Bill Hulet Editor

Here's the thing. A lot of important local issues are really complex. And to understand them we need more than "sound bites" and knee-jerk ideology. The Guelph Back-Grounder is a place where people can read the background information that explains why things are the way they are, and, the complex issues that people have to negotiate if they want to make Guelph a better city. No anger, just the facts.

Tuesday, February 20, 2018

Recycling: Stewardship Ontario and "The Authority"!

In my last blog post I tried to make readers aware of how incredibly difficult recycling really is. It isn't just a personal activity, it's something that involves a huge infrastructure and a myriad of collective institutional decisions. I also tried to show how complex the economic and political elements can be through showing how different companies---acting in conjunction with subcontractors like Universities---actively try to confuse people about what is or is not actually recycled once you throw it into the blue bin. In this post, I'm going to try to expose readers to a radical plan by the provincial government to fix these problems by "changing the game" and in the process, completely rebuild the economy of Ontario.


The Problem:  Waste Recovery Has Stalled

Image from govt publication:
"Strategy for a Waste Free Ontario"
According to the province, waste recovery has been stuck at 25% in Ontario over the last decade. In gross terms, since the average citizen produces about 850 kilos of waste per year, that means that 638 kilos still gets land-filled. Multiply that by 13.6 million people, and you get an astonishing 8.7 million tons of garbage that is just thrown away every year. This is not only already not good, but even worse, waste reduction has also stalled---which means that things will only get worse as the population of Ontario increases. This would mean tax payers would have to pony up money and land to build a lot of new landfills. (Oh yeah, there's that whole destroying the planet thing, too.)

Even worse, there is a climate change element that needs to be considered. When organic waste---like a half-eaten hamburger or it's wax paper wrapper---gets tossed in a landfill it decomposes anaerobically (ie: "without oxygen".) A result of this is the production of methane, which is a greenhouse gas that is 25 times more potent than regular CO2. This means that a little bit of methane can be more hazardous to future generations than a lot of carbon dioxide.

People usually think of the bins on the curb as the core of waste production. But in actual fact, the organic waste that we put to the curb in green bins only represents 47% of the waste---the other 53% comes from what's called the "IC&I", or, "Industrial, Commercial & Institutional" sectors. Some of that does get put into the industrial composting stream---but a lot doesn't. For example, where I work (ie: my "day job" in the "institutional sector") a lot of food waste ends up in the garbage stream because there is no provision for students to separate their compostables from recyclables---and very few would make the effort if they could.

In addition, as I pointed out in my previous article, the physical act of separating trash into various different components is really, really difficult because there are so many different types of materials and when you mix them together you end up with contamination that makes the result worthless as a feed stock for future manufacturing. (And it doesn't help that businesses are trying to throw sand in the eyes of consumers in order to promote their product as being "recyclable" or "compostable".)

What this means is that the only real way to stop throwing out all this garbage is to do that most difficult of political activities:  change human behaviour. And this doesn't just mean getting people like university students to stop throwing half-full cups of coffee or pizza slices into the recycling bins. It also means that businesses will have to start thinking about recycling when they design and market products. (One industry insider told he calls this "lust to dust" product design.)  To be totally honest, it will require "social engineering" on an absolutely huge scale to get every business leader, employee, and, customer "with the program" in order to scale back on the enormous amount of crap we throw away in this province.  If we really want to get a handle on solid waste---and to be honest we don't really have much choice---we have to accept the truth of Naomi Klein's statement about climate change:  "This changes everything".


It's Hard to Change People's Behaviour!

A lot of people are financially like this woman.
Image used under "fair use" rule,
from Daniele Summerfield's Real Estate Blog
A big part of the problem with changing human behaviour is that a lot of individuals and businesses are like a person standing on their tippy toes in water that is so deep that it only allows them to keep their noses in the air. That is to say, they're only marginally adapted to the status quo and are terrified about any change because they feel it will destroy their life.

As a matter of fact, this is a sad but inevitable part of life. In any given population of both people and businesses there are individuals that are "just barely getting by" and when something unexpected comes along, it wipes them out. It's just like all the really sick folks who die when a flu pandemic hits, or, the people who live pay cheque to pay cheque and lose their homes when they get laid off. Part of this is because of things that are simply outside of their control, and, sometimes it is a problem with people who have made bad decisions (think of someone who spends every spare cent they have on frivolous purchases instead of putting money into a "rainy day" fund.) When the day of reckoning comes, however, because of the way the human mind is constructed almost no one ever says "oh, well that's bad luck" or "ultimately it's my fault for making some bad choices". Instead, they point their finger at the government and scream about "those damn bureaucrats with their unnecessary red tape!!"

As a result, it rarely works well for a politician to simply pass regulations against a specific activity. If they do, they end up being the target of anyone who's business or lifestyle suffers because of the change. So instead, the "best practice" nowadays is to start measuring the activity of a specific thing that society wants to get rid of, and, then create some price mechanism that will encourage businesses and individuals to stop doing it. The iconic example is a carbon tax. The idea isn't to raise extra money for the government, it's to encourage individuals and businesses to avoid paying the tax by insulating their homes or taking public transit instead of driving a car.


This leads us to the second huge problem with changing people's behaviour. Large swathes of the body politic don't look at issues on an individual, cost/benefit analysis. Instead, they've adopted a "short-hand" for thinking where they compare all human activity to a preconceived template. If it it fits into that worldview, good;  if not, bad. At that point they have decided what "team" they are on, and if it's in opposition, all honest discussion ends and it's time to declare war and use whatever means present itself to make sure that they win. This is what is known in political science as "ideology".

Unfortunately, ideological thinking in our society has "poisoned the well" a bit on price mechanisms because certain political organizations have "banged the drum" over the "tax" part of price mechanisms like carbon taxes and studiously avoided mentioning the "changing human behaviour" side of them. A good example of this comes from an advertisement ran by the Conservatives in the 2008 election.

The lesson to learn from sources like talking oil spots is that if the government is going to get into the social engineering business, it needs to create some distance from itself and the people trying to change human behaviour.


Some readers may have noticed that I've taken all the Google "Adsense" adverts off the blog. I've done this for two reasons. On-line advertising has changed dramatically over the last few months, with most of the ad revenue being channeled away from "little guys" like this blog, and towards a small number of "big players". This is being explained as a method for cutting down on "fake news", but the end result is that revenue from ads has effectively dried up for a lot of people---including me. (Actually, it never really was that much.) In addition, looking at the stats, it's obvious that more than half of people who read this do so on their cell phone, which doesn't show ads anyway. Toss in folks who use ad-blockers, and advertising just isn't worth it.

This makes subscriptions through Patreon even more important to support people working to keep citizens informed. Even a dollar a month makes a difference! If you do choose to make a larger subscription to the blog, there are rewards:  $5/month gets you a copy of Walking the Talk, and, for $10/month, I'll send you a copy of Digging Your Own Well too! One time donations are also appreciated (all major credit cards plus PayPal accepted), so if you want to avoid making a long term commitment, you can just make a single, lump sum payment. 


Introducing "Stewardship Ontario"

Recognizing the political minefield that is created by directly intervening in the economy, or even trying to use taxes as a price mechanism to get people to stop wasting so much stuff, the Ontario Liberals tried a new approach. They decided to force the businesses making and importing all the waste to be directly responsible for getting rid of it. To that end, they created a non-profit corporation, "Stewardship Ontario", who's task it is to monitor and deal with all solid waste issues in Ontario. It is governed by a board of directors who are elected by industry members who's ability to vote for directors is directly tied to how much money they pay into the institution.

When you think about this idea, it does a great job of separating out the politics from decision-making on solid waste issues. Take, for example, the disposable coffee pods that I mentioned in the previous blog post. If the province steps in and orders producers to stop producing the darn things, their company will scream bloody murder about "red tape" stifling innovation. If, instead they force the producers to standardize their product so they are all either recyclable or compostable---same thing. If they try to force the companies to pay a lot of money to expand the recycling or composting facilities so they actually are recyclable and compostable instead of just being marketed that way---again, more wailing and gnashing of teeth plus dark complaints about "tax-grabs" from conservative-sponsored talking coffee pods.

But if instead Stewardship Ontario orders the coffee cup manufacturers to standardize their products and come up with some practical, affordable way of dealing with the mountains of waste, there's no way that this can blow up in the government's face. After all, it will be the other companies that create plastic containers that are ordering the coffee pod people to pull up their socks and make products that work in the same system that they use---not evil politicians! And because the people making the decisions are specifically the ones with the most "skin in the game" (remember votes for board members are based on how much money a business has to pony up to pay for the system dealing with all the garbage), they are going to have precious little sympathy for ideologically-based complaints because they are the ones subsidizing the disposable coffee pods gumming up the works.

Ever notice this logo?
It's on the side of lots of factories
Copyleft image c/o ISO
This might seem to be a bizarre "over-reach" by the government but if you know anything about modern industry, it seems less radical. There is an international, non-profit, private corporation by the name of "the International Organization for Standardization", ISO, that has been around since before the Second World War. It's purpose is to help industry work together to standardize parts and processes in order to foster trade and commerce. If you can't imagine what it does, consider what chaos would exist in industry if each manufacturer used their own particular type of bolt and nut. How would your local mechanic have any hope of fixing your car? Not only would he have to stock an astronomical number of parts but he'd have to have a warehouse just to store all his tools. What Stewardship Ontario really is, is a form of "ISO" for the province's solid waste.

I'm sure you've seen this logo.
Image public domain because
it is fundamentally geometric in design.
Another analogy that is even closer to home is "the Beer Store". It is also a private non-profit which is owned by 25 Ontario breweries and has existed since 1927. It was empowered as a regulated monopoly by the Liquor Control Board of Ontario to sell beer and also to manage a deposit return system for beer bottles and draft kegs. It still does, and the average beer bottle in Ontario is reused an average of 15 times before it gets recycled---which is a huge benefit to the environment.


The stubby!
Standardized perfection,
copyleft by Simon Laird
It is useful to consider one aspect of the history of Brewer's Retail Inc. At one time it operated in an environment where it wasn't constrained by things like international and inter-provincial trade agreements. As a result, it had the authority to impose industry standards---like the ISO. The result was the "stubby" beer bottle. This was the only type of bottle that was allowed in Ontario and it only had lables that were attached with water-based glue. This meant that when someone brought in a case of empties to the Beer Store the staff didn't have to sort them into different brands---because a bottle was a bottle was a bottle. When they were washed the labels fell off and there was no difference between Labatts Blue, Molson Porter, or, Carling Black Label.

Today, things are different. There is a standard type of beer bottle, which is called a "long neck standard". If a business wants to sell beer in a different type of bottle, it can. But if it does so, it pays an extra handling fee. And that's because it's a lot more work to sort different bottles---over 50 different types---into different boxes, and separate the boxes so they can be sent to different bottling plants for reuse. And, of course, all this extra handling results in more breakage and less reuse of the bottles. There's no way around the fact that the old standardized stubby bottle was better than what we have now. But there is an advantage to this new way of doing things:  it can operate in a system based on free trade.

Because Stewardship Ontario is an industry-based, non-profit trade organization, it's decisions are different from government regulation. I've been told that this means that its decisions cannot be over-ridden by the trade organizations like NAFTA. Trade agreements were what did in the stubby, but since all importers will have to deal with solid waste issues inherit with their product through the Stewardship Councils, this takes the government out of the process. This means that this is the way we could see the return of standardization---but through a process that is seen as voluntary instead of imposed.

But it's important to realize that the present regime at the Beer Store exists in an environment where Stewardship Ontario is only paying 50% of the cost for recycling and land-filling waste. The province has set a time line for moving towards 100%. (More about this in my next post.) As increasing amounts of money are levied against businesses, they will start trying to engineer in waste reduction and recovery as part of their product design, instead of just considering it a trivial after-thought. At some point, it will make sense for Stewardship Ontario to start setting standards and charge enough money for deviation that there will be a real penalty for ignoring those stardards. I suspect at that point we very well may see a return to something like the stubby beer bottle. I also suspect that similar things will start popping up in other industries---maybe standardized wine bottles, maybe refillable pickle jars, etc. That's certainly what the government had in mind with this legislation, and what industry insiders think is going to happen.

In other words, Stewardship Ontario allows for the creation of rational packaging---like the stubby beer bottle---again. Only it does so through a price mechanism instead of government regulation. And this price mechanism is done through business self-regulation instead of special taxes, which avoids the creation of talking beer bottle ads during election campaigns. 


As I mentioned above, advertising revenue has dried up for the "little guy" because of social media attempts to control the spread of "fake news". Other changes to the business model of businesses like FaceBook have hindered the ability of a small blog like this one to spread "virally". Unless you are a huge player, the only way to promote your site is increasingly by having to buy advertising from the social media provider. This means that "word of mouth" is even more important. If you read this blog and find it useful, remember to post a link to it with a description on the "friends" group that you are on. 

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Introducing the Resource Productivity & Recovery Authority

People of the same trade seldom meet together,
even for merriment and diversion,
but the conversation ends
in a conspiracy against the public,
 or in some contrivance to raise prices.
Adam Smith, Capitalist Saint
Public Domain Image, c/o Wiki Commons 
Many of my cynical readers will at this point no doubt be asking themselves: "This sounds all very good---but business people don't care about the public good, THEY WANT MONEY. What's to stop them from perverting this system?"

As the government admits in their 2016 publication "Strategy for a Waste-Free Ontario:  Building the Circular Economy", it is important for there to be a mechanism that stops businesses from abusing their control over price mechanisms aimed at limiting waste.
"The legislation provides the Authority with the tools for a graduated method of ensuring producer compliance with regulated requirements and a fair system that discourages non-compliance and prevents free-riders. Compliance and enforcement tools include inspection powers, the power to issue compliance and administrative penalty orders and the ability to conduct investigations."
P-14, "Strategy for a Waste-Free Ontario"
What the government is talking about is a non-profit corporation that's mandate is to keep the Ontario Stewardship Council honest and transparent. This is not a trivial task, because our province has a history of "shenanigans" when it comes to getting businesses to pay for the cost disposing of their products after they've been used.

One really annoying example came when Stewardship Ontario first introduced "eco-fees" in 2010.  The idea was that each item a company made or imported had to put money into a fund to help municipalities or the province pay for either recycling or land-filling these items. It wasn't so much a tax as an example of "full-cost accounting". (This is the idea that businesses should really pay the full cost for what they do instead of expecting the tax-payer to clean up their mess.) Some retailers had the bright idea of listing their products as costing a certain amount, and then adding on the "eco-fee" at the cash register (eg: exactly the same thing they do with the GST tax---which is also annoying and not done in Europe.) That way, the company managed to act as if the cost of cleaning up the mess they created was just another "cash grab" by the government. As an added bonus, when they advertised their products these companies made it look like they were selling items for a lot less than those competitors who simply accepted that the eco-fee was part of the cost of production and "buried" them in the item's cost. Indeed, some companies even seem to have been able to make a little extra money in the process by over-charging consumers while they were at it. The fact of the matter was that some businesses seem to have just decided that they wanted to stick a finger in the eye of the government by following the talking oil spot manoeuvre.   

Glen Murray
reigning in big business
image from Govt documents
Another annoying example of bad behaviour involved the tire disposal fee. The "Toronto Star" exposed some very suspicious behaviour by executives in the Ontario Tire Stewardship program. These included strange internal accounting practices, what appeared to be money laundering, support of lavish lifestyles for directors, and, money being spent on fundraisers by the Liberal Party. (As a result, the Tire Stewardship program is the first recycling program that is being replaced by the new legislation---it disappears this year.)

It is very clear in reading the introductory documents put out by the then Minister of the Environment and Climate Change, Glen Murray, that the Resource Productivity & Recovery Authority was specifically set up to stop these sorts of excesses. It is even "baked into" the language he uses:  he calls the organization "the Authority".

As a matter of fact, no one I've spoken to calls the Resource Productivity & Recovery Authority (RPRA) "the Authority". Instead, it's called "rip-rah"---after the acronym. But Murray's point should be well taken. The "invisible hand" of capitalism specifically encourages businesses to always pursue the "bottom line". And as everyone knows, that phrase really means "I don't give a damn about anything else except money!!!!" We need a strong "authoritah" to pull over businesses, and start smashing them in the shins with its nightstick to deter them from trying to stick the taxpayer with the cost of cleaning up the messes they create.

If you look at the way RPRA has been set up, it certainly looks like Murray understood that it needed to be protected the same way a lot of other government agencies are, or it would be prone to political influence. So it has specifically been designed to be one step removed from elected politicians. It is a non-profit corporation (like a university) that starts out with the Minister of the Environment and Climate Change appointing a certain number of people to the board of RPRA, and, then these member appointing others. At that point, all the board members then elect a Chair.  And at that point, the Board then goes on to follow a fairly complex set of directives from the Ministry. Primarily, these outline regulations aimed at getting Stewardship Ontario to collect data on solid waste and developing a game plan for reducing it according to a provincially-set time-table. It is also supposed to create and manage transition plans aimed at shutting-down existing recycling systems (things like tires, e-waste, toxic waste, etc) and rolling them into programs set up by Stewardship Ontario. (And of course, it has already done this with the tires, which will no longer involve a separate entity or a consumer-paid "eco-fee" when that program is done away with this year.)

As I've pointed out in previous blog posts, a great deal of what gets done in both Ontario and Guelph gets done not by direct political intervention by Council or Cabinet, or even by career bureaucrats, but instead by appointed boards and commissions. The idea is to create a "fire wall" between people who have to raise money and get votes (which makes them vulnerable to the wealthy and otherwise influential.) These include things like libraries, the police, health boards, the OMB, and so on. In a democracy it is important to have oversight by elected officials so things don't get "taken over" by vested interests---but it is equally important that issues don't become "political footballs" where emotional appeals to public prejudices (like talking oil spots) overwhelm expert opinion about where the public good really lies.


If you look at the RPRA website, you can see a subset called "Datacall". If you look at the left hand side of the site you can see a line of links. These give a lot of detailed information that allow people to compare things like rates of recycling by municipality. They also show the amount of money that Stewardship Ontario channeled from businesses that create the crap to the municipal governments that have to clean up the mess. How this money gets divided up changes from year to year according to another program called "The Waste Free Ontario Act of 2016". This will have a profound impact on Guelph, because it needs to decide how it is going to adapt to the new regime. My next blog post will deal with these specific issues. What I've written above is more than enough for most people to digest. But unless citizens know about the issues that I've raised here, they will be unable to understand what the city Council is doing as they try to prepare for future changes in solid waste. Which means I had to explain all this stuff first.