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Waste: Ways out of the mess

A paper by Richard D North[1]
Version: 230204

Prejudices about waste: abstinence vs solutions
The "Waste Hierarchy": preferring the costly and inconvenient
Waste: raw material or insoluble problem?
Life Cycle Analysis: widening the issues
Can waste be virtuous?
Waste: political realities
Waste politics: At a local level, NIMBY politics
Waste politics: at EU level
Waste politics: at UK level
Waste economics and policy
Where are we right now?
A note on the waste industry: where the buck stops
A note on the funding of this paper


Here is a foretaste of the conclusions this paper will reach.

1) Waste minimisation, reuse, recycling, composting, landfill and incineration can all be good – and all bad – according to circumstance. The “waste miles” involved may be the biggest deal with any of them.

2) The “Waste Hierarchy” ignores the above truth, and attempts to prioritise ecological waste options, technology by technology. If anything – it gets them back to front. However, it does effectively rank waste options by their cost and inconvenience. So (by mistake) it reminds us that cheapness and convenience may be a rather good guide to waste options, or at least that using cheapness and convenience as our guides may not be harmful.

3) The UK planning system is so "democratic", it makes good waste policy difficult.

4) It would be nice if the EU did not regulate every last detail of waste management (especially as they've bought into the Waste Hierarchy, so they are wrong about much of it). But they will continue to try to. This may not matter: lots of experiments with different options may be useful.

5) The EU may not be bad on economically-efficient incentives to better behaviour: for once it might buy an “Anglo-Saxon” argument.

6) Domestic householders should be charged for waste disposal as they are for waste water disposal. This is as near to "Polluter Pays" as we need to get. “Metering” may not be a good idea.

8) The waste industry is one of the few elements in the story with the society’s environmental and economic well-being at heart.


Waste: delicious dilemmas.

A handful of examples:

1 The UK taxes landfill - but that hasn’t much reduced the flow of troublesome domestic wastes to holes in the ground.[2]

2 In the US, recycling lead is one of the few activities threatening to raise the level of the heavy metal found in children’s blood, after years of decline.[3]

3 In the US, charging householders for waste disposal on the basis of the amount they throw out has seemed to lead to a good deal of fly-tipping.[4] In Switzerland it works a treat.[5]

4 Ecologically-alert Denmark sends the waste products of its large incineration programme for landfilling in Norway (a practice which abuses the Green’s cherished principle that countries should look after their own waste, but which seems to work).[6]

5 Schemes to force US householders to put out less waste (or charge them) tend to result in them putting out very little less waste. However, they compact it rather more - a job easily done by the lorries the councils send round. [7]

This little list reminds us that unintended consequences are the policy-maker’s first birthright. On the other hand, the list should not lull us into a comfortable dilemma-ridden sense that nothing can be done, or that we can avoid making decisions. Waste disposal is one of the few problems on which voters exert real influence, and do it through authorities – their districts and councils – close to them.

This is a paper about “household and municipal waste”: the stuff the binmen pick up from households, retailers and offices. This is not the biggest or worst of the waste issues society faces, but it is the most visible. Also, it is both the bedrock of the waste industry, and the location of some of the most important planning and other decisions politicians have to make – and the answers to which determine industrial waste policy.[8]

There has to be waste policy. Waste is not something the market can handle by itself. The market is good at producing things people want - it is not so good at valuing things people do not want. Arguably, waste is one big “externality” (those social and environmental costs that the market does not capture by itself). It certainly involves managing – and costing - many externalities (many sorts of pollution, including global warming, and all sorts of nuisances such as noise).

It happens that for about twenty-five years, I have reported on the waste industry – and have always enjoyed its problems. I have always been fascinated by the people who undertake this difficult and unpopular work, and have admired most of them a good deal.

Contrariwise, I have disliked the Green tendency to stigmatise the industry.

So this paper by someone who loves the market, and has an affectionate interest in the waste industry, is about seeing how we can better describe the “problem” of waste, and develop rules which handle it by harnessing the market’s energy rather than frustrating it. And of course, one wants a healthy environment as well.

But Green opinion is a not good guide to waste policy, because all its prejudices tend to exaggerate the problem of waste, and its intractability. And its prejudices also lead it to dogmatic preferences between different waste options.

For all that, Green orthodoxies are at the heart of much of the emerging EU policy on waste, and that is almost as much the reality against which UK policymakers must work as is the fact that - one way or another - the nation's bins must be emptied every week.

Prejudices about waste: abstinence vs solutions

More than any other of the green issues, waste comes laden down with prejudices. More even than driving SUVs, travelling to exotic destinations in airplanes, or eating animals from factory sheds, throwing things away makes nice people feel guilty. There is something in our genes almost, something learned at our mother’s knee - our grandmother’s knee even more - which says, “Waste not, want not” as we bin things. We say, with a sigh, “Ah well, out of sight, out of mind”, but even as we say it we know that we have avoided the proper awareness of the consequences of what we do.

This prejudice runs deeper than the problem of what, actually, we should to do with things once we’ve consumed them. It is about the whole business of consumption. If throwing things away is bad, the prejudice goes, so too is the profligacy that inevitably gives rise to waste. The Green view is that much of what we have - what we buy and cause to be made - is not needed and ought not to be wanted.

Other issues mirror this sort of logic. All energy is more or less polluting, so we ought to stay at home and wear an extra sweater. All industrial plants disgorge more or less damaging emissions, so we should eschew their products. The point is: the Green argument says that technical fixes (“end of pipe” solutions) are at best a second best: the best-best is self-denial.

As we consider what do about the mountains of waste we throw into the huge holes quarry firms have dug out so we can have roads and houses, we should bear in mind this prejudice. It matters because the waste issue is above all an area in which the Green campaigners would far prefer that there was no solution but abstinence.

The "Waste Hierarchy": preferring the costly and inconvenient.

This helps explain the idea of a “waste hierarchy” which has guided (plagued, one might say) the policy debate. This ordering of preference has two versions.[9] One suggests that we should first minimise waste (and the higher up the production chain the better) and then move to recycling and only then move on to disposal. There is a second, more detailed, version of the waste hierarchy that prioritises the various technologies that can be deployed. It usually runs, in order of preference: recycle, treat, compost, incinerate, landfill. Few people dispute these hierarchies in public. In private, there is hot debate between those that see incineration and landfill as capable of being a form of recycling (because they can produce either useful energy or materials or both) and those who see them as dumping by another name. The next section deals with this issue.

If there were an anti-consumerist logic behind these hierarchies (rather than a purely environmental one), it could hardly be better-served. Landfilling is very cheap. Incineration is relatively expensive.[10] All the others are either yet more expensive or inconvenient, or both. That’s to say: kill or punish landfill, and one has a powerful device for making consumer society much more difficult or expensive. By killing or punishing incineration, one can make life pretty expensive or inconvenient. By insisting on composting or recycling (let alone reuse) one is forcing yet further cost or nuisance on people. (We can include composting as an expensive technology partly because only a sophisticated version will do, and because it leaves a goodly fraction of waste to be handled by other means.)

As we shall see, the Waste Hierarchies are wrong in their ecological prioritising, but they are a pretty accurate ranking of the cost or inconvenience of the various waste technologies. The Green argument suggests that cheap solutions are careless ones. The "consumerist" is inclined – contrariwise - to wonder if the economic cost of a solution might not capture some of its ecological cost too (perhaps by pricing the energy, labour and materials involved).

Anyway, the waste hierarchy serves the anti-consumerist doctrine rather well. It legitimises the idea of penalising cheap and convenient waste options so that they are as expensive and inconvenient as “naturally” awkward ones.

Waste: raw material or insoluble problem?

Anything which is recycled was never really waste. What one person discards, but another can use, was never really waste. It was a raw material. Again and again, those who handle waste wish it was seen as a resource for someone else in the chain. Oddly, the Greens, who are inclined to want us to see the value in waste, nevertheless are reluctant to accept that it is a resource. They are sufficiently in love with abstinence to wish that we had never consumed, and certainly never discarded, anything. They want it to stay stigmatised, even as the rest of us might seek to see it more positively as a raw material.

Hardly surprisingly, a huge amount of policy-makers’ time is spent debating this issue.[11]

The Greens want waste to maintain its status as a “problem”, though they also want to "close the loop". Their case is that almost everything we do is environmentally bad, and even recycling is only less-bad than not consuming in the first place.

The upshot is that the waste disposal industry wants a wide definition of "recycling", and the Greens want a very narrow one.

Thus, in a classic case, the “Ghost Ships” which were towed to the UK for scrapping were (in Green eyes) “toxic” and an ecological disaster waiting to happen. For the shipyard, they were a source material coming in for recycling and such waste problems as they gave rise to (asbestos, for instance) were small beer compared with the waste which the UK already has to dispose of.

Similarly, plastic in packaging, for instance, is frowned-upon by Greens as troublesome waste. In Green eyes, plastic can be made a little more forgivable if it is collected and treated so as to become a usable plastic again. But a fan of incineration might see it as pre-used fuel for a power-generating incinerator, and as such rather better than ordinary fuel since it has fulfilled an additional human purpose. So reviled is this material that the EU penalises its use as fuel in incinerators (more of which below).[12]

The plastics case nicely shows us that the Greens insist that recycling consists in producing a material as much like the original product as possible. The waste industry is more inclined to say that getting any sort of good value out of a material is good enough.

We can tackle this in another way: The Greens understate the environmental downsides of their beloved recycling, provided the material is for reuse. And they exaggerate the environmental downside of the many of the waste industry’s practices, even where they capture quite a lot value.

Life Cycle Analysis: widening the issues

In the UK, it happens that we have always had - and in some places still have - large holes in the kind of geology into which it is fairly easy to put things without much risk of their leaking nastily into their surroundings. (It is surprising, granted how little containment mattered to early landfillers, how few landfills have caused leakage problems.) There is then a separate issue about the emissions of methane that any rotting material will produce. Methane is a greenhouse gas, so it is a bad idea to release it to the atmosphere. There are two solutions to this problem: capture the methane and be glad it is wonderfully efficient fuel[13], or not put rottable material in the landfill in the first place. After all, it can be composted separately, and the methane produced can be captured at that stage.

It is a peculiarity of recent UK environment policy that we have taxed landfill and produced the effect that putrescible (arguably problematic) material still went to landfill but inert (rather benign) material stopped being sent. This latter was a pity since such stuff was needed to help make landfill work well. The latter effect was put right by re-jigging the tax. The former, more intractable issue will be tackled, it is hoped, by increasing the tax (and doing so well beyond the level needed to capture the environmental externalities.)[14]

But the problem with landfill may not really be the one that is so often advertised by the Greens. We have fewer holes than we used to, and we now landfill waste further and further away from where it’s produced. Thus, Brighton’s polite south coast “arisings” are now shipped to a landfill amongst the gritty northern realities of Stoke on Trent. Those “trash miles” would need to be factored into any serious account of the ecological effect of Brighton’s waste disposal.

We will come back to this, the heart of waste and any other environment issues. We need “life cycle analysis” to tell us how to judge the real impact of this or that human activity. The point is that one can’t usefully pick on small bits of the process involved.[15] So the delivery of waste to the hole in the ground may matter as much as the more obvious emissions from the waste once it’s there. The difficulty, of course, is that totting up these impacts is a lot harder than running a company account through a spreadsheet. And what is worse, knowing the up- and down-sides of one route of disposal gets one nowhere until one has done the same calculation for any alternatives.

Suppose that one now considers incineration. Its supporters remark that its gaseous emissions are simply no problem, and haven’t been for 20 years since regulators have tightened up controls, following vast improvements in the technical ease of controlling the problem. Never mind the rhetoric of the greens or the politicians of every stamp - nor even the industry. Listen to the UK regulator, the Environment Agency (whatever the predilections of its politically-correct bosses): its website declares its acceptance that the risks are acceptable.[16] By the way, there is evidence that of the CO2 emitted by waste incinerators, only about 13% is “net”, or “additional” to what would have been produced in the absence of incineration.[17] Plant a few trees, and this “surplus” could be mopped up. There are issues to do with the 10 percent of the original waste which remains in the form of flue-gas residues (from what would have gone up the chimney) and the non-combustible slags and ashes which remain in the grate, as it were, after burning. These contain heavy metals and require landfilling. So the issue of incineration is largely a landfilling issue.

Since neither landfilling nor incineration has a fraction of the problems normally ascribed to them, but neither is problem-free, why not suppose that recycling would be preferable to either?

Well, the main reason is that recycling tends to involve the energy-intensive treatment of low-value materials with the hope of producing a rather lower-value material than we started with. So it’s often a question of burning lots of fuel to get a poor product. Sometimes the equations work out not badly, or very well. But that’s rare, and on the whole the best recycling is the sort which aims low.

This is not to dismiss recycling. It happens that the paper and glass industries both need recycled material as they produce “virgin” material. Often, industrial sources (factories, supermarkets even) are excellent sources of material which can be cheaply shipped to recycling plants where commercially useful products can be made from them. Often, industrial plants can be designed so as to produce “waste” streams which can be good raw materials for other processes, and goods - cars, for instance - can be produced so as to be more easily recyclable.

But the last case is an interesting one: some of the cars now produced are less easily recycled than previous models. But this is because they are made of materials which make them light (yet strong) enough to save lots of energy in their use. If the recycling foregone in this change saved less (or cost more) energy than the lightened vehicle, then the deal is a good one, whatever the verities.

Similar cases can be made about reuse. New cars are less polluting in nearly every way than old ones, so any drift towards changing cars has environmental benefits, though any drift toward larger engines can undo the energy efficiency which is now possible. One might say this more cautiously if one factored in the environmental costs of earning the money to pay for the trade-in. Ditto, fridges, deep-freezes, central heating systems and even houses.

So amongst the first lessons for a waste policy-maker is the hardest one of all: there are no simple guides to virtue here. The trick is to think through the real effects - the real costs and benefits - of a waste policy, not to hang one’s hat on a formula or a hierarchy.

Can waste be virtuous?

If we recast landfill as a sort of creative geology and incinerators as biomass energy generators (rather like a wood-burning stove) then we can suggest that the “bottom end” of the conventional hierarchy can be virtuous. Landfill takes the bits of the earth’s crust we have quarried for materials we want for roads and buildings, and it refills these holes with materials whose best use may be as hole-filling. Incinerators take materials of small use, and discover their value as sources of heat. In the former case, we can be positively glad that much our waste material is inert - and then consider whether we should be capturing the methane from the rottable fraction of our landfilled waste. Methane is a potent Greenhouse gas, if released unburnt. But when burned, it is transmogrified into one of the least global-warming fossil energy sources.

In the case of incineration, we can be glad that much of our “waste” in burnable - and consider whether the non-burnable part is really such a problem in landfill, or might be recoverable in other ways.

So the core of these cases is that landfill and incineration both have the potential – like composting and recycling - to find value in what had previously been considered waste of no, or negative, value.

Waste: political realities

Waste politics: At a local level, NIMBY politics

Waste is handled by the waste industry, which is contracted to do the work by Local Authorities, on behalf of their voters. Local Authorities are also the main location of the planning system, on behalf of their voters. We have no idea whether voters will pay for expensive waste solutions (they’ve never really been asked). But we do know that they hate almost everything the waste industry wants to do. This is a real bind.

All we know about the future of waste policy is that “reforming” it will involve finding about 2000 new sites. These may be incinerators, landfills, composting yards or sheds, or treatment (recycling) plants - listed here in order of the political objection likely to each application.

We might bear in mind that the most serious goal of most policy-makers will be the global warming implications of waste policy. Rightly or wrongly, they have the Greenhouse at the front of their minds. But it is nuisance and toxicity – the latter often more imagined than real – that worries the voters. This is, by the way, a problem for Greens: they agree that Global warming is or ought to be their number one issue, but they are stuck with having sold recycling (which may be bad for the Greenhouse) as a core value.

So one of the peculiarities (and problems) facing waste policy-makers is the opposition of the very people who are throwing away the waste.

Our planning process is extraordinarily open to the objections of affected citizens. So NIMBY (“not in my backyard”) is a powerful force. Most waste planning applications will be discussed and delayed for years and even decades whilst local voices are attended to.

The opposition to landfill and incineration is vociferous and forceful and usually expresses itself at the point at which the industry seeks planning permissions to fill a quarry or build a smokestack. Recycling – composting, and so on - only looks like a solution to this problem. People are likely to object to those facilities too.

Of course, even energetic recycling programmes will leave plenty of waste still to be buried or burnt, or composted.

The dislike of voters for almost all its technologies will leave the waste industry in the position it has always occupied. It is in the planning permission business. Like the house-building trade, landfillers in particular must build a stock of land, whose location and geology will of course matter a good deal. But the physical land will be no use if the owner hasn’t managed the political situation well, and got the permissions and permits which allow him to be in business. Firms offering incineration, and to a lesser extent people offering composting, have the problem that very high-profile campaigns will be waged against them, with groups like Greenpeace operating both nationally and locally against their plans.

This is one of the many points where “environmentalism” works against good environmental policy.

Our core problem is to find a place in the system where the economics of different waste disposal options is married up to their ecological efficacy, but also where decisions can happen. One obvious answer is to see Local Authorities and their voters as this pinch-point. Local voters are crucial in deciding what options can happen on the ground – it would be a good idea for them to sense sharply the costs of bad waste decisions.

Tantalisingly, we are nearly there already. Local Authorities charge their voters for waste disposal. But the price is low. And worse, it is buried within general council charges.

Perhaps local voters should pay a direct charge for waste disposal. And then – and this is much more controversial – perhaps each voter should pay according to how much their waste disposal costs.

Wouldn’t that impose a proper economic and ecological discipline?

We’ll return to this.

Waste politics: at EU level

The EU believes in treating wastes. It has always been more interested in regulation than in voluntary approaches.[18] It has also, and this is important, been keen on dictating precise outcomes (“x” waste should go to “y” disposal option with “z” standards applied). In consequence, it has been less interested in a light touch which sets broad targets.

But the real problem is this. We cannot readily predict which waste options work in any particular situation, and are working to improve the environmental outcomes from any and all options. So we need to lay down the broad outlines of what we seek, and then allow many experiments in how to achieve them.

There is a parallel issue. Societies everywhere are trying to work out how to penalise “bad” waste options and incentivise “good” ones. These “fiscal instruments” of course all depend on intervention in the market.

Roughly speaking, the biggest divide is between the Germanic tendency and the Anglo-Saxon. The Germans believe that every aspect of waste disposal should be regulated, and that it is very reasonable to tell producers and consumers in great detail what they should do with their waste. They are then happy to impose quite high costs on consumers to make particular waste outcomes come about. They have, for instance, imposed a packaging recycling system which is widely regarded as clumsy, expensive and ecologically counterproductive.

The British (and the US) believe that the least intervention by regulation or penalty (or incentive), the better. Their approach is to try to find the right points of leverage, the points where the least intervention produces the greatest desired affect. This is sometimes described as trying to find “Silver Bullet” intervention.

There is a degree of convergence here: the Germans do believe in sending price signals, and the British do believe that fiscal measures do at root depend on regulations (even tradable permits – a favoured option – depend on government selling “quotas”).

Besides, we could argue that the Germans are at least exploring what works, whilst it took the British nearly ten years longer to get seriously interested in recycling. Even now, we are reluctant. The British position may be justified, but it was hardly innovative.

In brief, the EU is at the moment sending signals that it is quite interested in a lighter touch.[19] So whilst the EU has invested too much in the Waste Hierarchy, and in precise regulation, there are indications that it is open to Anglo-Saxon arguments about how to use economic sticks and carrots. And there are signs, too, that the EU may be less in thrall now to the Waste Hierarchy than it once was: it is more open to the idea of recovering any sort of value from waste, rather than thinking in terms of high quality materials recovery alone.[20]

Waste politics: at UK level

The past twenty years have seen a gradual capitulation by British regulators. Successive recent secretaries of state and green ministers have “gone native”.[21] They have succumbed to the Green argument. This is not merely a matter of expediency, but an actual change of heart. In very recent years, these ministers have appointed increasingly “Green”-minded people to be the public face of, for instance, the Environment Agency.[22] This means that a broadly “continental” approach has been adopted in the higher reaches of British official environmental thinking, and even its policy. It has become anti-whaling, anti-nuclear, anti-incineration, anti-landfill.

Partly, this is a response to a capitulation to EU thinking. During the 80s, the UK faced a fairly serious diplomatic problem because of its insistence that "dilute and disperse" (landfilling, dumping at sea) were often very acceptable environmental solutions to waste. The Continentals and Greens everywhere thought this was plain offensive. By about 1988, the UK gave in, though many of its best environmental regulators persisted in believing that they were right.

In this most technically and politically tricky area, the Cabinet Office - Mr Blair’s own thinktank - produced a document, “Waste Not, Want Not”.[23] This was presumably a response to a Downing Street perception that the environmental establishment within Whitehall wasn’t coming up with the required goods.

Of course, no realistic UK waste strategy could presume to fly in the face of EU prejudices. “Waste Not, Want Not” celebrated recycling, but in any case certainly had to take an anti-landfill, pro-recycling point of view. It then went on to consider how to send the right signals, both regulatory and economic. This included the idea – howled down when it was trailed – that householders might be charged a variable fee, according to how much waste they produced.[24]

Waste economics and policy

Sustainable Development and the Polluter Pays principle.

No modern policy can be sold unless it can be expressed in terms of “Sustainable Development”. This “principle” suggests that we must find means of having economic growth (development) within ecological constraints (which would ensure its viability – or sustainability).

This is a matter of marrying ecological and economic goals.

Thinking along these lines has lead policy-makers to want economic players to pay for the ecological damage they do. This is called “capturing the externalities”. This might seem to be a doomed attempt to put a price on the priceless (and “deep” Green thinking certainly does see it this way). But it can be defended as the only way of ranking undesirables: it must be right to “fine” lesser polluters less than greater ones. One has to attempt such prioritising.

To apply fiscal measures, one must be able to identify the economic player who should bear responsibility, and to whom it makes sense to apply pressure. Enter, the Polluter Pays Principle. This has become a core policy mantra, and like most Green mantra, it does not, actually, bear very much inspection. Yes, it goes well with seeking villains and placing blame. But its great weakness is that it provides no guide to the one thorny issue at stake: who should we target when we aim at the “polluter”? Do we mean the last to touch the product in question (the consumer, usually)? Or do we mean the other end of the chain: the producer? Or anyone in between: the wholesaler or retailer? The Greens will habitually settle for any soft touch in the chain - normally the deepest pocket, the politically weak, the PR-conscious. So they are very fond of placing blame and responsibility at the door of manufacturers and retailers – or the waste industry.

The Greens and many policy-makers (the EU, for instance) like the idea that firms should pay charges for the waste disposal costs their products will eventually cause. The campaigners might not care much whether it’s the manufacturer or the retailer that is penalised, both are reassuringly capitalistic.

But there is a profound problem here. Charging firms for the waste they cause consumers to throw away doesn’t connect the consumer with the problem the waste causes.

Many ecologically unsound waste solutions (wrong-headed charges on, or barriers to, consumption; too much recycling) would impose costs and inconvenience on waste-producers. At the moment, many of these costs are borne by Local Authorities, who have not really made clear how they are borne by "consumers" - the voters. (The difficulty here is that local authorities are too busy “selling” the virtues of recycling to be keen to tease out its expense.)

It would make sense that as many of these costs are made highly-visible to those who must ultimately bear them. Thus, we could also claim to put the Polluter Pays principle into play.

To be fair, the Greens are very keen that everyone in society should be engaged with the waste issue. They want householders to separate their waste into lots of different streams, each to its own box, for recycling. They think this engagement is so good (healing and instructive) in its own right that they often argue for it even whilst conceding that it may be doing no ecological good and may well be expensive (which they think a virtue in itself).

So we can borrow some Green tendencies, and even rather wickedly pretend we like the Polluter Pays Principle, as we suggest that householders should see and feel very clearly the costs - necessary, useful, or absurd - of waste disposal policy.

This direct charging approach would connect the final-disposer with the realities of waste disposal, and the realities of planning and other decisions which affect it. There is hot dispute amongst the policy-makers about charging householders. The biggest issue is whether householders should be made to pay a more visible version of the current flat-fee, or whether we should move on to a “Pay To Throw” system, by which households are charged according the amount of waste they throw away. One problem with this is that poor or irresponsible households would be tempted to fly-tip. Another is that the problem with waste is not necessarily either bulk or weight – it is toxicity: people might be perversely tempted to hide their worst waste in ways neither visible nor weighable.

Any of these approaches would make situation clearer than it now is. An authority would be free to adopt expensive and inconvenient policies if it liked. But instead of seeming to impose costs on anonymous or disliked producers and authorities, the Greens and their capture of policy would be seen to be costing each of us real money. Voters and consumers would have an incentive to take an interest in seeing if waste policy made good environmental and economic good sense.

Where are we right now?

The UK government (see the remarks on “Waste Not, Want Not”, above) has toyed with the idea of charging householders for the amount they throw away. Their proposal was criticised as being an excessive new charge on the poor – and as being likely to lead to fly-tipping (as Americans say has happened there and as the Swiss say doesn’t happen there).

There are some signs that current EU consultations allow that we need to avoid clumsy fiscal measures – applying the wrong charges in the wrong places[25]. So there is a chance to get good policy there.

It doesn’t much matter that EU, and thus UK, policy has to adhere to the Waste Hierarchy for now. If we use the right charges and subsidies to gently nudge many waste disposal experiments into being, we will soon have the evidence with which to confront current prejudices – or to confirm that they are well-founded.[26] There is increasing evidence that underneath politically-correct rhetoric, policy makers are preparing for this more nuanced approach.[27]

There are several locations where good sense on the economics of waste policy is being promoted. The OECD seems an obvious one, and some parts of UK officialdom is another. Several academics seem to understand the issue, as do several EU governments.

In Europe, the position seems surprisingly fluid, and open to good policy-making.

A note on the waste industry: where the buck stops

One should for parity's sake perhaps point out some false arguments or dangerous prejudices from the waste industry, to match those of the Greens. The difficulty is that the waste industry makes very few claims - it seems mostly merely to wish that other people's claims had rather more substance.

The waste industry is capitalistic, and thus not a favourite of the Green mindset. Beyond that, the industry was mostly built on the loathed landfill, with some participants branching out into - or specialising in - incineration. So they were natural targets. Now some of these firms have branched out into recycling and composting, so that ought to help their political image problem a little.

The industry may be able to present itself as not so much part of the problem as part of the solution. But there is something more intriguing about its having so many fingers in so many different waste technologies. This is to say that the waste industry might be thought to have a positive interest in bad policy. True, many firms own holes in the ground and have become very expert in the politics of getting planning permission to use them as landfills. So they might be thought to dislike the modern political preference for outlawing landfill. But they are canny enough to see that landfill has a long future and that other technologies will become part of the suite they must deploy. And these other technologies - recycling, for instance - provide many more opportunities for adding value. They are inherently expensive, and likely to provide decent room for profit margins.

Waste disposal is a difficult, politically tense, capital-intensive business in which existing players are very likely to maintain existing toeholds and opportunities. As Green politics drives the regulator towards more and more sophisticated options, the business will quite likely become more and more profitable. The EU’s landfill directive alone has led to the UK landfill tax, but also to new regulations which have doubled the turnover of the sector.

This analysis might lead the casual observer to suppose that firms could more or less indifferently read the runes as to likely regulatory futures, and plan accordingly. They could cheerfully adopt fashionable mantras which slate landfill and celebrate recycling.

There is however a powerful countervailing engine toward a sort of virtue in the waste industry. This is the fact that firms have to manage reputational issues which have much longer timelines than apply in politics. Waste firms know that twenty years hence they will be answering questions about their early-third millennium practices and the rationale which drove them. If landfill, incineration or recycling turn out to be inefficient - if they turn out to contribute overly to global warming, or pollution of any kind - the media, campaigners and politicians of the day will cheerfully lay much of the blame at the “polluter”, the firms who promoted and profited from these technologies.

There is therefore a strong driver for the firms to ensure that their arguments today will hold water now and for a long time to come.

But note the way this different timescale affects politicians. They will seek attractive solutions (ones which accord with their view of the world), and try them out on voters. Naturally, if they sense that the preferred policy is finding favour, they will pursue it. If not, then there are some issues which it is fairly safe to delay for a few years. Pensions, nuclear power and waste management all come into this category. They are controversial in different ways, but they have it in common that delay in grasping the nettle is politically attractive.

A note on the funding of this paper

The Environment Services Association (the trade body of the UK waste industry) funded my attendance at an OECD seminar on the economics of waste. This brought me up to date with policy making in this area, and I am very grateful for it.


[1] Richard D North is media fellow of the Institute of Economic Affairs (www.iea.org.uk). www.richarddnorth.com.

[2] OECD, 2003a OECD Seminar on waste, Paris 2003, DEFRA paper, forthcoming

[3] OECD, 2003 OECD Seminar on waste, Paris 2003, Sigman paper, forthcoming

[4] OECD, 2003 OECD Seminar on waste, Paris 2003, Fullerton paper, forthcoming

[5] OECD, 2003 OECD Seminar on waste, Paris 2003, remark by Swiss delegate

[6] OECD, 2003 OECD Seminar on waste, Paris 2003, remarks by Danish and Norwegian delegate

[7] OECD, 2003 OECD Seminar on waste, Paris 2003, Fullerton and Raub paper, forthcoming

[8] Whether local voters want a landfill or an incinerator for municipal waste will determine which of these options are available to industry.

[9] EU, 2002 Environmental Technologies Action Plan, Waste Management – Working Document (18/12/2002), 2nd Draft of Discussion Document: "A central role is played by the concept of hierarchy. This concept proposes the following list of waste management option in decreasing order of priority: first comes the reduction of waste generation then reuse, then recovery, and last disposal. The recovery steps covers various options such as material recycling, energy recovery or composting, which are sometimes also ranked according to a often contested hierarchy. [rdn note: this usually runs: recycling, composting, landfilling, incineration, with the last two reversible according to taste]

[10] OECD, 2003 OECD Seminar on waste, Paris 2003, OECD Secretariat paper, forthcoming

[11] EU 2003 Towards a thematic strategy on the prevention and recycling of waste, EU COM(2003) 301 final, Brussels, 27.5.2003: “In recent jurisprudence the European Court of Justice developed a criterion for distinguishing between waste recovery and waste disposal. According to the Court, a waste treatment operation is to be classified as recovery when the fundamental objective of the operation is that the waste substitutes the use of primary resources. The Court has notably concluded that filling a mine with waste could be a recovery operation if the waste is used in replacement of primary resources that would have otherwise been used for the purpose of filling the mine . This could for instance be the case when, for the purpose of stabilising land a mine must be filled. The Court also concluded that use of waste as a fuel in a cement kiln is recovery when excess heat is generated and this heat is used in the process . In contrast, the Court decided that incineration in a dedicated municipal waste incinerator has for primary objective to dispose of the waste. The Court added that, in the cases analysed, this classification as disposal operation would not be changed if, as a secondary effect of the process, energy is generated and used.” [RDN comment: this is surely a weird judgement – it implies that provided one pretends to want the energy more than the waste disposal, incineration becomes virtuous.]

[12] Resource, Nov-Dec 2003, Breaking the chain: “But with limited Energy from Waste [EfW] capacity – and the removal of major EfW activities as a recovery process compliant with the Packaging Directive targets – a new approach will be required …… ”

[13] Sita, 2003 Environment Report, 2002, page 16: A useful explanation of the role of energy from methane captured from landfill sites (some is burned-off in flares, which is less-bad than its being voided to the sky – but recovery for energy-use is growing).

[14] OECD 2003a

[15] EU, 2002: “ The major challenge for the recovery of materials from the ‘difficult’ waste streams was to know the real cost of the whole recovery chain. We must here distinguish between the overall cost and the cost of the recycling step per se. A ‘profitable’ recycling step does not necessarily mean that the overall recycling activity is profitable. One of the major lessons learnt, is that the most important factor that determines the overall profitability of recovery operations is the cost of collection and sorting.”

[16] See this link:


[17] OECD, 2003 OECD Seminar on waste, Paris 2003, Martinsen and Vassnes paper, forthcoming

[18] EU, 2003: “Better management of a number of problematic waste streams has been achieved through Community directives on specific waste streams. Important hazardous wastes have been addressed such as waste oils, PCBs/PCTs and batteries. Heavy metals have and are being further restricted by Community waste legislation in a number of products, aiming at qualitative prevention. Recycling and recovery targets have been set for some key complex waste flows, i.e. packaging, end-of-life vehicles (ELVs) and waste electrical and electronic equipment (WEEE). Such targets are necessary where separate collection and recycling are not profitable under free market conditions but are beneficial from a societal point of view. Although these targets are generally the subject of much debate during the adoption process, once adopted they provide the legal certainty and stability necessary to allow the recycling industry to programme investments in the knowledge that there will be a demand for recycling services.”

[19] http://europa.eu.int/comm/environment/natres/ and http://www.esauk.org/

[20] EU, 2003: "The objective of this Communication is to launch a process of consultation of the Community institutions and of waste management stakeholders to contribute to the development of a comprehensive and consistent policy on waste prevention and recycling. Waste prevention and recycling policies shall contribute together with energy recovery and sound disposal options to the achievement of an optimal waste management strategy aimed to minimise environmental impacts through the adoption of the most cost-efficient option." And this: “Waste treatment is only one of the ways in which waste generates environmental impacts. Improving the efficiency of resource use is just as important. This is where waste prevention and waste recovery, whether energy recovery or material recovery can make a specific contribution to reduce the environmental impact of resource use, above and beyond what can be achieved by regulating waste treatment processes.”

[21] For the Tories under Margaret Thatcher and John Major, William Waldegrave was an early example of a British minister who learned to take the environment very seriously (in the mid 1980s); Chris Patten followed this lead. But it was John Gummer who was both a more senior minister and most completely “Green-ed”. Under Tony Blair, Michael Meacher as environment minister became (if he was not already) spectacularly “Green” and in the end resigned (though as much over Iraq as over the Government’s GMO policy). For instance, Mr Meacher seemed unable to endorse incineration, though the Environment Agency – his statutory professional advisor – did.

[22] Barbara Young, a former director of the Royal Society for the Protection of Birds, a green campaign group was appointed chief executive of the Environment Agency, an essentially technical body.

[23] http://www.number-10.gov.uk/su/waste/report/01.html

[24] http://www.number-10.gov.uk/su/waste/report/00-2-es.html

Document: "Waste not, Want not - A strategy for tackling the waste problem in England" (November, 2002)

Heading: Executive Summary


Heading: Putting in place a robust economic and regulatory framework is the most essential ingredient for success

This requires:

[various measures, including...]

.....greater freedom for local authorities to develop new financial incentives for householders to reduce and recycle their waste. Households currently pay the same Council Tax no matter how much waste they produce or whether they recycle or not. This means that they have no incentive to manage their waste in more sustainable ways. This report has identified 17 other major industrialised nations where incentives are available for households who produce less waste, and/or recycle and compost more. These schemes have helped reduce waste growth, contain costs, and achieve recycling rates 3-4 times higher than that of the UK. Comparable incentives that could be taken forward in the UK include: Council Tax discounts for people who recycle or compost; reward schemes for people who recycle or compost regularly; and giving local authorities freedom to introduce variable charging schemes, where the Council Tax element for waste would be removed and charges to households made according to the amount of un-recycled and unsorted waste they produce….

[25] http://europa.eu.int/comm/environment/natres/ and http://www.esauk.org/

[26] See the Advisory Committee on Business and the Environment at http://www.defra.gov.uk/environment/acbe/default.htm and in particular: http://www.defra.gov.uk/environment/acbe/pubs/pdf/acbe-greentax-final.pdf


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