CRV Part 2: Unintended Consequences

Posted in Diversion, Policy, Recycling, Waste Reduction, You Should Know... by ecotulip on February 17, 2010

This is part two of a two-part examination of the recent controversy surrounding the CRV.

What could go wrong with a program that incentivized citizens to teach their children about recycling and work? What could go wrong with a program that enabled many poor people to participate in diverting useful material from going to the landfill while helping them to make ends meet?

 The CRV program, which boasts 85% recycling of bottles and cans, has become central to an underground economy with all of the unhealthy incentives that have created a spectrum of thieves in the last twenty years.

Theft from curbside bins

Recycling thieves have focused on the redeemable material put out in bins and collected by local recycling and garbage companies.  In December alone, San Francisco received more than 1,500 complaints from residents of people rummaging through their garbage, making noise and stealing recyclables in the wee hours. In the morning, the littered sidewalks gave evidence to scattered garbage on the sidewalks–both an eyesore and a health hazard. And don’t be fooled. Sometimes it is an elderly person looking for a little extra income, but more often than not it is a junkie, desperate for another fix, or an organized group with a van looking for material to redeem at a recycling center across the Bay. Mike Mosedale wrote a news story about the same problem in Minneapolis back in 2006. No matter where it happens or how you categorize it, it is still theft.

Redemption of California funds from outside California

There are other unintended circumstances. People from states that border California make their way here to redeem their collection of recyclable containers. The result is that the CRV (Fund B) is drained and unsustainable for the Californians that paid, and then are taxed for it to exist. For example, Super Bowl XLIV weekend, a red truck with an out-of-state license plate stopped on the corner to let me pass. Squeezed in the cab were three men, and the back of the truck had been modified so that it held, from what I was able to glimpse as the car pulled away, two or three tons of flattened cardboard boxes. I’d seen other similar trucks, sometimes packed with cardboard, and other times with tin, aluminum, and glass bottles.  

Shoddy accounting and fraud

The recycling centers themselves are under scrutiny for the many reports of fraud and faulty accounting leveled against them. For example, there are limits to the amount that a redeemer can collect at one time, so many have been turned away without full payment. They are told “we can only pay you $50 at a time, but leave your materials here.” Shoddy record-keeping practices, including jotting down only the redeemer’s first name only, and verbal promises to pay them at a later time, account for some of the “unclaimed money” that  support the handling and processing fees paid to companies for collecting recyclables.

The economic inefficiencies of a program that some prefer to expand but is hard to fix are amplified by the budget crisis in California. Staring in 2002, the state “borrowed” over $500 million from Fund A for other purposes and has yet to repay it. As a result, about 160 of the approximately 2,100 recycling centers in California have closed since July 2009. Many employees of the centers have cried fowl, although the program’s relevance is now questionable. The program was started as a first step “litter control” measure. Other recycling efforts that have since been implemented have taken resource recovery much further, including curbside recycling programs, comingled (single stream) recycling, and composting.

The program’s economic sustainability is also questionable. What is the benefit of an artificially created economy that encourages theft and fraud, and that is entirely supported by the state? The CRV was created at a time when there were fewer curbside recycling programs across the U.S. The effect of an outdated program like the CRV has been to increase the costs of curbside recycling programs (imagine empty recycling trucks that have already been paid for by taxpayers driving down the street, while recyclables stolen from curbside collection are redeemed at a materials recovery facility, only to be sold back to the curbside recycling program.). What is the purpose of an unsustainable program that reduces the availability of legitimate, green jobs with benefits and attempts to replace them with haphazard, fraudulent operations? Needless to say, the value and recognition for doing the right thing should return to the communities where the materials are legitimately collected through curbside programs.

5 cents: Minimum deposit required for cans and bottles covered by the California Redemption Value, or CRV, program
21.9 billion: CRV bottles and cans purchased statewide in 2008
$1.2 billion: Annual CRV money collected by the state
Sources: California Department of Resources Recycling and Recovery; state Department of Finance; TOMRA Pacific

The Sacramento Bureau reported that Governor Schwarzenegger will continue to fund recycling centers for two or three more months. His long-term plan in December, 2009 was to increase the redemption value for glass and plastic containers. He also wants to increase Fund A by another $60 million this year, through accelerating the payments from beverage distributors and manufacturers.

CRV Part 1: Good Intentions

Posted in Diversion, Policy, Recycling, Waste Reduction by ecotulip on February 12, 2010

This is part one of a two-part examination of the recent controversy surrounding the CRV.

I don’t drink much soda. I grew up in a neighborhood full of former hippies who, whenever I would reached for a Pepsi, suggested I try water, juice, or tea instead. So it wasn’t till recently, when I bought a small computer in California, that I noticed the “recycling fee” dangling towards the bottom of my receipt. The environmental handling fee is like the California Redemption Value (CRV) program’s fee which comes with every soft drink and other beverage container at your local grocery store that should be recycled.

Actually, there are two “CRV”s. They are often confused.

The CRV was established in 1987 as an “anti-liter” program, and it was meant to achieve a social good. It was one part of the California Beverage Container Recycling and Litter Reduction Act. The program charged manufacturers a small fee for the disposal of the containers that they manufactured, like plastic soda bottles, or aluminum cans, tins of tuna, etc. In a way, the environmental handling fee helped manufacturers to recognize that “disposable” containers often end up along the highways and river ways of the country.  The CRV fee was actually passed on from manufacturers to consumers in the price of the bottle, can, or tin, and therefore increase the amount we pay in taxes for the container.  Let’s call the CRV pool of “anti-liter” money collected by the state from these fees Fund A.

 The other CRV (California Refund Value) is what recycling centers pay for the bottles and cans that consumers collect and redeem at the centers. Recycling centers can range from machines at the supermarket where anyone can feed with leftover beer cans, to the fenced-in lots in the outskirts town where families unload the bags of glass bottles they’ve collected.  The way that the California Refund Value was meant to be used was this: a person who happened upon aluminum can or plastic bottle that had been thrown along the side of the road could take it to a recycling center and redeem its value from the state. The program allowed people who needed a little extra money to find a way to get it. It also kept the recycling rate up for a given community, and the streets liter-free. Currently, the state pays consumers $0.05 or $0.10 per container, depending on its size. Let’s call this CRV pool of money made available to recycling centers for “buying back” containers Fund B. Fund B was paid into with the money the state collected from manufacturers of recyclable containers (aka Fund A).

The program was set up so that Fund A would pay for Fund B. Not a bad idea. From the social and environmental perspective, the program would give everyone the right incentives to do the right thing: manufacturers were charged for the externality created by their products, and families were given a little revenue for redeeming the products and returning them to manufacturers for their next production cycle.

According to CalRecycle, the CRV program has facilitated the recycling of “more than 200 billion aluminum, glass, and plastic beverage containers… since the program began in 1987.”

Everyone is set up to do the right thing… Right?


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