Issues Surrounding 'The Bottle Bill'
An IPP Backgrounder
By Heather Milway, IPP Research Intern

This backgrounder (2-page PDF)


bottle pictureFor the past 35 years many beverages sold in the state of Iowa have included a container deposit of 5 cents to encourage recycling of glass, specific plastic and cans. The deposit has resulted in an 86 percent recycle rate on the containers currently covered.[1] But the law does not cover many products that have emerged on the market, such as bottled water and various sports drinks. Proposals in the Iowa General Assembly would change that.

A bill in the Senate, SSB1247, proposes that the deposit law apply to the containers for those newer products, and that the handling fee on plastic bottles for the distributors be increased. Supporters see several benefits:

• Recycling of an extra 33 tons of containers each year.
• Keeping those containers out of ditches and landfills, for a cleaner countryside and an increased lifespan of landfills.[2]
• Covering a greater share of the cost of operation for redemption facilities with the increase in the handling fee.

Litter Reduction

The original “bottle bill” in Iowa focused on reducing litter along Iowa’s roads and in waterways. Over three decades of experience have shown that financial incentives increase the recycling rate for glass and can products, and the legislation has enjoyed bipartisan support through the terms of four governors since its passage in 1978. Placing a deposit on containers has altered consumer behavior, so that 86 percent of covered containers are redeemed. Supporters of an expansion of the bottle bill believe that increasing the types of containers should have a similar effect, further reducing litter and encouraging higher redemption rates.

Increased Handling Fee

Many redemption facilities struggle due to the 1-cent handling fee, which has never changed through 35 years of inflation. Increasing the fee to 2 cents would help redemption organizations better cover their costs.

Increased Returns of Containers with Deposits

Figure 1The state of Michigan has experienced even higher rates of container returns with a higher deposit of 10 cents (Figure 1). Michigan currently recycles 95 percent of containers.[3]

Michigan found that the high social costs of litter were also better addressed by the 10-cent approach by forcing the higher social cost of litter on the private individuals.[4] This is not part of the Senate bill.

More Comprehensive Course of Action

Some argue against an expansion of the container deposit program on grounds that it does not comprehensively address recycling in Iowa. These critics call for a requirement for all cities and counties to have “single-stream recycling,” which they say would better capture all products that can be recycled. While single-stream recycling includes more than the containers covered by the deposit law, it does not necessarily assure that litter would be reduced. The deposit offers a financial incentive to not litter, or to pick up litter, particularly in the case of containers that are portable and easily discarded while walking or driving. As noted above in Figure 1, under the current bottle law 86 percent of containers are redeemed in Iowa, compared with 28 percent in states that may have recycling but do not have deposits.

Conclusion

The Senate bill could increase returns of recyclable containers, in keeping with the original goal of discouraging litter and encouraging litter pickup. This would reduce municipal and county spending on waste management, potentially increasing the lifespan of the current landfills. The increased handling fee for plastic containers would lessen the strain on redemption facilities that have seen increasing costs with inflation.

[1] The Iowa Recycling Association. April 2013. http://iowarecycles.org/index.asp?ID=4599
[2] The Gazette, Cedar Rapids, April 2, 2013. Editorial: “Think bigger than the bottle bill.” http://thegazette.com/2013/04/02/think-bigger-than-bottle-bill/
[3] Businesses and Environmentalists Allied for Recycling. 2002. “Understanding beverage Container Recycling: A Value Chain Assessment." ”http://thecorr.org/Bear.pdf
[4] Porter, Richard c. February 1978. “A Social Benefit-Cost Analysis of Mandatory Deposits on Beverage Containers,” Department of Economics, University of Michigan, Ann Arbor, Michigan.
[5] Iowa Recycling Association. January 2005. I! Recycle. at http://www.iowarecycles.org/jan05bottlebill.pdf

Heather Milway is a research intern for the Iowa Policy Project. She is a student in the Graduate program of the Department of Urban and Regional Planning at the University of Iowa.