So I said I would talk about how people only care about the services that products provide, rather than the products themselves. I lied. I want to talk about another topic, which I think informs upon the product/service discussion. Basically, this has unexpectedly become a mini-series. Hey, it just means I don’t have to think up as many topics!
Extended producer responsibility laws. Sounds fancy, huh? Well, maybe not fancy, but certainly complicated. Kind of like magnetic resonance imaging (i.e., taking pictures of your insides), granting a writ of certiorari (the Supreme Court will hear the case) or earnings before interest, taxes, depreciation, and amortization (how much money a business made this year).
So what are extended producer responsibility
(EPR) laws? They are a class of business regulations that place a legal responsibility on manufacturers to ensure their products are not harmful to society through their entire lifespans. Most commonly, these regulations require businesses to share in the responsibility of properly disposing of their products at end-of-life. In other words, they can’t sell something and then say, “not my problem now!”
Whether or not you’ve realized it, you’ve seen the mark of these laws many, many times. Ever look at a beverage bottle and see that, in some states, the empty bottle can be returned for a five or ten cent deposit refund? Those are one form of EPR law. Essentially, a small refundable tax is imposed upon the sale of beverages to incentivize their recycling. In those states, manufacturers, distributors and recycling companies are required to participate in the system.
I’ll give another example of a product that could use some EPR help. Do you know how a compact fluorescent lightbulb
(CFL) works? Mercury gas is excited with electricity, and the hot gas radiates visible light. The good news is that CFLs use between one third and one fifth the energy of an incandescent bulb and last way longer. That’s why environmentalists have been fans for a long time. The bad news is that mercury gas is poisonous to humans.
So what happens when a CFL does burn out? If people have them in their homes, they probably replace the bulb and might just drop the old one in the trash, where the glass could very well shatter and release poisonous gas into the ambient air. Yeah, not good.
So what’s the answer? Should companies not be allowed to make CFLs at all? Banning the product outright seems to be heavy-handed (though I will say that advances in LED lighting are making CFLs and incandescent bulbs more and more obsolete, which is good). Should companies be allowed to say, “not my problem, we aren’t the ones being poisoned!” That doesn’t feel right either (but spoiler alert, this is the case in most states). So then, why not an EPR law to encourage manufacturers to be a part of responsibly disposing of CFLs? That seems like a good middle ground.
That said, imposing regulations on businesses has become a politically fraught activity. Some groups advocate for removing as many regulations as possible, so that economic growth can be maximized. Others advocate for using more and more regulations as sticks to punish every bad behavior that comes from the business sector. What do I think? I think good regulations are good and bad regulations are bad. Yep, a cop-out.
Here’s what I also think – the best system is one in which business and industry don’t need to be regulated at all. How does that relate to my products/services pontification? I’ll connect those dots next week.