APPENDIX 9
Memorandum from Cory Environmental
INTRODUCTION
Cory Environmental welcomes this opportunity
to contribute to the Environmental Audit Committee's review of
progress towards achieving sustainable waste management in England
and Wales. The UK faces—and must overcome—huge challenges
if it is to meet both its international obligations and its own
targets to move towards more sustainable waste management.
At the present time there is little consensus
on how these challenges should be addressed. The Company believes
that many of the proposals put forward for dealing with the country's
waste have tended to duck the difficult issues and choices by
positing populist solutions, with little regard paid either to
their technical or economic viability. The priority for the future
should be to settle once and for all on the ways in which the
UK will ensure that the waste strategy is delivered. Cory hopes
that the Environmental Audit Committee's conclusions and subsequent
report will be sufficiently robust and workable to play an important
part in that debate.
ABOUT CORY
ENVIRONMENTAL
Cory Environmental, a subsidiary of Exel plc,
is one of the UK's leading waste management companies. The Company
has extensive landfill capacity across the UK that serves as a
basis from which to provide waste management services to local
authorities and businesses. In addition, Cory has been at the
forefront in recent years in developing innovative, cost-effective
approaches to recycling and composting.
Mindful of the growing importance of finding
alternatives to landfill, the Company has played an active part
in the development of other waste treatment technologies, including
energy from waste and gasification. Increasingly, the services
Cory offers both to local authorities and to businesses incorporate
substantial efforts to help reduce the amount of waste produced,
and to explore efficient and effective ways of increasing significantly
the proportion separated for recycling.
BACKGROUND TO
WASTE STRATEGY
2000
The Environmental Audit Committee's main purpose
is to audit the implementation of the Government's Waste Strategy
2000 and performance against the waste targets set out in the
strategy and those derived from EU directives. The UK has, in
effect, been working towards such a strategy for at least the
last 10 years. Key milestones in the evolution of the strategy
have been:
— Declaration in 1990 of the "aspirational"
target to recycle 25% of household waste by the year 2000.
— Identification by the Royal Commission
on Environmental Pollution in 1993 of incineration with energy
recovery as the Best Practicable Environmental Option (BPEO) for
mixed Municipal Solid Waste (MSW).
— Publication in December 1995 of "Making
Waste Work", the UK's first comprehensive (non-statutory)
waste strategy, which, in setting a core target "to recover
40% of municipal waste by 2005" to be achieved by careful
application of the waste hierarchy having regard to BPEO, established
the principle of integrated waste management.
— Recognition that fiscal measures
will be as important as regulation in achieving the level of behavioural
change required to meet the challenges being set.
— Introduction of the landfill tax
in 1996.
— Adoption from 1993 of the principle
of Producer Responsibility and its subsequent application to key
waste streams such as packaging, newspapers, and in the next few
years to end of life vehicles and electrical equipment.
— Adoption in 1999 of the EU Landfill
Directive with its very demanding targets for inter alia
the reduction of the amount of biodegradable municipal waste going
to landfill.
It is clear from this that a great deal of work
and thought has gone into developing the current government strategy
for more sustainable waste management in the UK. That strategy,
furthermore, is founded upon a small number of fundamental principles
that have never been seriously challenged. These might be summarised
as:
— The waste management hierarchy: the
hierarchy starts from the principle that the most environmentally
effective solution may be to eliminate waste. However, it recognises
that this is often not practicable, so ways must be found to recover
more value from the waste that cannot be avoided. This may be
done through re-use or through recovery (either by recycling,
composting or incineration with energy recovery). If none of these
options is possible, the final resort will be to disposal through
incineration (without energy recovery) or landfill.
— Best Practicable Environmental Option
(BPEO): the concept of the BPEO holds that the hierarchy should
not be applied slavishly. A wide variety of factors (including
the nature of the waste, the collection method, the location of
processing facilities etc) can affect the social, economic and
environmental consequences of applying a particular option. BPEO
is "the outcome of a systematic and consultative decision-making
procedure which emphasises the protection and conservation of
the environment across land, air and water. The BPEO procedure
establishes, for a given set of objectives, the option that provides
the most benefits or the least damage to the environment as a
whole, at acceptable cost, in the long term as well as in the
short term. [44]"
— The precautionary principle: states
that "where there are threats of serious or irreversible
damage, lack of full scientific certainty shall not be used as
a reason for postponing cost-effective measures to prevent environmental
degradation. [45]"
— The proximity principle: suggests
that waste generally should be treated or disposed of as near
as practicable to its point of origin. This helps to ensure that
problems are not simply transferred to another area. It also serves
potentially as a useful spur to action by local and regional authorities
to plan for and provide the full range of waste management infrastructure
to enable them to work towards regional self-sufficiency.
This suite of principles provides a framework
for rigorous assessment of the social, economic and environmental
costs and benefits of the different waste management options.
Cory believes that they also provide a sound underpinning for
the Committee's review of "Waste Strategy 2000". Taken
as the heart of a sustainable waste strategy, these principles
should help to guide the UK towards the specific implementation
measures that will be needed to meet its targets and obligations.
DETAILED COMMENTS
The Environmental Audit Committee intends to
examine current progress against targets set out in Waste Strategy
2000, and those which flow from EU directives such as the Landfill
Directive. Cory considers that in this context there are two important
questions that need to be asked. First, how successful has the
UK been to date in moving towards attaining the targets it has
set itself for more sustainable waste management. Second, what
more needs to be done to ensure that the Government's strategy
is delivered.
Cory's view is that so far little has been achieved
in concrete terms. Since the national waste strategy was published
in 2000, waste volumes have continued to grow rapidly, while recovery
and recycling has progressed only marginally. The result is that
more waste is being landfilled now than at the time of publication.
The recent scoping paper from the Strategy Unit
in connection with that Unit's current review of the national
waste strategy notes (in line with "Waste Strategy 2000")
that municipal waste volumes have been growing in recent years
by around 3% a year. The paper rightly notes that such growth
rates compound the already substantial difficulties that the UK
faces in meeting the requirements of the Landfill Directive.
Cory considers that it is sensible to model
future strategies around a range of possible growth rates in waste.
However, the Company is concerned at arguments promoted in some
quarters that the long-term growth rate may be significantly lower
than 3%. There are important factors that Cory believes are likely
to drive further growth in waste arisings in future. Most prominent
among these are:
— The strong historic link between
the rate of overall economic growth and growth in waste arisings.
The Company is extremely sceptical that this linkage can be broken
at a price that is acceptable in terms of the lifestyle and quality
of life changes that are implied. Cory suggests that some of the
political choices required to drive change of this kind may prove
unpalatable.
— Waste arisings in the UK are already
low on a per capita basis compared to volumes in other
advanced modern economies. Substantial reductions in volume took
place in the second half of the last century (for example as a
result of the move away from coal fires for domestic heating and
the substitution of lightweight materials in packaging). This
reduces the scope for easy further reductions in the short to
medium term. The Resource Recovery Forum's two reports considering
international recycling achievements provide details[46].
— In areas where waste growth is already
outstripping improvements in recycling and recovery rates, such
as London, demographic trends will make the problem more acute.
This is illustrated by reference to demographic data published
recently by the Mayor of London[47],
which shows that between 2000 and 2016, London's population is
expected to grow by some 700,000. This will lead to the creation
of more than 350,000 new households in the capital. These demographic
changes will add impetus to the rate of growth in waste arisings.
These are complex issues and it is not easy
to summarise the trends or the potential scale of their impacts
in a few paragraphs. However, they do seem to militate against
many of the more optimistic suggestions that are made about the
likelihood of growth being arrested.
Some action has been taken to try to minimise
waste arisings, and improve recycling rates. A number of new initiatives
(such as WRAP) have been launched and some additional funding
(such as the additional £140 million for recycling initiatives)
has been identified. While welcome, these measures will not be
sufficient to meet the challenges. They are too small in scale
and will take too long to really "bite" on the problem.
The Government has not made significant progress on initiatives
that might use genuine market drivers to change behaviour fundamentally.
The most critical issue that needs to be addressed
relates to the cost of achieving more sustainable waste management.
In its August 2001 report "Resource productivity, waste minimisation
and the landfill tax" the Advisory Committee on Business
and the Environment (ACBE) noted that "one estimate is that
the waste management sector needs to invest in excess of £1
billion in order to provide the facilities to deliver the current
Waste Strategy targets."
Elsewhere the Environmental Services Association
has suggested that "the annual cost of treating the municipal
waste stream needs at least to double to about £3 billion
if the UK is to comply with its existing legal duties. [48]"
ACBE has suggested that an early indication
of a significant rise in landfill tax would go some way to encourage
this investment. Cory is not convinced that early and substantial
rises in landfill tax are the best way forward. ACBE itself says
that revenue and survey data suggests that the tax has not sustained
the early shift away from landfill. The reasons for this are various:
— Landfill tax is opaque: householders
are not charged separately for waste disposal; the landfill tax,
incorporated into Council Tax bills, has no impact at the point
of waste generation. Even at a rate of £30 per tonne, the
impact of the tax on overall Council Tax bills would be in most
cases marginal.
— Landfill tax is regressive: in
effect the landfill tax is a "stealth tax"—most
people are unaware that they are paying it and certainly will
not register from year to year the financial impact of increases.
In many respects it is regressive: because they are largely unaware
of it, neither businesses nor householders can plan effectively
to reduce their exposure by reducing the amount of waste they
produce. Because it is levied uniformly across a council area,
it takes no account either of ability to pay or contribution to
the waste problem.
— Landfill tax is damaging to business:
this is perhaps the biggest problem with the tax, and is two-fold.
First, it imposes across the board costs on business that may
be damaging to competitiveness. This is especially the case in
the manufacturing sector where the UK often is competing with
low-cost economies, most of which do not have an equivalent of
the landfill tax. In addition, there are many wastes for which
there is no practicable alternative to landfill—again this
is particularly the case in manufacturing.
— Landfill tax is at best marginal
to the relative cost of landfill and recycling: evidence presented
by ACBE[49]
shows that, broadly speaking, the cost of recycling often is less
than the cost of landfilling. The differential is already substantially
greater than the level of the landfill tax. It is unlikely, therefore,
that any future increases in the rate of the tax—even if
they were substantial—would have any measurable influence
on behaviour. For example, currently recycling paper and board
is between £4 and £38 cheaper per tonne than landfilling.
The additional economic stimulus from increased landfill tax rates
would be marginal.
Although landfill is rightly identified as the
disposal option of last resort in Waste Strategy 2000, there are
many reasons why the UK will continue to rely on landfill for
substantial volumes of waste for many years to come. In reviewing
progress towards achieving sustainable waste management, the Environmental
Audit Committee needs to recognise that well-managed landfill
can be a desirable, sustainable solution and that for some waste
streams it will always be the Best Practicable Environmental Option.
Examples might include:
— rural areas, where waste volumes
are low and the cost of separated collection for possible recycling
would be excessive; and
— materials for which no practicable
alternative use is available to enable recycling.
Cory, therefore, considers that future increases
in landfill tax should be limited and measured. Another word of
caution must be applied to the fact that revenues from the landfill
tax, by and large, do not go into investment in waste management.
Instead, other means will need to be found to raise the funds
that are necessary. One option that will be worth exploring—for
MSW—will be direct charging. Experience elsewhere shows,
however, that this is not without difficulties and potential pitfalls.
Direct charging will work best as an incentivising
mechanism, rather than as a source of direct funding for alternatives
to landfill. To be equitable, it can only be introduced when members
of the public have access to alternative options so that they
have a realistic possibility of reducing their exposure. Without
this, direct charging can be a regressive, stealth tax just like
landfill tax.
Unless there is political will to grasp the
fact that a substantial increase in expenditure is required to
fund the scale of change needed to meet the targets, it remains
doubtful that in the long term they can be met.
In addition to the fundamental issue of funding,
Cory considers that the Government will need to:
— Embrace more coercive measures to
make people change their behaviour. This might take the form of
environmental taxes to discourage waste production (Ireland's
recently introduced tax on plastic bags is an example);
— Accept a more prescriptive approach
to land-use planning for major new waste management infrastructure,
whether for recycling, composting, energy recovery or landfill.
The proposals in the Government's recent planning green paper
relating to the reform of the land-use planning system fall some
way short of this;
— Review the structural arrangements
at local government level through which, over much of the country
the responsibility for waste collection and waste disposal is
split between different tiers. Cory considers that there should
be universal unitary responsibility. Only this can have some hope
of delivering coherent sub-regional strategies that will be geared
towards meeting all key targets.
— Above all, progress of any kind will
require government to give a much stronger lead than it has hitherto
been willing to give—including a willingness to promote,
take and adhere to sometimes difficult and unpopular decisions.
Cory believes that whatever routes are adopted,
meeting the demanding statutory targets will require the development
of significant new waste management infrastructure. This will
include new landfill capacity and thermal treatment plants (energy
from waste) as well as recycling facilities. To meet the likely
level of demand and to be cost-effective, some of the new recycling
facilities will have to be very large scale.
The ability of the waste management industry
to develop the necessary infrastructure is constrained by growing
public opposition to new waste management developments. Incinerators
are particularly difficult in this context. Experience suggests,
however, that all forms of waste management facilities—including
those needed to support popular recycling initiatives—can
run into substantial public opposition.
Environment Minister, Michael Meacher MP has
commented on this issue several times in the past. He argues that
the onus rests with the industry to do much more to explain to
objectors the need for particular new facilities and to convince
them of their safety and environmental acceptability.
Cory disagrees fundamentally. The industry must,
of course, bring forward proposals for new developments that meet
all the relevant regulatory standards and it must be able to demonstrate
the local or regional need for proposed new developments. However,
insofar as municipal waste is concerned (and this is the key focus
of government concern) proposals for new infrastructure are driven
by government policy and by local authority strategy. The waste
management industry is not responsible either for determining
statutory targets or the strategies for meeting them. It simply
provides cost-effective responses to the needs of others.
By asking the industry to take the lead in making
the case for new infrastructure, the Government is trying to pass
responsibility and lay off risk in an unacceptable way. The Government
has decided that an integrated waste management strategy is appropriate.
It must now acknowledge that it must make the, often unpopular,
case for this and for the infrastructure that it requires.
October 2002
44 RCEP, 12th report. Back
45
"Waste Strategy 2000", volume 2. Back
46
Recycling achievements in North America/Europe. Resource Recovery
Forum, 2000. Back
47
Planning for London's Growth, Mayor of London, March 2002. Back
48
ESA memorandum to PIU, February 2002. Back
49
"Resource productivity, waste minimisation and the landfill
tax", ACBE, August 2001. Back
|
