Extended Producer Responsibility and Product Design: Economic Theory and Selected Case Studies

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.