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9. CONCLUSIONS AND COMMENT

9.1 Valuation of Costs and Benefits of Waste Treatment Options

The quantification of external costs and benefits requires one to value them in some way. Valuation of external costs and benefits has the attraction for policy makers of enabling a ranking of the outcomes of one policy or action relative to others. The component pros and cons of one approach or another can, at least in principle, be summed together to allow a judgement to be made as to which approach might be 'the best'. Attractive though this may be in principle the attraction is superficial. The significance accorded to the numerical outcomes of valuation exercises is, on the evidence of recent studies, more significant than can be justified by the scientific uncertainties and methodological shortcomings which cannot be assumed away in conducting such analyses.

That such emphasis on the need for valuation should be prevalent at the current time is somewhat surprising for two reasons:

1. A considerable body of literature now exists which question the degree of certainty that can be attached to scientific information. Note that this is not just a question of whether we can know things within 'knowable' error bounds or confidence intervals, or whether we can assign probabilistic risk to certain outcomes, but also one of facing up to the not-so-simple fact of uncertainty in our knowledge even of the impacts which we might seek to place values upon.

2. The methodologies themselves are subject to widespread criticism from both inside (albeit expressed sometimes only privately) and outside the economics discipline. This is not the place to review the available literature here, merely to make the point that critics can be sub-divided into those who levy fundamental criticisms (which question the validity of the whole approach), and those whose criticisms are internal to the debate about valuation (concentrating principally on methodological shortcomings).

On the other hand, there are enough opposing trends to make the prominence of valuation techniques understandable.

The defence of various valuation methodologies usually takes the form that 'they are the best we have available.' But this pre-supposes a need for valuation for a specific purpose, and frequently, it presumes the necessity of using cost-benefit analysis as a decision making tool. It is not answer to the question, 'Does valuation have a role in the policy process?' which is the question that critics frequently ask.

As Harvey (1997) points out:

'the critic of money valuation, who is nevertheless deeply concerned about environmental degradation, is faced with a dilemma: eschew the language of daily economic practice and political power and speak in the wilderness, or articulate deeply-held nonmonetizable values in a language (i.e. that of money) believed to be inappropriate or fundamentally alien'.

It has not been our intention to 'speak in the wilderness', hence the efforts to develop on the one hand a credible analysis in the mould of earlier works, but on the other, one that maintains awareness of the 'warts' of the analysis, rather than simply presenting the ''n'all' aspect of the work.

It is noticeable that more honest attempts at valuation are always forced to grapple with a tension between the desire to be influential in the policy domain (and as Bromley (1989) has argued, there are few professions that seem so well-equipped to influence policy), and recognition that the numbers have limited value. RPA and Metroeconomica (1999), having admitted that valuation methodologies have their faults, conclude a recent report on cost benefit approaches by stating:

There is little justification, however, for omitting non-marketed goods from the cost-benefit equation on the basis of accuracy alone. This may result in the decision-maker implicitly assigning them a value of zero, which in turn will result in a mis-allocation from an opportunity costs perspective.

If we had followed this approach in this analysis, we would be doing little more than guessing at a large number of the external costs which are involved. The obvious point to be made is that assigning non-marketed goods a wrong value is as likely (perhaps more so - numbers have a habit of being quoted out of context) to result in mis-allocations as attributing no value. The point to be made here is that the analysis should try to be honest in its approach, and also, in the applicability of its results. What politicians do with numbers once they are generated is (arguably) up to them, but they should be left in no doubt as to the severity of the limitations that may be applicable.

When uncertainty is present, there is no way of "magicking" it away. Some attempt to grapple with the issue was made by AEA in work for the European Commission (IIASA et al 1998). Alongside a form of Delphi survey, which produced rankings of perceived confidence in estimates of damages related to specific types of effect, the authors produced confidence intervals for the valuation of specific effects. In that analysis, the smallest 95% confidence interval spans four orders of magnitude (the ratio of the high to the low end of the range is over 22,000). It is worth quoting the authors' views of the implications of such wide variations:

'Overall this part of the analysis succeeds in providing quantitative data on uncertainty, but on its own fails to clarify issues. [That is, beyond stating that the benefits analysis is subject to large uncertainty, which is already widely appreciated]. Some commentators will no doubt say that the existence of large uncertainties undermines the credibility of benefits analysis as a tool for policy makers. In fact we regard the converse as true: the fact that possible errors are large makes it all the more essential that benefits analysis is carried out so that policy makers develop an appreciation of the potential risks of their actions.'

The authors are probably right in their view that some commentators will disagree with their view. They justify their own viewpoint by making the point that policy makers might be faced with decisions in different contexts, with the same cost implications, which are more or less certain to generate low benefits, or far less certain to generate potentially large benefits. Two points are worth making here:

• The authors do not suggest why this aids decision-making. The decision still becomes a political one based on judgements as to the risks associated with inaction (or alternative action) in respect of either issue.

• More importantly, this is not always the type of decision facing policy makers. Typically, decision-makers, including local authority waste managers, are trying to find the best course of action, or policy decision to take in the context a specific problem. They are not choosing between a portfolio of policy 'possibilities' from completely different contexts.⁵⁷ Typically, they will have to balance alternative approaches to dealing with the same set of pollutants / wastes in circumstances where no specific course of action is 'vector superior' to all others. This means that the uncertainties pervade the decision making process, and there is limited scope for claiming that the uncertainties are less under specific courses of action.

[⁵⁷ At least, this will not be the case at the level of a decision-maker. There may be considerations regarding parliamentary time which have to be taken into account by Government.]

The difficulties in arriving at clear decisions remain.

In asserting that environmental valuation has such a role, valuation exercises have to face head-on a number of criticisms relating to what it is they are valuing (the existence of scientific uncertainty, the location-specific nature of some impacts), their accuracy (the existence of statistical, measurement and data errors), their completeness (can attempts at valuation account for everything, and where it does not, how sure can we be that what is omitted is not important?), their methodological flaws (of both fundamental nature, and those internal to the approach), and their suitability for the purpose (even if valuation exercises were carried out perfectly, there is no reason to believe that such an approach to decision-making should over-ride other legitimate approaches to decision-making). Decision makers rightly have concerns beyond the outcome of valuation exercises. Policy makers have to exert political judgements, all the more so in cases where more technocratic approaches (such as LCA-based valuation) provide a relatively inconclusive guide (for all the reasons mentioned) to knowing what should be done.

Waste management provides a fascinating arena for the application of valuation techniques. The presumption has been that with life-cycle analysis as its hand-maiden, valuation can provide the route to clear decision making in this regard. It is worth quoting the Draft Strategy on the matter:

'Life cycle assessment is the systematic identification and evaluation of all the environmental benefits and disbenefits that result from a product or function throughout its entire life. Applying LCA to waste management identifies what the impacts on the environment from any waste management process are likely to be and can take into account all the environmental effects of any proposed change. For example, this might include changes in the amount of fossil fuels consumed in power stations and the change in pollution associated with this. LCA thus provides a basis for making strategic decisions on the ways in which particular wastes should be dealt with, in order to develop a truly sustainable strategy for the management of our waste' (our emphasis).

Yet even where we know a good deal about emissions to the environment, we do not always know the associated environmental effects with much certainty. It is not straightforward to move from knowledge of emissions first to knowledge of impacts, and then to some valuation of those impacts which enables a strategic decision to be made in the absence of controversy. Hence, whilst tools such as WISARD can present an analysis of emissions, the fact that different sources of the same pollutant, emitted in different locations, can have quite different impacts is not appreciated.

Whilst valuation can claim to account for some of the shortcomings of LCA-based analysis (notably, the absence of any consideration of disamenity in the siting of waste management facilities - see above), these approaches undoubtedly open up new concerns relating to ethics and income distribution. Shall we, for example, choose to site all waste facilities where willingness to accept the facility is lowest?⁵⁸ If we are assuming energy from waste plants displace coal at the margin, to what extent will local residents, faced with potentially high 'non-global' air pollution externalities, be happy to accept the facility on grounds of the societal benefits it generates (principally for those living in the vicinity of a coal-fired power station)? To the extent that these are real, the so-called Coasean solution might be to ask those near such coal-fired stations to pay those in the vicinity of a proposed energy from waste plant to accept them. It seems unlikely that they would, though there are schemes in the US in which compensation is paid to residents in order to encourage them to accept the presence of waste treatment facilities such as incinerators.

[⁵⁸ See Harvey (1997) for an excellent discussion of the whole issue.]

Does it help or hinder engagement of citizens to tell them what value is being placed upon the deaths that will 'be brought forward' because of the siting a specific facility? Certainly, this reveals a limitation of 'externality adders' approaches. These generate a proxy number rather than clear information concerning impacts. They do not tell (and nor does a life-cycle inventory) how many deaths will or will not 'be brought forward' under specific scenarios.

The debate about valuing deaths brought forward, or statistical lives, risks losing sight of more fundamental principles. If we are already accepting the scientific validity of studies that suggest direct links between the emissions of specific pollutants and the increased likelihood of death, then there must come a time at which one legislates heavily to phase out the pollutant concerned, all the more so since those people most likely to have their death 'brought forward' are the most vulnerable. There are lines which we cross at our collective peril, and if with hindsight and new information we recognise we have already crossed it, all the more reason to step back. In discussing the issue of causal proof, Beck writes (from a German perspective):

'In other countries, quite different norms apply to the validity of causal proof. Often, of course, they have only been established through social conflicts… judges in Japan have decided they will no longer interpret the impossibility of a rigorous proof of causality to the detriment of victims and thus ultimately against everyone. They already recognize a causal connection if statistical correlations can be established between pollution levels and certain diseases… In Japan, a number of firms were obliged to make enormous payments to injured parties in a series of spectacular environmental trials. For the victims in Germany, the causal denial of the injuries and illnesses they have experienced must seem like sheer scorn. As the arguments they collect and advance are blocked, they experience the loss of reality in a scientific rationality and practice that have always confronted their self-produced risks and dangers blindly and like a stranger' (Beck 1992).

This 'economic Cyclopia of techno-economic rationality', in which 'the really rather obvious demand for non-poisoning is rejected as utopian' (Beck 1992) increases the prevalence of the NIMBY phenomenon. There have to be real concerns that the exercise of the same 'rationality', in the technical quest to determine the Holy Grail of BPEO, will over-ride the quite legitimate concerns of local people if not for their health per se, then for their 'otherwise uncurtailed lives.'

9.2 Study Results - The Effects of Kerbside Recycling

The limitations of the external cost analysis we have undertaken are significant. The key results of the analysis are summarised in Boxes 3 and 4. These list together the positive and negative factors contributing to the balance of costs and benefits, private and external, when kerbside schemes are introduced against a backdrop of either 'landfill only' or 'incineration only.'

Perhaps the most interesting point to make on the basis of these results is that the costs of recycling need not be great. As discussed in Boxes 1 and 2 in Chapter 7, Those attaining 12.5% percent diversion are likely to find that the avoided costs of collection and disposal begin to approach the net costs of running the scheme. These positive contributions are not disputed (though as mentioned earlier, some schemes will be fortunate enough to receive recycling credits in which case the avoided disposal costs are already incorporated in a scheme's net costs - to add the avoided disposal costs would therefore imply double-counting in these cases). At higher disposal costs and / or higher participation rates, recycling schemes will begin to pay for themselves, although the prices paid for materials will play an important role in determining whether that is indeed the case.

The experience from elsewhere suggests that market development schemes can lead to materials prices rising rather than falling in an otherwise over-supplied market.

Table 52 presents a different representation for incineration and landfill with and without a kerbside scheme with a hypothetical recycling rate for dry recyclables of 20.8% (equivalent to 250 kg per household, a high performance scheme on the basis of those examined).

Table 52: External Costs Associated with Landfill and Incineration, With and Without Recycling Schemes

This is the highest rate at which dry recyclables can be extracted in the proportions in which they were removed by the schemes we have examined (since rates of extraction are limited by assumed waste composition). It is also the same as the highest rate of extraction per participating household in the schemes examined by us.⁵⁹ The scheme is assumed to have collection rounds of 14.4 km whilst the incineration collection round is 30km and the landfill collection round is 100km. The net costs of the kerbside scheme are assumed to be twice that of the schemes described above.⁶⁰ Two points are worth noting:

• Whilst in the best case scenario, incineration on its own is preferable to landfill on its own (it generates greater net benefits), when the recycling scheme is introduced, the situation reverses. The reason for this is that more of the benefits associated with incineration are associated with the presence of materials (in particular, steel, aluminium and paper) in the waste stream which kerbside collections remove. This applies to a lesser extent in the case of landfill.

• The best case in terms of overall performance, in both low and high externality adder scenarios is the landfill with recycling scheme. This is partly due to the point just mentioned, but also due to the assumed lower costs of landfill. This situation could change over time owing to landfill tax and other factors. Equally, some incinerators may have lower costs than we have supposed here. Much also depends, as will be recalled from Chapter 6, on assumptions concerning efficiency of energy recovery (for both landfill and incineration)), materials recovery (for incineration), oxidation rates at the cap of the landfill, efficiency of landfill gas capture, flue gas emissions from incineration, etc.

⁵⁹ Clearly, 100% removal of specific materials is a significant achievement. Rather than suggesting an 'impossible rate of extraction', the fact that one kerbside scheme extracts 246kg per participating household suggests that the composition data we have used may be inapplicable. It is straightforward to run the models with new waste compositions. ⁶⁰ We have not employed analysis of the likely change in costs associated with increased rates of materials extraction per household and participation. From the schemes we looked at, however, one could make an estimate of this, and it is more than likely that the costs would be less than double the current levels because of increased collection densities, falling fuel costs and labour time per unit of material, etc. On the other hand, in the absence of growing markets for secondary materials, one could argue that were such schemes present more widely, the materials revenue would fall relative to the counterfactual situation.

We have been careful once again to stress the incomplete nature of this work in the Table. The caveats we have carried throughout the report remain.

Given the size of the uncertainties involved, it is debatable whether one should accord any significance to the absolute ordering of these schemes. However, there are some pointers here as to how one might use LCA-based valuations in the context of waste management. No model is a complete reflection of the reality it hopes to capture. It will bear the hallmark of the judgements of the modeller as well as the flaws implied in seeking to simplify the complex world we inhabit. Models can, however, help elicit the direction of effects, and prompt discussion as to the reasons for these, when they are subject to certain 'perturbations '. Arguably, it is in shedding some light upon these (as opposed to absolute values) that the sort of model we have sought to develop may have some value. In this sense, whilst it is tempting to seize upon the headline numbers as in some way representing estimates of the 'absolute size' of the externalities associated with waste management schemes, the more interesting observations relate to the insights gained from considering the effects of the kerbside scheme on the comparative performance of the 'incineration' and 'landfill' schemes.

Even this has to be treated with some caution. If looking at these results, a course of action suggests itself because it would reduce the measured externalities, due regard would have to be given to the likely direction of effects on the unquantified externalities. Just because externalities have not been measured here, that does not mean that they are associated with insignificant effects. The danger here is that the numbers concentrate minds only on the quantifiable effects, not on the broader picture concerning the effects of the plant concerned.

All the externalities missed for incineration and landfill are negative with the possible exception of any benefit attributable to post-closure amenity benefits from landfill (likely to be small). For recycling, the picture is less clear since one is effectively looking at the net impact of one process replacing another. Note however that to the extent that benefits from aluminium and steel recycling fall, the benefits attributed here to incineration arising from metals recovery would fall also.

Lastly, in relation to the comment about the absolute magnitude of the externalities involved, we stress again that one should not be tempted to believe that minimisation of waste is a negative activity in that it prevents us from acquiring net benefits through treating waste so generated. Minimisation is beyond the direct consideration of the study, but it generates its own environmental (and, commonly, financial) benefits.

9.3 Implications for Waste Management

This type of report arguably has implications for two key levels of decision-maker. The first is the policy maker with the remit to make alterations to the institutional framework for waste management. The second is the planner / decision-maker, tasked with implementing strategies on the ground for dealing with municipal waste. It goes without saying that neither can do exactly as they might wish. In particular, finance will be a constraint and this is where both 'levels' of policy maker have a shared interest.

This Section is split into two and seeks to understand where this type of report leaves both types of actor.

9.3.1 Policy Makers

Government policy sets out, as a fundamental platform for launching policy initiatives, the requirement for costs to outweigh benefits. Policy makers might hope that this type of study would suggest a clear course of action on the basis of a cost benefit type approach. This study does not do that and it also suggests why other studies that might appear to do so perhaps do not.

Ironically, and contrary to what we had expected, the costs of kerbside schemes in the context of integrated management systems are relatively low. Implementing a kerbside scheme generating 12.5% diversion of material on its own might cost as little as £1-3 (net) per tonne of MSW managed.⁶¹ This is the same as the landfill tax increases over the next few years. As landfill tax increases, the economics will shift in favour of recycling (certainly relative to landfill) as the avoided disposal costs increase.

[⁶¹ This is the difference between the avoided disposal cost and the lowest net cost for the schemes we looked at (which are not in receipt of recycling credits).]

As regards a 'cost benefit analysis of recycling' the study is not completely conclusive. Although the environmental case (i.e. considering externalities only) for recycling a number of materials appears a compelling one, the analysis remains incomplete in this regard. For each treatment option, there are unquantified externalities, and the analysis remains somewhat crude. Even so, with the results as they stand, all one can say is that the work is highly suggestive of external benefits that would close the gap between the net financial costs of kerbside recycling and the avoided financial costs of such schemes. Strictly, the incomplete analysis carried out here is inconclusive because of unquantified effects.

The study is a long way from being a full cost-benefit analysis. This is not to say that a complete analysis would necessarily generate any more conclusive policy recommendations than those generated here. We have sought to show that to the extent that one looks for very firm and conclusive pointers for policy on the basis of an analysis of private and external costs, the unavoidable uncertainties and errors which plague attempts at valuation of environmental externalities reduce the likelihood of this proving to be the case. Perhaps the relatively unproblematic introduction of the landfill tax has boosted hopes in this regard. Riley 1996 notes the role of externality analysis in setting the level of the landfill tax. But as our work has sought to show, one can re-visit that analysis and formulate some quite different numbers, not to mention conclusions.

One of these is that, with hindsight, it would have made sense to levy different rates of landfill tax on sites with and without energy recovery. A higher tax rate on the latter might have encouraged early installation of gas collection equipment with significant environmental benefits. This might still be of some relevance today since all sites accepting municipal waste will have to install this equipment anyway owing to the Landfill Directive. Some of the most successful environmental taxes have been those which, through imposing differentials, create incentives to switch from one course of action to another (e.g., differential taxes on leaded / unleaded petrol). The case here would be similarly strong (and would generate benefits). As long as the differential tax lay below the abatement cost, installation of gas equipment would be expected to occur rapidly.

In respect of the treatment options we have considered, the most glaring omissions would appear to have been:

• Disamenity (of all facilities);

• Emissions to water and land, including leachate; and

• The 'non-environmental' aspects of the cost benefit analysis. The latter include, for example, employment effects which have been the subject of work undertaken by Waste Watch (1999b) and Murray (1999), as well as potential benefits from changes in balance of payments, competitiveness and so forth (some of these being less than straightforward to quantify).

In respect of the first of these, Table 53 summarises some studies from elsewhere.

Table 53: Summary of Waste Related Valuation Studies

Note: Table reproduced as in original source. This does not list some of the sources referred to in the central column so these do not appear in the bibliography.

Source: RPA and Metroeconomica (1999)

These can appear small relative to some specific examples. In a affidavit for a Judicial Review of a recent Leicestershire MSW landfill site planning decision, for example, Susan Reiblein provided evidence that her property value fell from £150,000 to between £20,000 and £40,000 as a result of interference from a landfill 340 m away. Even the operating company (Hepworth) accepted a £40,000 reduction because of 'bad neighbour' development.

Benefits transfer is, as the studies has indicated elsewhere, highly problematic and should always be approached with caution. The evidence here can be taken alongside the studies presented in Brisson and Pearce (1995) (some of the studies are also featured in that work). The first thing to note is that much more work has been done in the context of landfills than in the context of incineration. More importantly, and potentially more relevant to the UK in the future, many of the studies look at hazardous facilities, and one would expect WTP (willingness to pay) and WTA (willingness to accept) bids to be higher for these than for MSW facilities. Currently in the UK, co-disposal occurs, but in the future it cannot because of the Landfill Directive.

One US study which looked at waste to energy plants is that by Kiel and McClain (cited in Brisson and Pearce 1995, but not referenced). They looked at the effects on house prices over time from the pre-rumour stage, through to the rumour stage, the construction phase, the online phase, and later years of operation. House prices were affected only once construction began and peaked in earlier years of operation before falling back slightly. The effect was a reduction of the order 3% per mile in the vicinity of the incinerator. Gerrard (1994) notes that in North America, 'Compensation has been quite successful in siting MSW landfills and incinerators which have much lower perceived risks than do HW/RW [hazardous waste/radioactive waste] facilities.' A popular form of compensation has been 'value protection' which compensates householders for depressed house values (see above).

Where recycling is concerned, there may be site-related disamenities associated with industries using secondary materials but one might argue that these, such as they occur, displace extractive activities elsewhere in the world (see Chapter 6) as well as (in the longer-term) any disamenity related to primary processing facilities. Whereas one finds studies, and thinking, couched in terms of willingness to pay to avoid, or willingness to accept most waste treatment facilities, where recycling is concerned, surveys have been carried out to gauge willingness to pay for the service. Jakus et al (1996) carried out studies to elicit willingness to pay for recycling, and estimated this at £5.78 per household per month. Evidently, this is far in excess of the actual costs of kerbside schemes in our mini-survey. Tiller et al (1997), on the other hand, report that in Tennessee, households would pay $4 per month (on the basis of contingent valuation). Again, per household, this is far in excess of the costs of kerbside recycling in our schemes.

Taken in the round, what these studies appear to do is reflect the public preference for certain approaches to waste treatment. These are important. Sceptics concerning valuation techniques might at least recognise the ordering of preferences that these appear to suggest. Quite how the disamenity effects of incineration, as measured through contingent valuation approaches, would compare with landfill is unclear (and likely to vary with location). To the extent that population densities are important, the fact that incinerators are usually in urban or peri-urban locations would suggest that the disamenity would be larger (since more households would be affected). On the other hand, we have only limited knowledge from studies seeking to elicit the disamenity associated with municipal waste incineration so do not know the speed at which the disamenity experienced falls with distance (and whether it varies with capacity, and if so how?). Brisson and Pearce (1995) suggest 4 miles as the domain of influence for landfills. It could be that this is less in the case of incinerators.

The public preference argument in favour of recycling is an important one. It is especially important given that: Local authority waste management is funded by local taxation, so it is appropriate that the views of the public should be taken into account; and Technocratic approaches to waste management decision making are unlikely to lead to determinate decisions as to what should be done. As far as we can discern, recycling is an environmentally beneficial option, though again one must stress the incompleteness not only of this study, but of all others besides.

To add to arguments in support of recycling, one can point to the fact that balance of payment effects are likely to be positive. Employment may also be generated. Lastly, there may be important softer effects from kerbside recycling since it may imply an increase in awareness on the part of householders concerning the wastes they produce.

If people are, in the general case - and this not universally true⁶² (one finds volunteer communities for waste management facilities, frequently, it should be added, where there are gains to the community incorporated in the package) - unfavourably disposed to the presence of large waste treatment plants, the question arises as to how to go about minimising the need for these. This has to account for the costs of the approaches undertaken. The key is perhaps not recycling, nor landfill, nor incineration, but minimisation. This is the area where virtually all interests in waste management come to agreement, yet relatively little is spent on tackling the problem, certainly as regards MSW.

[⁶² One finds volunteer communities for waste management facilities, frequently, it should be added, where there are gains to the community incorporated in the package.]

A key issue in the UK at present is that householders have no incentive to minimise the waste they generate, and nor is there much spent on educating them as to how best to do this. As long as this is the case, there may be much to be said for moving the incentive upstream to retailers and the like. The Packaging Regulations will have some effect in that respect through putting in place incentives for minimising packaging waste, but they affect only packaging materials. Other components of the municipal waste stream could be addressed through Producer Responsibility mechanisms, not necessarily of the same nature as were developed for Packaging Waste. These could be used as a mechanism for tackling the recovery of some wastes arising in the household stream such as direct mail, and as has been discussed elsewhere, newspapers.

The new emphasis on market development is also a welcome one. The initiatives in England, Scotland and Wales, and the intention of some regions to incorporate plans for market development within their Structural Funds programmes may generate an environment in which entrepreneurs can develop new industries in a more conducive and receptive environment. But market development is specifically not a strategy for waste minimisation

Part of the significance of minimisation, when set in the context of the Landfill Directive targets, is that, other things being equal, a lack of it requires more facilities for biodegradable municipal waste diversion. These bring with them the site-specific disamenity effects and the non-global air pollution effects that are directly traceable as consequences of the behaviour of the community at large. It can be argued that it is an unjust distribution of the effects of a 'solution' to what is currently a societal problem. Minimising waste will minimise the extent of this unjust distribution of the burden of dealing with waste.

If, as Chapter 8 suggested, waste minimisation is an important strategy for meeting Landfill Directive targets, there must be logic in extending the tax on landfill to cover incineration, particularly since energy from waste has been exempted (somewhat strangely, given its contribution to global warming) from the climate change levy. This would have the dual effect of tilting the financial equation in favour of recycling and promoting minimisation. In the longer term, there would also be merit in extending the tax (albeit at a lower rate) to recycling itself.

MEL (1999) suggested that the current maximum rate of recycling for dry recyclables might be 15%. But that study carried with it the important caveat (overlooked by some) that this was contingent upon there being no change in the institutions, financial arrangements and legislation regarding waste management. It would be difficult to see how these could remain the same for the foreseeable future given requirements for the UK to change what is currently doing in order to comply with the Landfill Directive. The question then becomes not 'what is best practice now?' but, 'if we have to change what we are doing, how can we ensure that the change occurs smoothly, and in such a way as generates benefits such as we believe them to exist?' Extending the tax on landfill to incineration has the merit of giving incentives to both minimisation as well as recycling. Revenues could be channelled into a diversion fund for which local authorities would bid (on the basis of incremental costs of the scheme in excess of the costs of the counterfactual linear treatment option). This would seem a more laudable use of funds and of administrative capacity than the current ENTRUST set-up. Note that the French Landfill Tax on Household and Industrial Assimilated Waste (Déchets Industriels Banaux), now included alongside other environmental taxes in the General Tax on Polluting Activities (TGAP), was established in part to generate a modernisation fund for waste management.

Note that because recycling tends to save energy, there would also be logic in devoting some of the funds generated by the Climate Change Levy to recycling and waste minimisation. This would help re-instate some element of joined-up thinking (waste and climate change) in the design of the climate change levy that may be lost as a consequence of the exemptions specified thus far.

9.3.2 Waste Managers

Decision-makers at the local level have been asked to pursue BPEO, and to do so frequently with very few resources. It is something of an oddity that a key platform of waste management in the UK, BPEO, is not particularly well understood. Privately, some waste managers cynically express the view that anything can be the BPEO. In the absence of firm guidelines as to how this is to be applied, as well as some assurances that their attempts to pursue BPEO will be rewarded with sufficient finance to implement it, local authority decision makers are likely to lose some enthusiasm.

The suggestion of this work is that a technical application of costs and benefits to waste management decisions does not lead one to conclusive results as to what the best option is. In order to even approach this, an enormous amount of work would need to be done, much of location-specific in nature. Even then, the analysis would, most likely, still incorporate uncertainties and wide ranges regarding various impacts. The Environment Agency's Life Cycle Assessment tool, WISARD, may to some extent aid decision-makers in assessing the trade-offs which might exist across facilities. But the tool also obscures the effects of the pollution in the environment in which it is emitted. It does not give an account of the severity of actual impacts of the pollution concerned, nor does it consider other issues such as employment, and nor does it account for disamenity. Also, the assessment of burdens associated with different waste management options are intimately related to what is happening outside the treatment method itself. The question concerning displaced energy sources is such a crucial one in assessing net burdens that it deserves to be revisited to understand how this form of system expansion should be handled (the more so since decisions regarding energy from waste landfill and incineration capacity are likely to have an impact a long way into the future).

In this context three points seem worth making:

• Waste management decisions (especially concerning siting of facilities) are not about to be cleansed of their fundamentally political nature by application of technical approaches to determining BPEO. Like it or not, waste management decisions are political ones. There is little point in either denying, or trying to overcome this. For this reason, it is important to know not just quantities of pollutants, but which ones are emitted where, and what will be their impact and upon whom?

• To the extent that finance is viewed as a constraint on pursuing options which are more politically popular, the availability of finance to local authority waste managers will have significant political consequences (all the more so if the questions advanced above are answered in transparent manner).

• The pressing need for minimisation becomes even clearer, and it is in this area that much effort should now be expended.

The potential for minimisation remains under-explored. More pro-active authorities might take up the challenge of minimisation rather than simply accept, in fatalistic manner, an unending growth in the waste stream, especially following the passage of the Waste Minimisation Bill. Such authorities might seek, through education and through awareness campaigns to influence the choice of products made by consumers, particularly so as to maximise the recyclability / re-usability of packaging purchased.

The degree to which such education is effective might be increased by measures such as variable charging or other imaginative incentive schemes, as well as allowing, as in the German Ordinance, consumers to leave unwanted packaging in retail stores, a move which would bring home the message of Producer Responsibility without bringing to the home unnecessary packaging.

In addition, authorities could encourage householders to:

• Sign up with the Mailing Preference service so as to reduce 'junk mail'.

• Engage in home composting.

• Engage in softer 'demonstration' based approaches, such as using non-disposable nappies in local hospitals;

• Purchase goods with lower packaging content.

• Place labels on letterboxes stating that where this is the case, the residents have no wish to receive free 'newspapers' or other 'junk mail.' For many residents, this is simply unwanted material that goes directly from the doormat to the dustbin, especially where there is no opportunity to return the mail to those responsible for its being posted.

• Engage in 'clear-out' days on which streets become temporary waste exchanges.

Also, there might be merit in looking at the application of the Essential Requirements Regulations of the Packaging Directive. When the Regulations came into force the Local Authority Committee on Trading Standards (LACOTS) made a resources bid which DTI accepted and the money was added to the Revenue Support Grant. However, because it was based on a 'soft touch' enforcement approach with low inspection frequencies it was for not more than £120,000, divided between about 200 Trading Standards Authorities in the UK, amounting to about £600 per authority. We understand that the lowest frequency for inspection is about 1 inspection every 14 years.

Guidance, developed by the DTI in conjunction with LACOTS, was published in August 1998. It did not give a steer to LAs about inspection frequencies or enforcement approach. A "code of practice for optimising packaging and minimising packaging waste" was produced by the Industry Council for Packaging and the Environment (INCPEN) and endorsed by relevant industry associations, the Institute of Packaging and LACOTS. A series of compliance statements for different types of packaging has been published by LACOTS - available on the LACOTS open website at www.lacots.org.uk (under Information Services). Whilst the larger companies have tended to 'comply', it is believed that there are still low levels of awareness among SMEs about the Requirements. This is disappointing, since the only onerous requirement is record keeping, and there may be distinct financial advantages to the companies themselves in achieving compliance.

Local Authorities have to be aware also of the possibility of a Composting Directive in the near future. This could require that the organic fraction of waste is separately collected or home composted in the future. Local Authorities need to be aware of these developments. Some local authority waste managers have not even heard of the proposed Composting Directive, but were it to come in, it would affect every Authority in the land. This argues for flexibility in strategies such that they appreciate this as a possibility. Taken together, the Landfill Directive and the Composting Directive suggest that one logical approach for Local Authorities will be to work together in minimising, composting and recycling materials in the foreseeable future. This would occur with a view to reviewing progress made towards Landfill Directive targets at pre-specified dates, which would then allow an assessment to be made of the need for other diversion capacity. The figures used from the Netherlands in Chapter 8 suggest that much could be done to minimise requirements for other diversion facilities, but that significant efforts in minimisation would have to made to eliminate such a need altogether.

Just as Local Authorities need to be informed about the possibilities for a Composting Directive, so it might make sense for citizens in Local Authorities to be informed about the nature of the decisions having to be made in their Authority. Some citizens are already being made aware of these, not always in the way they would wish. The implications of the Landfill Directive remain 'unperceived' by most citizens even though every one of them will be affected, directly of indirectly, by it. Part of a waste strategy at the local level will be to inform all citizens of the nature of the decisions which need to be made, and the options available.

9.4 Concluding Remarks

It would have been relatively easy in this study to 'prove' that recycling is 'unequivocally' superior to other options. Change a number here, massage the figures there, alter the ranges, and hey presto, recycling wins! But the aim is a broader one. One lesson from this work is that however strongly one believes the quantification of private and external costs and benefits should be an ultimate arbiter of whether or not something may or may not be a good idea, one is likely to have to accept the fact that studies attempting to do this will be less than conclusive. This raises questions as to how what has been stated as a 'fundamental principle' of Government policy - that policies where the benefits do not justify the costs should not be introduced - can be put into operation. Do we do nothing where the costs and benefits themselves are subject to considerable uncertainty? Do we pretend that analyses which are less than complete, and which are trying to cope with uncertainty, constitute the basis for policy formulation? Do we need cost benefit analysis at all to arrive at a decision? To what extent do we fall back instead on other principles of policy making, such as the Precautionary Principle? Or do we take actions, but ones which retain flexibility (and degrees of reversibility) whilst seeking to address what one suspects (perhaps on the basis of a precautionary approach) is a problem in hand? These are, at heart, epistemological questions. At what point do we know what it is we think we have to know in order to justify action? What models of rationality should we be using in such cases (because the message is that old ones are likely to fail us)?

Such a debate needs to be opened in the spirit of a non-dogmatic attempt to explore the alternatives to cost-benefit based decision making. So much time and effort has been spent trying, apparently, to concoct a rationale for one or other course of action even where the co-incidence of public desires, and what the cost benefit analyses undertaken thus far suggest, are 'in sync'. There will always be another dispute about the life cycle inventories, about the value of life (not to mention the view as to whether this is an acceptable practice at all),

about the threshold value for this or that pollutant's effect, and about the carcinogenic nature or otherwise of a whole host of different pollutants whose impacts we don't really understand (least of all when they are mixed in a soup).

There will be those who are asking why, when economic analyses undertaken and the opinion of the public are apparently aligned, are we still waiting? Why are mistrustful of other country experiences when we are ill-placed as a nation to judge where the boundaries to recycling and composting might lie? Will the Treasury inject the finance required to stimulate an activity which appears necessary and desirable for a variety of reasons? If it waits for a strictly determinate outcome from cost-benefit analyses, we could be waiting for a very long time indeed (or alternatively, as seems to be our destiny in the UK, until a new Brussels Directive emerges).

What institutional models should we design for the purposes of policy-making? It is less than clear that with 20 year objectives to meet (under the Landfill Directive), the current structures will serve us especially well. Hukkinen's (1999) work perhaps provides a starting point, exploring the extent to which cognitively dissonant mental models of environmental problems are constructed by those in the policy making field.⁶³ The suggestion is that new institutions with less corporate perspectives are required. These have to include stakeholders:

'the efficiency and the social good of a particular institutional design are defined by the stakeholders who have to tolerate or enjoy the institutions… The only thing that planners can wish to do is stimulate the creation of institutions that enable the stakeholders to search and find an acceptable concensus on environmental issues, instead of continuing to redefine and disagree on them.'

[⁶³ The case study on Finnish waste management is particularly interesting in the context of this study.]

Note that the comment on the social good resonates with the institutionally informed criticisms of Bromley (1989). Instead of looking solely at costs and benefits, the distribution of which is dependent upon pre-existing market structures, we need to look instead at how the structure of markets has to change in accordance with conceptions of social welfare. Might it be pertinent to re-consider the structures of rights and obligations within which citizens function? Should we, as citizens, have the right (as we currently do) to discard materials without considering their potential value as a matter of course? More fundamentally, can we justify continued growth in materials consumption in the context of debates concerning sustainability and the needs of future generations (and projections of a 3% growth rate in the waste stream until 2020 are, to say the least, alarming)? Should, for example, distributors of free newspapers and mailshots have the right to expect local authorities, and hence, citizens to foot the bill for collecting and disposing of their materials? How can we justify the distributional (il)logic of having large waste treatment plants in specific locations that deal with what is actually everyone's problem? Isn't it right that everyone that everyone should be obliged to try to solve that problem? The oft-quoted bottom line numbers of externality assessments are apt to downplay the significance of the distribution of the costs and benefits which comprise the bottom line. (It should be added here that we can know something about the nature of distribution of these even where their magnitude is unknown.) These are questions that seem prior ones to consideration of costs and benefits. They imply the establishment of institutions, formal and informal, which structure markets, and within which costs and benefits are assessed.

The focus in the UK thus far appears to be the costs of minimising the solution to the UK of meeting Landfill Directive targets. This may not lead to particularly innovative approaches, and nor is it likely to lead to a situation in which the potential to seize opportunities in respect of new jobs is grasped. Ironically, one obvious way of alleviating the financial constraint, variable charging (in the United States, Pay as You Throw), in which householders are charged directly for waste services (and which would allow them greater freedom to determine what treatment approaches are used in their area), will not happen unless primary legislation comes onto the statutes (despite the fact that there appears to be some degree of support for such an approach - Waste Watch 1999b). There has been some concern that this will have regressive impacts. Yet it is difficult to believe that even if this were true, the remaining Council Tax element could not be adjusted to account for this supposedly regressive effect.

We started this study with a hypothesis:

although the financial costs of recycling may be greater than that for other methods of dealing with waste, to the extent that one is able to incorporate the environmental costs and benefits associated with all methods, the economic analysis will show that when one accounts for all these, recycling will be shown to be the best option for dealing with the relevant fractions of municipal waste.

The hypothesis is not proven conclusively. There are a number of persuasive arguments that one can present for recycling. There are fewer for other treatment options (other than that they make the job of 'dealing with waste' disarmingly simple). There are more for waste minimisation (and energy efficiency).

Many other countries apparently see some merit, more than we do here in the UK, in the simple messages conveyed in the waste management hierarchy. The simplicity and clarity of the message that the hierarchy conveys has much to recommend it, even if it might not lead to perfect outcomes in environmental terms. It is surely incumbent upon those who claim that it does not to state why, and to ensure that their answers are more than simply theoretical. After all, if one is looking to give some guidance to decision makers, asking them to follow BPEO is certainly not devoid of its own problems, and it opens up huge space for argumentation. Countries like the Netherlands more or less reproduce the hierarchy through principles for local authorities and householders. Denmark does the same with its waste tax. The Landfill Directive holds no great fears for these countries, though to be sure, they have had to make awkward decisions in the past (not least, in the Netherlands case, in terms of incineration capacity, where concerns about emissions from these led to imposition of relatively stringent standards for pollution control).

Given this, from the point of view of Local Authority waste managers, one can do much worse than making the hierarchy, and not BPEO, the guiding principle of decision making in waste management. Quite apart from reproducing the ranking which most studies, albeit highly imperfect ones (as this one is), that have been carried out suggest, this may have the twin merits of enhancing the flexibility of waste strategies, and aligning UK waste management with European proposals for new legislation. A failure to do the latter risks painting the UK into a corner in which it is continually dancing to a tune set in Brussels. It will be interesting to see how many Authorities (and Regional Technical Advisory Bodies), for example, in setting out strategies to meet Landfill Directive targets, take on board the possibility of a Composting Directive entering into force in the medium-term.

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