As noted above, the ultimate objective of waste-related environmental policies is to reduce environmental impacts to their economically efficient level. (See OECD, 2004 for a full discussion.) If the use of recyclable materials has fewer waste-related environmental impacts than primary materials, the internalisation of waste-related externalities should increase recycling rates, even if the ultimate policy objective is to decrease environmental damages rather than to increase recycling rates as such. Other types of externalities, such as those associated with upstream primary resource extraction and exploitation, may also be reduced. However, such impacts are best addressed at their point of generation (i.e. forestry, mining, etc.) and not downstream at the point of commodity production or waste generation.
If the incentives are appropriate (and there are no other market or policy failures), the level of recycling should be such as to equalise the marginal damages from primary and secondary resource use. However, this is, of course, often exceedingly difficult to implement in practice and it is for this reason that the policies outlined in Section 2 above have been introduced.63 Nonetheless, despite their inability to target waste-related externalities directly, more general solid waste policies will have impacts on recycling rates by changing the relative attractiveness of different waste management options. In
63. As noted, such targeted recycling policies are indirect means of reducing damages by supporting an apparent means of mitigation.
particular, by increasing the cost of other waste management options (such as landfill or incineration) they will increase incentives for the recycling of recyclable materials. However, the extent to which they do so will depend upon the precise nature of the measure introduced, and the broader policy context in which it is placed. Table 5.2 provides some examples of waste-related environmental policies which are likely to affect the level of recycling significantly, even if this is not their primary objective. (For empirical evidence and literature reviews see Johnstone and Labonne 2004, Kinnaman and Fullerton 1997, and Beede and Bloom 1995.)
Table 5. 2. The effects of selected solid waste policies on recycling
Unit-based waste fee
Landfill standards (performance or technological)
Incinerator standards (performance or technological)
Landfill or incinerator bans
By increasing the cost of disposal, encourages recovery of recyclables.
By increasing the cost of landfill disposal, may encourage the recovery of recyclables. By increasing cost of landfilling waste, may encourage the recovery of recyclables. By increasing the cost of incinerating waste, may encourage the recovery of recyclables.
By preventing the landfilling or incineration of recyclables, will increase supply.
Empirical studies indicate that the effects are likely to be much greater if such measures are accompanied by collection schemes.
Environmental effectiveness depends upon the extent to which the cost of tax is ultimately passed on to waste handlers and generators in marginal terms. Environmental effectiveness depends upon the extent to which the cost of the standard is ultimately passed on to waste handlers and generators in marginal terms. Environmental effectiveness depends upon the extent to which the cost of the standard is ultimately passed on to waste handlers and generators in marginal terms. Effects on recycling are different for wastes which can be recovered for material or energy.
This can increase recycling rates for those recyclables which have been banned for disposal due to concerns about environmental impacts (i.e. used motor oil, lead-acid batteries, etc.)64 However, it may divert waste into illegal disposal._
Indirectly, almost all solid waste policies will affect rates of recycling. In some cases these effects may be even more important than directed recycling policies. For instance, the combined application of strict technological and performance-based standards for landfill and incineration, with unit-based waste fees which are set at a level which recovers all costs (financial and environmental), will certainly lead to increased rates of recycling. Indeed, some empirical studies have found that the price elasticity of recycling rates in the face of unit-based waste fees can be as high as 0.4 (see Kinnaman and Fullerton, 1999).
However, unit-based pricing of solid waste is not applied systematically across all OECD countries. Moreover, such measures will not result in optimal levels of recycling by material type, since waste fees and taxes cannot be set at reasonable administrative cost at a level which reflects management costs for individual constituent parts of the waste stream. Even when used in conjunction with technology-based or performance-based standards they are crude means of targeting externalities. It is for this reason that they need to be accompanied by the types of policies outlined in Section 2 above.
64. Note that some municipalities have introduced bans on recyclables which do not have particularly acute environmental impacts but which can be recycled - i.e. composting of organic waste. Such measures fit under the heading of targeted recycling policies discussed above.
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