Empirical evaluation of the economic and environmental efficiency of Extended Producer Responsibility in Quebec

Abstract

Quebec's Extended Producer Responsibility (EPR) system for packaging has been in place since 2005. It requires producers to contribute financially to the end-of-life of their packaging. This contribution varies according to the material and weight of the packaging, encouraging packaging reduction and material substitution. As producers adapt to the additional costs of EPR, their responses range from improving material efficiency to adjusting prices, which can affect consumer demand. In this research, we investigate the upstream environmental and economic efficiency of EPR in Quebec, using firm-level data for over 2,000 companies. Our assessment considers environmental efficiency if we observe a causal effect on packaging reduction and substitution. This reduction may be due to material efficiency (e.g., shrinkage, thinning of packaging, avoidance of collective packaging) or reduced sales of packaged products. We declare the policy economically efficient if it enables packaging reduction without negatively impacting sales at the provincial level. To this end, our research plan includes a diff-in-diff on consumption data for the province of Alberta. Co-authored with Karima Afif & Bocar Samba Ba (Université de Laval)