ALBANY – A York University professor, with expertise in economic and municipal recycling program studies, recently found unrealistic and overstated cost savings and benefit projections in New York State’s proposed Packaging Reduction and Recycling Infrastructure Act bill.
“Economic theory and practical experience suggest that these costs [imposed by the proposed Packaging Reduction and Recycling Infrastructure Act’] will not be absorbed by producers alone. Packaged goods—such as food, beverages, and household staples—tend to have inelastic demand, enabling high rates of costs to pass through. Ignoring this cost transfer gives the false impression of a net savings. In practice, New Yorkers are likely to see packaging waste costs embedded in consumer prices rather than property taxes—a regressive and less transparent mechanism of cost recovery.”
Specifically, because of “unrealistic assumptions,” and “overstated” municipal benefits, among other factors, the cost savings projected by Beyond Plastic to come from overly aggressive “expanded producer responsibility” legislation are unlikely to be realized.
Those were the findings of Dr. Calvin Lakhan, a professor of Environmental and Urban Change at York University, who holds degrees in economics and has done extensive research and reporting on recycling and EPR programs in Canada and the U.S. Professor Lakhan was reviewing the recently issued “Projected Economic Benefits of the New York Packaging Reduction and Recycling Infrastructure Act,” which projected significant municipal and consumer cost savings from a current legislative proposal in New York (S.1464/A.1749) that would impose material use bans and material use reduction mandates on broad categories of packaging.
“This is more evidence pointing to the unworkable, unachievable, and costly mandates proposed in the PRRIA,” said Ken Pokalsky, Vice President of The Business Council. “It is why legislatures in other states, like Minnesota and Maryland, have adopted a far different approach to EPR that focuses on increased recycling to divert materials from landfills and waste to energy. We believe other legislation (S.5062/A.6191) modeled on the Minnesota statute is a far better choice for New York and New York consumers.”
Dr. Lakhan’s review of that report found that the PRPIA largely reallocates costs from municipalities to producers, and that the bill’s material use reduction mandates were unlikely to be achieved. Moreover, he observed that EPR compliance fees can raise consumer prices on staple goods by 2 to 6%, and that this cost burden falls disproportionately on lower-income households, who spend a higher percentage of household income on packaged food compared to higher-income households.
A one page summary of his findings is available here, and the analysis is available here. Dr. Lakhan recently also completed an updated EPR cost impact assessment for The Public Policy Institute.