Paper discusses the findings of a research project which explored the packaging waste management system in Latvia. The paper focuses on identifying how the policy mechanisms can promote ecodesign implementation and material efficiency improvement and therefore reduce the rate of packaging waste accumulation in landfill. The method used for analyzing the packaging waste management policies is system dynamics modeling. The main conclusion is that the existing legislative instruments can be used to create an effective policy for ecodesign implementation but substantially higher tax rates on packaging materials and waste disposal than the existing have to be applied.