Interview with Christopher Snowdon
SpeakFreely: I’m here today with Dr. Christopher Snowdon, Head of Lifestyle Economics at the Institute of Economic Affairs. In his work, he focuses on lifestyle regulation and evidence-based policymaking, often clashing with proponents of the so-called nanny state and its attempts to strip away various pleasures from our lives.
But today, I’d like to talk to you about a slightly different policy topic than usual: the deposit return scheme. I think you might be one of the only people who have seriously researched the actual costs and benefits of this policy. So, to begin with, what is the economic case for a deposit return scheme? It’s often said that it boosts recycling rates—but are those benefits overblown by policymakers?
Christopher Snowdon: The question of whether it’s cost-effective kind of depends on what your refuse collection system already is. So it definitely wouldn’t be cost-effective in the United Kingdom. In the UK, we have a fairly good system whereby recycling gets picked up from your front door—every two weeks, usually—and that then is obviously taken off and sorted and recycled. So given that so many bottles and cans are already just taken away very easily—you dispose of them in your own home, put them in the recycling bin, and they get taken off—there isn’t a huge amount left over to, you know, take to a deposit box and put back in.
The government argued that this was about reducing litter, and I’m sure it would reduce litter to some extent, because at the very least you would have kids and homeless people picking up bottles and cans and getting the deposit back. But that’s a fairly small amount of litter, and it amounts to a really very expensive job creation scheme for a few people.
If you were starting from scratch, then it would be a different kettle of fish. But in the UK we’re not starting from scratch—we’re starting from quite a high level of recycling, about 70–80%. That could probably go up to 90–95%, possibly, if you look at the experience in other countries. But the marginal cost is really enormous for quite a small marginal gain.
SF: So I think the most important part of your report, which you wrote for the Institute of Economic Affairs—I think in 2019—comes down to the hidden costs of the policy. So, in the grand scheme of things, just how costly would it be in the case of Britain?
CS: It’s—as you say—a while since I wrote it. I think we were looking at something in the region of a billion pounds a year, and that would create a certain amount of valuable recycling. But actually, the only truly kind of profitable recycling—in terms of drink containers—is cans, which are kind of going out of fashion anyway, because Coca-Cola and companies like that tend to prefer selling things in plastic bottles. And plastic is really quite expensive to recycle; it’s not cost-effective.
So it’s not as if you end up with a huge amount of saleable product here. The only way the government could justify it in its impact assessment was by putting an enormous value on people’s, um, hatred of litter, essentially. It was very obviously not going to be cost-effective. It was very obviously going to cost a lot of money, so they had to rely on these intangible benefits of not seeing litter.
Now, straight away, you’re into the realms of, you know, make-believe, really. You’re trying to put real monetary costs onto very intangible benefits. Now, that’s not to say there aren’t intangible benefits to having less litter—certainly, people will feel better not seeing litter around—but how much people would actually pay to live in a country with no litter at all is really hard to tell.
All you can do is ask people—and talk is cheap. So the government used a very, um, fanciful model to put a very high value on what people would theoretically pay to have less litter around, then assumed that the system itself would be really effective in removing that litter, and then said: “Ah yes, this thing’s going to cost £800 million a year, but the benefits will be £900 million a year—so it’s cost-effective.” Now, that, of course, is not what most people think when they think of cost-effectiveness. You’re comparing apples and oranges, really. It can be justified—don’t get me wrong. Economists are interested in welfare as well as nickels and dimes. But it’s not what people think.
You know, if you say, “This is going to yield £100 million of benefits, and it’s going to bring in more than it costs,” people think, “Oh, that’s good. As a taxpayer, I’m going to benefit from that.” But that’s not what’s going to happen at all. You’re going to get these intangible benefits of seeing a bit less litter around—and that’s great—but if that’s all there is to it, and it is, then the government should just say that.
SF: Yeah. I think in your report, you made a very good point about the unpaid labour. I think you estimated there’s around £1.7 billion in unpaid labour, which comes from people having to travel to the return stations.
And I think you’re absolutely right. I happen to live in a country that does have this deposit return scheme—Finland—and I do hate it. I have to go with, like, one or two bottles to the supermarket, or they just end up lying around my room. And then I live like a hoarder because I have to keep all those bottles, waiting to take them to the supermarket. Could you talk a bit more about that?
CS: Yes, absolutely. I mean, the unpaid labour is a major oversight in all of this. As I say, you can make a case for including the emotional or psychological benefits of seeing less litter. But if you’re going to do that, you also have to include the far more tangible costs—like people having to go to a supermarket or a bottle deposit station, which they wouldn’t generally need to do, because recycling is normally taken away from their doorstep.
So this becomes unnecessary unpaid labour. And it’s actually quite easy to estimate what unpaid labour is worth: you just look at what people would be earning, or what wage they’re prepared to accept in the real world. I can’t remember the exact figure I came up with in the study, but it was clearly a very high number.
And again, this is a real cost, greater even than the cost of employing all these people, and having this headquarters, and all the rest of it—you know, people endlessly going around picking up bottles and cans from supermarkets and elsewhere. One of the major costs is your people are having to do something that they don’t really need to do, for the most part—and they’re not being paid for it.
So, when you have a system whereby your recycling is picked up, and all the wine bottles you use at home, all the cans you use at home, all the bottles of water and Coca-Cola you’re using at home—they’re going straight into a recycling bin, which is taken away—and that service is going to continue even with a bottle deposit scheme.
So there’s no savings from doing that. It’s just that, rather than put them in your recycling in your home, you then have to stick it all in the car and drive off somewhere, and wait in line, perhaps, and stick them into some machine and get a voucher, which you then redeem for cash. You know, it seems to me to be a hugely complex and largely unnecessary exercise that everybody is forced to perform for the sake of getting your recycling rate up from 82% to 94%, or whatever.
SF: I think in your report you also mentioned that there’s some concern about municipalities, which are responsible for garbage collection. And without the recycling of bottles, they would have much lower income from that part of the system. So it would actually cost the municipalities as well to have this system implemented—right?
CS: Yes, indeed. Um, as I say, the finished product, as it were, of the recycling—particularly when it comes to aluminium—is worth a bit of money. And so local authorities, who do the refuse collection in Britain, they can sell that, and they do sell that. So there was an issue there about whether this was going to cost local authorities money.
Now, obviously this is just a transfer of wealth—because instead of the local authorities selling the recycling, it would be the central government or some, you know, arm’s-length body running the bottle deposit scheme. So it’s not an economic cost in that sense, but it is something that could be fixed. I mean, the government could just say, “Okay, we’ll give you the money.” It’s just a further complication, really, and a further political consideration.
Which all adds up to the conclusion of why this never happened in England. It was meant to happen in Scotland. It kept being put off again and again and again, largely because—well, several reasons. But the big one really was that England wasn’t doing it. And obviously we’re all part of the same nation—the United Kingdom. So there were concerns, for example, that people would be taking their bottles from England and getting money for them in Scotland, despite not having paid a deposit on them.
They missed out on the economies of scale from having a UK-wide system. There were also a lot of concerns, particularly from the pub industry and the alcohol industry, saying: look, when it comes to glass bottles, we already have, effectively, a circular economy. I mean, there’s just very, very little in the way of wasted glass.
Because people who drink wine are pretty good about putting their wine bottles in the recycling. And people who go to pubs, buy a bottle of beer, drink the bottle of beer—the empty bottle stays in the pub. That then goes back to the brewery when the brewery comes with the full bottles. I mean, it’s a really effective system. And suddenly having to mess about with a bottle deposit scheme, particularly with glass, didn’t make any sense.
So, because of that, and various other practical difficulties, it’s never actually happened in England. When I wrote that paper in 2018, it was supposed to be happening—definitely, the government was committed to it. But various other things took priority. And I think—maybe they read my paper, I don’t know—but I think they realised: actually, this is not particularly sensible. It’s not really that necessary. It’s going to cost a lot of money and inconvenience a lot of people.
I think the public would’ve been very annoyed, actually, when this came in. People like the sound of it, particularly in England, where older people have a memory of there being a bottle deposit cap on some fizzy drinks when they were younger. You’d take the bottle back, get 10p, and people have kind of fond memories of that.
But I don’t think they’d be happy if they realised what was actually involved—namely, that all the stuff they currently just stick in the bin, they’d now have to put in the boot of their car and take elsewhere.
SF: In your paper, you mentioned that for every pound saved, there was something like eight pounds wasted because of this policy. So yeah, it’s very costly—and I’m wondering, who is it most costly for? It seems like supermarkets are kind of losing out here, because they have to buy all the equipment for the deposit system, and they also lose quite a bit of space for the machines. So are supermarkets the biggest losers in this scheme?
CS: I don’t know—I think actually small shops could do even worse. Um, just because of reasons of space. You know, we’re talking about small, what we call in Britain, corner shops. And they’re going to be kind of forced to become bottle deposit centres. So people are going to turn up with bin bags full of bottles—probably unwashed. Where are they going to put them all? You know, you could end up with a huge quantity of stuff stuck behind the till—stinking. On a hot day, a whole lot of smelly bin bags full of bottles that had sticky drinks in them. It’s a real headache.
I mean, this was the reason I think it did fall apart—even though it was well-meaning and supposedly quite popular—because so many people had quite serious objections to it. It was just a really badly thought-out policy. I fully accept—and I think I say this in the paper—that in places like Finland … How long has Finland had a scheme like this?
SF: I think the Nordics pioneered the policy…
CS: In the seventies, I think, was it?
SF: Yeah, I believe so.
CS: Yeah, um, well, fine—those were different times. It was a different era, and you didn’t really have any kind of domestic recycling back then. So if you’re starting from that point, it makes sense.
And I’m not necessarily saying that Finland should get rid of it now—I don’t know how it works over there. I’ve been to Iceland, and I know that there they sort of just use it as a way of giving to charity. Effectively, the Boy Scouts come round and pick up the empties, and they take the money. People just kind of write it off as a charitable expense, almost.
So yeah, I’m not saying it was a stupid idea by any means to bring these things in during the 1970s or ’80s. But trying to bolt it onto an already very expensive and basically fairly effective system doesn’t make any sense.
SF: One interesting part, which I think is worth mentioning as well, is: who are the rent-seekers in all this? You retweeted an article titled “Coca-Cola and Irn-Bru urge next FM to make deposit return ‘top priority’.” So what exactly does Coca-Cola want from this? What’s in it for them?
CS: Oh yeah. Yes. As I recall, it wasn’t so much rent seeking—it was more like the sunk cost policy, really. The Scottish government had announced this. England had kind of announced it earlier, but the Scottish government seemed very committed to it and had a deadline ready and everything.
And Coca-Cola had just spent a whole load of money preparing for this. And then once the Scottish government said, actually, we might not do it after all, they were like, well, we’ve just spent all this money, we might as well do it now.
And I guess there was some—you know, the rent seeking, I guess, would’ve come in from the fact that they’d already spent the money, and some of their competitors hadn’t. So they were at least looking for a kind of level playing field. Possibly in some sense it might keep out smaller competitors. That’s often the way with these large corporations and their lobbying.
But I think in the first instance it was really just more—they resented the sunk cost and thought, we’ve spent a long time and a lot of money preparing for this, let’s just do it. I think that was the main thing. But it’s a long time ago now, so I can’t quite remember the details.
But yeah, I remember being pretty appalled at Coca-Cola for making that call because, as I say, it’s primarily ordinary consumers who were gonna pay the cost for this—both in terms of the occasional lost deposit, but more generally in all this unpaid labor.
SF: I think kind of the main conclusion should be maybe that if states are concerned about the amount of litter on the streets, they should just do more anti-litter work.
CS: Right. I mean, that’s the other thing. I think I say this in the paper. If you look at how much this scheme is gonna cost, if you use even half of that amount on litter collection, you will have a bigger impact on litter than the bottle deposit scheme, because obviously the bottle deposit scheme only applies to bottles and cans, whereas people who go out picking litter are picking up everything. So you’re dealing with litter in general, rather than just one specific and relatively rare form of litter. So yeah, if the government was serious about, you know, in effect spending quite a lot of money, a lot of money on, um, litter reduction, this is not the most effective use of their money by any means.
SF: I wonder if there’s like a broader point that’s kind of visible here about convenience. Prof. Bryan Caplan in one of his pieces wrote: “People love convenience. They happily sacrifice other values for convenience. But they don’t want to acknowledge this fact – or affiliate with those who do. In politics, however, almost no one talks about convenience. When governments mandate extra privacy or safety or consumer protection, crowds cheer and pundits sing. The market mercifully sells us the convenience we want without judging us. Government, in contrast, takes us at our word – and robs us of precious convenience bit by bit, day by day.”
Do you think we should take up the fight against inconvenience? How could we frame it better?
CS: That’s a good question. Um, yeah, you don’t really get people making the argument for convenience very often as such. And yeah, perhaps we should in some instances, because there are campaigners out there who are deliberately trying to make things less convenient.
I mean, you live in Finland, so you know—you’re used to the state monopoly on alcohol, for example, right? Which, you know, makes things inconvenient. Just the pretty restrictive licensing hours, right? These are deliberate policies from the temperance movement because they deliberately target what they call availability—advertising, availability, and affordability. Those are the three things they go after, all designed to deter you from buying alcohol.
And the temperance movement is very keen on restricting the number of outlets, because they—correctly—think that’s going to make it less convenient to buy alcohol. And restricting the hours, and restricting things like Deliveroo or alcohol delivery companies—all of this stuff makes our lives more convenient, and they’re not against convenience per se, they’re just against alcohol, right? And so anything you can do to make alcohol less easily consumed, they’re in favour of.
So there’s stuff like that we absolutely should fight for. And people will say, “Oh well, can’t you just go without alcohol between these hours, or on a Sunday?” Well, why should I? I mean, I can go without it. It’s just a matter of thinking ahead. But sometimes people like to live more spur of the moment, and be spontaneous.
And you’ve got public health campaigners trying to do the same thing in different ways—targeting tobacconists, banning cigarette vending machines, and so on. You have people who are deliberately trying to make things inconvenient because they don’t like the products.
Then you have things like the bottle deposit scheme, which isn’t trying to stop you from buying bottled stuff—it’s well-meaning, but just misguided. And it does make life less convenient, for want of a better word.
So look, I mean, convenience is part of a kind of set of issues that, when any policy is being debated, people will speak about—just not maybe as directly as you’re putting it there. And sometimes, of course, economists will put it in other language. So in my paper, I talk about unpaid labour, and I come up with figures for what that unpaid labour is, as a kind of intangible cost, which is just another way of making the same argument.
SF: What are you working on at the moment?
CS: We’ve just finished the new Nanny State Index. In which Finland is third. Unfortunately, it has gone behind Lithuania in recent years. I’m mainly working on policy-making at the moment. I’ve got a paper coming out in a journal over the summer. I’ve had a series of reports in the Institute of Economic Affairs, which people can find at iea.org.uk. The most recent one was called The Corporate Playbook, looking at the kind of rhetoric used by some public health campaigners to go after consumer choice.
The one before that was called The People Versus Paternalism, in which I look at the kind of imbalance between consumers and small state-funded pressure groups who are constantly trying to relieve them of their liberties. And asking why it is that millions of consumers can’t beat, you know, a handful of killjoys. There are logical reasons for it, and I then try and look at what could be done to overcome the kind of paradox of participation, as they say.
SF: That’s very interesting. Thank you very much for your interview.
CS: Pleasure.
You can follow Christopher Snowdon on his Substack.
