Recycling: Voluntary industry solutions instead of government compulsion
In the case of separate collections for recycling, voluntary industry solutions are superior to both individual company solutions and a system operated by the state. At least, this is the conclusion of a presentation by Avenir Suisse.
At the national eWaste Forum in Zurich, Patrick Dümmler and Fabian Schnell from Avenir Suisse presented their analysis on the "Economics of Waste Management and Recycling", which focuses on Switzerland. They examine the question of how recycling systems, in particular separate collections of special materials and appliances, should be designed as optimally as possible. One focus is on the take-back systems for electrical and electronic equipment that have been established in Switzerland for many years. However, environmental policy requirements and the economic incentive systems play the central role in all systems.
Central role of consumers
The more damage caused by improper disposal, the lower the inhibition thresholds must be for consumers to dispose of waste correctly. The effort for the consumer is reduced by the uncomplicated return of used materials to as many collection points as possible with customer-friendly opening hours. On the other hand, however, there are the costs of operating the system. Operating costs should be as low as possible, which is best ensured through competition, for example by allowing private players to compete for a contract through a tender process - but this is still rarely the case today. From the consumer's point of view, therefore, an optimal balance must be found between incentives, transaction costs and operating costs of the system.
However, Avenir Suisse believes it is just as important that consumers should also be held responsible - and that consumer sovereignty should be preserved. According to Dümmel and Schnell, the right incentives must be set before regulatory bans or prohibitions are applied. The proportionality of any sanctions (such as fines) must also be maintained.
Voluntary systems as efficient hubs for recycling
The conclusion of the study was that waste disposal and recycling should be entrusted to private players, and that state-owned companies or even organizations integrated into the administration should be avoided. In Switzerland today, there is obviously no market failure that justifies the state intervening with its own companies.
Avenir Suisse also has recommendations for free riders, i.e. companies that do not participate in a voluntary industry solution: It should be possible to exclude them as far as possible; however, this should not necessarily be at the price of a forced connection to a system. This would create a monopoly, the economic benefit of which is highly questionable.
The systems should also be very close to the manufacturers and importers of the products for another reason. This is the only way to guarantee that technological trends and changes in consumer buying behavior are recognized and responded to as quickly as possible.
It is also important that the systems are free to conclude contracts with third parties for the receipt of the old equipment and for recycling or destruction. This includes, in particular, the possibility of freely setting prices for the services provided by third parties.
Overall, he said, Switzerland is a global leader in the disposal of end-of-life appliances thanks to lean regulation based on systems with an upfront recycling fee, which should not be jeopardized by government intervention.
