Extended Producer Responsibility (EPR) legislation aims to create incentives for producers to design products that are easier to recycle. In this paper, we study whether a collective EPR implementation, which is common in practice due to its cost efficiency advantage, can achieve this goal. In particular, we look for cost allocation mechanisms in a collective system that provide at least as effective design incentives as those induced by an individual system benchmark, while ensuring voluntary participation of producers (i.e. satisfying group incentive compatibility). Based on a biform network game model, we show that a cost allocation mechanism that satisfies the above criteria exists only if the recycling infrastructure satisfies certain properties in terms of (i) how recycling costs change as a function of design choices and (ii) the processing capacity mix relative to the return volume. Otherwise, a cost allocation mechanism that leads to effective design incentives can only guarantee individual rationality but not group incentive compatibility. This indicates a critical tradeoff between producers' design incentives and their voluntary participation in a collective system. That is, participation by enforcement may be required for a policy maker to induce superior designs and maintain a stable collective implementation (and therefore realize its cost efficiency advantage). If this is not feasible, then one needs to accept collective implementations as enablers of cost-efficiency at the expense of inferior design incentives, and find other means (i.e., other forms of regulatory intervention) besides cost allocation to provide design incentives.
This report updates the 2001 Guidance Manual for Governments on Extended Producer Responsibility (EPR), which provided a broad overview of the key issues, general considerations, and the potential benefits and costs associated with producer responsibility for managing the waste generated by their products put on the market. Since then, EPR policies to help improve recycling and reduce landfilling have been widely adopted in most OECD countries; product coverage has been expanded in key sectors such as packaging, electronics, batteries and vehicles; and EPR schemes are spreading in emerging economies in Asia, Africa and South America, making it relevant to address the differing policy contexts in developing countries. In light of all of the changes in the broader global context, this updated review of the guidelines looks at some of the new design and implementation challenges and opportunities of EPR policies, takes into account recent efforts undertaken by governments to better assess the cost and environmental effectiveness of EPR and its overall impact on the market, and addresses some of the specific issues in emerging market economies.
We analyze product design implications of Extended Producer Responsibility (EPR)-based take-back legislation on durable goods. In particular, we observe that durable product design incentives under EPR may involve an inherent trade-off that has not been explored to date: Durable goods producers can respond to EPR by making their products either more recyclable or more durable, where the former will decrease the unit recycling cost whereas the latter will reduce the volume the producer has to recycle. When these two design attributes do not go hand-in-hand, as is the case for many product categories, product design implications of EPR can be subtle. We find that seemingly similar EPR implementation levers, namely recycling and collection targets, may have opposing effects in driving producers' design choices. Furthermore, more stringent legislative targets do not always guarantee improved product recyclability and durability. In particular, if the objective of EPR is to induce recyclable product designs, a low recycling target accompanied with a high collection target is preferred. On the other hand, if the objective of EPR is to induce durable product designs, a low collection target accompanied with a high recycling target is preferred.
We analyze product design implications of Extended Producer Responsibility (EPR)-based take-back legislation on durable goods. In particular, we observe that durable product design incentives under EPR may involve an inherent trade-off that has not been explored to date: Durable goods producers can respond to EPR by making their products more recyclable or more durable, where the former decreases the unit recycling cost and the latter reduces the volume the producer has to recycle. When these two design attributes do not go hand-in-hand, as is the case for many product categories, product design implications of EPR can be counterintuitive. We nd that more stringent collection targets (defined as the portion of total product volume to be collected) or recycling targets (defined as the portion of each collected product unit to be recycled) may imply reduced recyclability or durability. Moreover, although collection and recycling targets appear to be similar EPR implementation levers for increasing the total amount of materials recycled, they in fact have opposing e ects in driving producers' design choices. As a result, EPR may have unintended consequences for the environment. A calibrated numerical study on the Photovoltaic Panel (PVP) industry allows us to show that more stringent EPR requirements (such as those proposed by the recent recast of the WEEE Directive) can lead to a PVP technology choice with lower recyclability and higher durability, and consequently result in higher greenhouse gas emissions. These results call for a careful analysis of the benefits of EPR legislation in the context of durable goods.
One of the key objectives of Extended Producer Responsibility (EPR) is to instigate design for the environment. In collective EPR schemes, the fee schedule set by Producer Responsibility Organisations (PROs) is typically quite simple and provides weak incentives for design change by producers. Fee modulation, changing fees paid by producers in a collective EPR scheme based on product design, can provide producers with stronger design incentives, but adds complexity to the system. The paper defines a classification for fee modulation (by criteria and methodology) and discusses potential challenges and opportunities. It concludes with key policy insights that can further stimulate this emerging policy approach.
A core characteristic of extended producer responsibility (EPR) policies is that they place some responsibility for a product's end-of-life environmental impacts on the original producer and seller of that product. The intent is to provide incentives for producers to make design changes that reduce waste, such as improving product recyclability and reusability, reducing material usage, and downsizing products. This paper assesses whether the range of policies that fall under the EPR umbrella can spur this 'design for environment' (DfE). It summarizes the economics literature on the issue and describes conceptually how policies should affect design. It then analyzes three case studies in detail and two more case studies more briefly. The conclusion reached is that some DfE - especially reductions in material use and product downsizing - can be achieved with most EPR policies, including producer take-back mandates and combined fee/subsidy approaches. However, none of these alternative policies as they are currently implemented are likely to have a large impact on other aspects of DfE.
This report updates the 2001 Guidance Manual for Governments on Extended Producer Responsibility (EPR), which provided a broad overview of the key issues, general considerations, and the potential benefits and costs associated with producer responsibility for managing the waste.
This dissertation, "The Effectiveness of Extended Producer Responsibility in Motivating Eco-design Changes: Perspectives From China's Electrical and Electronics Industry" by Jieqiong, Yu, 余洁琼, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Extended producer responsibility (EPR) as a holistic approach to product stewardship has been increasingly incorporated into environmental policy agenda in the last two decades. One major expectation of EPR is to prevent environmental problems at source by providing appropriate incentives for product eco-design changes. However, available studies empirically examining the actual influence of EPR on eco-design are limited. This research therefore aims to fill the research gap by evaluating the effectiveness of existing EPR programmes in driving eco-design changes from the perspective of China's electrical and electronic (EE) industry, and shed some light on the prospects of EPR development in China. Based on the analytical framework developed from reconstructed intervention theory, three intensive empirical studies have been carried out. The first study examines the perception and responses of 50 China's EE manufacturers regarding the EU EPR programmes (i.e. the WEEE and RoHS Directives). The second study investigates the responses of 36 China's EE manufacturers to the Chinese EPR programmes (i.e. China WEEE and China RoHS legislation) and identifies possible factors that exert causal impact on the occurrence of eco-design. In order to gain a deeper insight into the practical manifestations of effective EPR implementation in the private sector, three company case studies have been conducted in the third stage of the research, serving as an important supplement to the first two studies. The three studies show that EPR programmes in a stringent regulatory approach focusing on products' environmental properties such as substance bans can exert strong influence on design changes. However, mandated recycling legislation seems to have little driving effect for companies to change product design. The research points to the weakness of collective producer responsibility that is currently adopted in many EU Member States for WEEE implementation in achieving continuous eco-design improvements. It highlights the significance of realising the principle of individual producer responsibility in EPR programmes for achieving this goal. Based on an attributability assessment, the research further shows that there are a number of factors that influence the adoption of eco-design in China, and the link between legislative EPR programmes and eco-design is complex and evolving. Not only may the EPR programmes have different existing, anticipating and potential effect on the incorporation of eco-design, but they may have very different driving influence on environmental laggards and leaders. In this regard, this research suggests that there is no one-stop solution for EPR in China. A mixed mechanism that integrates various policy instruments such as administrative, economic and informative instruments, in conjunction with cooperation and infrastructure facilities, would be the most effective means to implement EPR in the context of China, thereby achieving the goal of sustainable production and consumption. DOI: 10.5353/th_b4718593 Subjects: Electronic industries - Environmental aspects - China Electronic apparatus and appliances - Environmental aspects - China Social responsibility of business - China
We study recycling technology choice, a critical factor that has received little attention in the context of extended producer responsibility, and its interaction with product design-for-recycling in driving the environmental benefits of recycling systems. Collective recycling systems have long been criticized for restricting the environmental benefits of extended producer responsibility because of free riding issues among producers, which can undermine incentives for product design-for-recycling. We revisit and refine this assertion by analyzing the interaction between recycling technology and product design-for-recycling choices. We develop game-theoretic models where producers and processors decide on product design-for-recycling and recycling technology choices, respectively. We then compare the equilibrium benefits of recycling in collective and individual systems. The key result in this paper is that when recycling technology choice is taken into account, collective recycling systems can lead to higher environmental and economic benefits than individual recycling systems. This is because collective recycling systems provide stronger incentives for recycling technology improvements. In turn, these improvements can help overcome the drawbacks associated with inferior product design-for-recycling outcomes caused by free riding concerns among producers in collective recycling systems. In light of these results, we posit that an exclusive focus on product design-for-recycling to assess the environmental benefits of extended producer responsibility-based recycling systems may need scrutiny. Producers and policy makers may need to evaluate recycling systems with respect to the incentives they provide for both product design-for-recycling and recycling technology improvements.
