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Bottle Bill in Oregon and Hawaii:Cost/Benefit Analysis
Team One Brett Baumgartner
Lauren ButzZack DeMar
Katherine HansonPhil Lewis
Brian LuevanoPenelope Scott
Dan Sullivan
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ProblemThe US consumes 1500
plastic water bottles every second
The plastics used degrade very slowly
Cause of the “Great Pacific Garbage Patch”
Plastic can be remolded and formed into new bottles
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Bottle Bill BackgroundHow It Works How It StartedThe consumer pays a
deposit when purchasing the bottle and gets it back when they recycle it
Empty bottles were littering the streets
Failed attempt in Virginia
First successful bill was passed in Oregon
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Oregon: Bottle Bill Established in 1971
known as the “Bottle Bill”
Created friction between large bottle producers
Reduced production costs
Competed with local bottlers
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Oregon: Bottle BillBenefits Costs
Energy conservationA ton of plastic bottles
saves approx. 3.8 barrels of oil
Recycled materials uses 2/3 less energy than raw materials
Reduction in costs In 1971 Marion County
spent $20,000 on litter removal
Estimated $100,000
Inflation1971 5¢= 28¢ in 200118 pack=$5.04 rather
than 90¢
Breakage and contamination“down cycling”
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Oregon
Improvements Needed:Lack of increases in redeemable deposits
Deposits have not taken inflation into effect Decreasing incentive to return/recycle bottles
Less willing for individuals to participate possible decreases in the effects of the bill
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Hawaii: Bottle Bill
Solid Waste Management; Deposit Beverage Container Law (Act 176)
Only state without curbside recycling
Goal: Increase recycling and reduce littering
Implemented on January, 1st 2005 5 cents redeemable deposit Container fee is 1 cent per
container Redemption rate exceeds 70% in a
year the fee is raised .5 cents (1.5 cents per container)
Consumer receives 3.5 to 4 cents for that container.
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Hawaii: Costs and BenefitsCosts
Not efficient due to lack of oversight
Potential Fraud due to over-reliance on self-reporting from distributors and redemption centers
Benefits+4.7 billion beverage
containers recycledGives an incentive to
recycleReduces litterHawaii reached a 79%
recycling rate (2009)
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Hawaii
Improvements NeededNot enough state supervision
Loss of moneyOperation issues Lack of awareness
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Cost Benefit Analysis
YearCost savings in nominal
termsFuture cost savings in real
dollarsPresent value
1 $100,000 $97,561 $89,097
2 $100,000 $95,181 $79,382
3 $100,000 $92,860 $70,727
4 $100,000 $90,595 $63,016
5 $100,000 $88,385 $56,145
In 5 years, a total cost savings of $358,366.75
Inflation rate = 2.5%Discount rate = 9.5%
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Cost-Benefit Analysis: AEM ModelOverall environmental quality (benefit) defined: • Reduction of litter caused by
irresponsible bottle disposal• Expressed on x-axis• Scale of 1 to 10, 10 being
highest environmental quality
Cost to consumer • Bottle Bill shifts marginal
cost curve from MC to MC_New, effectively lowering the cost to consumer and raising environmental quality
• Example: Instead of bottle exchange, Hawaii decides to implement curb-side recycling because it’s cheaper and more efficient. Also, this would eliminate the problem of fraudulent reporting by businesses.
1 2 3 4 5 6 7 8 9 10$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
D=MBMCMC_New
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The Future of the Bottle Bill
11 current bottle bills Beverage production industryRetail industry
Deposit law progress
Arizona’s bottle billsTitle: “beverage containers; recycling fund;
redemption”
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ConclusionBottle Bills are great ways to reduce waste
Proper incentives to increase recyclingVulnerable to market inefficiencies
What can you do to encourage recycling laws and their efficacy?
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Questions??