![]() Extended producer responsibility (EPR) is one contemporary way that market economists propose addressing these economic externalities. ![]() This practice of shifting the cost of disposal has become an essential part of producer profits. The full burden of disposing of goods does not always fall to either the producer or the consumer, but is placed on the municipality. In a capitalist market, the cost of disposing of a product after its useful lifetime has not historically been considered in the price placed on it. Recently, legislation to address these economic externalities surrounding post-consumer waste has been discussed and passed in various countries around the world.ĭiagram explaining externality. In the example above, the cost to the municipality for putting a glass bottle in the dump is not reflected in the market prices associated with the bottle. In most economic case studies, one person’s or group’s economic activity has a negative effect on a different community for which members are not compensated, such as when industry pollutes rivers. Externalities, according to economists, are any sort of benefit or cost placed on a third party without compensation. Economists define this problem as a negative externality. In an economic sense, it is usually municipal and state governments that account for the cost of damage waste causes to local environments when deciding how to deal with waste, but this cost is not already part of the price of goods or services that produce waste. How might this be corrected? How might civil society properly account for the cost of wasting recyclables like glass bottles? Recycling glass is not too expensive, but the only revenue for those in the recycling business comes from selling products made from recycled materials. So despite the myriad of uses for recycled glass, all glass bottles sold in Missoula end up at the dump. ![]() The city is too far from existing glass recycling centers to make recycling profitable. Missoula, Montana, a city of 70,000 residents, cannot feasibly recycle glass. ![]()
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