GEE system, others, such as the forest
industry, would thrive. The demand for its products would increase.
That would mean growth and more jobs. Government regulations would
need to be put in place to ensure the proper management of the
clear-cutting practices would have to be phased out and replaced by
better options. Replanting would have to increase to not only renew
the resource but also expand it to meet increased demand. Forest
preservation for current and future generations would have to become
a priority. Regulation will likely remain the primary instrument
for the protection of old-growth forests.
What Needs to Happen
Let's look back at the
initial planning exercise that we did to determine what an
optimal environmental plan would look like (the silent scenario).
The GEE would result
in higher costs for products with high metal contents.
Manufacturers would shift to substitutes whenever possible, and the
automobile industry would start building more conservational and
environmental vehicles. All of this would help save non-renewable
resources, which is what would take place in an ideal situation.
Products that are
made with toxic chemicals or are harmful to the environment would
become more expensive under the GEE. Manufacturing and consumption
would move to greener alternatives. Carbon taxes would result
in a shift to renewable energy. As a result, contaminants and
carbon emissions would decrease, which are things that would also
happen under an optimal environmental plan.
The GEE strategy
proposed in this book would deliver exactly what would happen under
ideal circumstances. Of course, some job and economic displacement
would be inevitable no matter how we decide to address environmental
problems. A better unemployment insurance system would help us make
the transition and result in a society being more competitive in the
The GEE would make
the changes much less painful than the other options we have. The
D-Day scenario was one of drastic implementation, but countries will
likely begin slowly, making the transition relatively easy.
We have the means to
bring about large-scale environmental change; the only question
remaining is, do we have the will? We do not really have a choice.
Problems are already bad and will only get worse with further
delays. The GEE will inevitably result in a number of lifestyle
adjustments. However, together they will have a huge impact on
global warming, conservation, and the environment.
We can act now; the
GEE gives us the means to do so.
First Step: Laying Out the Foundation
The GEE is scalable.
This means that the initial tax rate on raw mineral resources could
be 100%—a doubling of current prices—or 30% or less as
necessary. As such, the Green Economic Environment strategy
could easily be phased in slowly and progressively, making it
implementable without an excessive amount of planning. In the
beginning, it would likely be difficult to estimate the most
appropriate level for each tax. However, because the system is
scalable, it would not be necessary to do so.
Lower initial rates
would decrease the impact of the GEE on the economy and allow
governments to see how environmental taxes interact with each other
and to assess appropriate levels. They would also help familiarize
the public with the implications of the new system. As such,
scalability would make it possible for countries to begin
creating the green economic environment without delay. Of course,
as environmental taxes are collected, the retail sales levies and
the non-progressive share of income tax would be reduced in equal
What is important is
to lay down the foundation as early as possible to start reducing
carbon emissions, the depletion of non-renewable resources, and
contaminants. Initiating the implementation early would have
several advantages: it would give us more time, allowing for a
softer implementation, and dispel any hopes that a government
commitment to a greener future is lip service. It would be a firm
signal to the business sector that times are definitely
changing and that companies should start planning for a green
Second Step: Short-Term Levels of Taxation
The second stage is
intermediate in nature and would seek to establish a realistic
national implementation. Countries would more fully commit
themselves to the new system and select rates of taxation
should be high enough to achieve significant amounts of resource
conservation and pollution reduction but not so high as to overly
affect a country's international competitiveness.
Third Step: Progressive Implementation
This step would lead
to the establishment of optimal national levels of taxation for the
different categories of products and resources involved. It would
essentially be a fine tuning of the tax rates developed during the
second step. The resource and other GEE levies would be gradually
increased to the new targets.
Fourth Step: International Agreements
implementation would likely reach limits, the fourth step would be
the development of international agreements. These would support
fuller national implementation, eliminate international
competitiveness issues, and take the green economic environment
The GEE Diffusion Effect: A Closer Look
The GEE would be
charged on raw materials and other products and diffuse itself as it
moves up into finished products. Even fairly high initial tax
levels—if this is what a country chooses to do—would not result
in excessive price hikes for consumer goods. This section takes a
closer look at the issue.
Tax Diffusion Through the Economy
The GEE would spread
in different patterns throughout a country's economy. At one end,
items like machinery, machine tools, and automobiles would probably
be hardest hit by resource taxation as they contain large amounts of
metal. However, a drastic 100% tax on raw materials would not
automatically mean a doubling of the price of these items. The
parts and components of machinery and vehicles are not simply metal.
They are technology, labor, and materials.
A kilogram of steel
and a tractor part weighing one kilo are not the same thing. The
part is metal that has been smelted, cut, or shaped into a specific
design. In those processes, value is added to raw materials. For
example, the part weighing a kilo may sell at double the price of
its weight in steel. That tax would therefore apply to only half of
the final price. Let us look at an example based on the drastic
implementation scenario discussed earlier.
Suppose that a
tractor made of 90% metal had a value of $100,000, with the cost of
its metal parts being $90,000 and that of its non-metallic
components, $10,000. Firstly, the tractor would not double in price
from a 100% tax on raw materials as only its metal parts would be
affected by the tax; the $10,000 worth of non-metallic components
would not go up in price.
Secondly, the tax
would affect only the raw materials, not their fabrication. Suppose
that raw materials cost $40,000 and their manufacturing into parts,
$50,000 (for a total of $90,000 as above). A 100% tax on
non-renewable resources would double the cost of metals from $40,000
to $80,000. The costs of manufacturing the parts ($50,000) and of
non-metallic components ($10,000) would themselves not be affected.
The final cost of the tractor would have increased by $40,000 to
$140,000, which is a 40% rise in price.
At the other end of
the spectrum would be services, such as the legal, educational, and
healthcare industries. As these do not generally involve the
selling of material goods, their costs should essentially not go up.
If anything, they should decrease as retail taxes are dropped. The
same would be true for renewable resources such as wood products and
In between, you have
the vast range of consumer products that would see varying increases
in price depending on the value of the non-renewable raw materials
they contain as well as the amount of transformation these have gone
A New Consumer Environment
Going back to the
Canadian example, dropping the federal retail sales tax would make
goods and services 5% cheaper. Doing the same thing with the
provincial sales taxes would further reduce most prices by another
6% or 7% for a total of about 11% to 12%. As a result, under a 100%
GEE scenario you may see the price for high-metal content goods
increase by about 25% net. The cost of services and renewable
resources would decrease by a few percentage points. Other
items would range from no change in price to moderate increases.
Many things would be
cheaper, others, more expensive, but our total purchasing power
would essentially remain the same as we would have more disposable
cash from the rebate on income and retail taxes. The GEE would mean
a different way of life but not a lower standard of living. We
would experience a different consumer environment which would lead
us to buy fewer unenvironmental goods and more green ones. Our
buying patterns would change.
The Packaging Scenario
In the packaging
industry, the strategy would yield similar results. The GEE would,
for example, bring in taxes on new containers. The environmental
levy would optionally be backed up by regulations standardizing
them. The products purchased by consumers would remain exactly the
same. A fruit juice is the same regardless of what it is bottled
As all new containers
would be taxed, companies would naturally and progressively
shift to recyclable and reusable alternatives. The soft drink and
beer industries in many countries used to function on that
basis and still partly do so today when they reuse their own
bottles. In terms of economic organization, this is essentially old
What would be
different under the GEE is how the recycling of empty containers
would work. It would be based on markets as opposed to the
bureaucratic refundable-deposit system. Empty bottles would
eventually be sold to recyclers rather than returned.
Of course, the old way of doing things would still remain an option
in situations where it is desired or is still the best alternative.
Under the GEE, choice would still exist for consumers. Soft drinks
in plastic bottles would still be available but more expensive
because of their less environment-friendly packaging.
One thing that would
change in our lifestyles is that we would likely spend more time
recycling, taking items over to depots or processors and selling
them back for reuse or raw materials. Those who would be too busy
to do so, or would not want to, could forgo the cash and just leave
them at the curbside to be picked up by recycling entrepreneurs or
kids wanting to make a little cash.
The Dynamism Issue
The chisel effect of
the GEE in shaping a new society would be continuous. Dynamism is a
very positive and desirable factor in bringing about environmental
change. Metal content would decrease in many things as
non-renewable resources would be substituted for by renewable or
reusable materials. Businesses would continue to seek ways to lower
their costs by switching away from taxed inputs. As the price of
toxic intermediate chemicals would go up, they would be increasingly
replaced by more environment-friendly alternatives. Processing
methods would change and become greener.
A continuous incentive
to do better is exactly what we want. For the first time with
respect to the environment, the issue would not be the lack of
funding but keeping positive change from happening too fast.
11. Disposable Grandchildren: Packaging and Contaminants
This chapter will
cover in more details one of the most important sectors of the
economy as it relates to the environment: packaging. Its products
are pervasive in society. Furthermore, many are single use and, for
that reason, extremely wasteful. As such, the packaging sector
has a massive impact on the environment and is in need of major
conservation includes various recycling and reuse programs.
Renewable resources such as paper products are also the focus of
recycling because of the cost of their disposal. The packaging
industry is of direct relevance to resource conservation not only
because of its use of non-renewable materials—such as steel and
aluminum—but also because of its products' utilization of
landfill space. Targeting the sector is crucial because of the
sheer amount of waste it generates and because, if properly managed,
it is one of the keys to resource conservation.
The 20th Century Approach
How should we manage
the packaging industry? Should we impose severe restrictions on it?
Should we tax it or assess import tariffs? It is undeniably one of
the most difficult environmental problems to handle. The way we
currently manage packaging is nothing short of a crime against
Packaging serves once
and is then discarded. How can we still be so widely using
non-renewable resources for its fabrication? We consume tons of
depletable materials—which will be desperately needed by future
generations—for products that not only see virtually no use
but also cost a lot of money to dispose of and will plague landfill
sites for a long time!
century can make one claim: to have brought about the disposable
society. By indulging in convenience, we are turning the world
into a garbage dump, making our very grandchildren disposable. They
will be left living in a highly polluted environment, with
their own body tissues reflecting the chemical mix around them.
Recycling and reuse
programs will need to see significant shifts in approach and scale
if they are to achieve effectiveness and produce reasonable results
for the environment. Recycling is not the long-term solution to
resource conservation. It is just a part of it. On the current
scale, it only mitigates the problem although we may feel that a lot
is being achieved.
Plastic soft drink
bottles, for example, can be recycled to make t-shirts, carpeting,
or pillow stuffing. However, most bottles do not get recycled in
the first place and end up in landfill sites. Products made from
recyclables eventually also end up in garbage dumps, only later.
Steel containers can be resmelted, but again, a lot of them do not
get recycled in the first place, and even metal that has been given
a second life eventually rusts away into the environment.
conservation, and efforts in this direction should continue.
However, it only slows down depletion to some extent and delays the
inevitable. For that reason, the real long-term solution for
the industry is to reduce, reuse, and shift to renewable resources
such as paper and cardboard.
The Market Approach
programs often have to be funded by governments because there is
generally no market for used materials at the actual cost of
collection. That is, recyclables are most often resold by
municipalities at less than it costs to pick them up.
Taxpayers, therefore, have to make up the difference. Furthermore,
the government bureaucracies that run the programs tend to be
less efficient than their private sector counterparts.
Another approach to
recycling has been the refundable-deposit system in which a small
levy is charged on bottles and cans and refunded when the empty
containers are returned to vendors. Hundreds of millions of
deposits have to be collected and kept track of by retailers. Then,
each has to be refunded. Net surpluses and deficits have to be
accounted for and returned to or claimed from government agencies.
Again, this may not be a very efficient approach.
The GEE would enable
and support a new strategy for conservation. A levy on
packaging and/or materials would have the double effect of reducing
our consumption of non-renewable resources and of creating natural
markets for reusables and
recyclables by increasing their value above the cost of
their collection, i.e. by making the industry profitable. This
could replace the more bureaucratic and inefficient deposit system
although the latter would still be an option wherever it is more
Under the GEE,
private companies would buy and sell reusables and recyclables for
profit. Items would be collected and sold for cash at market prices
without government intervention. The system would have the
advantage of keeping the element of choice for both corporations and
consumers. Certain useful but wasteful types of packaging would
still be available, although for a higher price, as opposed to being
regulated out. This would provide more options for consumers and is
generally preferred by businesses as it gives them more flexibility
and time to adapt.
In the long term,
natural markets would develop by themselves as non-renewable
resource taxes are progressively increased and profitability levels
are reached in those sectors, i.e. when the cost of recycled
resources such as metals is significantly lower than that of newly
extracted minerals. However, in the short term, there could be the
need for a combination of approaches.
The Short-Term Market Approach
taxation remains, in my opinion, the most efficient approach to
environmental change, its initial levels would be limited by
international competitiveness. As such, an interim strategy
for packaging is likely to be needed in the beginning.
The goal for the
industry would be to shift to either reusable containers or 100%
renewable, recyclable, and biodegradable resources such as
cardboard. Non-renewable and non-biodegradable materials such
as polystyrene fillers (better known under the trade name Styrofoam)
would be taxed in order to foster their replacement by environmental
alternatives such as cardboard frames, molded paper pulp, etc.
Regulations could further be applied to inks, glues, tapes,
chemicals, etc. to ensure that they are of only non-toxic and fully
With respect to
food-grade and other containers having a potential for reuse,
the GEE would tax new items, making used ones or those made with
recycled materials cheaper. Market forces would naturally act to
shift industries towards them. Food-grade containers include
the various plastic tubs and steel cans that edibles come in as well
as the aluminum cans and glass or plastic bottles used for liquids.
The goal would be to switch from them to reusable alternatives
as they are a large part of our daily production of garbage.
Under the GEE, people
would not return their empty containers for a refund. Instead, they
would resell them to a local recycler for what these would be worth
on the market at that time.
The role of
governments would be to set taxes sufficiently high so that empty
containers would be worth reselling instead of being thrown away.
In some ways, the GEE approach would resemble the refundable-deposit
system, except that it would not have its bureaucracy. One of the
main differences between the two would be that the price of returns
would not be fixed but vary from recycler to recycler and by
Communities that are
too small for recycling to be profitable or that do not have local
recyclers could continue the programs that they already have.
Under the general GEE
scheme, raw materials (outputs) from producers would be taxed once.
One way to solve the lack of initial incentive or profitability in
the reuse and recycling industry would be to tax those outputs again
when they are bought by packaging manufacturers (as inputs).
For example, steel
and glass would be taxed once with producers at the established GEE
rate. Manufacturers that use these to make regular goods (tools,
toys, dinnerware, etc.) would not pay a second levy. However,
companies using them for the manufacturing of packaging would be
taxed a second time as the raw materials are purchased as inputs.
This would make
containers fabricated from new materials more expensive, which would
increase the incentive for packaging manufacturers to move to
used materials. It would also create a market for recyclables since
waste metals would be cheaper as they would not be taxed.
Manufacturers of packaging would naturally shift to them.
Each type of material
could be assessed for environmental friendliness or
desirability. Criteria such as reusability, renewability,
biodegradability, and toxicity could be used to set tax levels. For
example, steel and aluminum would be assessed higher levies because
they are depletable. Cardboard would be at the bottom of the scale
because it is both renewable and biodegradable. As desired, the
various types of plastics currently used in the packaging
industry could be assessed individually and get different tax rates.
could easily be taxed based on weight. Governments would simply
have to require exporters to list the types of materials and net
weights of packaging on labels and shipping documentation.
This would probably be
the simplest approach to creating a market-based strategy for the
packaging industry at the beginning. In the longer term, the basic
GEE output tax might be enough to support profitable markets for
used materials although input taxation would remain an option to
ensure high standards of recycling in an industry that is very
Keep in mind that we
are still discussing a revenue-neutral approach in which higher
environmental levies would be offset by a drop in other taxes.
A less desirable
strategy would involve individual levies on types of items. This
approach would be more difficult to implement because of the variety
of packaging available. However, it may be preferred by some
countries for one reason or another. Let us first look at the range
of available options.
One of the best
environmental packaging at the moment is glass. It is natural,
recyclable, and reusable. Under an individual taxation scheme, new
containers would face levies to promote reuse and expand markets for
recyclables. Used ones would remain unlevied.
Plain cardboard would
be a very good choice too but can only be used for packaging dry
goods. For liquids, an alternative to glass is waxed cardboard
cartons as are currently used in the packaging of milk and some
drinks in many countries. These, however, are generally not
reusable. They could be levied but at a low level because of their
bio-biodegradability and the renewability of their materials.
such as regular plastic bags (those used for carrying groceries) and
plastic-lined cardboard cartons could be levied at an intermediate
level. They are less environmentally desirable but better than many
Because they do not
bio-degrade easily and are generally not made from renewable
resources, plastic containers would be fully targeted under an
individual taxation system. So would steel and aluminum cans.
However, the same items made from recycled materials would be taxed
at a lower level in order to promote their use and the development
of their markets.
Examples of Individual Taxation
would be fairly complex. The following is an example of it and
assumes that regulations standardizing container types and sizes
have been implemented (see Standardization a little further
For the sake of
simplicity, the following will deal only with smaller size items
such as soft drink bottles and steel cans for foods. Larger or more
expensive containers could be the object of a separate scheme
or category. Non-renewable would refer to packaging made
from resources that are limited in supply and depletable such as
steel, tin, aluminum, etc. As most materials do eventually
biodegrade, non-biodegradable would refer to those that
do not break down within a few years in nature.
A typical scheme could
look like this. Taxes would be charged preferably directly to
manufacturers and on imports at customs. The first level of levies,
$1.00/item for small sizes, would be applied to new non-renewable,
non-reusable, non-biodegradable containers.
It would essentially
comprise items that we would want to phase down or out for their
unenvironmental or unconservational characteristics. This
would shift producers and food processors—as well as
consumers—away from them and towards better alternatives. The
$1.00 levy would not be a refundable deposit but a cost. It would
be recouped through revenue-neutrality and by selling containers
back to recyclers.
The second level of
levies, $0.75/item, would be applied to composite containers such as
plastic- or foil-lined cardboard cartons, for example, those
currently used for packaging juices. This level would represent
better alternatives. The levy would promote a switch to more
environmentally desirable types of materials.
The third level of
taxes, $0.40/item, would be charged on all new non-standard
containers not already taxed above and made of reusable and
recyclable materials. This would represent good alternatives
such as glass containers. New and non-standard items would be taxed
to promote a shift to standard ones, which would be more reusable,
and to encourage reuse.
The fourth level
would target new standard containers. A $0.30/item levy would
promote their use over that of non-standard ones. The less
fragmented markets are, the cheaper and more efficient processing
for reuse would be because of economies of scale. This would result
in lower costs to consumers, more successful processing
industries, and increased resource conservation.
packaging, used containers, would not be taxed. At present, this
field is fairly limited. Beer is one industry in which bottles are
washed, sterilized, and reused. However, this is undeniably
the exception rather than the rule. Various foods could be packaged
in reusable glass jars. Soft drinks could go back to being bottled
as they used to.
The above could be a
typical packaging scheme used to promote environmental and
conservational behaviors in the sector. Of course, rates could be
higher or lower. As a general rule, the higher a tax, the more
industries would shift away from undesirable products and
towards more environmental alternatives.
distinguish between types of plastics based on reprocessability.
Reusability could also be graded and levied differently based on the
number of times a container can be refilled. Ultimately, each
container type could even be graded individually based on
environmental and conservational characteristics and desirability.
So could raw materials under a double-taxation scheme.
Overall, the above
system would mean that the choices that are better for the planet
would be less expensive. Plastic soft drink bottles would still
show up on shelves; so would steel and aluminum cans. However, they
would be more costly. That would provide for flexibility for both
consumers—who would still be able to choose lighter packaging out
of convenience—and producers, which may find it cheaper or more
useful to use less environmentally desirable containers, or too
expensive to convert away from them in the short term.
The GEE packaging
component would be relatively simple to implement on a national
basis. Once the taxes are in place, the market would take care of
the rest. The question is, how do we ensure that local
manufacturers and businesses are not put at an unfair advantage with
the implementation of such a system?
Packaging does not
represent a large percentage of the total value of the products we
purchase. Furthermore, once markets are developed, used containers
and those made from recycled materials may come out to be cheaper
than even unlevied new ones. As such, there might not be a need to
packaging itself (empty boxes, bottles, etc.) would have an unfair
competitive advantage. To ensure fairness, governments may choose
to implement the levies that are applied to local packaging on all
imports and optionally rebate them on exports. This could be done
under either the double- or the individual-taxation scheme.
Foreign manufacturers using recycled standard containers or
countries having such programs could qualify for tax exemption
through bilateral agreements.
A second option would
be to apply a uniform but lower tax on all imports. This would
offset some or most of the unfairness in competitiveness and keep
A third option would
be to charge levies at points of sales in stores. That would be
much more bureaucratic, greatly multiplying the number of places
from which governments would have to collect. However, it would
have the benefit of treating both locally-made and imported products
in the same way. The bureaucracy would shift from manufacturers to
retailers. Such an approach could make it difficult to distinguish
between new and reused containers.
In the long run, the
solution may lie with international agreements since common
standards would greatly simplify things.
Taxes on packaging
would shift markets to environmental alternatives. As already
stated, glass is one of the best options as it is reusable.
However, the fact that containers can be reused does not mean that
they will be and not go straight to the landfill. Many fruit juice
and drink bottles are not reusable. Others are never recycled
despite the refundable-deposit system. Glass is a depletable
The plethora of
formats currently existing on the market makes it generally
unprofitable to collect containers and process them for reuse.
Unless special measures are taken to address the issue, we could
still end up adding substantially to our garbage problem—not to
speak of wasting a very useful resource—even if we have a sound
recycling and reuse strategy. As such, countries serious about the
environment should consider standardizing formats. Simple
regulations could easily achieve that and result in broader reuse
markets, higher rates of return, and savings.
The large variety of
sizes and shapes currently in existence makes it difficult and often
unprofitable to process containers for reuse. The market for each
type is very small, and trying to collect, process, and warehouse
them would be costly given the limited volumes. Even in the beer
industry, there are dozens of bottle designs although it does not
appear to be so. Most are very similar but specific to companies,
fragmenting the market and making it more expensive for businesses
to reuse them.
If containers were
regulated into a minimum number of categories and designs,
reuse could become more profitable and attractive to businesses
of all sizes. Standardized sizes and formats would promote larger
markets. For example, there would be a very few types of each of 5
ml, 10 ml, 50 ml, 125 ml, 250 ml, 350 ml, 500 ml, 1 liter, etc. jars
and bottles. Design specifications would be available to both local
and foreign container manufacturers so that overseas exporters who
wish to qualify for a tax exemption could do so. A levy
differential between non-standard and standard containers would be
put into effect to promote the shift to the latter.
would be slightly less expensive to produce than their non-standard
equivalents as they would be manufactured and handled in larger
runs. As most companies would purchase the same types of
containers, their market size would increase and they could be more
easily reused as the larger volumes would make it profitable to
collect and resell them.
transporting, storing, and wholesaling of used standard bottles and
jars would be much less costly as several companies within an area
would share the same pool of containers, reducing inventory expenses
and allowing their processing for reuse to be carried out locally.
This would naturally promote a shift to them.
standard would mean buying
green. As such, consumer preferences would likely shift towards
this more environment-friendly alternative. Using standard
containers would essentially be free publicity and a marketing
advantage for most companies.
individual-taxation scheme, governments could impose a higher levy
on new standard containers—both local and foreign—to shift the
market to used ones. Food processors and other companies would
naturally gravitate towards the cheaper alternative, generating a
demand for them, and essentially creating a reuse market.
a double-taxation scheme, the second levy would act to make new
standard containers more expensive than used ones and promote a
shift to the latter.
What would be the
result of such an approach? Store shelves would look different.
Groceries would be heavier to carry. Consumers would collect their
standard used jars and bottles and sell them for cash to recycling
firms that would process them for resale. Reuse would be achieved
without the bureaucratic and inefficient need for deposits and
refunds, or the involvement of governments. An enormous amount
of resources would be conserved. Landfill and intermediate chemical
use would decrease drastically.
Used Container Processing
The beer industry
often reuses its own bottles. It manages to do so because its
product is pervasive in society and major players dominate the
market. Large numbers of containers go back and forth between
brewers and consumers. That allows for economies of scale to take
place. Big companies have the capital to invest in bottle
processing machinery (washers, sterilizers, etc.), but smaller ones
often cannot afford it.
Many small towns
would likely not be able to economically process used bottles and
containers if packaging levies are implemented without
standardization. In most cases, they would have to be shipped out
of town to larger centers for processing. The fragmentation of
the market would add to costs, and the diversity of formats would
make it unprofitable to collect many types of containers.
would reduce the variety of designs as companies shift to
containers in lower tax brackets. The market would become less
fragmented. As a general rule, the more formats, the larger the
markets need to be for profitability. With fewer ones, smaller
centers could also have viable reuse processing operations.
Supply and Demand in the Reuse Market
Since the GEE strategy
does not involve a deposit system, the price paid to consumers for
their empties could vary depending on supply and demand and by
localities. As such, the market could not always be relied upon to
set a price which would ensure that recycling and reuse do
should reach high levels of efficiency and be the most beneficial to
consumers. Smaller and less competitive ones may have to be
supported by regulation. Governments may need to establish a
minimum amount paid per empty container. It would have to be high
enough to ensure that they are returned and that conservation
strategies bear fruit.
A number of states in
the U.S. have bottle return systems. The average deposit charged is
about $0.05. Although some programs are relatively successful, the
rate of return of others can be as low as 60%. Canada's deposit
fees range from $0.05 to $0.40. To provide enough incentive for
people to return most of their empty containers and achieve
acceptable recycling standards in today's context, a minimum levy of
$0.20 to $0.30 may have to be charged. In places where markets
would not occur naturally and be profitable, municipalities
would likely have to run recycling and reuse programs themselves.
As in other GEE components, all of the above would be compensated
for by a drop in other taxes.
The GEE would yield
very tangible benefits in the packaging sector. A lot more would be
reused and recycled than currently is. Waste would become valuable.
Companies would actually compete over your garbage. Resource
depletion and landfill expenses would be greatly reduced,
intermediate chemical usage from the manufacturing of new containers
would decrease, and the cost of recycling programs to
municipalities, eliminated in many cases.
As packaging is
massively used everyday, governments should not hesitate to use high
standards of reusability, renewability, and biodegradability in its
respect. They should do so urgently. The industry is in dire need
of a comprehensive policy ensuring that reuse is maximized and that
wastage is minimized. The only issue here is convenience, and our
inability to get our act together.
GEE Management of Renewable Resources
Governments may also
choose to tax some renewable resources to avoid over-exploitation.
For example, new paper could be levied (at the producer level for
collection efficiency) to reduce pressure on forests.
products would then become cheaper than new ones, promoting
conservation and saving landfill space. A stronger demand for them
would be created. Market forces would kick in, leading companies
into the business of collecting paper and reselling it for profit to
recyclers. Some of this is occurring at the moment but on a much
smaller scale than it should.
The GEE could be
pushed further into a full management strategy for renewable
resources. To promote reforestation, governments could tax
old-growth lumber in order to shift the demand to timber coming from
land that has been replanted. It could assess higher levies on
lumber produced through clear cutting or other poor management
practices (assuming those are not regulated out).
The same strategy
could be applied to fisheries, with poorer management approaches
penalized by taxation, or species with dwindling stocks assessed
levies to increase their price and decrease demand. Of course, all
of this would also be done in a revenue-neutral way.
The GEE would be a
powerful market-based mechanism to manage renewable sectors of the
economy. It would provide for them the same benefits that it offers
as a conservation strategy for non-renewable resources: simplicity,
flexibility, market friendliness, minimal bureaucracy, etc.
The New Consumer Environment
would include a combination of taxes on non-renewable resources to
decrease their use and create natural markets for recycling. A
second set of levies targeted at non-renewable packaging would deter
its use and reduce unnecessary wastage. Standardization and taxes
on new containers would lay the foundation for a solid reuse
industry without the need for the inefficient deposit-refund system.
Levies on specific
renewable resources could also be used to promote conservation and
prevent over-exploitation by giving a competitive advantage to
recycled products. Most municipal recycling programs would be
taken over by private entrepreneurs. The new market-based approach
to resource conservation in the packaging sector would be much
more efficient and effective than the current patchwork of
taxpayer-funded programs. Again, remember that all these taxes
would fill governments' coffers and that overall taxation would
remain the same.
The GEE would slowly
reshape the economy. Store shelves would take on an unusual
appearance at first. Some types of foods may look funny in glass
jars. Bulk sections in stores would likely expand. Most soft
drinks would again be sold in glass bottles and be heavier to carry.
We would not have the
diversity of containers we are used to, but that would only mean
saving resources and the environment. We would still see the
familiar logos of food companies on glass jars.
Flexibility and Scalability of the Market
Choice would remain a
component of a market-based resource conservation strategy.
Non-standard, plastic, and most other types of containers would
still be legal but more expensive. A soft drink company that does
not care about the environment could continue to use plastic
bottles, but its product would be pricier because of the tax on
non-reusable containers. Likewise, consumers would be able to
continue to buy unenvironmentally packaged goods but at a higher
flexibility to the system. As already stated, it is an option that
is often preferred by businesses as it gives them time to adapt.
The flexibility of a market-based strategy would make it more
acceptable to everybody. The approach is fully scalable, and the
level of taxation as chosen by society would determine how much more
one would have to pay for convenience.
The case for the
reduction of pollutants has already been made many times in
environmental literature. As such, the issue will not be
rediscussed here in any detail. Contaminants would be a major
target of a
GEE strategy. Some issues—appropriate
tax levels, international competitiveness, etc.—are very similar
to those for non-renewable resources.
One of the
differences with respect to contaminants is that they are more
substitutable than metals. There are generally many alternatives
available. Also, their contribution to the final cost of many
products is often much smaller than that of metals. As such, their
impact on the price of consumer goods would generally be less
important. These are some of the considerations that would have to
be examined closely in defining and determining policy.
Under the GEE,
contaminants would be taxed to reduce their use and shift industries
to cleaner substitutes. The determination of what should be levied
and at what level is much beyond the scope of this book. Each
chemical has its own properties and effects on the environment.
Generally speaking, the guiding principle for those would be, the
more toxic or harmful a compound, the higher the tax applied.
Industrial and Domestic Contaminants
In the industry,
undesirable chemicals and other compounds would be taxed at the
producer level. The byproducts of the manufacturing process
are more problematic as they are often not visible to authorities.
They are not bought like inputs but produced internally. They
are not sold either, making them difficult to track. In some cases,
levies might be appropriate, but in others regulations might have to
Many of the
pollutants plaguing the planet today are not industrial. They
are not intermediate chemicals or byproducts of the industry. They
are the very goods produced for us consumers. They comprise the
various household cleaners, laundry detergents, solvents, etc. we
employ everyday. These and other harmful end products would also be
targeted by the GEE (taxed at the manufacturing level) as they
are used massively, in millions of households around the world.
Relatively high levies should probably apply to them as many can be
easily replaced by more environmental alternatives.
The Agricultural Sector
industry that puts food on our tables is also a very significant
source of pollution. Modern intensive agriculture uses a variety of
herbicides and pesticides that degrade our water systems and the
environment. The GEE would and should target these contaminants to
reduce their use and shift the industry and its R&D towards more
organic alternatives and practices.
should also be paid to domestic herbicides and pesticides for the
same reason. Some urban centers in North America have already
made moves in that direction. These would fall under the
contaminant strategy of the GEE and would be taxed at the
A second source of
pollution relating to modern agriculture is the widespread use of
chemical fertilizers. They are responsible for the explosion in
productivity that the industry saw in the last century but are also
prime culprits in the degradation of our rivers and lakes as they
promote the growth of algae that choke them and the fish that live
in it. They would be targeted by the GEE to reduce their use and
promote greener practices.
GEE strategy in the agricultural
sector—assuming a government opts for it—would raise the
price of foods grown with chemicals and artificial fertilizers,
shifting consumption to better and healthier organic alternatives.
People would consume fewer contaminants, antibiotics, and
carcinogens. Agricultural land and the environment would be
protected. Again, everything would be revenue neutral.
Copyright Waves of the Future, ©2010