CRV Part 2: Unintended Consequences

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.

4 Responses to “CRV Part 2: Unintended Consequences

  • Tom Hundt
    11 years ago

    This article leaves out important numbers.

    How much gets paid out in CRV at recycling centers? If 85% is recycled, that’s 15% surplus in the system… until you subtract off the materials coming from out of state. How much is that? (The solution for cross-state transport is, of course, to have a national standard deposit amount and to have consistent redemption practices everywhere. Remove the incentive to haul materials across state lines.)

    Also missing is data on how much Norcal/Recology loses out on due to theft from blue bins. Do we have an estimate?

    • Bob Besso
      11 years ago

      Based on data I have accumulated during recycling theft patrols, I estimate CRV lost to recycling poachers is between 5 and 10 million dollars per year, in San Francisco alone!

  • Governor Schwarzenegger signed ABX8 7 ( into law yesterday. The “Bottle Bill Fix” will retroactively pay recycling centers for payments that were suspended last year till June 2010. The allocations are summarized as follows:

    $20 million for conservation corps recycling
    $10.5 million to local governments
    $10 million for quality incentive payments for glass
    $10 million for market development for plastic containers
    $44 million in handling fees for supermarket recycling centers
    $15 million for curbside recycling (payment in December 2010)

  • “…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….”
    I can understand this type of statement coming from a metro-sized area (still tho it’s a bit harsh), but in more rural northern ca communities Ukiah, Lake County, Fort Bragg ets… the recycling center facilities boast customers from all walks of life. From the homeless to off duty police, literally every “fringe” to “in” demographic/clique uses these centers to cash in.
    I read a few months back, a .pdf from 08′ i found on google, stating that CA CRV had an estimated $180 million in surplus funds. MI had the highest rate of recycling by consumer due to MI’s nearly .10cent across the board return value on each consumer drink bottle (plastic/glass/aluminum). Grocery/Liquor stores of all sizes (mom & pops to box) offer the MI buyback program to customers, as well as scattered “centers.” Maybe CA could take a lesson

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