BERKELEY’S 25 CENT DISPOSABLE CUP LAW and the Law of Unintended Consequences

Restaurants and stores in Berkeley are now required to charge customers 25 cents for disposable cups. It does not matter what the cup is made from. The charge is 25 cents whether the cup is polystyrene (which is not biodegradable), biodegradable plastic, cardboard, or even paper. If the cup is designed for single use, the charge is 25 cents. The restaurant gets to keep the money. The purpose of this law is to dramatically reduce the number of disposable cups used in Berkeley. However, I think this law may do just the opposite. You can buy 12-ounce disposable cups at Costco for 5 cents each. Restaurants in Berkeley can now sell those cups for 25 cents each. They are prohibited from charging less. That means that a restaurant in Berkeley can sell a disposable cup for 5 times the cup’s cost. That’s a huge profit margin! Restaurants don’t sell food for 5 times its cost. In other words, the city of Berkeley has given restaurants a financial incentive to use more disposable cups, just the opposite of the law’s intention! Some people bring their own cups with them when they go to coffee shops and restaurants, but relatively few people do that. I know quite a few Berkeley restaurants that are struggling financially. Now they can charge customers 25 cents for disposable cups that cost them 5 cents. What do you think they will do? I think they will do the obvious thing and use more disposable cups. This law does not require restaurants to have reusable cups, and many places that sell beverages, like convenience stores, don’t have dishwashers or any way to wash and sterilize cups. The Berkeley city council often passes ‘feel good’ laws like this, without thinking through the practical consequences of what they are doing.