Analytical Framework for Evaluating the Costs and Benefits of Extended Producer Responsibility Programmes

Extended Producer Responsibility (EPR) is an environmental policy approach under which the responsibility of producers for their products is extended to include the social costs of waste management, including the environmental impact of waste disposal. This paper sets out a framework for assessing the costs and benefits of EPR. As compared with “conventional” waste management EPR involves the collection of particular end-of-life products, product categories or waste streams. In some cases these wastes would traditionally be handled appropriately through municipal waste management programs. Packaging would be one example. In other cases they might be handled, or might need to be handled, as special wastes which would be inappropriate for a municipal waste management programme. Solvents, scrap tires, used crankcase oil, lead acid batteries and electronics fit into this category. To evaluate the costs and benefit ratio for EPR programmes, the costs of these features need to be weighed against the benefits in terms of the reduced social costs of waste management, including the various externalities associated with landfilling or incineration and the environmental risks associated with “doing nothing” by maintaining existing practices. As compared with alternative policy instruments, an attraction of EPR is the incentive it creates for producers to consider post-consumer waste-management costs when making decisions about product design and marketing. Such “Design-for-Environment” incentives are an important part of the overall assessment of EPR, but their practical evaluation could be difficult.