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Waste Policy - August 2018

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

Background information (provided to panellists)

The Senate Environment and Communications References Committee recently released its report from its inquiry into the waste and recycling industry in Australia. The Committee noted that by 2014–15, waste disposal to landfill had increased to 21 million tonnes, while the quantity of material recycled in Australia had increased to 35 million tonnes. In addition, Australia exported some 4.2 million tonnes of recyclable materials, including 1.3 million tonnes to China.

The Committee recommends that the Australian Government prioritise a circular economy in which materials are used, collected, recovered and reused, consistent with Australia’s National Waste Policy which, inter alia, aims to reduce the amount of waste for landfill disposal.

The inquiry was prompted by a contentious Four Corners report into the waste and recycling industry which highlighted major incidences of illegal dumping of waste and recyclable materials.

On 1 January, China has effectively stopped accepting Australia’s exported recyclables due, in part, to their strict new rules on contamination. This has contributed to what many have called a 'waste crisis' in Australia.

Public interest and debate around waste and recycling issues has also been piqued by recent corporate announcements to reduce single-use plastics (e.g. supermarket shopping bags, drinking straws) and the second series of the ABC's 'The War on Waste'.

Lastly, some submitters to the Senate waste inquiry expressed concern that waste levies have contributed to illegal dumping. State government landfill levies (paid in addition to landfill gate fees which cover the private costs of landfilling) have steadily increased, which for example, at $138 per tonne in NSW metropolitan areas, now exceed by an order of magnitude available landfill externality valuations such as made by the Productivity Commission in 2006 and in supporting research to the National Waste Policy in 2009.

Collaborator credits: we would like to thank Drew Collins for his assistance in framing this poll question and for his expert overview of the results.

Overview of poll results by Drew Collins

drew-collins

Drew Collins

A number of surveys have been conducted in Australia on community attitudes to the environment.

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.

Read more

NEP Q32 - Chart 1 (Responses)

NEP Q32 - Chart 2 (Responses weighted)


Responses (16)


 

Peter Abelson

Uncertain (neither agree nor disagree)

7

Unfortunately the question is too broad to allow for a specific response. In my view, there would be net benefits in diverting some waste from land fills but not in diverting other wastes.


 

Garry Barrett

Strongly agree

9


 

Harry Bloch

Strongly agree

10

There is a standard market failure argument that householders and at least some businesses don't pay the incremental pecuniary costs of the waste they have picked up from their premises, much less any of the substantial environmental costs. Even where waste removal charges are separately indicated on council rate notices, the charge is compulsory (no opt-out provision) and is independent of the quantity of waste picked up from the premise.


 

Alison Booth

Strongly agree

10

While I agree with the proposition, I would have preferred to see some discussion of what alternative policies might be. The waste sector is an environmental sector, and this is one in which the federal government has shown itself  to be very weak. Managing waste is important for productivity, and the environment – and through the latter, the welfare of future generations. Firms and individuals are unlikely to take into account the externalities associated with waste, and this is a clear example an an area in which there are externalities that government needs to manage. (There are some rare examples of companies shifting towards more environmentally friendly packaging, for example, and a decent government could use fiscal incentives to encourage thistrend. Unfortunately our government is not that imaginative.) A further problem is that waste  management  affects all levels of government, so there is also a coordination problem.  Moreover, 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. Taking action to manage waste is needed now to mitigate risks to long-term sustainable growth and to contribute to emissions reductions.


 

Matthew Butlin

Uncertain (neither agree nor disagree)

7

The answer to this is highly location dependent.  And I assume diversion refers to recycling.  Where population densities are high, land is very scarce and there are public safety concerns from landfill, then the proposition is highly likely to be correct. But not where population density is low and land is scarce.


 

Lisa Cameron

Agree

8

It is unsustainable to keep producing the amount of waste that Australian households produce. The costs of landfill (including the environmental costs) will grow into the future and there are economic opportunities to be had in the expansion of our ability to recycle within Australia.


 

Uwe Dulleck

Strongly agree

9

Relatively simple policy changes can help to make us use our resources much more efficiently. The focus on waste is just one way to achieve such efficiency gains. While we still may have enough space for landfill, the long term cost of this strategy is likely to be underestimated.


 

Saul Eslake

Agree

7

The question as stated begs some others - such as, diverted from landfills to where? and what instrument(s) might be used to encourage diversion?  Prima facie, encouraging greater re-use and/or re-cycling (or less waste in production and packaging) sound like desirable policy goals; and using market mechanisms (pricing, taxes or subsidies) a sensible way of achieving those goals. But that wasn't what was asked.


 

Gigi Foster

Disagree

6

Setting high landfill charges is a brute-force and misguided way to try to encourage recycling in a setting where the market's capacity to accommodate recycling is inadequate.  Also, the breakdown into landfill versus recyclable waste in Australia's current waste management system is on par with peer nations.  Rather than narrowly targeting how much we are putting into landfills, the government would be better advised to subsidize the domestic recycling industry in the short run in order to build up our capacity to process the quantities of recyclables that Australia generates. The money to pay for such a subsidy could come from levies on companies that use environmentally unfriendly (i.e., landfill-bound) packaging or in other ways leave high environmental footprints via the production and sale of their goods.


 

john freebairn

Disagree

8

The society optimum waste quantity would equate marginal social benefits with marginal social costs, and then for different categories of wastes. Social costs of landfill include opportunity value of sites, disposal costs and any external costs associated with pollution to water and air and neighbourhood comfort. Including regulations and their costs, most local councils seem to set fees equal to or greater than marginal social cost.It should be important to recognise the heterogeneity of the vast array of different waste products sent to landfill, and their different marginal social costs and benefits. And, technological changes are and will continue to shift both curves over time.


 

Tony Makin

Uncertain (neither agree nor disagree)

6

Whether there are clear net benefits or not ultimately depends on a thorough (though seemingly challenging) cost benefit analysis that weighs any commercial gains from waste recycling in whatever form and to wherever against costs arising from possible externalities and government subsidies.


 

Jeffrey Sheen

Agree

7


 

Hugh Sibly

Uncertain (neither agree nor disagree)

9

It is difficult to form a definitive view on the basis of evidence I am aware of. Recycling and waste minimisation clearly have some benefits. However many of these process have hidden or 'opportunity' costs. For example, reducing food 'waste' often involves a significant amount of unpaid labour (and possibly other costs). It could be that the opportunity costs of this labour outweighs any benefit provided by the salvaged food.


 

Helen Silver

Agree

8


 

Julie Toth

Strongly agree

10

Increasing our genuine recycling rate is a no-brainer. It will increase the utility we gain from our resources, increase our national productivity and decrease the negative externalities of landfill. Maximum benefit requires maximum efficiency and efficacy in the recycling process. We also need to reduce the volume of waste created in the first place.


 

Joaquin Vespignani

Uncertain (neither agree nor disagree)

6