Examination of Witnesses (Questions 560-579)
Ms Julie Hill, Miss Hannah Hislop, Mr Andrew Lee
and Ms Sue Dibb
11 MARCH 2008
Q560 Lord Lewis of Newnham: Yes.
Ms Hill: They are. When we published A Zero
Waste UK we asked for a five pound escalator and we got an
eight pound escalator in the budget—which was a surprise.
I think it indicates that for the Treasury this is a relatively
easy tax to put on: there is not a large number of losers—people
to complain—it is seen to be an environmental tax. Until
a couple of weeks ago, there was an argument about recycling the
revenue, which has now disappeared, but it is a relatively easy
green tax. It is having an effect, as far as I can see, on the
waste industry and the people I talk to; in the sense that they
know landfill is not the long-term future, not just because of
UK policy but because that is the way most of Europe thinks, to
be fair, that landfill is just not the right thing to be doing
in the future. But what counts is whether they can invest in alternative
infrastructure. The reasons they have not been investing as fast
as was envisaged by Defra and the Treasury are multiple. One is
that the relative costs of that infrastructure is still quite
high. The landfill tax has not bitten as much as it might have
done if the base price of landfill had continued to rise, but
it has not. In some areas, because there is quite a lot of landfill
available or permitted void available, the base price has dropped,
so the overall price of landfill is not as high as it might have
been. The risks of investing in alternative infrastructure are
quite high. There is a relatively small number of what are considered
by bankers to be genuinely proven technologies. While people may
reel out a list of things you can do to waste other than landfill,
the numbers that are considered bankable are really quite small.
On top of that, if you are talking about municipal waste, you
have complexities of the PFI procurement process offer for local
authorities, and then you have the planning nightmare, which is
a very hard one for anyone to solve. Municipally owned alternative
infrastructure has been slow, very slow, coming on stream and
the National Audit Office has looked at this. Privately-owned,
what are called "merchant facilities", built by waste
companies on their own books for industrial waste we keep being
told will come on stream in reaction to the higher landfill tax,
but not many people have seen much yet. That must still represent
the perceived degree of risk and the lack of perceived political
drive, to be honest. It is a bit like the fuel tax argument: a
higher fuel tax or vehicle excise duty in the absence of a complete
package to drive things, is potentially seen as a revenue raising,
easy green tax hit, rather than the roadmap (to use Andrew's terminology)
to a revised economic system.
Q561 Lord Lewis of Newnham: How do
you view the variation in the country?
Ms Hill: It tends to depend on how much permitted
void exists in different areas—which can be a mixture of
history and geology. It depends what a local authority strategy
is. They, of course, have complete freedom to design their alternative
strategies. They are driven by the Landfill Directive on Biodegradable
Waste; the local authority performance targets on recycling overall;
the available money; their demographics, in terms of whether they
are urban or rural; whether they have ethnic populations which
culturally tend to be more difficult to communicate these messages
to. There is a huge mix. For local authorities the situation is
extraordinarily complex. We began to feel very sorry for the average
local authority trying to deal with these problems, as set against
our vision of a resource reclamation society, because nobody seems
to have that responsibility for creating a resource reclamation
society other than these poor local authorities who do not have
the tools to develop it.
Q562 Baroness Platt of Writtle: Could
the Local Government Association not put over some best practice?
Ms Hill: Yes, they work very hard on it. The
difficulty is the lack of a national coherent strategy, which
of course means taking power from local authorities, which politically
is in completely a separate direction from where most political
parties are now going. They are all talking about localism, but
the difficulty here is that localism tends to translate into fragmentation
and inaction in some cases. Some local authorities do tremendously
well, but everyone will struggle with the mix, in the end, between
the way in which we deal with municipal waste, which, as we have
said, is less than 10 per cent of the waste streams, and that
tie-up with commercial industrial streams. We have separated the
two institutionally, down the middle, and we have found no tools
to bring them together. We have landed the smallest sector with
the most complex problems and we have hardly looked or touched
the commercial sector with any policy or fiscal instruments other
than landfill tax at all. That is why the mix of policy here is
just not working.
Q563 Lord Lewis of Newnham: It is
also complicated by the fact that the majority of agreements into
which they enter are for a period of about 20 or 25 years, which
means that they are burning their boats in every sense of the
words.
Ms Hill: Yes.
Ms Dibb: Just to add to that, because you make
a very good point, it does not work for business either, that
variability of different collections in different local authorities.
The supermarkets we spoke to told us that it was a real problem.
They were trying to design materials and packaging for consumers
to dispose of which could potentially be more recyclable, yet,
as every local authority has a different scheme, it really does
not work for them. They are saying that there needs to be a priority
materials strategy nationally.
Q564 Baroness Sharp of Guildford:
One of the things I note from that table in the Green Alliance
paper is that those countries which have the lowest use of landfill
and the highest recycling rates also have the highest rates of
incineration. In your Cradle to cradle strategy, I take
it that incineration does not really come in. As the Green Alliance,
you would like to see zero waste, total re-use and recycling and
so forth, as distinct from putting incineration into that.
Ms Hill: We do not rule out using some waste
streams as fuel, where that extracts better value in environmental
terms than recycling—and I use "in environmental terms"
very carefully. Work that was done for Defra tended to show, almost
invariably, that recycling most materials yields carbon benefits
over energy from waste. The trouble with debate on energy from
waste is that it has now been taken from the materials resource
recovery end of the debate into the energy security debate, so
there is a drive to say, "We have an energy security problem,
let's see whether energy from waste (incineration with energy
recovery) can help solve that." It seems to us very unlikely
that it does—partly because energy security, if we are worried
about gas, would not be touched at all by energy from waste, because
gas is largely about heat and energy from waste is largely about
electricity, and, if we are worried about electricity, there are
much more promising renewable sources of electricity. To go back
to the construction example, if all renovation and new-build had
photovoltaic panels on their roofs, I am sure you could generate
a lot more electricity than doing it from energy from waste, and
it would be embedded and therefore much more efficient in its
distribution. I have not done those figures, but as a strategy
I would imagine it is better. Our view is that where materials
have a value in terms of their recycling—an environmental
value: there is a resource benefit, a carbon benefit from recycling—it
is a waste to burn them. However, there may be some situations
where transporting things long distances or the markets or the
nature of the material means that combustion could be a good option.
I think it has to be looked at in those terms—not just from
the idea that energy from waste is a better form of disposal than
landfill, therefore it ticks a few boxes. That is how I fear the
policy develops.
Q565 Chairman: What does the Danish
version of the Green Alliance think of this? Looking at these
figures, they have about the highest levels of incineration. Is
this a British view, that we have been more successful in handing
out incineration, getting rid of it?
Ms Hill: No, it is historic. The UK has a large
level of landfill, principally because of geology. We have done
a lot of extraction of aggregates and clay which leaves convenient
holes in the ground to fill up. To a lot of other European countries
that option has not been available or they have just not seen
it as the right thing to do. They have thought of incineration
as the cleaner, better option. Historically, particularly in Denmark,
a lot of incineration was put in place with district heating,
so the waste heat was used very close to where these plants were.
They have a positive image of incineration, about generating energy
and a positive use of waste. Our version of incineration tended
to be without any energy recovery at all and without adequate
pollution control, so that incinerators left a negative legacy
rather than a positive one. That is not to say that modern incineration
or different kinds of thermal technology could not have a positive
contribution but I do not think looking at the relative figures
in Europe teaches us anything, to be honest. I do not think they
tell us anything about the right mix for the UK. They are very
much a product of history. Just because countries on that table
have high levels of incineration, it does not mean that they want
to maintain that.
Q566 Chairman: That is what I was
getting to.
Ms Hill: Some of them tax incineration as a
way of promoting recycling. Many realise the carbon benefits of
recycling outweigh thermal treatment of some waste streams. Those
figures do not represent a snapshot of how the world should be
at all; they reflect a very dynamic mix of history and policy.
The most salient thing really is that most of those countries
are aiming much higher with recycling than the UK.
Mr Lee: In Denmark, for example, the whole energy
system is completely decentralised. That has been achieved over
the last 30 to 40 years.
Q567 Chairman: What about the electricity
they import from Germany and Sweden?
Mr Lee: Yes, but if you draw a map of Denmark
and you look at the distribution of domestic power generation
it is very, very decentralised. It is almost the opposite of the
UK. We looked at this when we looked at Ofgem and the regulation,
so there is that link with energy from waste. The SDC has just
been asked to advise the Scottish Government on exactly that issue.
We produced a report on that which we would be very happy to share
with you. We came to the conclusion that energy from waste does
have a place in a sustainable waste management stream but it is
a small place and it is at the end, when you cannot do anything
else, and it is using these techniques like gasification or pyrolysis.
It is not a way of developing a big source of energy and, therefore,
you do not want to create the perverse incentive that you are
generating waste to feed the energy from waste plants.
Q568 Lord Lewis of Newnham: The energy
security problem is coming very much more to the forefront of
people's thinking, I am afraid. You do not have to agree to it
but that seems to me to be the general trend. I am sure Mr Lee
is right in saying this is going to become a problem for the future.
Mr Lee: Yes, I think that is true, but then
you need to look, in this order really, at: reduction of energy
demand; expansion of renewables in the UK—there are huge
opportunities; capturing wasted heat in the system; and carbon
capture and storage. In terms of the priority on energy security,
that is where I would say the priorities are.
Q569 Lord Lewis of Newnham: I wish
I was as optimistic as you are. After all, we do have a set of
regulations which are operative for new-build as far as heat and
energy is concerned.
Mr Lee: Yes.
Q570 Lord Lewis of Newnham: On an
inspection, something like one third of them failed, but nothing
is done about it.
Mr Lee: I agree.
Q571 Lord Lewis of Newnham: Not a
thing is done about it. Until you start putting teeth into that
side, I am afraid it is just a load of wishful thinking.
Mr Lee: I agree.
Q572 Lord Haskel: I wonder if I could
come to the consumer. You have told us that the consumer is well
disposed towards waste reduction but also in one of the papers
you say that the myth of the green consumer has been perpetrated
for more than 20 years. Of course consumers often buy their products
on the basis of cost, convenience, habit or fashion. Do you think,
bearing in mind our previous discussion about regulation, that
retailers should only be able to supply environmentally friendly
products? Then you take the role of the consumer out of the equation
and eliminate this matter of choice. Do you think that is realistic?
Who should be responsible for choosing what the product should
be?
Ms Dibb: SDC has done a considerable amount
of work looking at the role of the consumer in terms of changing
markets. As we said earlier, I will if you will really
exposed the myth of the green consumer being able to change the
whole of markets. And we are interested in the whole of the market.
We are not interested in a green niche that can afford to pay
the extra for a premium-priced product. We are interested in all
consumers, whatever their income levels, being able to have access
to affordable more sustainable products. In order to do that it
is important to look at the choice that consumers have. We coined
the phrase "choice-editing" in the earlier work that
we did. Some people think that means not giving consumers a choice
at all. That is not what we mean. We are talking about shifting
the frame of choice; that is taking the least sustainable off
the market, but within the products available consumers will still
have choices. It is not about no choice. Of course it is what
retailers do all the time: there are thousands of different ranges
of products out there but retailers only stock a few. If you go
to Tesco you will probably only find two or three brands of baked
beans, you will not find the full range. Choice-editing is something
retailers do all the time. We are encouraging retailers to choice-edit
for sustainability. It is already happening. To take the white
goods example: you cannot now buy the least energy-efficient white
goods. In fact, they are thinking of having to renew the standards
because they are getting so much more efficient, so having A+
or A++. We really need to recalibrate that. There are other areas
where this is happening as well. You may have heard that B&Q
and Wyevale Garden Centres have decided they do not want to sell
patio heaters any more. They think patio heaters are at the end
of the spectrum of "no-no products" with which, as responsible
retailers, they no longer want to be associated—the choice
is that of putting a jumper on if one wants to sit outside in
the cold weather, for example. Sainsbury's only stock Fairtrade
bananas now; Marks and Spencer only stock free range eggs. These
are all examples of choice-editing that are happening now. In
terms of who should be responsible, clearly retailers have a very
important role here, but we are also talking about maybe procurement
standards. In setting standards for procurement, you can set them
in a range which says, "No, we do not want you to supply
us with the least sustainable."
Mr Lee: The Government should be doing that
now with this system called "Quick wins on procurement".
Unfortunately, although government departments are doing quite
well on generating less waste and recycling more—and that
is probably because the targets are too flaccid and the targets
need to be ramped up—there is nothing like enough being
done on the procurement side to drive that sort of behaviour change
all the way down the supply chain. You are talking about £180
billion worth of expenditure in the public sector which could
be driving these changes and helping these choices to become available
for other people too. Some of these quick wins—about which
light bulbs you should use or which white goods you should use
or which IT you should use—in government departments are
still far from being implemented. There are some serious problems
in terms of leading by example.
Q573 Lord Methuen: How can sustainability
of individual products be communicated to customers in a clear
and meaningful manner? Would you perhaps use the traffic light
system as the Food Standards Agency is suggesting for food?
Miss Hislop: At the moment we think that consumers
trying to be ethical face a very difficult time. There is a whole
plethora of labels at the moment out there. In a world where the
choice-editing that the SDC has talked about has actually happened,
there is less of a role for labels saying "this product is
sustainable" because consumers can be assured that they do
not have to make these complicated decisions and they do not have
to weigh up all these separate things. In that sense in a cradle-to-cradle
world there would be less of a role for all these different labels.
To give a particular example, we now have a carbon label for Walkers
crisps, and that is an incredibly useful process. It allows Walkers
to identify all the cost savings and energy resource savings the
whole way down their supply chain. The end result for the consumer
is something that is fairly meaningless. What are they supposed
to do—buy a different flavour of crisps, buy a different
brand of crisps? It is not at all clear what is expected of them.
In a world where these unsustainable choices are choice-edited
out there is less of a role for labels. In terms of post-use products,
there may be more of a role for very clear labels in terms of
communicating to the consumer what to do with the product, when
it has reached the end of life. Taking the example I gave earlier
of compostable packaging, there is very much a need for very clear
labels saying what you do with this product, which bin you put
it in, et cetera. There is definitely more of a role for labels
there.
Ms Dibb: I think using traffic lights has been
an interesting example of where you can take information that
is on the back of a pack that very few people use or understand,
about the grams of fat for example, and turn it into something
that people can use because it is interpreted. You can use the
red, amber and green to help guide you to make your choices. What
is interesting about it is that alongside that—and there
is some confusion in the marketplace at the moment because there
are different schemes and we would very much like to see one,
simple colour-coded scheme—the Food Standards Agency is
working with companies to reduce levels of salt. It has set targets
and now it is working on saturated fat. What we say about labels
is that they may have a role but you do not start with the label.
You are not going to change consumer behaviour just by putting
labels on products. There may be a point at which it is useful
to communicate that information to consumers, but it must be information
that they can understand and use. We would agree that the current
carbon label may indicate that a company is taking carbon in its
supply chain seriously, but it is actually pretty useless to the
consumer.
Q574 Baroness Platt of Writtle: You
mention Walkers crisps. If you go into a supermarket, you are
thinking: eat less fat, do not eat too much salt, keep the sugar
down. The labels are going to be contradictory. Which way do you
go if you are taking a responsible point of view?
Ms Dibb: You highlight a real problem that many
consumers face: how to reconcile, on the one hand, health, with
other issues around the environment on the other. In our recent
report Green Healthy and Fair, that was very much what
we were saying. You cannot expect consumers to weight up these
issues.
Q575 Baroness Platt of Writtle: Why
try?
Ms Dibb: Yes, but the onus should not be on
us as individuals in the supermarket to try to make those choices.
What we are saying in our report to Government is: set out a vision.
We were looking at the food system but you can do it with any
system that we are talking about here. What does the sustainable
system look like, where are the synergies for example between
health and the environment, and there are real synergies. If you
can work that out, then you can communicate it to customers. We
think that there is some work to be done to look at the way that
standards could be better aligned. For example, we looked at the
Fairtrade standard. It does not have many environmental standards.
There are some environmental standards that do not major on some
of the Fairtrade side. We do think that there is a role for some
of those standards schemes to broaden their approach, but ultimately,
yes, we think there is a role for Government here. It is coming
back to the vision. It is asking: what is the vision, what does
the sustainable food system look like, how can we get there and
what it the role of labelling in helping to communicate that down
the supply chain?
Ms Hill: What I meant by the myth of the green
consumer is the myth that the green consumer can change the world
or the green consumers will change the world on their own. While
it is great for consumers to have that choice and attempt to make
that reconciliation, we cannot guarantee that those aggregate
choices will take the supply chain in a different direction. As
you have said, the value of the labels is often in the process
that a company has to go through to get the knowledge to put on
the label. One of the things that has had the most impact that
we have seen is Sainsbury's deciding to label its packaging as
to whether it is commonly recyclable or not. Of course those people
who produce packaging for Sainsbury's do not really want it to
carry a label that says, "Sorry, not yet recyclable".
They will be thinking very hard about how to provide something
that is recyclable. That is an example where the consumer end
is not the end in itself, but the notion of labelling is a means
to an end, which is to get the supply chain to concentrate on
what it is actually doing to a productive end.
Ms Dibb: You could argue that the red traffic
light on food is a very strong driver for the producer to try
to get that into an amber.
Q576 Chairman: I sometimes get the
impression that if you were having traffic lights on organic food
you would only have green because it is supposed to be good, but
it is usually more expensive, and the amount of goodness at issue
is really open to debate and it is the retailers who are driving
it because they know they can charge more for so-called organic
foods. There may not be any justification for doing so.
Mr Lee: A good example of a different way of
doing it, and perhaps the most famous example on sustainability
labelling now, is FSC (Forest Stewardship Council) timber. When
that standard was envisaged, it was partly envisaged as a signal
to the consumer: you buy the FSC plank for your shelf not the
non-FSC. That did not work at all because people said, "We
do not get it. It will be more expensive" and all the rest
of it. Instead it has turned into a supply chain driver so that
now B&Q and other people are saying that that is all you can
buy; you can have a green shelf, a red shelf, a thick shelf, a
thin shelf but it is going to be FSC timber, to get round this
precise issue that somehow there is a stitch up going on behind
the scenes here and this is about the retailer getting a bigger
creaming from the sustainable product. That is quite a good model.
It is the driving down in the supply chain but at the point of
sale what you get is sustainably produced timber, and you can
check that by the FSC kitemark.
Q577 Baroness Platt of Writtle: Some
evidence has suggested that consumption could be reduced by encouraging
more product services, which you mentioned earlier, where products
such as cars or washing machines are leased out temporarily as
a service and then returned to the manufacturers to re-use or
recycle. Do you think consumers in the UK are prepared to embrace
more of these service models and how successful could they be
in reducing net waste?
Ms Hill: As we were saying earlier, the cradle-to-cradle
provision is one of ultimate producer responsibility and a service
model—that you never actually own resources. The realism
of that is hard to judge. That is far removed from the way we
shop and own and consume; you have to get right into the psychology
of consumption about what it is that people like about shopping
and having a product around them to know whether that would be
a viable answer. There have been several studies showing that,
particularly with things where you are handling products that
are best stewarded by other people, like solvents or paint and
some systems to do with furniture, that could be a very good way
of reducing environmental impact overall. Whether consumers would
embrace them, first of all depends on them being on offer, which
they are largely not, because there is no economic incentive in
the marketplace for companies to offer that kind of change to
the way they do business. If there was, presumably they would
have done it by now. By definition, there cannot be the big market
incentive. Consumers do not tend to set a marketplace in an untested
way, do they? There has to be something available for them to
take up before it becomes clear that it is a runner. Nobody has
really put these things into the arena to test them, but I suspect
that they are not a panacea and they would not solve all the problems.
It would be one way of reducing a certain level of impacts for
very particular products. An overall model of producer responsibility,
of needing to take stuff back at the end of life, for a whole
range of products could work just as well. I do not know whether
you want us to say a little more about user responsibility.
Q578 Lord Methuen: Could I comment
on that because what you have described was the IBM business model
of the Sixties. In fact they got done by the anti-trust people
because they would not sell their computers and they leased them
to you. I worked for Rolls-Royce at the time. The benefit from
Rolls-Royce's point of view was that they always got the latest
model. From IBM's point of view, they had worked out their cash
flow and these machines then went out to India, from the developed
countries to the less developed countries, and so the business
model has been used in the past.
Mr Lee: There is an example right now of how
this could play out and it is to do with energy services and the
energy companies. We are working with Defra right now in the SDC
to look at exactly the issue you have raised, which is: will consumers
accept this sort of services model. This is what we are trying
to test with the energy companies and with Government and with
consumer groups. People have been talking for years about energy
companies coming to you to sell you the service of a warm home
and enough power rather than just selling units of energy. I know
everybody has talked about this but it has never happened. The
next phase, the new Energy Bill, would bring in this new supplier
obligation, which provides, if you like, a mechanism for doing
this. We are trying to explore just this, whether or not we can
start to make that shift. If you can get that right, then the
energy company has a vested interest in making sure you have the
latest and most efficient appliances in your house, that your
metering is accurate, all of these things, because they then are
able to sell less energy and they can make more profit. This is
what they tried in California. It worked quite well up to a point;
it probably went too far because the lights went off, but it is
an interesting model. Although you cannot just transfer the Californian
model straight across to the UK, I do not see any reasons at all
inherently, culturally if you like, why people here should not
get that energy services model because it is just simpler and
it makes your life easier.
Q579 Baroness Platt of Writtle: Consumers
will only opt for service systems if they offer value for money.
You have suggested one or two examples where they will. What economic
inference might be needed to support businesses in establishing
such schemes and how might consumers be encouraged to use them?
You are going to be setting up a new fashion, are you not?
Mr Lee: Yes. It will depend on the example.
If you take the one I was using, it is partly about things like
the carbon price, because that makes it more expensive for the
power companies to generate more supply; it is partly about this
energy efficiency commitment; it is partly about quite arcane
things like how long you enter into a contract with your energy
company.
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