Refund System, please refer to the full report. The £1.2 billion figure is based on the sum of all the ongoing costs and savings of running the scheme; as well as savings made by reduced environmental costs (such as carbon and air quality) and the assumption that each UK household is prepared to pay on average £48 per annum to clear up litter in their area. This assumption is based on research by Pricewaterhouse Coopers (2010) Estimating Willingness to pay for Improvements to Packaging and Beverage Container Waste Management, a report for the Environment Protection and Heritage Council, June 2010.

A summary report containing the primary recommendations and findings of the CPRE research can be downloaded here: Have we got the Bottle? Summary report

Stop the Drop is a flagship CPRE campaign, spearheaded by CPRE’s President Bill Bryson and launched in April 2008. The campaign calls for a national, long term education campaign, a bottle deposit scheme and a change to the law on roadside litter. To date the campaign has inspired the formation of 334 litter picking groups across England, who have collectively cleared 41,332 bags of litter to date. Further information about the campaign can be found at its websites: www.cpre.org.uk and www.litteraction.org.uk

Eunomia is an environmental consultancy that supports positive change. Our clients from both government and the private sector turn to us for policy development and analysis, service design and review, technology and market assessment, regulatory compliance and project management.

CPRE, the Campaign to Protect Rural England, is a charity which promotes the beauty, tranquillity and diversity of rural England. We advocate positive solutions for the long-term future of the countryside. Founded in 1926, we have 60,000 supporters and a branch in every county.

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