Deposit-refund system

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A container deposit refund facility in Melbourne Australia Victorian Container Deposit Scheme Returns Facility.jpg
A container deposit refund facility in Melbourne Australia

A deposit-refund system (DRS), also known as deposit-return system, advance deposit fee or deposit-return scheme, is a surcharge on a product when purchased and a rebate when it is returned. A well-known example is when container deposit legislation mandates that a refund is given when reusable packaging is returned. A DRS is a market-based instrument to address externalities, similar to a pigovian tax, with the key difference that a DRS refunds the fee after the product is returned. [1] This provides an incentive to consumers to properly dispose of a product.

While most commonly used with beverage containers, DRS can be used on other materials including liquid and gaseous wastes. [2] A DRS is used on products such as batteries, tyres, automotive oil, consumer electronics and shipping pallets.

There are three potential advantages of a DRS: it reduces illegal dumping by giving a financial incentive, it makes monitoring and enforcement easier, and evading the costs is difficult. [1]

DRS is said to be based on the principles of Extended Producer Responsibility. [3]

DRS can be either voluntary or mandated by legislation.

See also

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The Ontario Deposit Return Program (ODRP), also simply known as Bag it Back, is a regulation of the province of Ontario, Canada. Its purpose is to divert recyclable materials from landfill or low-quality recycling uses by charging a fee for each alcoholic beverage container sold in the province, and processing the material for re-use or other recycling activities once the containers are returned for a refund of the deposit fee. Customers forfeit the deposit fee if the container is not returned.

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Container deposit legislation (CDL), also known as a container deposit scheme (CDS), is a scheme that was first implemented in South Australia in 1977 and over the decades has spread to the Northern Territory in 2012, New South Wales in 2017, the Australian Capital Territory in June 2018, Queensland in November 2018, Western Australia in October 2020 and Victoria in November 2023. The scheme is due to commence in the last remaining state of Tasmania in early 2024.

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Encorp Pacific (Canada) is a federally incorporated, not-for-profit, product stewardship corporation with beverage container management as its core business. Their mandate is to develop, manage and improve systems to recover used packaging and end-of-life products from consumers and ensure that they are properly recycled and not land-filled or incinerated. This model is commonly referred to as Extended Producer Responsibility (EPR) or Industry Product Stewardship (IPS).

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References

  1. 1 2 Walls, Margaret (November 2011). "Deposit-Refund Systems in Practice and Theory" (PDF). RFF DP 11-47. Resources for the Future. Archived from the original (PDF) on 1 August 2014. Retrieved 22 August 2012.
  2. Fullerton, Don; Wolverton, Ann (2000). "Two Generalizations of a Deposit-Refund System" (PDF). American Economic Review . 90 (2): 238–242. doi:10.1257/aer.90.2.238.
  3. Gupt, Yamini; Sahay, Samraj (2015-06-01). "Managing Used Lead Acid Batteries in India: Evaluation of EPR-DRS Approaches". Journal of Health and Pollution. 5 (8): 52–63. doi: 10.5696/i2156-9614-5-8.52 . ISSN   2156-9614. PMC   6221476 .