Brian Fallow: Rubbish drive lacks bottle

The Parliamentary Commissioner for the Environment has taken a swipe at the Government's "starry-eyed" reliance on voluntary measures in waste management and its reluctance to use financial sticks and carrots.

In a report tabled yesterday, commissioner Morgan Williams, an independent watchdog answerable directly to Parliament, says such sticks and carrots have been shown internationally to be effective in changing behaviour.

They can take a variety of forms, including levies, deposit and refund schemes and tradeable permits.

They are designed to ensure at least that the polluter pays, and preferably that businesses and consumers save or make money by doing the right thing environmentally.

And they are based on the fairly self-evident proposition that if the costs of waste disposal are socialised, there is little incentive to keep them down.

Their use was a central element of the national waste strategy drawn up after widespread consultation in 2002, but the Ministry for the Environment has not followed up on them.

Instead, says the commissioner, the ministry "informed us that neither economic instruments nor regulation will be introduced to manage waste unless industry wants these policy tools to be used".

If this is the ministry's position, it sounds too good to be true from industry's point of view.

Or too good to remain true, in these ever less laissez-faire times.

The commissioner is not arguing that voluntary schemes have no place or are bound to be ineffectual, merely that the Government needs to have other clubs in its golf bag as well.

The Motor Trade Association runs a voluntary scheme called "Tyre Track" to deal with getting rid of waste tyres.

It connects tyre dealers, and others who need to dispose of old tyres, with registered tyre transporters and registered disposal points, such as recyclers, processors, landfills, farmers, marinas and speedways.

The cost of this scheme is passed on to customers when they buy new tyres.

Some companies run voluntary product take-back schemes for used lubricating oil, cellphones and paint.

Overall, however, the commissioner doubts that the voluntary approach delivers much more than business as usual.

The two-year-old packaging accord set targets for recovery of the main packaging materials, paper, aluminium, glass, steels and plastic.

But the report notes that while packaging recovery is increasing, so is the use of packaging, so the amount of packaging going to rubbish tips has remained largely constant since 2002.

The British have adopted a cap-and-trade system aimed at reducing the amount of waste going to rubbish tips.

It sets a limit, or cap, on the amount of waste that can be disposed of at each site in order to meet targets for reducing the total amount of waste going to landfill dumps.

Tradeable permits reflecting that limit are issued. The aim would be to progressively lower the limit.

Operators able to divert waste from their rubbish tip - to a recycling operation perhaps - can sell their excess permits to other operators who are liable to exceed their limit.

Overall, this process should discover the most cost-effective methods of meeting the national target.

The same principle is behind "carbon" markets in rights to emit greenhouse gases.

Since resistance from unwilling potential neighbours is making it harder to find new landfill sites, such a scheme might make sense in New Zealand.

The Danes have gone another way, with a tax system which makes it most expensive to dump waste, cheaper to incinerate it and charges no tax for recycling.

Remember when charities used to run bottle drives, collecting beer bottles for the refund?

The South Australian Government has for 30 years been running a scheme that imposes a deposit of 5c or 10c on beverage containers. That is ultimately paid by the customer, but is refunded when the containers are returned to a collection point.

The result is that about 80 per cent of containers are recycled.

Inspired by such examples, the Ministry for the Environment has done ... well, nothing really.

Inquiries by the commissioner's office discovered that since December 2002, the ministry had done little to encourage or even discuss using "economic instruments" - carrots and sticks - to manage waste.

"Only a waste levy was considered and even that work was terminated, removing any opportunity for stakeholders to comment on the idea," the report says.

Instead, the focus has been on industry partnerships and voluntary schemes.

They are fine as far as they go, but it is not clear how far that is.

They are liable to free-rider problems.

And they tend to be ambulance at the bottom of the cliff measures, dealing with the disposal of products and materials at the end of their lives.

Incentives applying early in a product's life cycle, to minimise waste in the manufacture and packaging of goods, are nowhere to be found.

But the commissioner believes "the right incentives could motivate manufacturers to incorporate design features and materials into their products so that waste is avoided or hazards reduced, or ensure that the materials are able to be recovered, reused, recycled and so on".

Legislative limits appear to be part of the problem.

The Local Government Act restricts councils' ability to use economic instruments in waste management plans. They can be used to cover the costs of such schemes, but the High Court has ruled that if a levy seeks to do more than recover costs, it is a tax and not authorised by the act.

This may change.

A bill from Green MP Nandor Tanczos, before Parliament's local government select committee creates a levy on waste sent for disposal.

The levy, to be set initially at $25 a tonne, is intended to "send an economic signal to deter wasteful behaviour" and to provide money for bodies and measures the bill sets up.

They include subsidies for the development of waste reduction plans by businesses and public organisations.

The bill also imposes "product stewardship" obligations on anybody who manufactures or imports products intended for sale.

They must individually or collectively organise ways to collect the products at the end of their useful lives and "appropriately process the materials of which they are made".

How much of this will emerge from the select committee remains to be seen but the fact it has got that far is a message in itself from lawmakers to business.

The bill and Williams's strictures about the carrots and sticks are signs that the days of ignoring cost of waste disposal are numbered.