Anecdote from an Austrian in a pub last night (no time to fact check so take it for what it’s worth): at one time Germany were offering a 25 cent refund on returned plastic water bottles to encourage recycling. Meanwhile, in Austria, Aldi and Lidl were selling bottled water for 17 cents. Visiting family in Germany, my Austrian friend loaded his car with water.
How “green” government subsidies distort economics: it becomes profitable to spend energy making plastic bottles, fill them with water, drive them a hundred miles, pour the water down the drain and sell the plastic, whereupon more energy is used to melt it down and make new bottles.
I seem to remember reading a report that criminals were manufacturing plastic bottles to sell back to the government.
Here we go:
http://www.dw-world.de/dw/article/0,2144,2213834,00.html
Very enterprising! Criminals? Well they were being fraudulent I suppose.
Environmental benefits of the German scheme? If it costs 500 million Euros a year to run the bottle return scheme, a good proportion of those costs boild down to energy costs…
I have a feeling that almost all costs are really energy costs: food and transport of employees. Hmm, the energy-theory of value…