Money makes the world go round and the same goes for waste management. One of the biggest challenges is ensuring sustainable financing and this was at the heart of an intense first day of the Sustainable Financing for Waste Management Study Tour.

But what does sustainable financing really mean? Most waste management follows a linear pattern – items (such as plastic bottles, aluminium cans, electronics, whitegoods, batteries, tyres, etc.) are produced by a manufacturer. A country then imports these goods, where a local shop buys them, and sells them to us. From there, those items typically end up in a landfill, the environment, or higher value items might get recycled.

This is problematic for small islands because where is that waste supposed to go? Islands are either too small to keep the waste, don’t have the technology to recycle, or are too far away from recycling facilities in other countries and cannot afford to ship waste there.

Sustainable financing tries to change this by creating a continuous flow of funding to ensure those items get recycled. This is known as an Advanced Recovery Fee and Deposit (ARFD) system and here’s how it works.

Let’s say you want to import plastic water bottles. Instead of just importing those bottles, the manufacturer is charged a small fee for the import, known as a deposit. This is usually a small amount, maybe 10c per bottle. This 10c is added to the sale price. The local shop buys the bottle at the increased price, and so do we. But, by having an ARFD system, the consumer (us) is able to return that item to a collection centre and be refunded a portion of the deposit amount, say 5c. The remaining 5c, or any unredeemed deposits, are then put into a central fund which is used to facilitate the recovery, recycling and off-shore shipping of those same bottles. In this way, the ARFD system helps to create a shared responsibility for the management of waste, with the manufacturer, the importer, and the consumer. This system can also bring benefits to entire communities. Instead of you, the consumer, collecting your 5c deposit, you could give that to a community institution, like a school or a charity group, and enable them to collect funds.

There are many different ways to set the system up, and they go by different names, but the important thing is to create a system that responds to the unique situation within each island state. Throughout the day, talanoas were held with legislators from Australia, New Zealand, Palau and Kiribati to understand what systems they have and what can be learned from their experiences.

A lot was discussed. New South Wales in Australia has the second oldest Container Deposit Scheme in the world and because they use 600 million containers every year, the scheme has not only kept 45,000 tons of beverage containers out of landfills, but has generated $60 million for local communities. Palau’s Deposit Beverage Container scheme, the oldest in the Pacific Islands, has handled more than 174 million containers and generated more than $17 million for waste management. New Zealand is in the process of setting up their scheme and shared insights into how they assessed their country’s needs, highlighting the important role that both industry and NGOs can play in developing a zero waste network.

The talanoas were rich with information, and the Study Tour participants were on top form, asking questions, sharing experiences, posing challenges, and engaging in an open and honest dialogue for the benefit of all.

It was a lot to take in but participants ended the day in high spirits and are all set for the first day of the Circular Economy Conference starting tomorrow, where we will have the opportunity to unpack these important issues and ideas even further.