Competition, Sustainability and Packaging Policy in the UK

This paper examines the use of economic instruments in the implementation of environmental policy, based upon a recent study into the European Union Packaging and Packaging Waste Directive (94/62/EC). It explores the introduction of competitionbased models in the UK implementation of the Directive, and assesses their ability to achieve positive environmentaloutcomes in a cost-efficient manner. Several problems for the competition model are discussed, particularly the fear of profiteering within marketbased systems by some economic operators; the behaviour of economic operators towards non-profitable market segments; the ability of free-market models to engender public participation in recycling programmes; and the failure of private sector solutions to consider the full environmental costs of packaging. Neo-liberalist competitive models do not address such problems convincingly, and therefore continued government intervention is required if the UK is to meet its targets under the EU Directive. Whilst economic instruments and competition provide avenues for a more effective environmental policy, there is a continuing need for government regulation rather than unquestioning faith in the benefits of the free market.