Implications of a National Waste Levy for Product Stewardship Policies and Schemes

1 Introduction

2 Effects of a Waste Levy

3 Conclusions

1 Introduction

1.1 Background

This report examines the potential implications of a proposed national waste levy [Draft Proposal for a Waste Levy in New Zealand (2006) prepared by representatives of local government and the waste industry.] on product stewardship policies and schemes.

A national waste levy has been proposed with the objectives of raising revenue to support waste minimisation activities and to provide incentives for waste diversion from landfill. Also, as part of a longer work programme, the Ministry for the Environment has announced a policy direction which encourages a shift towards a product stewardship [Ministry for the Environment (2005) Product Stewardship and Water Efficiency Labelling.] approach to waste management. This would shift the burden and responsibility for waste management away from local government and towards industry. Consistent with this, several industry-led product stewardship schemes are in operation. The concern of this study is whether these two approaches are at odds in any way and whether a government-regulated waste levy would do damage to the industry-run voluntary schemes.

The brief for this study is for the following questions to be addressed.

1. Are there elements of the waste levy proposal that could be beneficial to product stewardship schemes and if so, how could the potential for benefit be maximised?
2. Are there elements of the waste levy proposal that could be detrimental to product stewardship schemes and if so, how could the potential for detriment be minimised?
3. What are the arguments for and against different levies for different waste streams so as to reflect differences in the potential harm (health and environmental effects)?
4. What are the arguments (in policy and economic terms) for and against exempting specific wastes (such as packaging) from a levy?
5. Where do both waste levies and product stewardship schemes operate together?

Before going on to answering these questions, we briefly define the schemes under discussion.

1.2 Definitions of Schemes

1.2.1 Waste Levy

The proposed Waste Levy would impose a charge on all waste going to final disposal via landfill or incineration. It would be charged on a weight basis. The objectives of the levy are:

• revenue raising to provide funding for waste minimisation initiatives; and
• incentives to divert waste from final disposal.

The levy would be paid by anyone taking waste to final disposal including industry, councils and households. Revenues collected from the levy would be paid to an independent Board that would distribute the funds to:

• councils to fund waste minimisation activities in their statutory waste management plans;
• a fund that could be available to local government, industry, community groups and others for waste minimisation activities.

The proposed level of levy and the distribution of funds is shown in Table 1.

Table 1: Details of the Proposed Levy

	2006	2007	2008	2009	2010
Levy	$10/tonne	$20/tonne	$30/tonne	$?	$?
% TLA Component	100%	75%	50%	50%	50%
Waste Minimisation Fund %	0%*	25%*	50%	50%	50%
$ TLA	$10	$15	$15	$	$
$ Fund	$0*	$5*	$15	$	$
Indicative total revenue from landfills [These figures are based on 3.2 million tonnes of waste disposed to landfills in New Zealand. This is a 2004 estimate by Waste Not Consulting in a June 2005 report to the Ministry for the Environment.]	$32 Million	$64 Million	$96 Million	?	?

All amounts are GST inclusive.

* Any unclaimed or unspent TLA funds to be directed back into the contestable fund.

Source: Draft Proposal for a Waste Levy in New Zealand (2006) prepared by representatives of local government and the waste industry.

1.2.2 Product Stewardship

Product stewardship involves those with a role in the life-cycle of a product (producers, importers, brand owners, retailers, consumers and other parties) accepting some responsibility for the environmental impacts of products throughout their life-cycles. [Ministry for the Environment (2005) Product Stewardship and Water Efficiency Labelling. New Tools to Reduce Waste. Discussion Document.] Impacts can be upstream, from the choice of materials and the manufacturing process, or downstream, from the use and disposal of products. The Ministry for the Environment lists common product stewardship schemes or elements of schemes as: [Ministry for the Environment (op cit).]

• changes to product design;
• consumer information;
• collection and recycling;
• financing mechanisms;
• deposit refund schemes;
• advance disposal fee schemes;
• materials charges;
• specified recycling contents;
• reuse, including remanufacture.

They include relatively low cost and low impact interventions involving the provision of information through to those that involve changes to product design or the funding of collection and recycling schemes. Figure 1 shows the possible locations of intervention by product stewardship schemes during the life-cycle of material.

Figure 1: Interventions by Product Stewardship Schemes [The life-cycle includes a fill step that applies to packaging.]

The issue for discussion is whether a waste levy that applies to final disposal will have impacts on existing voluntary interventions at these other points in the life-cycle.