Environmental Taxation The Case of Municipal Solid Waste

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Environmental Taxation-The Case of Municipal
Solid Waste

• Dr. Ofira AyalonDepartment of Natural Resources
  Environmental Management,
• Graduate School of Management 
• University of Haifa

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90s
USA, EUROPE
ISRAEL
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The Production Chain
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• Production, Transport, Consumption,
  Disposal

Leachates
Visual nuisance
GHG
Resources depletion
Air pollution
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Economic Incentives Along The Production Chain
Raw materials tax

• Subsidies (e.g. green lable)
• deposit

Packaging tax (green dot)

• Landfill tax
• Reduced tax for incineration
• Subsidies for recycling schemes

PAYT
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END OF PIPE INCENTIVES

• Waste Tax- Landfill Tax
• usually imposed by states
• Raise revenue. Introduction of the waste tax
  (PPP) made it unnecessary to raise other taxes
  with less favorable side effects (e.g. labor
  taxes).
• Introduction of environmental taxes - greening
  the fiscal system. 
• Generate a positive environmental effect. The
  increase in the costs of landfilling would make
  other alternatives such as incineration,
  recycling and prevention more attractive.

The landfill tax should reflect the externalities
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• Economic Valuation of Externalities Related
  to Waste Management
• Tzipi Eshet
• Mordechai Shechter
• Mira Baron
• Ofira Ayalon

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Externality valuations of emissions from
landfilling (/ton waste).
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Externality valuations of emissions from
Incineration (/ton waste).
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Externality valuations of emissions from
Incineration (/ton waste) (continue)
New-Jersey
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Landfilling and WTE
Landfilling total costs 3 - 44 /ton waste
landfilled common estimate around 9 /ton
waste WTE total costs 1.3 - 171 /ton waste
incinerated common estimate around 15 /ton
waste
Type of site (modern/old), facility age,
composition of waste, urban or rural location
(transportation), with or without energy recovery
and including or excluding of disamenities.
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Disamenities

• The magnitude of the effects will depend on
• Distance from the site,
• Type of waste (municipal or hazardous),
• Type of site (existing, new or proposed site),
• Topography and Prevailing wind directions,

Disamenity is usually associated with prices of
local properties
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Valuation of household disamenities
Methods Hedonic Pricing (HPM)
Contingent Valuation (CVM)

• Units of measure
• Percentage or dollar reduction in housing prices
  according to the per km distance from
  landfill/incinerator site
• Yearly WTP per household or per km to reduce or
  for a specific disamenity
• Disamenity cost per ton of waste

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Valuation of disamenities (results)
Reduction in housing prices 1.06 6.25 per
km distance, average 3.6 per km.
Maximal effect range 4 6.4 km from a
landfill or incinerator, average 5.2 km.

Disamenity cost 2.437 /ton waste
landfilled or incinerated
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Relation between landfill tax rate and recycling
rates
Higher Tax- Higher recycling
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Relation between country area and landfill taxes
rates
Small Area Higher Tax
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PAYT

• Unit pricing or variable-rate pricing usually
  imposed by municipalities
• Traditionally, residents pay for waste collection
  through property taxes or a fixed fee, regardless
  of how muchor how littletrash they generate.
• Pay-as-you-throw (PAYT) - Households pay a
  variable rate depending on the amount of service
  they use.

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Electro-mechanical chamber system with
volume-based accounting system
Reduction in waste production (10-50), Higher
source separation (90)
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Deposit schemes
11 States in US 10 States
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Net costs 60 M NIS/ year
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• CAC packaging directive

The Dual System in Germany (DSD) was established
by manufacturers as a non profit org. to collect,
sort and recycle post consumer primary packaging-
from households and small businesses.
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The license fee is calculated by multiplying the
weight of the materials that make up the complete
pack with the respective material prices. The
license fee may be reduced by 30 due to its
material content.
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Dont underestimate the need for Engineering
Technology

• OVERALL Life Cycle approach
• Upstream waste minimisation, Downstream
  end-of-pipe treatment and recycling
• Sustainable design
• Product design
• Resource consumption
• End-of-life
• Materials Recovery
• Recycling
• Collection, Separation and Recovery
• Composting
• Energy Recovery from Waste
• Biofuels
• Anaerobic digestion, Gasification, Pyrolysis
• Contaminated Land Remediation
• Site investigation and monitoring
• Risk Assessment and Management
• Prevention

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• Thank you for your attention and
• Happy Birthday, Moti!