Institute of Economic Affairs finds costs of deposit return scheme largely outweighs gains

A new briefing from the Institute of Economic Affairs has revealed that the running costs of the government’s proposed deposit return scheme for drinks cans and bottles is an expensive way of achieving very little.

The report finds that the DRS is expected to cost almost £1 billion to set up, to collect recyclables worth just £37 million.

While the DRS is expected to increase recycling rates, it is unlikely to recover more than an extra 10 to 15 per cent of beverage containers.

Whilst it would be better to recover and recycle this waste than send it to landfill, the marginal cost is excessive, and a relatively small proportion of cans and bottles should not be recovered at any cost.

The government’s impact assessment puts an unfeasibly high value on the intangible benefits of a modest reduction in littering while ignoring the significant costs to consumers of collecting and returning their containers, according to the briefing, and a DRS would be a loss-making inconvenience for consumers and retailers alike.

Chris Snowden, author of the report and Head of Lifestyle Economics at the IEA, said: “A bottle deposit scheme is a nice idea in principle, but it just doesn’t make economic sense.”“The government’s own estimates show that it will cost over £800 million to collect recyclables worth just £37 million. It is a loss-making enterprise which consumers will ultimately pay for.”

“In addition, everybody is going to have to start traipsing off to collection points with bottles and cans which would otherwise be recovered with minimum hassle through kerbside collection.”

“To make the scheme appear worthwhile, the government has put an unfeasibly large figure on the value of a modest reduction in littering while totally ignoring the unpaid labour that will be expected of every household.”

“Increasing recycling rates is a noble aim but it should not be done at any economic cost.”