One Greenie Finally Gets The Disposable Cup Solution Right

That the entire blabber about disposable coffee cups is a nonsense is obviously true. We grow trees to make the paper to make cups, we use them to make cups, we stick the residue in a hole in the ground where we’d have put much of the tree anyway. What problem? Or, burn them, as we would the tree.

But, you know, recycling is one of those manias which periodically overwhelm a society. Still, we find here that we’ve one Green who actually gets the solution right. That is, assume there is indeed a problem, then what do we do about it?

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]A business selling compostable coffee cups and biodegradable food boxes was bubbling along nicely until MPs suggested a “latte levy” early last year. Overnight, Vegware’s website traffic tripled and its sales suddenly soared.[/perfectpullquote]

Well, super for them of course. But a latte levy isn’t going to be the answer:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] Idiocy may not be a word contained within the report, but the research found that a charge of 25p per cup only gets a few per cent of people to take a reusable one. The vast majority of people shrug and take the standard ones which, after that 20 minutes of use, pile up in a landfill site. This is one half of the information we need to determine whether we’ve got a problem here or not. It is a useful rule of life to remember that absolutely everything has a cost. And also that there are a good number of things which have a benefit. Doing the things which have more benefits than costs is also known as getting richer. Economics, after all, is a method of identifying the things that make us richer and encouraging us all to do more of them. So, given that people will, in the main, pay 25p to use a disposable coffee cup shows us that people value using a disposable coffee cup at some point north of 25p. As the paper tells us, there are 2.5 billion cups used per year in the UK, so that’s £625 million of benefit to people. [/perfectpullquote]

The imposition of that levy is thus a cost of £625 million to the general population.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]I’m told that one medium cup a day for a year amounts to some 5 kg of waste. As the report tells us there are 7 million cups used each day, so that is 35,000 tonnes of waste a year. And we know what the cost of a tonne of landfill waste is. We’ve got a Pigou Tax on it: it’s £83 per tonne these days. The annual cost of chucking those paper cups into landfill is therefore just under £3 million.[/perfectpullquote]

Imposing a cost of £625 million to deal with a damage of £3 million is insane. Therefore we shouldn’t do it.

But, but, what if the damage done by the cups of greater than that £3 million? The correct answer is as our biodegradeable cup maker is saying:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] It makes far greater sense, he adds, to ratchet up the costs of using rubbish dumps by significantly increasing the landfill tax. That tax, where supermarkets and coffee chains pay £88.95 a tonne to dispose of waste, is intended to encourage firms such as Costa, Pret a Manger and McDonald’s to cut waste or embrace recyclable packaging and composting. [/perfectpullquote]

Yep. Markets not working well enough for you? Then stick a crowbar into market prices to change incentives. Further, do so in general. Make all such waste pay whatever the sum is.

It’s called a Pigou Tax, devised by the bloke who taught Keynes his economics. Sadly, of course, the other Greens aren’t going to listen to the one person who grasps the economics of being green. Too much of the underlying feelz in this area is somewhere between an ignorance about and denial of economics.