National Economic Panel



ESA National Economic Panel Polls





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WASTE POLICY_ Drew Collins

Drew Collins

By Drew Collins (BDA Group)

Proposition: There are clear net benefits for Australians from (further) increasing the diversion of waste from Australian landfills.

A number of surveys have been conducted in Australia on community attitudes to the environment. From a national perspective, the Australian Bureau of Statistics (2011)1 in a survey of environmental issues found that concern about the accumulation and disposal of household waste (at 63%) was only surpassed by concern about water shortages (64%) – possibly reflecting the survey timing following the Millennium drought. Surprisingly, concern over climate change at that time registered only 57%, and despite the continued degradation of the Great Barrier Reef, inland waterways, and threatened-species habitat (an area of threatened species habitat bigger than Tasmania has been destroyed between 2000 and 20172), concern as to a decline in the natural environment was recorded at only 39%.

Governments at all levels have actively promoted landfill diversion, and recycling in particular. Communities are embracing broader sustainability practices, and recycling is seen as a material way this can be done with opportunities for everyone to contribute. However, there are costs as well as benefits involved in diverting resources from landfill to reuse, recycling, or energy recovery. With the recent loss of access to the Chinese waste market and challenge this has presented in finding alternative destinations for this material, the proposition in this month’s National Economic Panel Poll is whether the community has reached a suitable balance between landfill diversion and disposal.

ESA-Monash Forum panellists were asked to consider this proposition:

"There are clear net benefits for Australians from (further) increasing the diversion of waste from Australian landfills."

Survey responses

The majority of respondents (56%) either agreed or strongly agreed that there would be benefits from further increasing landfill diversion, net of associated costs. Respondents also reported a high degree of certainty in their answers: when weighted by each panellist’s confidence, 61 per cent agreed with the proposition.

Julie Toth believes increasing recycling is a ‘no-brainer’, and Harry Bloch points out that there is a standard market failure at work where householders and many businesses don’t pay the substantial environmental costs associated with waste disposal.

Alison Booth believes taking action to manage waste is needed now to mitigate risks to long-term sustainable growth and to contribute to emissions reductions - Australia will not be able to continue exporting some of our waste overseas, as other countries are now showing more enlightened policies towards management of the environment and waste than we are.

Other respondents supporting the proposition were not as totally confident. For example, responses indicated that the long-term cost of landfilling is ‘likely’ to be underestimated (Dulleck), while encouraging greater recycling ‘sounds’ like a desirable policy goal (Eslake).

Issues raised

The policy balancing challenge is best summed up by John Freebairn, who states that the society optimum waste quantity would equate marginal social benefits with marginal social costs. This first principles statement reminds us that all actions have costs as well as benefits. For example, in addition to the large costs of waste dumped illegally in response to policies promoting the diversion of wastes from landfill, Hugh Sibly points out that recycling processes have other hidden or 'opportunity' costs, such as the use of unpaid labour. Therefore, even socially ‘bad’ activities typically have an optimal non-zero level.

Freebairn points out that technological change (and other factors) will shift relative costs and benefits over time, presumably in favour of greater landfill diversion. However, Foster warns against ‘brute-force’ policies such as high landfill charges to push landfill diversion beyond the market’s capacity to accommodate recycling. This imposes net costs on the community. Nevertheless, Foster is also confident that net benefits can be realised over time from greater landfill diversion, as she advocates for subsidising the domestic recycling industry in the short run in order to build up more capacity to process recyclables in Australia.

While only 12% of respondents disagreed with the proposition, some 31% were uncertain. This is not surprising, as much waste policy (to this writer) appears premised on assumption and wishful thinking, rather than on good data and analysis. There simply is a shortage of detailed analysis of the social benefits and costs of landfilling and its alternatives.

Tony Makin notes the need for a thorough cost-benefit analysis that weighs any commercial gains from waste recycling against costs arising from possible externalities and government subsidies. In some instances, more recycling may deliver net benefits; in others probably not (Butlin, Abelson).

In summary, the disparate views expressed in this month’s Poll reflects the lack of information available to support an assessment of the proposition. In turn, governments would be well served by improving this information base before rushing into new programs in response to the recent ‘waste crisis’. It just may be that economic savings from increased landfilling in the short term may be better employed tackling more pressing, albeit less popular, environmental issues.

1 ABS 2012, Environmental views and behaviour, 2011-12 Catalogue Number: 4626.0.55.001 
2 University of Queensland 2018 – see shrinking-despite-federal-laws/10208406, accessed 7 September 2018

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