oversight

Solid Waste: Trade-offs Involved in Beverage Container Deposit Legislation

Published by the Government Accountability Office on 1990-11-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

GAO

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                 *.
                       SOLID WASTE
                       Trade-offs Involved in
                       Beverage Container
                       Deposit Legislation



                                         142685
,”   .,   .,,   “.   I.   .   .   .   .   .   .._.___   .   .   .._________.._.   -.-
                       United States
GAO                    General Accounting  Office
                       Washington, D.C. 20648

                       Resources, Community,    and
                       Economic Development     Division

                       B-240986

                       November 14,199O

                       The Honorable Mark 0. Hatfield
                       United States Senate

                       The Honorable James M. Jeffords
                       United States Senate

                       The Honorable Paul B. Henry
                       House of Representatives

                       In response to your August 4, 1989, letter and subsequent discussions
                       with your offices, we agreed to provide information on the potential
                       effects of a national beverage container deposit law. In your request,
                       you noted that the debate on bills that you have introduced to provide
                       for beverage container reuse and recycling has been hampered by a lack
                       of data. For this reason, you asked us to obtain and analyze available
                       information in response to the following questions:

                   l What do existing studies say about the business and environmental
                     effects of beverage container deposit laws?
                   l Are beverage container deposit programs compatible with curbside
                     recycling programs?
                   . Does the American public support national beverage container deposit
                     legislation?


                       Existing studies generally conclude that beverage container deposit laws
Results in Brief       entail additional capital and operating costs to the beverage industry
                       but also benefit the environment by reducing litter, conserving energy
                       and natural resources, and diverting solid waste away from landfills.
                       However, these studies generally disagree about the magnitude of both
                       the costs and benefits. We believe that quantifying a national law’s
                       potential costs and benefits with a high degree of confidence is unlikely.

                       Although deposit systems can divert potential revenue away from curb-
                       side recycling programs, most states with a deposit law have found that
                       local curbside programs can coexist with deposit systems. Curbside and
                       deposit systems in combination are more costly than either is alone, but
                       deposit systems’ costs are borne primarily by the beverage industry
                       while curbside program costs are borne by municipalities. If curbside
                       and deposit systems in combination continue to divert a greater amount
                       of solid waste away from landfills, as landfill disposal costs increase, a


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                                                                                                                   ,

                        R-240986                                                                                              r




                        dual curbside/deposit system becomes more cost-effective for
                        municipalities.

                        A telephone survey we conducted indicates that the vast majority of
                        Americans would support a national beverage container deposit law.
                        Further, a number of surveys conducted by others show a high level of
                        public support for deposit legislation at the state and/or national level.


                        Over the past 20 years, Americans have become increasingly concerned
Background              about the need to reduce litter, conserve energy and natural resources,
                        and reduce the amount of solid waste that enters the nation’s dwindling
                        landfills. To address these concerns, between 1972 and 1983 nine states’
                        enacted beverage container deposit laws. In addition, national deposit
                        legislation has been proposed in the Congress since 1970. Under such
                        laws, consumers pay a per-container deposit that can be redeemed only
                        if they return their empty containers to retailers. The empty containers
                        are then eventually refilled or recycled.

                        Although deposit laws have been in place for nearly 20 years, their costs
                        and benefits continue to be debated by the laws’ advocates and oppo-
                        nents. Advocates maintain that the laws are an effective and efficient
                        means to significantly reduce litter, energy and natural resource con-
                        sumption, and solid waste. However, opponents maintain that the laws
                        result in substantial additional costs to the beverage industry and are
                        incompatible with more comprehensive curbside recycling programs.
                        Under curbside recycling, residents separate materials-such      as glass,
                        aluminum, and newspaper-from         their garbage and place them at the
                        curb. The municipality then collects, processes, and eventually recycles
                        these materials.


                        Studies examining the effects of deposit laws have not quantified the
Business and            laws’ costs and benefits to the extent that they can be weighed to deter-
Environmental Effects   mine the overall merits of such legislation. Although the studies do not
                        agree about the magnitude of related costs, most of the studies conclude
                        that beverage distributors and retailers incur additional net capital and
                        operating costs for the additional container handling, transportation,
                        and storage to implement deposit systems. In addition to the costs, a
                        concern on the part of industry, especially glass manufacturers, is that

                        ‘Connecticut, Delaware, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont have
                        beverage container deposit laws.



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I   R-349936




    national deposit legislation would affect beverage packaging and con-
    sumption. For example, the glass industry believes that the additional
    container handling, transporting, and storing required by a deposit
    system would encourage distributors, retailers, and consumers to choose
    plastic bottles or cans over glass bottles, which are heavier, more sus-
    ceptible to breaking, and not as easy to store.

    Our analysis shows that glass containers’ market share has fluctuated in
    both deposit and nondeposit states but, overall, has been declining as
    the use of cans and plastic bottles has increased rapidly. Glass con-
    tainers’ share of the beverage market decreased in some states and
    increased in others after implementation of state deposit laws. However,
    in addition to deposit laws, other factors, such as consumer preference
    for cans or plastic bottles, could have affected the market share of glass
    and other beverage containers. Department of Commerce industry spe-
    cialists told us that beverage packaging decisions are also influenced by
    factors such as the price of the container to the bottler and the price of
    the beverage to the consumer. Our analysis also shows that beverage
    consumption has fluctuated in both deposit and nondeposit states, likely
    due to a variety of factors such as health consciousness, demographics,
    and income. (App. II contains more information on the business effects
    of deposit legislation.)

    Regarding environmental benefits, most of the studies conclude that
    deposit laws have reduced litter, conserved some energy and natural
    resources, and reduced the amount of solid waste for disposal. For
    example, studies estimate that state deposit laws have reduced the
    volume of beverage container litter between 79 percent and 83 percent
    and the overall amount of solid waste by as much as 6 percent by weight
    and up to 8 percent by volume. A recent study concluded that deposit
    law states account for a disproportionately high percentage of the
    nation’s recycling of beverage containers. Accordingly, deposit laws
    could play a significant role in helping the nation meet the Environ-
    mental Protection Agency’s (EPA) %-percent by-weight recycling goal.
    (App. III contains more information on the environmental effects of
    deposit legislation.)




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                      0240985                                                                                     ,




                      Although sufficient data do not exist to determine the extent to which
Compatibility of      curbside recycling programs could be adversely affected by national
Deposit Laws and      deposit legislation, deposit systems can divert potential revenues-par-
Curbside Recycling    titularly the proceeds from the sale of aluminum cans-that help offset
                      these programs’ operating costs. However, scrap revenues do not fully
Programs              offset curbside programs’ operating costs. For example, in a Rhode
                      Island curbside program, total beverage container scrap revenue offsets
                      less than 19 percent of its curbside program’s operating costs. Other
                      curbside programs’ beverage container and other scrap revenues are
                      reported to offset only 15 percent to 40 percent of program operating
                      costs. Further, officials from most deposit law states believe that curb-
                      side and deposit systems are compatible, and all nine deposit law states
                      have some type of curbside or other recycling program.

                      Although curbside and deposit programs in combination are more costly
                      than either one alone, deposit systems’ costs are borne primarily by the
                      beverage industry and its consumers whereas curbside program costs
                      are borne by municipalities. Further, if both systems in combination con-
                      tinue to divert a greater amount of waste away from landfills, as landfill
                      disposal costs rise, a dual curbside/deposit system becomes more cost-
                      effective for municipalities. (App. IV contains more information on the
                      compatibility of deposit systems and curbside programs.)


                      To assess the level of public support for deposit legislation, we designed
Public Support for    a survey instrument and contracted with a private research firm to con-
Deposit Legislation   duct a nationwide telephone survey. Our telephone survey results indi-
                      cate that the vast majority of Americans would support a national
                      beverage container deposit law. Forty-four percent would strongly sup-
                      port, and 26 percent would somewhat support, such a law. In contrast,
                      11 percent would strongly oppose, and 7 percent would somewhat
                      oppose, such legislation. The remaining 12 percent either did not sup-
                      port or oppose such a law or did not respond. Further, the majority of
                      respondents in deposit law states approve of their states’ laws. Sixty-
                      three percent strongly approve, and an additional 19 percent somewhat
                      approve, of their state’s law. In contrast, 6 percent strongly disapprove
                      and 3 percent somewhat disapprove of the laws. The remaining 9 per-
                      cent either did not approve or disapprove or did not respond. A number
                      of similar surveys conducted by others have also shown a high level of
                      public support for deposit legislation at either the national or state level.
                      (App. V provides more details on public support of deposit legislation.)




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              R-240986




              Although nine states currently have deposit laws and various studies on
Conclusions   the effects of these laws have been conducted, we do not believe that the
              effects of deposit legislation have been quantified to the extent that it
              can be conclusively determined whether a mandatory national deposit
              system would be advantageous from a strict cost/benefit standpoint.
              Moreover, on the basis of our review of these studies and discussions
              with various deposit state officials and others, we believe that quanti-
              fying the potential costs and benefits with a high degree of confidence is
              unlikely. Many variables, such as differing marketing considerations
              and local solid waste conditions and programs, would have to be taken
              into account; and many assumptions about industry operations, mar-
              keting decisions, economic conditions, and consumer reactions would
              have to be made. Given this situation, we believe that the desirability of
              national beverage container deposit legislation is essentially a public
              policy decision in which value judgments must be made about the trade-
              offs between costs and environmental benefits and the desirability of
              federal involvement in solid waste management, an area that has gener-
              ally been a local responsibility.


              To respond to your questions, we identified applicable studies through a
              literature search and discussions with representatives of EPA, the
              Department of Commerce, and selected state, local, industry, and envi-
              ronmental advocacy groups. With these representatives, we also dis-
              cussed the business and environmental effects of mandatory beverage
              container deposit programs and their compatibility with curbside
              recycling programs. In addition, we analyzed data on beverage consump-
              tion and container market shares for states with and without deposit
              laws and visited deposit and nondeposit states with curbside recycling
              programs. Furthermore, we conducted a nationwide telephone survey to
              determine public acceptance and support for national legislation. More
              details on beverage container deposit legislation and our objectives,
              scope, and methodology are contained in appendix I.

              We discussed the information contained in this report with EPA and
              Department of Commerce officials and representatives of the National
              Soft Drink Association, the Beer Institute, and the National Container
              Recycling Coalition, These officials and representatives generally agreed
              with the information contained in this report. We have incorporated
              their comments as appropriate. However, as you requested, we did not
              obtain official comments on a draft of this report.




              Page 5            GAO/RCJSD-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation




                                     :,
                                                                                          r
B.240985




As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 15 days from
the date of this letter. At that time, we will send copies to appropriate
congressional committees; the Administrator, EPA; Director, Office of
Management and Budget; and other interested parties. Copies will be
made available to others on request.

If you have any questions, please call me on (202) 275-6111. Major con-
tributors to this report are listed in appendix VII.




Richard L. Hembra
Director, Environmental Protection
  Issues




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Page 7   GAO/lUXD-@l-26   Trade-offs   In Beverage   CmtaJner   Deposit   LegMation
Contents


Letter                                                                                                                   1

Appendix I                                                                                                           12
Background and          History of Deposits on Beverage Containers
                        The Beverage Industry and How Deposit Legislation
                                                                                                                     12
                                                                                                                     14
Methodology                  Works
                        The Merits of Deposit Legislation Are Debated                                                17
                        Objectives, Scope, and Methodology                                                           18

Appendix II                                                                                                          22
Business Effects        Effects on Beverage Retailers and Distributors
                        Effects on Beverage Consumption
                                                                                                                     22
                                                                                                                     24
                        Effects on Beverage Container Market Shares                                                  26

Appendix III                                                                                                         31
Environmental Effects   Views of Deposit Legislation, Opponents and Advocates
                        Results of Prior Studies
                                                                                                                     31
                                                                                                                     32

Appendix IV                                                                                                          36
Compatibility of        Views of Deposit Legislation, Opponents and Advocates
                        Results of Available Studies
                                                                                                                     36
                                                                                                                     36
Curbside Recycling      Curbside Program Costs and Benefits                                                          38
and Deposit
Legislation
Appendix V                                                                                                           39
Public Support for      Results of GAO’s Public Opinion Survey
                        Other Surveys Also Show Support for Deposit Legislation
                                                                                                                     39
                                                                                                                     41
Beverage Container
Deposit Legislation
Appendix VI                                                                                                          43
GAO’s Public Opinion
Survey




                        Page8             GAO/WED-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
                        Contents




Appendix VII                                                                                                         50
Major Contributors to
This Report
Bibliography                                                                                                         51

Tables                  Table I. 1: Summary of State Deposit Laws                                                    14
                        Table II. 1: Changes in Market Shares of One-Way Beer                                        29
                            Bottles in Deposit and Nondeposit States Between
                             1977and1989
                        Table 11.2:Changes in Market Shares of Beer Cans in                                          30
                            Deposit and Nondeposit States Between 1977 and
                             1989
                        Table 11.3:Changes in Market Shares of Refillable Beer                                       30
                            Bottles in Deposit and Nondeposit States Between
                             1977and1989
                        Table III. 1: Roadside Litter Reductions in Deposit States                                   32
                            as Cited by Prior Studies
                        Table V. 1: Public Support for State Deposit Laws as Cited                                   42
                            by Prior Surveys

Figures                 Figure 1.1: How the Beer and Soft Drink Industries Work                                      15
                        Figure 1.2: How a Deposit System Works                                                       17
                        Figure 11.1:National Beer Consumption Rose From 1966                                         25
                             to 1988
                        Figure 11.2:National Soft Drink Consumption Rose From                                        25
                             1966 to 1986
                        Figure 11.3:National Beer Container Market Shares From                                       28
                             1966 to 1989
                        Figure 11.4:National Soft Drink Container Market Shares                                      29
                             From 1966 to 1986
                        Figure III. 1: Beer and Soft Drink Containers as a Portion                                   34
                             of the Municipal Solid Waste Stream (by Weight)
                        Figure V. 1: Nationwide Support for National Deposit Law                                     40
                             Is Strong
                        Figure V.2: Support for National Deposit Law Is High                                         40
                             Among Residents of Deposit States
                        Figure V.3: Approval of State Deposit Laws Is High                                           41
                             Among Residents of Deposit States



                        Page 9            GAO/WED-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
Abbreviations

EPA       Environmental Protection Agency
GAO       General Accounting Office
NSDA      National Soft Drink Association


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w




    Page 11   GAO/RCED-91-25   Trade-offs   in Beverage   Container   Deposit   Legblation



                                                                                             “. .,.
 PI=

bsground          and Methodology


                         Over the past 20 years, Americans have become increasingly concerned
                         about the environment and the need to reduce litter, conserve energy
                         and natural resources, and reduce reliance on landfills. Many solutions
                         to these problems have been offered, including litter control laws, bans
                         on certain types of packaging, and comprehensive recycling programs.
                         One action that several states have taken and that has been proposed 01
                         a national basis is beverage container deposit legislation, which for the
                         most part focuses on beer and soft drink containers.

                         Advocates of such legislation assert that deposit laws reduce litter and
                         solid waste, conserve energy and resources, and increase environmental
                         awareness at no governmental expense. Opponents assert that deposit
                         legislation addresses only a small portion of the waste stream at the
                         expense of selected industries, hurts more comprehensive recycling
                         efforts, and is a costly and inefficient way to reduce litter and waste.


                         Late in the 1800s beer and soft drinks were available almost entirely at
History of Deposits on   taverns or drug stores. Beer was stored in kegs, soft drinks in dis-
Beverage Containers      pensers, and both were served for consumption on the premises. Both
                         beverages gradually became more available in bottles that were filled at
                         local breweries or soft drink bottlers and sold for home consumption.
                         Until late in the 194Os, beer was packaged almost exclusively in refill-
                         able glass bottles that could be reused up to 30 times. Most soft drinks
                         were also sold in refillable bottles through the 1950s. A deposit, volunta-
                         rily imposed by the brewer or bottler, helped ensure that the consumer
                         returned the bottle.

                         In 1935, brewers began packaging beer in nonrefillable cans. The glass
                         industry later introduced a one-time-use bottle, commonly referred to as
                         the “one-way” bottle. During World War II, beer was shipped in cans
                         and one-way bottles to the Armed Forces. In the postwar period, the can
                         industry and its chief supplier, the steel industry, joined in a concerted,
                         effective promotion of the beverage can. By 1970, nearly 40 percent of
                         packaged soft drinks and 76 percent of packaged beer were sold in one-
                         way bottles and cans. By 1986, the market share of one-way bottles and
                         cans’ increased to about 86 percent for soft drinks and over 91 percent
                         for beer. Representatives from the beer industry state that the switch to
                         one-way containers for beer was due to consumer acceptance of its con-
                         venience. Others interpret the switch as a result of dual pressures from

                         ‘The aluminum can was introduced in the early 1960s. Since 1978, the majority of beverage cans
                         have been made out of aluminum rather than steel.



                         Page 12                 GAO/RCED-91-25     Trade-offs   in Beverage   Container   Deposit   Legislation
Appendix I
Background and Methodology




the metal can industries to sell containers and from retail stores to
reduce handling of returned containers.

As the market share of refillable bottles and thus the portion of bev-
erage containers with deposits dwindled, interest grew in proposals to
mandate deposits on beverage bottles and cans. Between 1972 and 1983,
deposit laws became effective in nine states-Connecticut,     Delaware,
Iowa, Maine, Massachusetts, Michigan, New York, Oregon, and Vermont.
The primary goal of these laws was to reduce litter and conserve energy
in an attempt to counteract the effects of a “throwaway” society.
Deposit laws have also been seen as a way to reduce solid waste and
save dwindling landfill space. California in 1987 enacted a beverage
container redemption law in which redemption centers rather than
retailers redeem beverage containers. In 1988, Florida adopted a dis-
posal-fee system that affects beverage and other containers. As of
October 1, 1992, a disposal fee of 1 cent will be levied on any container
that is not recycled at a 50-percent rate. Several other states have also
recently considered enacting some form of deposit legislation. Table I. 1
shows the major provisions of the nine state deposit laws.




Page 12               GAO/RCED-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
                                     Appendix     I
                                     Background       and Methodology




Table 1.1:Summary of State Deporit
LOWS                                                                  Date deposit law
                                     State                            effective                 Provisions
                                     Connecticut                     . January 1980             Minimum Went deposit
                                                                                                Handling fee: 2 cents for soft drinks, 1.5
                                                                                                cents for beer
                                                  ---.      -~-           --
                                     Delaware                         January 1983              Minimum 5cent deposit
                                                                                                Exempts aluminum cans
                                                                                                Exempts containers larger than 2 quarts
                                                                                                Handling fee: 20 percent of deposit
                                     .___--
                                     Iowa                             July 1979                 Minimum 5cent deposit
                                                                                                Handling fee: 1 cent
                                                 -- -_---         -------
                                     Maine                            January 1978              _Minimum 5cent deposit
                                                                  _-----                        Handling fee: 3 cents
                                     Massachusetts                    January 1983              Minimum 5cent deposit
                                                                                                Handling fee: 2 cents
                                     Michigan                          December 1978            Minimum. IO-cent deposit
                                     ___-.._  ---             ----                              Handling fee: none
                                     New York                          September 1983           Minimum 5cent deposit
                                                                                                Exempts containers larger than 2 gallons
                                                                                                Handling fee: 1.5 cents
                                     --_---.--
                                     Oregon                            October 1972             Minimum 2cent deposit on refillable        -
                                                                                                containers, 5cent deposit on others
                                     _________ -_-.--...-..----_       --                       Handling fee: none
                                     Vermont                     July 1973                      Minimum 5cent
                                                                                                           --    deposit
                                                                                                Handling fee: the greater of 20 percent of
                                                                                                the deposit amount or 3 cents


                                     National deposit legislation has been proposed in the Congress since
                                     1970. In 1989, national beverage container deposit bills H.R. 586 and S.
                                     932 were introduced. The purposes of the bills are to combat litter, con-
                                     serve energy and resources, and reduce municipal solid waste. The bills
                                     mandate a minimum deposit of 5 cents on every container of soda, beer,
                                     and mineral water sold.


The Beverage Industry                facturers make concentrate, which they sell to bottlers. The bottlers
and How Deposit                      make the concentrate into soft drinks, package soft drinks in bottles and
Legislation Works                    cans, and distribute them to retailers. For beer, the brewer is also the
                                     bottler. Brewers sell beer to wholesalers, which then distribute the beer
                     Y               to retailers. Retailers for soft drinks and beer include grocery stores,
                                     restaurants, and bars. (See fig. 1.1.)



                                      Page 14                         GAO/RCEDBl-25     Trade-offs   in Beverage   Container   Deposit   Legislation
                                          Appendix I
                                          Background and Methodology




Flgure 1.1: How the Beer and Soft Drink
Industries Work                                       Brewer                                        Concentrate Manufacturer
                                              Produces and Bottles Beer                           Produces Soft Drink Concentrate




                                                                           Contalner Manufacturer
                                                                          Produces Bottles and Cans




                                                      Distributor                                         Bottler/Distributor
                                                    Distributes Beer                              Bottles and Distributes Soft Drinks




                                                                                  Retailer




                                          Page 16                GAO/RCED-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
Appendix I
Background and M&hodology




In recent years, soft drink concentrate manufacturers have purchased
bottling companies and other bottlers have been merging. Consequently,
many soft drink bottlers have consolidated their operations. Likewise,
brewers have become more centralized in recent years and dwindled in
number.

Deposit laws require that retailers pay a deposit, typicaily a 5-cent min-
imum, for each bottle or can of soda or beer they purchase from distrib-
utors. In turn, each consumer pays a deposit to retailers for each bottle
or can of soft drinks or beer purchased. The.consumer then redeems the
empty bottle or can at a store and recovers the deposit. The retailer
returns the empty container to the distributor who refunds the retailer’s
deposit. In seven of the nine states, the retailer also receives a handling
fee from the distributor, ranging from 1 cent to 3 cents for each
container redeemed. The beverage distributor may recycle, refill, or
landfill the empty bottles and cans. Figure I.2 displays how deposit sys-
tems operate.




2Although each of the nine state deposit laws establishes minimum deposit amounts, none of the laws
limit the deposit amount that distributors may charge retailers. Further, while all of the deposit laws
apply to beer and soft drinks, several of the laws also apply to liquor, wine, wine coolers, and mineral
water. Two of these laws place higher deposit amounts on wine and/or liquor bottles.



Page 16                   GAO/RCED-91-25      Trade-offs   in Beverage   Container   Deposit   Legislation
                                         Apmndix I
                                         Background and Methodology




Figure 1.2: How a Deposit System Works

                                            Beverages Are Sold                                    Empty Containers Are
                                           and Deposits Are Pald                                  Redeemed for Deposits



                                                   Dlstrlbutor                                              Consumer

                                                                                                                                      1

                                                       I
                                                   Beverage
                                                                                                                 I
                                                                                                        Empty Bottle

                                                       1                                                        1




                                                   Bev&age                                              Empty bottle
                                                                                                              I
                                                                                                             +

                                         $i-                                                                Distributor




                                         Beverage container deposit legislation involves many aspects of the bev-
The Merits of Deposit                    erage industry, including can and bottle manufacturing; beverage pro-
Legislation Are                          duction; and beverage bottling, distribution, and sales. A number of
Debated                                  container, beverage, and retailer trade associations recently formed the
                                         Coalition Against Forced Deposits. Those who support deposit bills
                                         include the League of Women Voters, the United States Public Interest
                                         Research Group, environmental groups, and other nonprofit organiza-
                                         tions. Such groups are represented in the National Container Recycling
                                         Coalition, which supports deposit laws. Arguments against mandatory
                                         deposit legislation generally center around the adverse effects on
                                         industry, while the arguments for deposit laws focus on benefits to the
                                         environment. Detailed discussions of these arguments and the business
                                         and environmental effects of deposit legislation are contained in appen-
                                         dixes II and III.



                                         Page 17                 GAO/RCED-91-26   Tradeoffs   in Beverage   Container     Deposit   Leglelatlon
                        Appendix I
                        Background and Metlwdology




                        By letter dated August 4, 1989, Senators Mark 0. Hatfield and James M.
Objectives, Scope,and   Jeffords and Representative Paul B. Henry requested that we provide
Methodology             information on the potential effects of national beverage container
                        deposit legislation. Their letter noted that the congressional debate on
                        bills that they had introduced to provide for beverage container reuse
                        and recycling has been hampered by a lack of data. In subsequent dis-
                        cussions with their offices, we agreed to obtain, analyze, and provide
                        information on the following:

                        1. What do existing studies say about the business and environmental
                        effects of beverage container deposit laws?

                        2. Are beverage container deposit programs compatible with curbside
                        recycling programs?

                        3. Does the American public support beverage container deposit
                        legislation?

                        To answer question one, we performed a literature search and held dis-
                        cussions with representatives from the Environmental Protection
                        Agency (EPA), Department of Commerce, beverage industry, solid waste
                        management organizations, the National Container Recycling Coalition,
                        and deposit law states to identify studies relating to the potential effects
                        of a national deposit law or the effects of state deposit laws. As agreed
                        with the requesters’ offices, we did not test the validity of the individual
                        studies. In addition, we supplemented our review of the studies with dis-
                        cussions of business and environmental effects with the representatives
                        noted above. These studies are listed in the bibliography.

                        To obtain additional information on the potential business effects of
                        deposit legislation, we performed ouriown analyses of packaging trends
                        and consumption for soft drinks and beer based on beverage container
                        market shares and consumption data provided by the soft drink and
                        beer industries. These analyses included comparisons between deposit
                        and nondeposit states and between deposit states’ trends before and
                        after passage of their deposit laws. Although we tried to obtain data for
                        the years 1966-1989, comparisons were limited for soft drinks because
                        we were unable to obtain soft drink container market shares by state
                        and were able to obtain soft drink consumption data by state only for
                        the years 1976-1978 and 1981-1984. For beer, we obtained container
                        market shares by state from the Beer Institute for all the states for the
                        years 1977 and 1982-1989. In addition, we obtained container market



                        Page 18                GAO/RCED-91.26   Tradeoffs   in Beverage   Container   Deposit   Leglelation
               Appendix   I
               h&ground       and Methodology




               shares for several deposit states for some of the other years, specifically
               1970,1971,1976, and 1978-81.

               From state recycling officials, we obtained beer and soft drink container
               redemption rates for seven of the nine deposit law states: Connecticut,
               Iowa, Massachusetts, Michigan, New York, Oregon, and Vermont. These
               data were not available for Delaware and Maine and the nondeposit law
               states.

               To address question two, we examined three major studies and other
               information on the compatibility of deposit systems and curbside
               recycling programs. We also visited three deposit and two nondeposit
               states with curbside recycling programs to interview state officials and
               private research organizations. Municipalities with curbside recycling
               programs keep inconsistent financial data, and different municipalities
               have different ways of accounting for recycling rates and costs. In addi-
               tion, often landfill fees do not reflect the real cost of landfill space.
               Without knowing the real cost of landfilling, we were not able to deter-
               mine conclusively the financial impact of taking beverage containers
               from curbside recycling. In any event, different municipalities have
               various types of curbside programs. Thus, it is difficult to compare pro-
               grams or draw conclusions about all curbside recycling programs from
               an examination of a specific community’s program.

               To answer question three, we designed a survey instrument and con-
               tracted with Westat, a private research corporation, to conduct a nation-
               wide telephone survey. As discussed in appendix V, the survey polled
               respondents on their support for a national beverage container deposit
               law and their own state’s deposit law, if appropriate.


Study Design   We hired a contractor to conduct a national telephone survey using a
               stratified, random digit dialing procedure. Random digit dialing is a
               method to obtain random samples of households and to minimize
               problems of access to nonlisted and yet-to-be listed telephones. This pro-
               cedure does not, however, address the issue of random selection of
               household members to ensure the best representation of the public
               views. Several techniques are available to obtain a representative
               sample of the population, When cost and time factors were considered,
               we instructed the contractor to use an “informant” approach.

               In an informant approach, we asked the respondents to indicate their
               views and those of members of their household over the age of 18. By


               Page 19                   GAO/RCRD-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
                     Appendix 1
                     Bnckground and Methodology




                     weighting these views together, we obtained an estimate of the adult
                     public’s views on the questions. The weighted aggregated results are
                     reported in appendixes V and VI.


Sampling Procedure   Respondents were drawn from two strata. The first consisted of residen-
                     tial telephone numbers located in the nine states that currently had
                     deposit laws in effect. These states were Connecticut, Delaware, Iowa,
                     Maine, Massachusetts, Michigan, New York, Oregon, and Vermont. The
                     second stratum consisted of the remaining 39 states (excluding Hawaii
                     and Alaska).

                     The contractor was directed to complete about 500 calls in each of the
                     two strata, using up to 3 retries before abandoning that telephone
                     number. In total, 3,487 calls were placed to complete 1,016 calls. We
                     obtained 359 refusals and 184 incompletes (including 133 callbacks, 48
                     language problems, and 3 other problems). Consequently, we obtained a
                     65.2-percent response rate (i.e., completes/(completes + refusals +
                     incompletes)). An additional 1,928 calls were made to obtain the 1,016
                     completed calls. These additional calls resulted in busy, no answer, non-
                     working, or nonresidential telephone numbers.

                     The ;-esults of the telephone calls were weighted for census characteris-
                     tics, and aggregated estimates were made to about 182 million adults.
                     Deposit state results are estimated for about 33.4 million adults, and
                     nondeposit state results are estimated for about 148.6 million adults.
                     Estimates and the accompanying sampling errors are reported in
                     appendix VI.

                     As with all sample surveys, this survey is subject to sampling error,
                     which defines the upper and lower bounds of the estimates made from
                     the survey. Sampling errors for the estimates in this report were calcu-
                     lated at the 95-percent confidence level; this means that 19 out of 20
                     times, the sample survey procedure used would produce an interval cap-
                     turing the true value. All sampling errors for the estimates in this report
                     are listed in appendix VI on a copy of the questionnaire.


Limitations          The reader should be aware of some limitations in this study. First,
                     because a random digit dialing procedure was used, people who do not
                     have a telephone are not represented in this study. The bias this
              ”
                     introduces is represented to the extent that behavior associated with
                     deposit legislation is related to telephone ownership.


                     Page 20               GAO/RCEDBl-25   Trade-offs   in Beverage   Container   Deposit   Legislation
Appendix I
Background and Methodology
                                                                        .




A second limitation comes from the use of the informant approach. This
approach introduces bias to the extent that the person who is answering
the telephone is able to know the views of other household members.
Since the activity of collecting and returning bottles and cans would
affect the entire household, we assumed that members in the household
would know the views of other household members. We chose not to use
the alternative approach of randomly selecting a respondent once a
household was contacted because of cost and time factors.

A third limitation exists since we achieved a 66.2-percent response rate.
Our results are limited to the extent that the remaining 34.8 percent,
who did not participate in the study, may hold views that differ from
our respondents’.


We discussed the information presented in this report with EPA and
Department of Commerce officials and representatives from the
National Soft Drink Association, the Beer Institute, and the National
Container Recycling Coalition. These officials and representatives gener-
ally agreed with the information contained in this report. We incorpo-
rated their comments where appropriate. However, as requested, we did
not obtain official comments on a draft of this report.

We performed our work from November 1989 to August 1990 in accor-
dance with generally accepted government auditing standards.




Page 21               GAO/RCED-91.26   Trade-offn   in Beverage   Container   Dcqoait   Legislation
Appendix II

Business Effects


                      Opponents of beverage container deposit legislation assert that the laws
                      increase costs to the beverage industry, reduce sales, and cause changes
                      in the way beverages are packaged, thereby adversely affecting some
                      container manufacturers. Although most of the studies we examined
                      concluded that deposit laws entail additional costs to the beverage
                      industry, these studies’ assessments of the magnitude of the costs dif-
                      fered. While many of the studies observed changes in beverage con-
                      sumption and/or container market shares following the enactment of
                      deposit laws, several of these studies noted that the changes were short-
                      lived and/or not resulting solely from the deposit laws. Similarly, our
                      analysis and discussions with government officials suggest that the
                      observed changes may be due to such factors as changing consumer
                      demographics and preferences rather than only the presence of deposit
                      laws. However, because data on the multitude of factors that affect bev-
                      erage consumption and container selection could not be quantified, we
                      could not determine the contribution of these various factors to changes
                      in container mix or consumption.


                      Representatives of beverage retailers and distributors assert that the
Effects on Beverage   capital and operating costs to implement deposit systems hurt retailers
Retailers and         and distributors because of the additional transportation, storage, and
Distributors          labor costs that are required under deposit laws. In addition, they main-
                      tain that deposit laws lower beverage consumption. Advocates of
                      deposit legislation argue that unclaimed deposits and scrap revenue
                      offset the distributors’ costs. Furthermore, they point out that under
                      deposit laws, the cost of disposing of used beverage containers is borne
                      by those who produce, distribute, sell, and consume beverages. In con-
                      trast, in states without deposit laws, public funds help pay for the dis-
                      posal of used beverage containers, which, in effect, subsidizes
                      distributors, retailers, and consumers of beverages.

                      We identified and reviewed seven studies on the business effects that
                      beverage container deposit legislation has on beverage retailers and dis-
                      tributors. Three of these studies were commissioned by the beverage
                      industry, one was commissioned by a food retailer trade association, and
                      three studies were prepared for deposit state governments. These
                      studies are listed in the bibliography.


Retailer Costs        Retailers incur additional costs under deposit laws because they must
                      sort, store, and account for redeemed beverage containers. These costs
                      are partially offset in most deposit states by a handling fee paid by the


                      Page 22           GAO/RCED-91-25   Trade-offs   in Beverage   Container   Deposit   Legislation
                    Appendix   II
                    Business Effects




                    distributor to the retailer. These fees range from 1 cent to 3 cents per
                    container.

                    Three of the studies we examined addressed retailer costs. A study per-
                    formed by the Food Marketing Institute in 1986 found that retailers’
                    redemption costs ranged from 2.4 cents to 3.2 cents per container,
                    depending on the size of the store and type of container. The study
                    noted that 70.2 percent of this cost was for labor, 18.4 percent for
                    storage space, and 11.4 percent for other expenses such as investment
                    and operating costs. A March 1990 study of New York’s deposit law
                    commissioned by the governor of New York concluded that the retailer
                    cost of handling containers is greater than the 1.5-cent handling fee that
                    retailers receive from distributors under New York’s deposit law. The
                    report also indicated that these costs are generally passed on to con-
                    sumers through increases in the retail price of beverages or in the prices
                    of other goods sold by the retailers. A 1985 study of deposit law costs to
                    retailers in New York, commissioned by the state of New York, also con-
                    cluded that costs exceed the 1.5-cent handling fee. The study also points
                    out that the discrepancy between handling costs and the handling fee
                    varies greatly across types of stores, return systems, and geographic
                    areas.


Distributor Costs   To collect empty beverage containers from retailers, distributors incur
                    additional transportation, storage, and labor costs. In addition, as men-
                    tioned previously, most deposit laws require distributors to pay retailers
                    a small handling fee per container. These costs are partially offset by
                    revenue that distributors receive from selling empty beverage con-
                    tainers as scrap and, in most states, by deposits not claimed by
                    consumers.

                    The three studies that examined the costs of deposit laws to distributors
                    reached different conclusions about the net cost of the law. Two studies
                    sponsored by the soft drink industry-one     prepared in 1989 for the
                    Michigan Soft Drink Association and the other in 1988 for the Massa-
                    chusetts Soft Drink Association-concluded     that distributors’ costs of
                    deposit legislation exceed scrap revenue and unclaimed deposits by
                    $14.2 million in Michigan and $1.4 million in Massachusetts. The third
                    study, prepared in 1989 for the state of Michigan’s Department of Nat-
                    ural Resources, estimated that distributors’ costs of complying with the
                    state’s deposit law in 1988 was $70 million but that scrap revenues and
                    unclaimed deposits totaled between $113 million and $118 million.



                    Page 23            GAO/RCED-91-26   Trade-offs   in Beverage   Container   Deposit   Legislation
                      Appendix   II
                      Business Effecta




                      Accordingly, the report implies a net gain to distributors of between $43
                      million and $48 million.

                      An additional study examined the combined costs of deposit laws to
                      beer and soft drink distributors and retailers. This 1989 study, spon-
                      sored by Anheuser-Busch Companies, Inc., a large brewer, examined the
                      costs of Vermont’s and New York’s deposit laws and concluded that the
                      net cost to retailers and distributors is $2.6 million per year for oper-
                      ating Vermont’s deposit law and $124 million per year for operating
                      New York’s law. The study further concluded that in Vermont these
                      costs resulted in higher beverage prices to consumers.

                      A draft report by the Research Triangle Institute, a research firm that
                      has studied deposit legislation issues for EPA in the past, indicated that,
                      based on their review of the issue, whatever the direction of the price
                      change caused by deposit laws, the magnitude is quite small.


                      Beverage and container manufacturing industry representatives argue
Effects on Beverage   that higher beverage prices and the inconvenience of the deposit system
Consumption           to consumers lower beverage consumption. Decreases in consumption
                      could adversely affect beverage retailers, distributors, and producers as
                      well as beverage container manufacturers who would produce and sell
                      fewer bottles and cans. However, other factors also affect beverage
                      consumption.

                      Although several of the studies observed some declines in beverage con-
                      sumption in states following the enactment of deposit legislation, most
                      of the studies concluded that the declines are short-term and only par-
                      tially attributable to deposit laws. For example, studies that examined
                      deposit laws’ effects on consumption in New York and Michigan noted
                      that increased legal drinking ages and/or price increases unrelated to
                      deposit legislation contributed to the declines in consumption.

                      Since 1970, Americans have increased their per capita consumption of
                      beer and soft drinks. (See figs. II.1 and 11.2.) Rates of beer consumption
                      rose annually between 3 percent and 9 percent in the 19709, at a slower
                      rate in the early 1980s. Since the mid-1980s, beer consumption has
                      remained essentially steady with periodic slight increases and de-
                      creases. Soft drink consumption has risen at a higher rate than beer
                      consumption.




                      Page 24            GAO/RCED-91-26   Trade-offs   in Beverage   Cmtdner   Deposit   L&dation
                                        Appendix II
                                        Business Effects




Figure 11.1:National Beer Consumption
Rose From 1966 to 1966
                                        500      12   oz. wrvlngs par capita

                                        450


                                        400


                                        350


                                        300




                                        100

                                          1955         lsw      1970     1972   1974   1976    1978       lee0       1982    1984       1988      1955
                                          YOU


                                        Source: GAO with Beer Institute data

Figure 11.2:National Soft Drink
Consumption Rose From 1965 to 1966      600      12 oz. contaInon per csplts


                                        450


                                        400


                                        350


                                        300

                                        250


                                        200




                                        100

                                          1965         1967     196s     1971   1973   1975     1077      1979       1981    1963       1955       1955
                                          Yaar


                                        Source: GAO with NSDA data




                                        Page 25                        GAO/RCEDBl-26    Trade-offs     in Beverage    Container     Deposit    Legislation
                      AppendixII
                      Businem~ Effects




                      On the basis of consumption data we obtained during our review, per
                      capita beer consumption dropped in seven of nine states after implemen-
                      tation of deposit laws. In five of these seven states, the declines reversed
                      the previous year’s growth in consumption. However, in two of these
                      five states, within 6 years per capita consumption returned to and
                      exceeded the levels experienced in the year before the deposit laws had
                      become effective. Such soft drink data are available only for three states
                      and show that consumption decreased in two of the states after imple-
                      mentation of deposit legislation.

                      Our analysis shows that per capita beer consumption changed substan-
                      tially even in states without deposit laws during the early 1980s when
                      most deposit laws were in effect. Between 1980 and 1984, beer con-
                      sumption increased in 16 states without deposit laws and decreased in
                      the remaining 25 states. The increases ranged from 0.5 percent to 12.3
                      percent while the decreases ranged from 0.1 percent to 16.3 percent.
                      Although soft drink per capita consumption increased between 1981 and
                      1984 for nearly all states without deposit laws, the increases ranged
                      from 4.6 percent to 40.6 percent while the decreases ranged from 4.5
                      percent to 17.1 percent, The variety of consumption changes in states
                      without deposit laws indicates that factors other than deposit laws
                      affect consumption.

                      We also discussed consumption trends with beverage industry special-
                      ists at the Department of Commerce who study beer and soft drink con-
                      sumption trends. According to their statements, several factors
                      influence beverage consumption patterns, including income, health con-
                      sciousness, and changing demographics.


                      Some deposit law opponents are concerned that deposit laws may cause
Effects on Beverage   significant changes in the way beverages are packaged and thereby
Container Market      adversely affect some container manufacturers. For example, glass
Shares                container manufacturers argue that deposit laws cause distributors,
                      retailers, and consumers to choose cans and plastic bottles over glass
                      bottles because cans and plastic bottles are lighter in weight, do not
                      break easily, and are easy to store.’ As a result, the glass container man-
                      ufacturing industry maintains that deposit laws cause a loss of jobs in

                      1In the past, many assumed that deposit laws would cause a shift towards refillable glass bottles.
                      Although this shift could increase the glass containers’ overall market share, it could reduce the
                      number of glass bottles manufactured-and so the number of jobs in the glass industry-because
                      refillable bottles can be reused many times. However, glass container manufacturers’ current concern
                      is that deposit laws cause market shifts away from glass bottles towards cans and plastic bottles.



                      Page 26                  GAO/RCEDSlIB       Trade-offs   in Beverage   Container   Deposit   Legislation
                          Appendix II
                          Budnesa Ef’fects




                          their industry. To assess deposit laws’ effects on beverage packaging,
                          we (1) examined existing studies on this issue, (2) analyzed available
                          national and state beverage-packaging trend data, and (3) discussed
                          with government container specialists the factors that influence bev-
                          erage-packaging decisions.


Existing Studies          Although several studies predicted that deposit laws would cause shifts
                          away from nonrefillable bottles and cans towards refillable bottles,
                          other studies concluded that the shift may be short-lived. In addition,
                          some of these studies emphasize that (1) major packaging changes have
                          also occurred in states without deposit laws and (2) not all of the pack-
                          aging changes in deposit law states can be attributed to deposit
                          legislation.


GAO’s Analysis of         We obtained and analyzed available packaging trend data for the
Beverage-PackagingTrend   deposit law states. Because packaging trends have been changing
                          nationwide, we also obtained and analyzed available packaging data for
n-c,
UizLit                    the nation and for states without deposit laws,

                          National packaging trend data for soft drinks were available for the
                          years 1966 through 1985. National packaging trend data for beer were
                          available for the years 1966 through 1989. State packaging trend data
                          for beer were available for only 1977 and 1982-1989. Since two of the
                          nine state deposit laws were enacted prior to 1977, we were able to pro-
                          vide a “before and after” deposit law packaging analysis for only the
                          remaining seven deposit law states. Because state packaging trend data
                          are not available for soft drinks, we could not provide an analysis for
                          changes in state soft drink packaging trends.

                          Our analysis shows that national beverage container market shares for
                          soft drinks and beer have changed dramatically since 1965. As figures
                          II.3 and II.4 show, the most dramatic change in national packaging
                          trends has been the decline in the use of refillable bottles. During this
                          period, the market share of cans has steadily grown while the market
                          share of one-way bottles has remained relatively steady. For soft drinks,
                          plastic bottles’ market share grew rapidly after plastic bottles were
                          introduced in 1978 but has leveled off in recent years.




                          Page 27            GAO/RCED-91-25   Trade-off~   in Beverage   Container   Deposit   Legislation
                                               Appendix II
                                               Bueinem Effecta




Flgure 11.3:Natlonal Beer Container Market Shares From 1965 to 1999
loo      Pwmnl

 90

 60

 NJ

 00

 80




                                                                                                        --
 10                                                                                                                                           -.

  0

  1900            1961          1909   1011   1973        1078       ion          1979       1981            1983      1986         lW7            1989
  YOU

         -        cans
         I. I I   one-waybottles
         m        reflllsble bottls8

                                               Source: GAO with Seer Institute data




                                               Page 28                 GAO/RCED-91-25    Trade-offs   in Beverage   Container   Deposit   Legislation
                                            Appendix II
                                            Business Effects




Figure 11.4:Natlonal Soft Drink Container
Market Shares From 1965 to 1985
                                            109      Potwnl

                                             90

                                             80

                                             70

                                             60 \

                                             80

                                             40

                                             30
                                             20

                                             10

                                              m


                                              lpB5        1967      1969          1971   1979        1975      1077        1979        1981        1983       19e5
                                              YSSr

                                                     -        cans
                                                     - - --   oneway bottles
                                                     B        refillablebottles
                                                     l mmm    pla8ticbottles

                                            Source: GAO with NSDA data

                                            As shown in tables II.1 through 11.3,changes in packaging trends have
                                            occurred in states both with and without deposit laws. For example,
                                            table II.1 shows that the use of one-way beer bottles declined in five of
                                            the seven deposit law states we examined. About half of the states
                                            without deposit laws also experienced declines in the use of one-way
                                            bottles during this period.

Table 11.1:ChanQtb8 In Market Shares of
One-Way Beer Bottle0 in Deposit and                                                                            Decline        No change               Increase
Nondeposit
1989         States Between 1977 and        -Deposit state9
                                            -__.-.----
                                                                                                                       5                      0                     2
                                            Nondeposit states                                                         21                      2                    18
                                            aData from Oregon and Vermont are not included because they enacted deposit laws before 1977




                                            Page 29                        GAO/RCED-91-25       Trade-offs   in Beverage   Container     Deposit     Legislation
                                         Appendix II                                                                                         .
                                         Business Effects




                                         As shown in table 11.2,beer cans’ market share increased in most deposit
                                         and nondeposit states.

Table 11.2:Changes in Market Shares of
Beer Cans In Deposit and Nondeposlt                                                                Decline       No change            Increase
States Between 1977 and 1989             Deposit states8                                                   2                 0                      5
                                         -.~
                                         Nondeposit   states                                               9                 2                     30

                                         aData from Oregon and Vermont are not included because they enacted state deposit laws before 1977.


                                         As shown in table 11.3,the market share increased for refillable beer
                                         bottles in deposit states. Nonetheless, such an increase also occurred in 6
                                         of the 41 nondeposit states.

Table 11.3:Changes in Market Shares of
Refillable Beer Bottles In Deposit and                                                             Decline       No change            Increase
Nondeposlt   States Between 1977 and               StateSa                                                0               1
1989                                     Deposit                                                                                                    6
                                         Nondeposit   states                                             24                 11                      6

                                         ‘Data from Oregon and Vermont are not included because they enacted state deposit laws before 1977.


                                         Although deposit law states experienced substantive changes in
                                         container market shares, not all of these changes were in the same direc-
                                         tion. Further, states without deposit laws also experienced changes in
                                         container market shares, again, not all in the same direction. Accord-
                                         ingly, it is clear that factors other than deposit legislation also affect
                                         beverage packaging decisions -an observation made by industry spe-
                                         cialists at the Department of Commerce. According to officials from the
                                         Department of Commerce, in addition to other factors, packaging deci-
                                         sions are influenced by consumer preferences and, most importantly, the
                                         price of the container to bottlers and the price of the beverage to con-
                                         sumers. A draft report by the Department of the Interior’s Bureau of
                                         Mines shows that cans and plastic containers are less expensive to pro-
                                         duce, fill, and transport than glass bottles. Accordingly, the glass
                                         bottle’s static market share may be largely due to its higher costs.
                                         Because it is difficult to determine the precise extent that deposit laws
                                         affect container market shares, it is not clear to what extent the laws
                                         result in job losses in the container manufacturing industry.




                                         Page 39                  GAO/RCED-91-25    Trade-offs   in Beverage   Container   Deposit   Legislation
Appendix III

Environmental Effects


                               Although opponents of beverage container deposit legislation disagree,
                               most of the studies we examined concluded, and officials from deposit
                               states generally concurred, that deposit laws have resulted in environ-
                               mental benefits. The studies and officials maintain that the laws have
                               significantly reduced litter, conserved some energy and natural
                               resources, and diverted waste away from landfills. Further, several
                               studies concluded that a disproportionately large percentage of the
                               nation’s recycling is taking place in deposit law states. Accordingly,
                               deposit laws could play a significant role in helping the nation meet
                               EPA’S 25-percent solid waste recycling goal.




                               The arguments of opponents against and advocates for deposit legisla-
Views of Deposit               tion generally do not center on whether certain environmental benefits
Legislation, Opponents         could be realized through deposit legislation but rather on the relative
and Advocates                  importance of such legislation to overall efforts to address the nation’s
                               solid waste problem.


Opponents’ Arguments           Opponents of beverage container deposit legislation claim that such laws
Against Legislation            do not appreciably improve the environment. They give the following
                               reasons:

                           . Solid waste is not reduced significantly, because beverage containers
                             comprise less than 5 percent of the waste stream.
                           . Deposit legislation creates a costly network for recycling because bev-
                             erage distributors are not efficient collectors of used beverage
                             containers.
                           . Beverage containers are already recycled at a high rate without deposit
                             legislation.


Advocates’ Arguments for       Deposit law advocates claim that deposit laws have a substantial and
Legislation                    beneficial effect on the environment in the following ways:

                           . Litter is dramatically reduced.
                           . Solid waste is reduced, and a significant portion of EPA’S recycling goal
                             can be met.
                           l Energy and resource savings are realized as industry uses recycled
                             rather than virgin material.
                           . Recycling of other materials is encouraged, because deposit laws create
                             a recycling infrastructure and make the public more aware of the need
                             to recycle.


                               Page 31           GAO/RCEDBl-26   Trade-offs   in Beverage   Container   Deposit   Legislation
                                            Appendix III
                                            Environmental       Effects




                                            The studies we examined address the above arguments to the extent
Results of Prior                            that they document that deposit laws have reduced litter and solid
Studies                                     waste by encouraging recycling of beverage containers. They further
                                            document that recycling enables reuse of the container or the materials
                                            out of which they are made, resulting in some energy and natural
                                            resource savings. The studies, however, do not quantify the benefits in
                                            relation to costs of implementing a deposit system. In addition, the
                                            studies do not measure the effectiveness of deposit laws compared with
                                            other means of recycling. A complete list of the studies we consulted is
                                            presented in the bibliography.


Litter Reduction                            When states first began to consider deposit legislation in the 197Os, one
                                            of the most often cited benefits was litter reduction, Although it receives
                                            less attention as an issue in the 1990s than it did in the 197Os, litter
                                            reduction is one of the few areas where the effects of a deposit law are
                                            documented.

                                            Studies we examined described litter as composed of from 10 percent to
                                            20 percent beverage containers by weight and 40 percent to 60 percent
                                            by volume. As shown in table III. 1, many studies cite reductions in bev-
                                            erage container litter in deposit law states as a result of the legislation.

Table 111.1:Roadside Litter Reductions in
Deposit States as Cited by Prior Studies                                                 Percent reduction                   Percent reduction total
                                            State
                                            __. -- ..__------       --- Year             beverage container litter           litter
                                            Iowa                        1980             78.7 (volume)                       38.1 (volume)
                                            Maine                       1979             56.0 (by item)
                                                                                              _._ ~~~..__~--.._~ ~~~.        10.0,.~~~~
                                                                                                                             ~~~    (by item)~~~
                                                                                                                                               ._....~_ ~.~
                                            Michigan                    1986                                                 24.4 (by item)
                                              Cans                                        78.4 (by     item)
                                              Bottles                                     51
                                                                                  _~ .._ _~  ,l (by
                                                                                           .__~       item)
                                                                                                      -~.-.._ .~~.~~~-~- ..~_~~ ~~~ ~~~    ~- ~~~~
                                            Oregon                        1974            83.0 (by    item)                  39.0 (by item)




Energy and Resource                         The energy and resource savings from recycling are also documented.
Savings                                     According to the Aluminum Association, the energy saved from making
                                            a can from recycled aluminum saves 95 percent of the energy that
                                            would be needed to make an aluminum can from virgin material,
                                            According to the Glass Packaging Institute, a trade association repre-
                                            senting the glass bottle manufacturing industry, for each 1 percent of
                                            recycled glass contained in a bottle, l/4 of 1 percent of the energy that
                                            would be required to produce a bottle from virgin material is conserved.
                                            For example, according to the Bureau of Mines, glass manufacturers


                                            Page 32                        GAO/RCED-91-2s     Trade-offs    in Beverage   Container   Deposit   Legislation
                        Appendix lII
                        Environmental   Effecta




                        find the optimum amount of recycled glass to use when making a new
                        bottle is 26 percent. Using the Glass Packaging Institute’s index for
                        energy savings, a bottle containing 25-percent recycled glass saves 6.25
                        percent of the energy that would be required to make a bottle from
                        virgin material. Some of these savings during production are offset by
                        the energy consumed by trucks and recycling equipment used to collect
                        and process empty containers. Still, the studies we examined report that
                        making beverage containers from recycled materials results in net
                        energy savings. A 1989 report prepared for the state of Michigan con-
                        cluded that Michigan’s deposit law resulted in an estimated energy sav-
                        ings of 37 percent of the beer can and bottle production, container
                        filling, and brewing processes. The amount of resource and energy sav-
                        ings due to a deposit law would vary by state or region depending on
                        such factors as the market shares of the different types of container,
                        distance from distribution centers, and container redemption rate.


Solid Waste Reduction   In 1988 (the last year for which data are available), the United States
                        generated approximately 180 million tons of solid waste, of which 4.1
                        percent was beer and soft drink containers. (See figure 111.1).EPA
                        predicts that 80 percent of all existing landfills will fill up and close
                        within 20 years. Finding suitable land for additional sites or disposal
                        alternatives is increasingly expensive and a growing public concern. In
                        light of this concern, EPA recently established a recycling goal of 25 per-
                        cent of the municipal solid waste stream by weight. Recently, deposit
                        laws have been seen as a way to help meet this recycling goal and
                        reduce our dependence on landfills.




                        Page 33                   GAO/WED-91-25Trade-offs   in Beverage   Container   Deposit   Legislation
                                           Appendix Dl
                                           Environmental   Effects




Figure 111.1:Beer and Soft Drlnk
Contalners as a Portion of the Municipal
Solid Waste Stream (by Weight)
                                                                                              Beer and soft drink containers


                                                                                              Other packaging



                                                                                              Other municipal solid waste




                                           Source: GAOwith EPAdata

                                           State recycling and deposit law officials in seven of the nine deposit law
                                           states estimate that between 72 percent and 98 percent of all beverage
                                           container are redeemed for their deposit.’ Given these redemption rates
                                           and that beverage containers comprise about 4.1 percent of the waste
                                           stream, it follows that deposit laws reduce solid waste by about 3 per-
                                           cent to 4 percent by weight.2 These figures are not significantly different
                                           than those presented in reports we reviewed that concluded that deposit
                                           laws reduced solid waste by 1 percent to 6 percent by weight and up to 8
                                           percent by volume. Accordingly, deposit laws could play a significant
                                           role in helping the nation to meet EPA'S recycling goal.

                                           Although state recycling rates for glass, aluminum, and plastic beverage
                                           containers are not available, deposit law states appear to account for a
                                           disproportionately high percentage of the nation’s recycling of beverage
                                           containers. For example, a 1990 draft study on markets for recycled
                                           glass performed by the firm of Temple, Barker and Sloane for EPA esti-
                                           mated that deposit states, although comprising about 18 percent of the
                                           nation’s population, recycled nearly two-thirds of the glass recycled
                                           nationwide.




                                           ‘Redemption rates were not available for Delaware and Maine.
                                           “These figures may be somewhat lower because not all redeemed beverage containers are recycled.



                                           Page 34                   GAO/RCED-91.25   Trade-offs   in Beverage   Container   Deposit   Legislation
  Appendix IU
  Environmental   Effecta




  Some state officials and representatives from the plastics recycling
  industry claim that deposit laws have fostered recycling markets, par-
  ticularly plastics recycling. According to the officials, without the large,
  steady supply of plastic soft drink bottles, plastics recycling may never
  have evolved so rapidly. The Office of Technology Assessment reported
  in 1989 that 98 percent of the nation’s recycled plastic soft drink bottles
  in 1986 came from deposit states. According to a representative of
  Wellman Plastics, Inc., one of the largest plastics recycling firms in the
  nation, nearly 98 percent of the beverage container plastic the firm
’ receives comes from deposit states.




  Page 36                   GAO/RCED-91-28   Tradeoffs   in Beverage   Container   Deposit   Legislation
                                                                                                            ,
Appendix IV

Compatibility of Curbside Recycling and                                                                             *
&posit Legislation

                         Deposit systems divert valuable scrap materials and revenues away
                         from curbside recycling programs. However, these revenues, even
                         without deposit systems, do not fully offset curbside program operating
                         costs. Further, officials from most deposit law states believe that deposit
                         systems and curbside programs are compatible, and all nine deposit law
                         states have some type of curbside or other recycling program. While a
                         dual curbside/deposit system costs more than either program alone, the
                         costs of a curbside program are borne primarily by municipalities, ’
                         whereas the costs of a deposit system are borne primarily by the bev-
                         erage industry and its consumers. Accordingly, if both systems in combi-
                         nation continue to divert a greater amount of waste away from landfills,
                         as waste disposal costs increase, a dual curbside/deposit system
                         becomes more cost-effective for municipalities.


                         Opponents of deposit legislation claim that deposit systems hurt com-
Views of Deposit         prehensive curbside recycling programs by taking away revenues
Legislation, Opponents   needed to pay operating costs. Beverage container scrap-aluminum       in
and Advocates            particular-provides   nearly half the scrap revenue a curbside recycling
                         program earns. Without this revenue, deposit law opponents conclude,
                         recycling programs will be forced to obtain other funding or discontinue
                         operation.

                         Those who support deposit legislation state that curbside recycling is
                         compatible with deposit systems. They say that deposit laws and curb-
                         side programs together can reduce municipal solid waste more than
                         either program alone. They also claim that the scrap revenue from bev-
                         erage containers is insignificant compared with the total program costs
                         of curbside programs. Advocates further claim that recycling centers in
                         deposit states can redeem the beverage containers that individuals
                         recycle through curbside programs. Finally, advocates point out that
                         many rural areas of the United States are not likely to have curbside
                         recycling programs.


                         We examined three studies on the compatibility of curbside recycling
Results of Available     and beverage container deposit legislation. The first study was commis-
Studies                  sioned by Anheuser-Busch Companies, Inc. and prepared by Franklin
                         Associates, Ltd. in 1989. The second study was an academic paper pub-
                         lished in the Journal of Environmental Systems in 1986. The third study
                         was commissioned by EPA and prepared by the Tellus Institute in 1989.
                         These studies deal primarily with the comparative cost of these pro-
                         grams. The studies are listed in the bibliography.


                         Page 36           GAO/RCEDBl-25   Trade-offs   in Beverage   Container   Depot&   Legblatiot~
Appendix IV
Compatibility   of Curbside   Recycling   and
Deposit Legislation




The Franklin Associates report for Anheuser-Busch concludes that in
Vermont and New York, respectively, curbside recycling and deposit leg-
islation together cost 2 and 2-l/2 times more than curbside recycling
alone. However, the report assumes a fairly high statewide participation
rate of 80-90 percent under mandatory curbside recycling. According to
the Research Triangle Institute, typical participation rates for voluntary
curbside programs are in the range of 30-40 percent of households and
mandatory programs’ rates are in the range of 40-90 percent. Further,
the report combines both industry and municipal costs and does not
explicitly state that the costs of curbside programs are borne primarily
by municipalities while deposit system costs are borne primarily by the
beverage industry and its consumers.

In contrast, the academic paper published in the Journal of Environ-
mental Systems emphasizes that the costs of deposit systems are borne
primarily by the private sector, whereas curbside recycling costs are
borne primarily by municipalities, Using a computer simulation model
for several model communities, the study analyzed the effect of deposit
legislation on municipal curbside and other recycling programs, with the
net benefit to the community’s solid waste management system as “the
bottom line.” Although the study acknowledged that deposit legislation
reduces curbside recycling program revenues, it stated that this reduc-
tion would not likely cause severe damage to municipal recycling pro-
grams with adequate resource bases, Further, because a dual curbside/
deposit program would remove more materials from the waste stream
than either program alone and deposit systems cost municipalities
nothing, the article concluded that the two programs complement each
other and should be seen as compatible tools for managing municipal
solid waste.

The Tellus Institute draft report for EPA similarly concluded that curb-
side recycling programs can be compatible with deposit systems.
Because deposit systems divert solid waste away from landfills at no
cost to municipalities, overall municipal solid waste disposal costs are
minimized with such a system in place. However, because a dual curb-
side/deposit system diverts more waste away from landfills than either
program alone, a municipality’s solid waste costs are minimized with
both programs in place after landfill use fees reach a certain level. The
study also concluded that a dual curbside/deposit system might be a
cost-effective option even if the beverage industry’s deposit system
costs are considered. However, landfill use fees would have to be signifi-
cantly higher when both industry and municipal costs are considered for
a dual system to be cost-effective.


Page 37                   GAO/RCED91-26         Trade-offs   in Beverage   Container   Deposit   Legislation
                     Appendix Iv
                     Compatibility   of Curbside   Recycling   and
                     Deposit Legielation




                     All deposit states have some form of curbside or other recycling pro-
Curbside Program     gram in addition to beverage container deposit systems. On the basis of
Costs and Benefits   this experience, most of the deposit state officials we talked to believe
                     that deposit legislation is compatible with curbside and other recycling
                     programs.

                     Municipalities do not calculate the costs and benefits of curbside pro-
                     grams on a consistent basis. Collecting recyclable materials, preparing
                     them for market, and educating the public are some of the curbside
                     recycling programs’ costs. Diverting solid waste from landfills-which
                     in turn extends the useful life of landfills and reduces landfill use fees-
                     is the primary benefit of these programs. Revenue from sales of recycl-
                     able materials is another benefit of curbside programs. However, reve-
                     nues from recyclable materials do not fully offset operating costs. For
                     example, a survey conducted by the National Solid Wastes Management
                     Association indicates that total scrap revenues-from beverage con-
                     tainers and other recyclable material--offset program operating costs by
                     16 percent to 40 percent. Financial data from a Rhode Island curbside
                     program show that revenue from total beverage container scrap offsets
                     less than 19 percent of the program’s operating expenses. Accordingly,
                     curbside programs are not totally dependent on the revenue from scrap
                     beverage containers.

                     Some deposit law advocates maintain that states with curbside pro-
                     grams can add deposit laws and increase their revenues. According to
                     these advocates, curbside programs in a deposit state could redeem for a
                     deposit the beverage containers that curbside participants put out for
                     collection instead of returning for a deposit. Even if the curbside pro-
                     gram collected fewer beverage containers than it would without a
                     deposit system in place, each container collected would be worth the
                     value of its &cent deposit, which exceeds its scrap value. For example,
                     supporters of a proposed state deposit law estimated that if 10 percent
                     of a community’s beverage containers are recycled through a curbside
                     program, the program could increase its revenues by about 32 percent
                     after a deposit law is implemented if it redeemed the beverage con-
                     tainers it collected rather than selling them as scrap.

                     This theory will, in effect, be tested by a materials recovery facility
                     planned to open in Connecticut, a deposit state, in 1991. According to
                     the operator of this facility, the facility has been designed to collect bev-
                     erage containers put out for curbside recycling and redeem them for
                     their deposit value.



                     Page 38                   GAO/RCED-91-25        Trade-offs   in Beverage   Container   Deposit   Legislation
Appendix V

Public Support for Beverage Container
Deposit Legislation

                        To assess the level of public support for deposit legislation, we designed
                        a survey instrument and contracted with a private research firm to con-
                        duct a nationwide telephone survey. Our survey results indicated that
                        the vast majority of Americans support a national deposit law. Further,
                        the majority of respondents from deposit law states approved of their
                        states’ laws. A number of surveys conducted by others have yielded
                        similar results.


                        The results of our nationwide telephone survey indicate that the vast
Results of GAO’s        majority of Americans, in both deposit and nondeposit states, would
Public Opinion Survey   support a national deposit law. (The complete results of our survey,
                        including sampling errors, are included in app. VI.) As shown in figure
                        V. 1, about 44 percent of the public would strongly support a national
                        deposit law and about 26 percent would somewhat support such a law.
                        In contrast, about 11 percent of the public would strongly oppose
                        national deposit legislation, and about 7 percent would somewhat
                        oppose such a law.

                        Support for a national deposit law is higher among residents in deposit
                        states, As shown in figure V.2, over 61 percent of the residents of
                        deposit states would strongly support a national law, and about 16 per-
                        cent would somewhat support such legislation. In states without deposit
                        laws, about 40 percent of the public would strongly support a national
                        deposit law, and over 28 percent would somewhat support such a law.




                        Page 89           GAO/RCED-91-26   Trade-offs   in Beverage   Container   Deposit   Legislation
                                           Appendix V                                                                                                  ,
                                           Public Support for Beverage     Container
                                           Deposit Legislation




Figure V.l: Natlonwide Support for
National Deporlt Law la Strong




                                                                                       Strongly support




                                                       A                               Somewhat euppolt
                                           Pmntages do not equal 100 due to rounding


Figure V.2: Support for Natlonel Deposit
Law lo High Among Reeldenta of Deposit
State8                                                                                 Neither oppose nor support

                                                                                       Somewhat oppose




                                                                                       Strongly support




                                                   L                                   Somewhat support

                                           Percentages do not equal 100 due to rounding

                                           As well as strongly supporting a national deposit law, residents of
                                           deposit states showed strong approval of their states’ deposit laws. As

                                           Page 40                   GAO/RCED-91-26        Trade-offs     in Beverage   Container   Deposit   Legislation
                                        Appendix V
                                        Public Support for Beverage   Chtoiner
                                        Depolit Leglslatton




                                        shown in figure V.3, about 63 percent of deposit state residents strongly
                                        approve of their state’s deposit law, and about 19 percent somewhat
                                        approve of the law. Only about 6 percent strongly disapprove of their
                                        state’s deposit law, and about 3 percent somewhat disapprove of the
                                        law.


Figure V.3: Approval of State Deposit
Law8 Is High Among Residents of
Oeposlt Stats8                                                                               8.6%


                                                   F
                                                                                             Neither approve nor disapprove
                                                                                             3.2%
                                                                                             somewhat disapprove
                                                                                             5.6%
                                                                                             Strongly disapprove
                                                                                             .2%
                                                                                             Missing




                                                                                             Strongly approve




                                                                                             Somewhat approve
                                        Percentagesmay not equal 100due to rounding

                                        We identified several national and state public opinion polls conducted
Other Surveys Also                      by others. These surveys also showed support for deposit legislation.
Show Support for                        For example, a 1989 survey conducted for a packaging trade magazine
Deposit Legislation                     indicated that about 64 percent of the respondents living in states
                                        without deposit laws would vote for a deposit law. Another example is a
                                        1987 survey conducted in Michigan for a conservation organization.
                    Y                   That survey found that about 82 percent of the respondents strongly
                                        supported the state’s existing deposit law and about 8 percent some-
                                        what supported it. As shown in table V.l, other polls and a referendum


                                        Page 41                 GAO/RCED-91-26        Trade-offs        in Beverage          Container     Deposit       Legislation



                                                                                 ._                ,.     -    ..   I   -.   -   .   ”   .-.   .   .X_        w   .   . . .   ,-   ..,-   .
                                         APW*      V
                                         Pub& Support for Beverage   Container
                                         Deposit Legidfdon




                                         conducted after states adopted deposit legislation show support for the
                                         law.

Table V.l: Public Support for State
Oeposlt Laws as Clted by Prior Surveys                                                                                             Percent
                                         State                                                                    Year            approval
                                         Iowa                                                                     1979                        56
                                         Maine                                                                    19798                       a4
                                         Massachusetts                                                            1989                        78
                                         Michigan                                                                 1987                        90
                                         Oreaon                                                                   1975                        90
                                         Vermont                                                                  1989                        83
                                         ‘%ferendum results




                    Y




                                         Page 42               GAO/BCED-91-26    Tradeoffs   ln Beverage   Container   Deposit   Legldation
Appendix VI

GAO’s Public Opinion Survey


                                                 Unlted States Gsmml Accounting Of&c

                                                Telephone Interview on National Beverage
                                                Container Deposit Legislation



              Hello. My name is                      . I am calling on behalf of the U.S. General Accounting Of&x. The GAO is an
              agency which assiststhe Senate and House of Representativesby reviewing federal programs. We have been asked to
              conduct a national survey on the public’s opinion of a proposed national law.

              1. There has been talk about a national bottle and can deposit law, which would require people like yourself to pay a 5
                 cent deposit for each Boyle and can of soft drinks, beer and other such drinks you buy. You would receive your 5
                 cent back when you return each empty bottle or can to the store. How much (if at all) would you personally oppose
                 or support this national law? Would you say you...(READ RESPONSES) (Check one.)
                                                                  %                  SE*
                 I. El Strongly oppose,                         9.7                2.5
                 2. 0 Somewhat oppose,                          6.9                2.1
                    3. 0        Neither oppose nor support,         a.7                2.4
                    4. 0        Somewhat support, or               26.4                3.7
                    S. 0  Strongly support this law if passed? 47.4                    4.2
                    6. c] Don’t know                            0.8                    0.8

              2.    Are there any other adults over 18 years old living in your household? (Check one.)
                                                                     %                SE
                    1.0 No --       SKIP TO QUESTION 3             14.5              3.0
                    2. cl       Yes --   CONTINUE                   85.4               3.0


              3. Could you give me the first name of the other adults over 18 years old who lives in this household?
                 (ENTER NAMES)

                    I.
                    2.
                    3.
                            .

                            .
                    11.
                    12.

                   * SE denotes          the sampling     error.
                   Note:         Figures may not equal 100 percent due to rounding.
                                 Screening questions used for sampling purposes have been deleted.




                                                       Page 43                GAO/RCED-91-25    Trade-offs   in Beverage   Container   Deposit   Legislation
                               Appendh VI
                               GAO’s Public Oplnlon    Survey




  4. Whatdoyouthink(READEACHNAMEOFHOUSEHOLDMEMBER)might          feel? Doyouthink (READ
     EACHNAMEOFHOUSEHOLDMEME8ER       WOUICI
                                          . ..(RF!ADRBSPONSES) (Checkonejbreach)*




      5. Strongly
         support this
         law if       I          I
         Pd             61.4          4.3                            Pd                  40.4           4.0     ,
      6. Mising                                                   6. Missing
                         1.4



  * These estimates represent        the combination     of the r&pondent        and all        other     household
     mmbers.
** :'N" denotes the estimated        number of responses        in the population        frm    which 0~            sample
    was drawn.




                               Page 44                  GAO/RCED-91-25      Trade-offs     in Beverage        Container      Deposit   Legislation
                                  hwndix   VI
                                  GAO’S Public opinion     Survey




5. If then wore a national law requiring a 5 cent deposit, some think that people will bring backbottles and cats of
   soft drinks, beer and other such drinks they buy so that they could get back their 5 cent deposit. In your opinion,
   how likely or unlikely is it that other p”ple will do this? Would you say it is...(READ RESPONSES) (Check one.)
   N=181,961,000                                                                      SE
   1. 0 Very unlikely,                                        =&-                  2.3
   2.0 Somewhat unlikely,                                    10.6                   2.6
   3. 0 Neither unlikely nor likely,                          3.0                   1.4
   4. cl Somewhat likely, or                                36.5                 4.0
   5. 0    Very likely?                                     40.9                 4.1
   6.0     Don’t know                                        1.0                 0.8

6. How about you? How likely or unlikely is it that you would bring back bottles and cans so that you could get your
   5 cent de it back? Would you say it is...(READ RESPO$SES) (Check one.)
   N=181, &?f, 000                                                               SE
   1. 0 Very unlikely.                                    8.9                   2.4
   2. 0 Somewhat unlikely,                                   3.7                 1.6
   3. 0 Neither unlikely nor likely,                         1.0                 0.8
   4. q Somewhat likely, or                                 12.9                 2.8
   5. Cl Very likely?                                       73.4                 3.7
   6. 0    Missing                                           0.1                 0.3

7. When you have empty bottles or cans of soft drinks, beer and other such drinks you buy, do you gcnerally...(READ
   RESPONSES) (Check one.)
   N=181,961,000                                                                                           SE
   1.0 Throw them out with other trash,                                                 &                3.8
   2. 0 Separate these items from other garbage and have it picked up for recycling,    16.1             3.1
    3. 0   Bring them to a local center for recycling,                                      24.9             3.6
   4. 0    Bring them back to the store to get your deposit back,                           17.6             3.2
    5. Cl Give them to charity, or                                                           6.6             2.1
    6. 0   Something else? (PROBE FOR A BRIEF DESCRIPTION)                                   5.8             2.0
    7. 0   Missing                                                                           0.1             0.3




                                  Page 46                   GAO/RCED-91-25     Trade-offs     in Beverage   Container   Depoeit   Leghlation
                                                                                                                                        I
                                     Appendix VI
                                     GAO’s Public Opinion   Survey




8. If them were a nationd law requiring you to pay a 5 cent deposit on each bottle and can of soft drinks, beer and
   other such drinks you buy, would you gcnerally...(READ RESPONSES) (Check one.)            (N=181,9%      000)
                                                                                           %
                                                                                         -.-                 SE
   1. 0 Throw them outwith other trash,                                                  4.9                1.8
   2. 0 Separate these items from other garbage and have it picked up for recycling, 7.4                    2.2
   3. 0 Bring them to a local center for recycling,                                      7.0                2.3
   4. 0 Bring them back to the store to get your deposit back,                          71.0                3.8
      5. Cl Olve them to charity, or                                                      6.0               2.0
      6. 0 Something else? (PROBE FOR A BRIEF DESCRIPTION)                                2.6               1.3
      7. 0 Don’t know                                                                     0.2               0.4
      8. c] Missing                                                                       0.1               0.3

DEPOSIT         STATES   ONLY

A. Are you aware that your state has a law requiring a depc&t for soft drinks, beer and other such drinks you buy?
   (Check one.)    (N=33,386,000)
                                                               %                    SE
      1.clYca                                                   94.9             2.2
      2.C1No-*         SKIP TO QUBS’MON 9                        4.9             2.1
      3. 0 Miming                                                0.2             0.4


B. How much have you increased or decreasedthe amount of soft drinks, beer and other such drinks you buy because
   of the deposit your state required you to make? Would you say you have...(READ RESPONSES) (Check one.)
   N=3 683,795
    Lb C3rcatlyincreased.
      2.   0   Somewhat increased,                              6.4              2.4
      3. 0 Neither increased nor decreased,                    85.3              3.5
      4. 0 Somewhat decreased,or                                3.8              1.9
      5. 0 Greatly decreasedthe amount you buy?                 2.1              1.4
      6. 0 Don’t know                                           0.5              0.7
      7. 0 Missing                                              0.2              0.4




  Y




                                     Page 46                 GAO/RCED-91-26   Traded%     in Beverage   Container     Deposit   Legislation
                                Appendix VI
                                GAO’s Public Opinion Survey




C. How much do you epprove or disapprove yarr state’s current law which requires you to make a deposit for soft
   drinks. bar, and other such drinks you buy? Would you sa$you...(READ RESl$SES)         (Check one.)
  N=31,683,795
     1. 0 Strongly 8pprcwe.                               64.4                4.7
     2. Cl Somewhat approve,                               19.3                   3.9
     3. t] Neither approve nor disapprove,                   8.2                  2.1
    4. 0 Somewhat disapprove,                                3.4                  1.8
     5. 0 Strongly disapprove of your state’s law?           4.6                  2.1
     6. 0 Don’t know                                         0.1                  0.3


CHECK QUESTION 2, IF NO OTHER HOUSEHOLD MEMBERS, SKIP TO QUESTION 9

D. What do you think (READ EACH NAME OF HOUSEHOLD MEMBER) might feels toward your state’s current
   bottle and can return deposit law? Do you think (READ EACH NAME OF HOUSEHOLD MEMBER THEN
   READ RESPONSES) (Chrck one for each) *



         Responses
    1. Strongly
         approves
    2. Somewhat
       approves
    3. Neither
       approves
         nor
         disapproves
    4.   Somewhat
         disapproves,
         or              3.2        1.6
    5. Strongly




                        5.6
       disapproves
       of your
       St&b




                        h
       current
       deposit law                  2.1
    6. Missing
                          0.2


l
     These estimates            represent     the    combination       of   the   respondent       and all
      other household             members.




                                 Page 47                 GAO/RCED-91.25 Trade-offs in Beverage Container Deposit Legislation
                                 Appendix VI
                                 GAO’s Public Opinion    Survey




NONDEPOSlT       STATES

A. If a 5 cent &posit were required, how much would you incr& or decreasethe amount of soft drinks, beer and
   other such drinks you buy becauseof the deposit you would have to make? Would you expect you to...(READ
   RESPONSES) (Check one.)
                                                                             SE
                                                          A-                0.3
    2.0 Somewhat inctcascd,                               3.2               1.8
    3. 0 Neither increased nor decreased,                      85.1             3.6
    4. q Somewhat dcctascd, of                                  8.0             2.7
    5. c] Oreatly decreasedthe amount you buy?                  3.1             1.7
    6. q   ]Don’tknow                                           0.2             0.5

   7. 0 Missing                                                 0.3             0.0
ALL STATES
9. In the Pastyear, have you made a deposit on any soft drinks, beer or other such drinks you can buy where you
   would get back your deposit if you returned the bottle ot can to the store? (Check one.) (N=181,961,000)
                                                               %                   SE
   1.0 No                                                    65.1                 4.0
    2.0 NOT SURE/DON’T REMEMBER                                   0.3            0.5
    3. q Missing                                                  0.2            0.4
    4.a    Yes-*                                             35.4                4.0
           How ftequently (if at all) did you bring back your empty bottles or cans where you already had paid a
           &posit? @EAb RESPONSES) (Check one.j
            N=64,393,645                                                          SE
           1. q Always 01almost always,                         iTi%             4.7
           2.0   Sometimes, or                                    6.9           3.1
           3. 0 Rarely, if ever?                                11.6             3.9


Finally, I’d like to ask you a few questions about yourself.

10. In what state do you live?




PLEASE ENTER SEX OF RESPONDENT. [IF UNSURE, PROBE:]
 N=181,961,000
11. Are you male or female? (Check one.)
                                              %                                   SE

    1. 0 Male                                                   47.8            4.2
    2. 0 Female                                                 52.0            4.2
    3. 0   Missing                                                0.1           0.3

Y




                                 Page 48                   GAO/RCED81-25     Tradeoffs   in Beverage   Container   Deposit   Legislation
                          Appendix Vl
                          GAO’s Public Opinion     Survey




12. What was the high& gmdo of school you completed? (;O NOT READ RESPONSES) (Check one.)
     N=181,961,000                                                    SE
    1.0 No/Somchijjh school                        16.1              3.1
    2. 0 High school graduate/nocollege            35.8              4.0
   3. 0    Some college                                  26.6                           3.7
   4. 0    College graduate 01 mote                      21.0                           3.4
   5. 0    Missing                                           0.5                        0.6

13. HOW old wets you on your last bitthday?

            years old


14. Would you say out gross income last year was... (READ RESPONSES) (Check one.)
    N=181,961,0 B0                                                       SE
    1. Cl UndcrS10,OOO                                 19"6             3.3
    2. 0 &twem $10,000 and $30,000                     41.8             4.1
    3. 0   Between $30,000 and $SO,OOO                      21.4                        3.4
   4. 0    OverS50,OOO                                      10.9                        2.6
    5. 0   Dont’ know                                        3.3                        1.5
    6. 0   Missing                                           2.9                        1.4

Thank you for your rime. Your answers will be very helpfid to our review.




                          Page 49                    GAO/RCED-91-25         Trah-offs         in Beverage   Container   Deposit   Legldation



                                                               .,
Appendix VII

Major Contributors to This l3eport


                        Peter Guerrero, Associate Director
Resources,              Edward Kratzer, Assistant Director
Community, and          Ray Smith, Assignment Manager
                        Gregory Kosarin, Evaluator-in-Charge
Economic                Angela Sanders, Staff Evaluator
Development Division,   Mehrzad Nadji, Assistant Director for Economic Analysis
Washington, DC.         Alice G. Feldesman, Senior Social Science Analyst




               Y




                        Page 50           GAO/WED-91-25   Tra&-offs   ln Beverage   Container   Deposit   Legidation
    h




Bibliography


                      Belasen, Alain T. “The New York State Returnable Beverage Container
General Report’sand   Law-Economic      Effects, Industry Adaptations, and Guidelines for
Studies of Deposit    Improved Environmental Policy.” Rockefeller Institute Working Papers,
Legislation           No. 31 (Spring 1988). A description and economic analysis of the adap-
                      tation of the beverage industry to New York’s deposit law.

                      The Bottle Bill. Prepared by Public Sector Consultants for the State of
                      Michigan, Department of Natural Resources. 1989. A summary of the
                      environmental and economic effects of Michigan’s deposit law.

                      Energy and Economic Impacts of Mandatory Deposits. Federal Energy
                      Administration, Office of Energy Conservation and Environment. 1976.
                      A study on the impacts of a national beverage container deposit law.

                      The Fate of Used Beverage Containers in the State of New York. Pre-
                      pared for the Aluminum Association, Inc. by Franklin Associates, Ltd.
                      Prairie Village, Kans.: 1986. A study to examine the costs and benefits
                      of New York’s deposit law and to determine the “ultimate fate” of the
                      used beverage container under a deposit system.

                      Forced Deposit Laws: There Are No Winners. National Soft Drink Asso-
                      ciation. Washington, DC: 1989. An examination of the negative effects of
                      deposit laws.

                      Gehr, William. Effect of the Vermont Beverage Container Deposit
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                      examination of the environmental and economic effects of Vermont’s
                      deposit law.

                      The Impacts of National Beverage Container Legislation. U.S. Depart-
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                      ington, DC: 1976. An analysis of the potential effects of a national
                      deposit law.

                      Lesser, William and Ananth Madhavan. ‘LEconomic Impacts of a
                      National Deposit Law: Cost Estimates and Policy Questions.” Journal of
                      Consumer Affairs, Vol. 21, No. 1 (1987), p. 122. An analysis of the
                      potential economic and environmental impacts of a national deposit law.

                      Moore, W. Kent and David L. Scott. “Beverage Container Deposit Laws:
                      A Survey of the Issues and Results.” Journal of Consumer Affairs, Vol.



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              Containers by the Nelson A. Rockefeller Institute of Government.
              Albany, N.Y.: 1986. A summary of the costs and benefits of New York’s
              deposit law 1 year after its implementation.

              Potential Effects of a National Mandatory Deposit on Beverage Con-
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              ws       description of the potential economic and environmental effects
              of a national deposit law.

              Report on the Management Study to Improve the Efficiency of the New
              York State Returnable Container Act. Prepared for the Moreland Act
              Commission on the Operation and Administration of the Returnable
              Container Act by KPMG Peat Marwick. New York: 1990. An analysis of
              the operation of New York’s deposit law.

              Rose, Daniel. “National Beverage Container Deposit Legislation: A Cost-
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              laws.

              Shireman, William K. et al. The CalPIRG-ELS Study Group Report on
              Can and Bottle Bills. California Public Interest Research Group and
              Stanford Environmental Law Society. Berkeley, Calif.: 1981. A summary
              and analysis of state deposit laws and their economic and environmental
              impacts.

              States’ Experience With Beverage Container Deposit Laws Shows Posi-
              tive Benefits. (GAO/PAD-u-08, Dec. 11, 1980). The U. S. General
              Accounting Office’s evaluation of the impact of a national deposit law
              by studying the economic and environmental effects of four state
              deposit laws,


              “Case Studies.” National Solid Wastes Management Association, Waste
Solid Waste   Recyclers Council, Information Packet No. 2. Washington, DC: N.D. Arti-
          Y
              cles on operating curbside recycling programs.




              Page 52           GAO/RCED-91-26   Trade-offs   in Beverage   Container   Deposit   Leglalation
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                     Characterization of Municipal Solid Waste in the United States: 1990
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                     and Emergency Response. Washington, DC: 1990. A report on the com-
                     position of the municipal solid waste generated, recovered, and disposed
                     of in the United States.

                     Choices for Conservation. Resource Conservation Committee Final
                     Report to the President and the Congress. Washington, DC: 1979. A com-
                     prehensive analysis of different methods of conserving natural
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                     Technology Assessment. Washington, DC: 1989. An examination of the
                     United States’ solid waste problem and current and proposed solutions.

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                     Beverage Container Life Cycle and Industry Trends. U. S. Department of
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                     Sjolander, Richard and Peter Kakela. “Michigan’s Mandatory Beverage-
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                     deposit law’s effect on beer sales.

                     Statistical Profile of the Soft Drink Industry of the United States.
                     National Soft Drink Association. Washington, DC: 1986. A compilation of


                     Page   53         GAO/RCED-91-26   Trade-offs   in Beverage   Container   Deposit   Legislation
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                     soft drink industry statistics from government agencies, soft drink
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                     Ackerman, Frank and Todd Schatzki. Bottle Bills and Municipal
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                     system.

                     Potential Impacts of a National Bottle Bill on Plastics Recycling. Pre-
                     pared for the U.S. Environmental Protection Agency, Office of Policy
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                     Recycling in the States: Update 1989. National Solid Wastes Managment
                     Association. Washington, DC: 1989. A summary of state recycling
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                     tration, Office of Metals, Minerals, and Commodities, Washington, DC:
                      1989. An examination of the scope and industry costs and benefits of
                     container recycling.

                     The Role of Beverage Containers in Recycling and Solid Waste Manage-
                     ment: A Perspective for the 1990s. Prepared for Anheuser-Busch Com-
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                     comparison of the cost-effectiveness of operating a curbside recycling
                     program with and without a deposit system in place.

                     Rozell, David. “Bottle Bill and Curbside Recycling: The Oregon Experi-
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                        Waste Reduction Manager on Oregon’s experience with curbside
                        recycling and its deposit law.

                        Shireman, Bill. Are Bottle Bills Compatible With Curbside Recycling? A
                        Review of the Impacts, Economics, and Politics. California Futures, Inc.
                        Sacramento, Calif.: 1990. A comparison of solid waste reduction attribu-
                        table to deposit laws and curbside recycling programs when operated
                        separately and in combination.

                        Sudol, Frank and Alvin Zach. “Newark, New Jersey Recycles.” 1989. A
                        paper prepared by Newark’s Department of Engineering on the city’s
                        recycling programs.


                        Michigan Soft Drink Bottlers’ Costs Resulting From the Deposit Law.
Distributor and         Prepared for the Michigan Soft Drink Association by Temple, Barker &
Retailer Costs          Sloane. Lexington, Mass.: 1989. A summary of the costs to soft drink
                        distributors of complying with Michigan’s deposit law.

                        Soft Drink Bottler Costs Under the Massachusetts Bottle Bill. Prepared
                        by Temple, Barker & Sloane, Inc. for the Massachusetts Soft Drink Asso-
                        ciationBoston: 1988, A summary of the costs to soft drink distributors
                        of complying with Massachusetts’ deposit law.

                        Survey on Supermarket Container Redemption Operations. Conducted
                        by Cresap, McCormick, and Paget for the Food Marketing Institute.
                        Washington, DC: 1986. Summary of costs to retailers of complying with
                        deposit laws and of redeeming refillable bottles in nondeposit states.


                        “Highway Litter Survey.” Memo to the Iowa Department of Transporta-
Environmental Effects   tion, Highway Division, prepared by John H. Moody, Apr. 16, 1980.
                        Results of a litter survey conducted on Iowa interstate highways.

                        Jacobs, Kenneth. Roadside Litter Study. Technical paper 79-10. Pre-
                        pared for the Maine Department of Transportation. 1979. A study to
                        determine the Maine deposit law’s effect on roadside litter.

                        Michigan Litter Composition Study. Michigan Department of Transpor-
                        tation, Maintenance Division. 1986. A litter composition study to assess
                        the Michigan deposit law’s effect on roadside litter.




                        Page 55           GAO/WED-91-26   Trade-offs   in Beverage   Container   Deposit   Legislation
                        Bfbliogravhy




                                       ,

                        Waste Reduction Manager on Oregon’s experience with curbside
                        recycling and its deposit law.

                        Shireman, Bill. Are Bottle Bills Compatible With Curbside Recycling? A
                        Review of the Impacts, Economics, and Politics. California Futures, Inc.
                        Sacramento, Calif.: 1990. A comparison of solid waste reduction attribu-
                        table to deposit laws and curbside recycling programs when operated
                        separately and in combination.

                        Sudol, Frank and Alvin Zach. “Newark, New Jersey Recycles.” 1989. A
                        paper prepared by Newark’s Department of Engineering on the city’s
                        recycling programs.


                        Michigan Soft Drink Bottlers’ Costs Resulting From the Deposit Law.
Distributor and         Prepared for the Michigan Soft Drink Association by Temple, Barker &
Retailer Costs          Sloane. Lexington, Mass.: 1989. A summary of the costs to soft drink
                        distributors of complying with Michigan’s deposit law.

                        Soft Drink Bottler Costs Under the Massachusetts Bottle Bill. Prepared
                        by Temple, Barker & Sloane, Inc. for the Massachusetts Soft Drink Asso-
                        ciation Boston: 1988. A summary of the costs to soft drink distributors
                        of complying with Massachusetts’ deposit law.

                        Survey on Supermarket Container Redemption Operations. Conducted
                        by Cresap, McCormick, and Paget for the Food Marketing Institute.
                        Washington, DC: 1986. Summary of costs to retailers of complying with
                        deposit laws and of redeeming refillable bottles in nondeposit states.


                        “Highway Litter Survey.” Memo to the Iowa Department of Transporta-
Environmental Effects   tion, Highway Division, prepared by John H. Moody, Apr. 16, 1980.
                        Results of a litter survey conducted on Iowa interstate highways.

                        Jacobs, Kenneth. Roadside Litter Study. Technical paper 79-10. Pre-
                        pared for the Maine Department of Transportation. 1979. A study to
                        determine the Maine deposit law’s effect on roadside litter.

                        Michigan Litter Composition Study. Michigan Department of Transpor-
                        tation, Maintenance Division. 1986. A litter composition study to assess
                        the Michigan deposit law’s effect on roadside litter.




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