California Shifts Recycling Costs From Taxpayers To Businesses

By Tom Joyce | The Center Square contributor, The Center Square California

July 3, 2022

(The Center Square) – California enacted a law that it hopes will cut down on plastic waste.

Gov. Gavin Newsom signed Senate Bill 54 into law this week. The bill, authored by state Senator Ben Allen, D-Santa Monica, will place "the responsibility for costs on the producers rather than the local communities who pay for waste management and recycling," according to a press release from the senator's office.

"Our kids deserve a future free of plastic waste and all its dangerous impacts, everything from clogging our oceans to killing animals – contaminating the air we breathe, the water we drink, and the food we eat. No more. California won't tolerate plastic waste that's filling our waterways and making it harder to breathe. We're holding polluters responsible and cutting plastics at the source," Newsom said in a statement.

The new law tells producers of specific materials (including single-use packaging and plastic food service ware) to form a Producer Responsibility Organization (PRO) to "manage industry efforts to comply with the law's requirements."

The organization is tasked with creating an implementation plan. An advisory board will review the plan, but it will need final approval from CalRecycle.

The law will require that all covered material is recyclable or compostable within 10 years. It calls for a 25% reduction in plastic-covered material introduced to the state's market during that span.

Also, the law establishes the California Plastic Pollution Mitigation Fund. The program will spend $500 million annually for the next decade – funded by industry – to mitigate plastic pollution in certain parts of the state.

"For far too long, plastic waste has been a growing burden for humans, animals, and the water, soil, and air we need to exist," Senator Allen said in the press release. "We knew that we needed to act. And in this time of extreme polarization in our nation, California was able to show that we can pass strong environmental legislation with bipartisan support that brought together the environmental and business communities. I'm so grateful to the ballot measure proponents who helped to force this issue, the many advocates who worked so hard through the negotiations, and the legislators and staff who recognized the need for action. With this new law, California continues its tradition of global environmental leadership – tackling a major problem in a way that will move and grow markets in sustainable innovations, create incentives for investment, and give tools to other states and countries to help play their part in this fight."

The California Chamber of Commerce says the new restriction will be difficult to navigate. Still, it's better than a similar ballot initiative that would have led to uncertainty and higher taxes.

"While California businesses both large and small will face a maze of environmental regulations as a result of SB 54, we believe that this proposal ensures long term policy certainty around recycling and packaging to help create a circular economy and avoids a costly and disruptive ballot initiative that would substantially raise taxes on all Californians and leave California's businesses susceptible to future attempts at expanded regulations," said chamber CEO Jennifer Barrera. "A legislative compromise on this issue allows the Legislature to make changes to the proposal in the future, if necessary, rather than having to go back to the ballot."

The focus of the work of The Center Square California is state and local-level government and economic reporting that approaches stories with a taxpayer sensibility.