Would you pay a tax on coffee cups?

The world's first recyclable coffee cup
The world's first recyclable coffee cup

Disposable coffee cups are a nightmare for the environment: Most end up in landfill sites, and putting them in the paper recycling bin makes matters worse because they can't be easily processed.

To tackle the problem, a group of British lawmakers is calling for a new £0.25 ($0.34) tax on disposable coffee cups. They hope a "latte levy" would force consumers to use recyclable cups and reduce waste.

About 2.5 billion paper cups are used in the U.K. every year. Less than 1 in 400 are recycled, according to the environmental audit committee of the House of Commons. In the U.S., 60 billion paper cups end up in landfills every year, according to industry estimates.

"Most people mistakenly think that disposable cups are widely recycled," the British lawmakers said in a report published on Friday. "This consumer confusion shows that retailers have failed to be clear with consumers about coffee cups."

The U.K. government said it would consider the lawmakers' recommendations.

coffee cup pollution

A typical coffee cup is made from cardboard with a thin plastic lining. This keeps the drink warm and prevents the cardboard from becoming soggy.

But it also makes the cup hard to recycle, because splitting the materials is expensive. Only four waste processing plants in the U.K. recycle them. Many coffee drinkers are not aware of this and put their cups into recycling bins. That contaminates the waste and makes recycling more costly.

Related: More plastic than fish in oceans by 2050

Tax would raise prices by 10%

The proposed tax would make an average cup of coffee around 10% more expensive -- a big hike in the U.K. where inflation is already running at over 3% and living standards are being squeezed.

Lawmakers said those who produce the pollution should bear the costs of managing it. The money raised from the tax would go towards building better recycling facilities, they added.

In response, Starbucks (SBUX) said it already offers a 25 pence discount to drinkers who use a recyclable cup -- currently just 1.8% of its customers in the U.K.

Related: Starbucks cups aren't recyclable. Here's the solution

It also said it would trial a 5 pence per cup charge in around 20 stores in central London for three months starting February. The money will be used to fund research by an environmental charity and behavioral change experts.

Costa Coffee, which operates over 2,000 stores in the U.K., said the government should consider "a mix of measures to address this issue with a focus on improving.... waste and recycling infrastructure." It also offers a discount of 25 pence to customers who bring their own cups.

The lawmakers say a stick is more effective than a carrot in changing consumer behavior. They cite the introduction of a 5 pence charge on plastic bag in supermarkets, which cut their use by more than 83% in the first year after it was introduced in England in 2015.

Recycle or face a ban

The paper cup industry warned a tax would hurt coffee chains, and said the government should instead focus on providing more recycling points.

"Indications are that introducing a tax on coffee cups will significantly deter shoppers, with over one third saying it would negatively affect how often they visited their local high street," said Neil Whittall, chairman of the Paper Cup Recovery and Recycling Group.

Related: This German city just banned coffee pods

The lawmakers want the government to set a target that all single use coffee cups should be recycled by 2023. If that can't be achieved, they want the government to ban disposable coffee cups completely.

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