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The Problem with Bottle Deposits

Neatorama is proud to bring you a guest post from Ernie Smith, the editor of Tedium, a twice-weekly newsletter that hunts for the end of the long tail. In another life, he ran ShortFormBlog.

(Image credit: Flickr user Steven Depolo)

About ten states have bottle deposit laws—measures designed to get you to bring your bottles back for recycling. Why aren’t they more common?

In 1971, advocates for recycling had a big breakthrough in the state of Oregon. The state became the first in the United States to require a deposit on bottled beverages sold within its borders. Suddenly, lazy people had a financially fruitful excuse to return bottles to their local stores—because if they did, they could make a little money. Since then, however, the diminishing returns of the nickel—the financial reward for recycling a can or bottle in most states that followed suit—has led to a dip in those taking part in the program. Fortunately, the most recent amendment of the bill took that into account; if the recycling rate of bottles falls below 80 percent two years in a row, the deposit will increase to 10 cents per bottle. Today, we look at the interesting economic dynamics created by bottle deposits. 

Advocating for Green Deposits

“Litter drove him wild. He’d come back with these bags and wave them and say, ‘Why do people have to do this?’ It perplexed him to no end. Knowing my father, he might have been worrying about how to solve the litter problem for ten years and never said anything about it.”

— Victoria Berger, the daughter of concerned citizen Richard Chambers, the man who successfully advocated for the bottle deposit rule in Oregon. Chambers, a nature advocate frustrated by the damage that litter was causing to the beaches and nature areas he loved, reached out to his state legislator, Rep. Paul Hanneman, in an effort to deal with the issue. He called Hanneman, inspired by a bottle-deposit plan being hatched in British Columbia, and convinced him to introduce legislation of his own. “Look at this mess,” Chambers told Hanneman. “We can stop this.”

(Image credit: Flickr user zen Sutherland)

Bottle litter: How manufacturers let the problem get so bad

The crazy part about Oregon’s move, which was quickly replicated in nine other states, is that a few decades prior, the soda industry had previously done deposits on their own—only to eventually decide it wasn’t worth it.

The reason for that shift had much to do with the evolution of how we drink beverages. Prior to World War II, much of our soda came bottled in refillable glass bottles that were expensive to produce, so the industry had a clear reason for wanting those bottles back.

But eventually, technology improved and different types of containers became more common. First, new types of glass bottles that weren’t made to be refillable. Later, manufacturers embraced aluminum cans, which quickly overtook the market from glass bottles.

These new kinds of containers were easier and cheaper to manufacture, but they also encouraged the public to not necessarily show the environment the respect it deserved. Quickly, littering of bottles and cans became a major nuisance.

To the industry’s credit, they’ve started to move away from this poor attitude on the issue, embracing recycling as important from both a business standpoint—as it turns out, aluminum is super-recyclable—and a corporate responsibility standpoint.

One thing that might help matters even further on this front is the rise of craft brewers, who may have a stronger focus on environmental issues than their big-box peers. In Montana, for example, craft brewers are helping by taking advantage of the state’s glut of old glass bottles.

“They really deserve an award for this program,” Dusti Johnson, an official with the Montana Department of Environmental Quality, told Yes! Magazine. “They’re saying, ‘hey, bring your waste back’ and then they’re using it again, which is even better than recycling.”

The Price of Fraud

$13 million is the amount that fraudulent efforts to deposit bottles from other states to take advantage of Michigan’s higher deposit rate—a strategy immortalized in the Seinfeld two-parter “The Bottle Deposit”—cost taxpayers as of 2007. Such schemes have led to real-life arrests and prosecution in both Michigan and Maine, which offers 15 cents for wine and liquor bottles.

(video link)

So why don’t more states have bottle deposit laws?

Simply put, bottle deposits tend to be more popular with the public than they are with manufacturers and retailers, who see the problem as economically damaging to their primary interest—selling beverages.

As a result, industry lobbying groups have increased their fight against the laws in recent years, arguing that curbside recycling is a better way to solve the problem.

“Comprehensive recycling programs, like curbside collection, provide an easy and effective way for consumers to recycle their household waste, including beverage bottles and cans,” the American Beverage Association states on its website. “Yet, some argue that these convenient and effective voluntary programs don’t go far enough. Data shows these deposit programs are costly, inconvenient and compete with more successful voluntary recycling efforts.”

That hasn’t stopped advocates of such laws from trying to expand them to other states, however. Texas, for example, has tried multiple times to introduce such a law, as recently as this year.

But bottle-deposit programs could eventually gain some ground in the years to come, as curbside collection efforts around glass in particular start to become more problematic.

Whether bottle deposits gain ground or not, one thing is clear, according to a 2013 study by the Container Recycling Institute: Despite an increase in beverage sales in recent years, recycling levels have remained fairly stagnant.

(Image credit: Flickr user Reciclado Creativo)

It Can Work

“You can make as much as you want if you put in the legwork.”

— Francis, a California can collector, discussing the nature of his work with Priceonomics. The state’s can-collection policy—5 cents for small bottles, 15 cents for large ones—has been a bit of a boon for those looking for a source of income, though the website notes that the back-breaking nature of the work often makes the rewards less valuable in the long run.

One of my first jobs involved working at a grocery store in Michigan. I was the guy who ran the bottle machine, mostly. We had the big, automated recycling machines for aluminum and plastic, though we had to put glass bottles into boxes after they came in on a conveyor belt.

The machines didn’t work particularly well; craft beers and obscure soda brands would gum up the machines, and frequently, people would come in with bottles in the hundreds, if not thousands—something the machines were poorly designed handle.

On a purely ecological and political level, bottle deposits are simply a great idea. But standing in the shoes of my teenage self, after a day covered in sweat and soda residue from dealing with the bottle-recycling machine, I would have done anything to convince the public that curbside recycling was the answer.

If you have $100 in bottles to deposit, I am not your friend.


A version of this post by Ernie Smith originally appeared in the Tedium newsletter, which tries in vain to make dull topics slightly more interesting. You can follow along on Twitter or Facebook.


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I don't think you should look at the fraction of the litter due to containers but the overall amount of litter. As it points out on page 17, there appears to be a correlation between introducing a bottle bill and the reduction of other types of litter, though the reason isn't known. I can conjecture that if you throw the can you just finished out the window then it might be easier to toss out other trash. But you are right, that isn't persuasive evidence. The strict numbers look like about an 8% reduction in litter (geometric mean of 4% and 21%, with 90% success rate at 10 cent deposit.) At this point I'm arguing the difference between "small" and "slight", so I concede.

Quoting p26, "The cost-versus-revenue bottom line for recycling programs is a hotly debated topic, due in part to whether the analysis is strictly fiscal or includes externalities such as reductions in air pollution, energy use, and environmental degradation." :)
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The same report also says that beverage containers represent 4-20% of the total litter stream. You could remove 100% of beverage containers, and still have a slight impact on total litter according to most of the citations.

And as I said, the deposit can be justified for dealing with other externalities. The impact of waste plastic on the environment can be quite significant. The impact of glass, much, much less so. If tourism impact from garbage on some place like a beach is significant, that would be another externality to account for, although other more targeted options might be better. The same report also gives an example where glass is composes the majority of material used in containers and collected by a deposit program, yet it comprises a small minority of the greenhouse gas savings. And I've seen such reports neglect important sources of greenhouse gases when discussing such savings, e.g. transportation, which can be significant when the recycling itself saves relatively little emissions. Water use seems to be overlooked by many reports too.

I've been places where the deposit depend heavily on the use of the container, instead of the actual material. One place had no deposit on milk containers, another avoided deposit on orange juice but not milk, and I've seen enough times where alcohol had different deposits. Like too many other things, decisions seem to be made with ulterior motives in mind and games are played with some of the reported results as post hoc rationalization.
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"Slight impact on littering"? If http://efc.umd.edu/assets/2011impactanalybevcontmd.pdf is right, "The states that have enacted deposit programs report significant reductions in beverage containers in the litter stream. Hawaii, for example, saw a 60% reduction in beverage containers as a percentage of total litter" and it looks like there's a 30% reduction in overall litter when a state introduces a beverage container deposit bill. How is that "slight?"
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My issue with deposits, is there are some things for which recycling does not achieve much useful, and wastes limited money that could be better used in other ways to help the environment. The deposit might make a slight impact on littering, but mostly ends up being a donation to a contracted company for recycling.

Some things, like aluminum, are so much easier to recycle than produce, that companies will pay for the scrap without any legal requirement. Other things like glass, take more energy, transportation, and water to recycle than to just make from scratch, while having almost no environmental impact sitting in a landfill. Deposits might be most appropriate for things that are marginally good for recycling, where a recycling company might not be willing to pay for the scrap, but there may be externalities that need to be incorporated into the cost of using the material. But instead of basing recycling on actual environmental impact, too many places use metrics that are not directly helping the environment, or worse, are doing so only to qualify for money from federal/regional government programs.
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In Alberta, nearly every beverage container requires a deposit, including milk and juice containers. All of these can be returned to a bottle depot for refunds. We see people looking through garbage cans, recyle bins, and dumpsters for empties to take back. One presumes most of them are homeless, and/or jobless. I guess it keeps the items out of the landfills (although we do have an excellent recycling/composting program in Edmonton) and provides some cash for those willing to do what it takes to recover them.
Even when I was a kid back in the 70's, we had this. We were horrified when we went to the States and saw all the glass bottles littering the highways.
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