ATTACHMENT G
COMPARATIVE PERFORMANCE OF OTHER OPTIONS
THE BASE CASE (STATUS QUO)
Over time, current efforts under the base case would result in modest growth in packaging recycling
and an incremental reduction in litter. However, the base case does not include action to address
current market failures which limit the recycling and litter reduction opportunities being exploited,
especially away from home.
The base case does not address increasing fragmentation in jurisdictional approaches as it does not
seek commitment to a strengthened national approach. This risks a patchwork of packaging
regulations continuing to develop across Australia with associated costs to businesses and the
economy.
OPTION 1—NATIONAL PACKAGING WASTE STRATEGY
Option 1 partially addresses increasing fragmentation in jurisdictional approaches through improved
government coordination. However, it does this weakly due to the low scale of investment and
outcomes delivered, which are unlikely to stop jurisdictions from implementing additional measures
driven by community and stakeholder expectations. Arguably, some of the opportunities the option
forecasts are already being pursued through government collaboration, potentially reducing the
scale of additional outcomes that it may deliver.
Because it is funded by government revenue, which does not provide a price signal to consumers,
option 1 may not be a strong mechanism for boosting incentives to recycle and prevent litter.
Option 1 does not address the identified market failures as strongly as other options due to its low
level of investment, which would leave many opportunities to address market impediments
unexploited.
OPTIONS 2A-D—CO-REGULATION UNDER PRODUCT STEWARDSHIP ACT
Co-regulatory arrangements operating under new regulations made under the Product Stewardship
Act (PS Act) would undertake recycling and litter actions on behalf of industry members and would
have strong incentives to achieve outcomes at least cost.
The regulations would set tightly defined targets for additional recycling to ensure delivery. The
trade-off is that a complex compliance monitoring framework is required. Therefore, although
co-regulatory arrangements operate cost-effectively these options would increase government
administration costs over the base case.
Because option 2a transfers current arrangements under this new framework, it involves increased
administration costs to manage current levels of effort. At the same time, option 2a seeks only a
modest increase in industry investment and the recycling rate, which is assumed to result from the
strengthened enforceability of the regulated targets. This would leave many opportunities to
address market impediments unexploited and is why it has a low Net Present Value.
Options 2b and 2d aim to achieve more ambitious targets and outcomes than option 2a, with
greater levels of investment. However, 2b’s sub-target for beverage container recycling and 2d’s
high overall target for beverage container recycling reduce the cost-effectiveness of these
approaches. Three quarters of beverage containers sold in Australia are made of glass and therefore
co-regulatory arrangements would be forced to invest heavily in glass recycling, with low market
return and limited impact on environmental externalities (see Chapter 7). The focus on collecting
beverage containers also limits opportunities to leverage co-benefits and value from the recycling of
other packaging materials. These options therefore have a negative Net Present Value representing
an overall cost to the economy and cannot be recommended for implementation.
Option 2c has a relatively high positive Net Present Value and overcomes the disadvantage of having
a beverage container sub-target because it also proposes the greatest recycling target for all
packaging materials. This push to recycle high volumes of the other materials compensates for the
glass recycling by exploiting more opportunities than options 2b and 2d and delivering higher
recyclate value overall. However, the cost-effectiveness per tonne of recycling is lower than in
options 1, 2a and 2e. Regulated targets are a less flexible mechanism than the preferred option, and
largely define the achievement of outcomes as chasing the recycling tonnage target. Finally, the
ambitious outcomes sought by option 2c are likely to approach the known limits of recycling under
current approaches, and the sensitivity and risk analysis identified that overall it carries a risk of
projected outcomes not being achieved.
While these options would address increasing fragmentation in jurisdictional approaches by
introducing consistent national regulations, options 2b, c and d increase the funding required from
the packaged goods industry to pay membership fees to co-regulatory arrangements to address
market failures and improve recycling and litter reduction substantially more than required by the
preferred option, for a largely similar result. It is assumed that this cost would be at least partly
passed on to and impact consumers.
OPTION 3—MANDATORY ADVANCE DISPOSAL FEE
Option 3 has a relatively high positive Net Present Value and was modelled to seek the same
additional recycling and litter reduction outcomes as option 2c, but through a different regulatory
mechanism. The advance disposal fee would be collected from industry based on tonnes of
packaging brought to market and invested by government to fund recycling and litter initiatives.
Overall, this option has similar strengths and weaknesses to option 2c. It invests in more
opportunities to achieve the greater outcomes, but with a lower cost-effectiveness per tonne than
other options. There is also the same overall level of risk as in option 2c that the ambitious outcomes
may not be achieved.
The primary impact of this option on business is to substantially increase the funding required from
packaging manufacturers and importers to pay the advance disposal fee. It is assumed that this cost
would be at least partly passed on to and impact consumers.
This option addresses increasing fragmentation in jurisdictional approaches by introducing a
consistent national regulatory framework in the form of taxation (collection of fees).
OPTION 4—CONTAINER DEPOSIT SCHEME
The CDS options modelled in option 4 all impose substantially negative net costs to the economy and
cannot be recommended for implementation. Although the introduction of new CDS options would
deliver high beverage container recycling rates and overall the greatest litter reduction due to high
rates of beverage container litter collection, this comes at an unsustainable cost. This cost is driven
by the roll-out of parallel, purpose-built infrastructure that diverts recyclate from existing kerbside
systems and must do so by handling and accounting for each unit—billions of beverage containers
per year.
In addition, the recycling outcomes are lower than other options such as 2c and 3 as they are
constrained by focusing on beverage containers rather than all packaging types. This remains true
even taking into account the estimated co-benefits, which are generally lower in options 4a and 4b
than the preferred option due to use of Reverse Vending Machines which can only take beverage
containers. Option 4c is projected to achieve co-benefits on par with the preferred option, based on
the performance of the SA scheme’s more diverse manual collection points.
Option 4 would address increasing fragmentation in jurisdictional approaches by introducing
consistent national regulations. However additional measures and costs are likely to be required for
options 4a and 4b in particular to harmonise with the existing South Australian and Northern
Territory schemes to form a national approach.