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Packaging, price and the pursuit of sustainable change

RPS Economist, Kapil Kulkarni on how eco modulated finance mechanisms could help Australia turn the tide on packaging waste.

18 April 2024
Kapil Kulkarni
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Last week, I was invited to speak at a webinar on packaging stewardship hosted by the Product Stewardship Centre of Excellence.

Fellow panelists Nick Florin (UTS Institute for Sustainable Futures) and Helen Lewis (Helen Lewis Research), webinar host Rose Read (Product Stewardship Centre of Excellence) and I explored what lessons Australia can learn from existing stewardship schemes and regulations as we try to move the dial on packaging waste. 

Packaging is ubiquitous in Australian society. Almost nothing we buy comes to us “naked” – without a shiny label, colourful wrap, or custom branded bag. Sometimes packaging is necessary to protect our goods. Often though, it’s a superfluous extra that consumers neither need, nor truly see. Nothing moves faster in and out of our lives. And vast quantities end up in landfill.

The webinar marked the launch of a new whitepaper commissioned by the Centre of Excellence that I was fortunate enough to contribute to – Global Scan of Packaging Stewardship Schemes: Lessons for Australia.

It takes a deep dive look at the regulations and schemes that have been introduced to reduce packaging production and waste, encourage the design and adoption of more sustainable (reusable and recyclable) options, and increase material recovery globally…what’s worked, and what hasn’t.

Large bundles of plastic bottles in high stacks waiting for processing at a recycling centre, or waste depot.

Australia making moves on packaging waste

Why the whitepaper and webinar? Because Australia is getting serious about tackling packaging waste.

At the end of last year, federal, state and territory environment ministers agreed that new federal regulations should be introduced that set minimum recycled content requirements for packaging, ban the use of harmful chemicals, and guide how packaging is designed. They also agreed that businesses must take more responsibility for the packaging they introduce to the market.

Regulation is coming. But how do we create a stewardship scheme that meets these objectives?    

As an economist, it’s my job to look at the numbers. It’s clear that the new scheme will place much more responsibility on packaging producers to turn the tide on waste. When it comes to business, the fastest route to change is via the bottom line.

If we want the packaging industry to do things differently, we need to make inertia too expensive. By making the cost of bad packaging behaviour too high to ignore, we can create triple-bottom line benefits for society as a whole – environmental, economic, and social.

 

Eco modulated levies

Making producers pay an annual levy based on the quantity of packaging they introduce to the Australian market is a key strategy to lean on. A levy system would create a funding stream that could be used to collect and recycle packaging waste, educate consumers (who also have a role to play), invest in sustainable packaging research and development, and more.

The concept at play here is ‘eco-modulation’. It’s a fancy term based on a simple idea. Good environmental choices are financially incentivised, while less sustainable behaviour incurs a monetary penalty.

Using hard-to-recycle materials or producing miles of unnecessary packaging? Higher fees, more cost. Incorporating post-consumer recycled content into your packaging, or removing it altogether? Lower levies.

A worker wearing high-vis loads large stacks of mixed packaging waste onto large truck/lorry.

Business will change when change makes good business sense

Financial mechanisms are only one part of the puzzle when it comes to creating a good stewardship scheme. The private sector is good at finding loopholes or workarounds for regulation, so good governance will be needed.

We also need to invest in new resource recovery technologies, develop new pathways for post-consumer materials, and create new markets where these products are valuable (more on that here: reimagining the circular economy).    

But if there’s one thing I know about creating rapid change in the business world, profit and loss is the best place to start. If we can create a race to the bottom on levies, we’ll be a good part of the way there on packaging.

And the benefits won’t stop at waste reduction. Broader environmental, social and economic rewards are waiting, too.