APPENDIX 1
Memorandum from Biffa Waste Services Ltd
Thank you for the opportunity to respond to
your call for evidence. Biffa Waste Services Limited is a wholly
owned subsidiary of Severn Trent Plc. Our interest in the Sustainable
Development Strategy originates from our role as the third largest
integrated waste management company in the UK coupled to our expanding
role as an environmental services provider. Through the mechanism
of the Landfill Tax Environmental Bodies Scheme we are also seeking
to accelerate strategic initiatives which interconnect the economic,
social and natural dimension to the sustainability debate by directing
funding flows amounting to around £6.5 million annually.
The nature of our business is such that we have close involvement
with the entire range of discarded material flows in the economy
and their points of origin. In consequence we are materially aware
of the dynamic produced by the interaction of voluntary, fiscal
and regulatory initiatives across a wide variety of material streams
and affected receptors. Turning to your specific areas of interest:
I. THE BALANCE
BETWEEN THE
STRANDS OF
SUSTAINABLE DEVELOPMENT:
ECONOMIC, ENVIRONMENTAL
AND SOCIAL
The document "A Better Quality of Life"
would benefit from a more succinct management summary or "map"
showing the inter-relationship between end life resource flows
in the economy, the nature of transfers between the economic,
social and natural worlds and the range of control mechanisms
impacting on each. We are great believers in the concept of mass
balance evaluation of these processes—whether focused on
material streams, industry sectors, species or social groupings.
The balancing nature of such flows and the mechanisms by which
those balances are achieved are not sufficiently emphasized in
the introductory sections.
Such approaches would, we believe, demonstrate
the central difficulty of achieving integrated sustainability
policies—namely that the natural and social dimensions are
more usually developed and implemented at a micro societal level—(they
are characterised as needing to be "local", within individual
control and demonstrated from the individual or species level
outwards).
Witness the "doing your bit" campaign
and the various "bottom up" strategies adopted for habitat
or wildlife preservation. (Our Landfill Tax funding programme
has sponsored the Otter Recovery Programme to the tune of £0.6
million over two years as well as a similar amount for a diverse
range of habitat conservation initiatives in conjunction with
the Wildlife Trusts around the UK. Thus we are well qualified
to speak on this point.)
In contrast the economic dimension is characterised
by macro considerations where good policies inevitably take considerably
longer periods of time to impact. These "long wave"
policy instruments demand:
(i) shifts in the technology base;
(ii) shifts in product design;
(iii) shifts in process systems (be it in
production of specific goods or entire supply chain management
system methodologies);
(iv) shifts in pricing/added value systems;
and
(v) shifts in corporate reporting and environmental
accounting systems.
Given the basis on which modern society works,
the dilemma lies in the contradiction that it is the economic
long range drivers which have greatest impact but the social and
natural areas which trigger crisis reactions in response to obvious
signs of distress or dysfunctionality. "A Better Quality
of Life" could more adequately emphasize the nature of this
central conflict by concentrating on the process whereby the priorities
in each of the three key areas of sustainability can be more effectively
integrated in the context of a political system and policy making
framework which treats the three separately.
II. THE IDENTIFICATION
OF BASELINES,
PRIORITIES AND
TARGETS FOR
ACTION
The consequent dilemma is whether such a process
should be broadly fronted or selective. The tools for combating
social and natural deprivation tend to be "rifle shot"
and are compensatory on the basis that needs need to be offset
by protection, conservation or funding support. Macro policies
directed at the economic framework, however, tend to imply economic
"sticks" which deduct—or imply the deduction of—added
value from certain actions on the basis that externality burdens
need to be recognised more clearly in an internality based economic
system. Such a "give and take" approach is not necessarily
wrong—it does underline, however, the need to consult widely
and establish in the minds of those affected the connectivity
between the deduction of added value from one group in society
(mainly operating in the economic world) and the transfer mechanism
of that value elsewhere into the natural or social environment.
We commend to the Committee that the success of any integrated
sustainability strategy is proportionately linked to the success
by which these balances are understood as we make the transition
toward a more sustainable economy.
The last Budget Statement appears to underline
that clear divisions will be drawn between the economic and social
areas—especially in so far as energy taxes will originate
at the level of the firm rather than at the level of the individual.
This notwithstanding the fact that significant
reductions in CO2 emissions have come from industry and the most
significant areas of expansion lie with the domestic consumer—especially
in the area of transport. Energy taxation has also triggered the
debate on transfer payments occurring within the economic "bubble"—most
notably from capital intensive sectors to labour intensive ones
(look no further than the reactions from the pesticides, chemical
and steel sectors in the energy intensive user groups). We pointed
out in our submissions to the Environment Committee a number of
these anomalies in our responses on Consumer Products in the Environment
and others stretching back over the last 18 months.
Baselines and priorities for action should thus
concentrate on how we can achieve market transformation. We suggest
that the overarching areas where this might be accomplished involve
a clear mind set on the following key areas:
(i) An integrated framework of data collection
and management (touched on in paragraph 6.13).
(ii) A common information technology framework
within Government (highlighted in the recent Modernisation of
Government White Paper).
(iii) Ensuring that sustainability issues
are embraced at the heart of policy thinking in Government departments
and are not seen simply as a peripheral issue (as pointed out
by the Minister in his evidence to you in May).
(iv) The integration of national sustainability
strategies with those being developed by the Regional Development
Agencies and Scottish and Welsh Parliaments (who may be in danger
of seeking to go their individual ways for all the right reasons).
(v) Agreement on the broad sectoral areas (in
the economic, social and natural arenas) within which focused
round-table thinking needs to be developed.
III. THE LINKS
BETWEEN TARGETS
AND INDICATORS
Such links need to be accelerated by the development
of an integrated data capture and management framework involving
common data classification systems and integrated software protocols
operating between Government, regulators and industry with regular
publication of headline indicators and a transparent audit trail
in much the same way that the internality economic data on inflation,
employment and monetary growth are released by the Chancellor
to the City on a regular basis. We see no indications that the
DETR, Environment Agency or Office of National Statistics has
the inclination or resources to initiate such a programme.
Such a framework needs to be developed at central
government level to guarantee independence as well as conformity
throughout each regional subset.
IV. THE IDENTIFICATION
OF RESPONSIBILITIES
FOR ACTION
WITH GOVERNMENT
These have already been touched on in Sections
II and III. Such initiatives are so wide ranging that the ENV
Group at Cabinet is the only one with the capability to drive
such wide ranging policies through. In a small way we have sought
to initiate this process via the mechanism of Landfill Tax Credits.
The three key areas on which to focus information flows we perceive
as:
(i) the regional framework;
(ii) material stream analysis; and
In consequence the Biffaward funding grants
have been directed at strategic initiatives in each of these areas.
Specifically to the University of Manchester and National Centre
for Business & Ecology to develop an holistic economic, natural
and social approach within the confines of the North West Regional
Development Agency area. We have also committed sums to a mass
balance of the Isle of Wight along the same lines as our publication—"Great
Britain plc: The Environmental Balance Sheet". This is designed
to develop an integrated approach to input/output resource management
systems in an English unitary authority where transport interaction
is controllable.
In the case of material flows we have committed
funds—or are considering such—in the areas of timber,
aggregates, carbon, nitrogen, glass, packaging and similar discrete
materials. The irony is that Entrust—or some of it's Board
Members—have difficulty in comprehending that such macro
economic evaluations are of relevance to the sustainability debate
in the context of the original legislation laid before Parliament.
We are in the process of debating this issue with Earl Cranbrook.
On the sectoral front we have committed or are
about to commit funds to research schemes focusing on the construction,
furniture, education, DIY and agricultural sectors—again
with the intention of developing input/output mass balance analysis
for those specific activities. We are seeking to integrate these
initiatives with the objectives of Government as part of that
process.
V. THE DEGREE
TO WHICH
THE NECESSARY
PARTNERS FOR
SUSTAINABLE DEVELOPMENT,
THAT IS
LOCAL AUTHORITIES,
BUSINESS & INDUSTRY
AND THE
VOLUNTARY SECTOR,
ARE SIGNED
UP TO
THE PROCESS
OUTLINED IN
THE STRATEGY
Our belief is that the strategic use of landfill
funds for this purpose naturally embrace many approaches which
can integrate the three disparate partners in this process. A
number of our Landfill Tax initiatives embrace the local authority
sector (our work on the Isle of Wight) and the voluntary sector
(the Wildlife Trusts, Groundwork and not for profit waste agencies
such as Waste Watch, SWAP and many others). Our objective is to
focus discussion and co-operation of these groups around our initiatives
in the regional, material stream and sector dimension on an as
needs basis. Government could be more proactive in understanding
this process and accelerating it.
We particularly commend to the Committee some
mechanism whereby a higher proportion of taxation flows from environmental
bads can be used—under controlled circumstances—to
accelerate this process (see our comments in VI below on tax).
VI. THE RESEARCH
BASE FOR
SUSTAINABLE DEVELOPMENT
The research base is a natural extension of
the interest groups identified in V (above). Developing a series
of focused reports and web sites around the regional, sector or
material stream focus would lay the ground for identifying the
most suitable mechanisms for market transformation in each of
those three areas. At national level there needs to be a more
holistic approach taken in the volume and range of funding flows
entering the economy through different departments of Government
(DETR, DTI, Home Office, DfEE, etc) to such diverse groups as
English Nature, The Foresight Programme, the Regional Development
Agencies, Universities Funding Council and so on. We commend to
the Committee the need to carry out an urgent evaluation of the
totality of these funding flows highlighting their various points
of origin and their various points of reception. There could then
be a review of how the taxation of environmental "bads"
in the form of virgin input taxes, regulatory costs and Landfill
Taxes impact on those areas currently already receiving funding
or conversely denied it. If the funding flows from fiscal and
regulatory instruments on environmental bads were suitably identified
on a sectoral basis, far greater incentives would operate if those
sectors felt they could influence the redirection of those flows
into the economic, social or natural world dimension of their
sustainability impact. At a structural level much work needs to
be done on how such a process could be accepted to the satisfaction
of the Treasury and that independent external audit transparency
was guaranteed. The upside for Government is that many individually
funded initiatives originating at departmental level might be
seen to be non productive, misdirected or actually supporting
unsustainable practices (for example capital spending initiatives
in schools which favour lowest cost options at the expense of
whole life accounting).
VII. THE ACCOUNT
TAKEN OF,
AND LINKS
MADE TO,
EU AND INTERNATIONAL
POLICY INITIATIVES
"A Better Quality of Life" is very
UK focused. The holistic objective should be to move the UK framework
from the existing paradigm to a higher environmental one. As such
we commend to the Committee the need to consider the opportunities
presented by the Integrated Product Policy (IPP) currently being
evaluated in Brussels. This focuses on the whole life approach
to product and sectoral environmental impacts—and as such
our own strategy for Landfill Tax funding at a material and sectoral
stream level mirrors that approach. Economic stimulus is needed
to move the economy from it's existing paradigm to the higher
environmental one thus fiscal measures, subsidiarity and international
competitiveness go to the heart of this debate. A number of areas
impact on this debate, specifically:
(i) Opportunities for using VAT offsets for
companies or products operating at a higher environmental paradigm
at their own cost—this obviously produces conflicts with
the common taxation approach.
(ii) Better, more sustainable solutions for
end material management often imply the need for substantial economies
of scale in the management of waste products which match the scale
economies which operate when those resources are input at the
front of the supply chain. In consequence there may be a need
for cross sectoral agreements for the reclamation of specific
materials from major plcs generating similar profiles—our
collection programme with the Brewers & Licensed Retailers
Association for glass is a case in point. Thus competition policy,
the Office of Fair Trading and other bodies may need to be involved
in the debate to develop the necessary transparency.
(iii) International trade issues are bound
to be affected in so far as a go it alone approach within Europe
will create strains in the international arena. These environmental
pressures merely reflect those already identified in the case
of hormone use for beef rearing, GMOs and so forth.
It may be necessary to review the overall impact
of environmental strategies in the context of the EU policy debate
in much the same way that the Cabinet Office may have to take
the lead in the UK.
VIII. THE STRENGTH
AND SUITABILITY
OF THE
STRATEGY COMPARED
TO (A)
EU AND INTERNATIONAL
COMPARATORS AND
(B) THE
UN REQUIREMENTS UNDER
THE RIO
PROCESS
Integration at this level is bound to be difficult.
The best case for the UK is to develop an integrated holistic
framework which tackles some of the needs we identify in Sections
I and II. In the economic framework the best approach Government
could take is to remind UK industry constantly that alignment
of their products and processes to embrace full externality accounting
is in their best long-term interest in so far as a global demand
for their solutions will emerge when compared to their competitors
who operate an internality cost base system. Nevertheless it is
incumbent on Government to provide the necessary methodologies,
data capture and threat/reward framework to create a suitable
framework for such innovations to be borne, develop and grow.
We commend to you our suggestions as to how
elements of this process might commence. We would be more than
happy to expand on specific elements of these approaches on a
personal basis if deemed appropriate.
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