Design Implications of Extended Producer Responsibility for Durable Products

We analyze product design implications of Extended Producer Responsibility (EPR)-based take-back legislation on durable goods. In particular, we observe that durable product design incentives under EPR may involve an inherent trade-off that has not been explored to date: Durable goods producers can respond to EPR by making their products either more recyclable or more durable, where the former will decrease the unit recycling cost whereas the latter will reduce the volume the producer has to recycle. When these two design attributes do not go hand-in-hand, as is the case for many product categories, product design implications of EPR can be subtle. We find that seemingly similar EPR implementation levers, namely recycling and collection targets, may have opposing effects in driving producers' design choices. Furthermore, more stringent legislative targets do not always guarantee improved product recyclability and durability. In particular, if the objective of EPR is to induce recyclable product designs, a low recycling target accompanied with a high collection target is preferred. On the other hand, if the objective of EPR is to induce durable product designs, a low collection target accompanied with a high recycling target is preferred