Waste Policy Discussion: The Potential Unintended Consequences of a National Waste Levy

1. Introduction

2. Background

3. Generic Elements of the Draft National Waste Levy Proposal

4. Definition of 'Unintended Consequences'

5. Methodology

6. Possible Adverse Effects from the Introduction of a National Waste Levy

7. Discussion

8. Conclusion

1. Introduction

A national landfill levy is a common policy tool used by many OECD jurisdictions to manage aspects of waste expenditure. New Zealand is exploring a range of policy options for funding waste minimisation activities. One of the options available is a national landfill levy.

The character and scale of the unintended consequences (or perverse incentives) associated with levies are entirely dependent on the structure of the levy framework, how the levy is administered and who benefits from the revenues collected by a levy. The purpose of this paper is to discuss generically the unintended effects noted in jurisdictions charging levies, explore the scale and character of those effects and to inform an exploration of how these unintended effects could be overcome by good design.

This paper sets out the issues that were discussed at a workshop in Auckland on 23 June 2006. Waste levy experts from Australia were asked for their point of view regarding each issue, particularly in terms of:

• how much these issues have created concern, and have the concerns been realised under the current levy regimes?
• what design elements are suggested to overcome issues?