The UK Environmental Audit Committee is urging the government to charge 25p "latte levy" on disposable coffee cups.
"We are encouraged by industry action to increase the recycling of paper cups with some major retail chains now offering discounts to customers with reusable cups", said a spokeswoman.
The MPs say the charge would lead to 750 million fewer disposable cups being discarded as litter, incinerated or sent to landfill, and would generate £438m.
The Committee's report also recommends that all single-use coffee cups are recycled by 2023, and if this isn't in effect by then that there is an outright coffee cup ban.
Labour MP Mary Creagh, chair of the committee said, "Coffee cup producers and distributors have not taken action to rectify this and the government has sat on its hands". There is no excuse for the ongoing reluctance from Government and industry to address coffee cup waste.
Pearlfisher head of realisation Jen Nathan says, "Designers and design agencies should be playing a significant role in helping to advise their clients on the most sustainable materials and production practices and connecting them with innovative partners and suppliers who are helping to find solutions to challenges like that of takeaway coffee cups".
"The government should set a target for all disposable coffee cups to be recycled by 2023", she said. "Disposable coffee cups are an avoidable waste problem and if the United Kingdom can not be confident of their future sustainability, the Government should ban them".
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Now many coffee shops offer an equivalent discount to customers who bring reusable cups (Pret A Manger just upped its discount to 50p), but awareness and uptake is very low, around 1 percent.
Starbucks said it would also continue the 25 pence (28 euro cent) discount it already offers to customers who bring their own cup.
The amount of carbon dioxide emitted by the production and shipment of 2.5 billion cups - the number discarded in the United Kingdom every year - is equivalent to that produced by burning around 120 million litres of petrol. "To understand how better this could work we are delighted to announce a partnership with Starbucks that will trial and promote a 5p cup charge in 20 - 25 central London stores". The trial will begin next month and initially last for three months.
"We recognise there is growing concern about the number of single-use paper cups being used and that our customers are interested in ways we can help them reduce, reuse and recycle", said a Starbucks spokeswoman. Reusable cups will be promoted alongside the charge, the revenue from which will go towards a "comprehensive behaviour change study" run by Hubbub.
"There's going to have to be a change to the recipe of the cups to make them degradable".
Estelle Brachlianoff, Senior Executive Vice-President at Veolia UK & Ireland, highlighted the progress it had already made in pioneering coffee cup recycling, working in partnership with Costa, Starbucks and McDonald's. That's just one out of every 400 cups.
"The public needs a simple, United Kingdom wide solution, one which is made possible by the introduction of an on-the-go waste management infrastructure". Is it about raising more money - from producers or consumers or both - to develop new, separate collection, sorting and treatment infrastructure for coffee cups and (surely) other forms of disposable food and beverage packaging?