Proper incentives and deposits – all we really need to clean up the environment
The role of incentives in our lives is truly and tragically underestimated. When money is dangled in front of people, batten down the hatches because you’ll have no idea what you can unleash. (Consider a series of polls on the website Buzzfeed. People were asked how far they would go for 5 million dollars. Two of the questions were: Would you accept the money knowing that it would take a life somewhere else in the world, and would you listen to nothing but country music for the rest of your life? 50 percent said they’d do the former, and only 47 percent the latter. Crazy, hey? Oh wait a minute, I wonder what they meant exactly by country music…)
Really, it’s true. Financial incentives in particular can lead to the most bizarre behaviour, especially over time, and the quality of incentives, or the direction they encourage behaviour in, can have incredibly huge consequences.
Recently we saw examples in the US shale world. Under incentive packages designed a decade ago when production growth or reserves growth metrics were deemed to be the best measure of success, we saw companies implement schemes that rewarded increases in these measures. We then saw companies go on suicidal growth paths that made zero sense externally – how can a professional, hired to run a company, orchestrate a series of activities that endangered the whole organization? – yet they happened anyway, because those executives were incentivized for something else. Odd as it seems, they were incentivized to grow even if it harmed the organization as a whole. And that is exactly what they did, and it happens over and over again, everywhere.
So, what would happen if we used the power of that technique for pure good? One of the biggest environmental problems we face is the voracious appetite of 7 billion people for more and more and more resources. Some of these, like food, are renewable – as long as we maintain our farmland’s productive capability, we can continue growing food indefinitely. Others though, like precious metals extraction, cannot continue indefinitely. If they do, more and more landscape gets mulched every year in the process.
The ridiculous part is that we have plenty of most raw materials; the problem is that many of them go into the garbage when done. There is no proper incentive to recycle; it is cheaper to simply buy fresh supplies.
What if that wasn’t the case though? And what if it turned out that it could be ridiculously easy to create an incentive to make sure they were recycled?
Imagine if there was a $500 deposit to be paid on every new cell phone sold – $250 by the manufacturer, and $250 by the customer. Each would get their deposit back if and only if the cell phone, at the end of its useful life, was recycled in its entirety. Current estimates are that only 12.5% of electronic devices are recycled, with the rest going to landfills, including a lot of valuable metals.
Do you think we’d keep discarding cell phones and all the other electronic gadgets that are far cheaper to replace than repair? And not just electronic devices; why can’t we use the same principle for pretty much everything? Any TV, appliance, electronic device, anything with valuable metal content could have such deposit requirements. The level of deposit could be set to match the scarcity of the metal, or the environmental impact of mining the metal. If new supplies of key metals/minerals only available by building huge new mines, say for like certain rare earth elements, then why not make existing quantities fabulously valuable so that people are incented to recover them? Yes, maybe it’s hard to recover trace amounts of metals, but what if it was worth it to do so?
If we implemented schemes like this, we could limit the growth of these far-reaching supply chains, ones that require extensive new exploration, mining, processing facilities, and other environment-pounding developments, all without changing our lifestyles or trying to reinvent the world’s energy system in wildly implausible ways.
Good luck in isolation, and remember the immortal words of Maynard James Keenan: “You owe it to yourself to do something creative with every breath you take.” Or at least read about energy and get some laughs, pick up “The End of Fossil Fuel Insanity” available at Amazon.ca, Indigo.ca, or Amazon.com