Dutch Waste TaxationBeijing – October 26-27th, 2010 Herman Vollebergh PBL Netherlands Environmental Assessment Agency CentER Tilburg School of Economics
Dutch Waste Taxation
Beijing – October 26-27th, 2010 Herman Vollebergh PBL Netherlands Environmental Assessment Agency CentER Tilburg School of Economics
Material flows and solid waste
2 Firms Resources Illegal Dumping/ Pollution Capital Labor Energy Households WasteF WasteH
The Netherlands (small EU country)
Densely populated 3
Dutch household waste (kg per cap) 1915-2009
4
Waste policy
Reduce Illicit Dumping & Pollution Collection of waste At home; Curbside Options for final waste disposal Landfilling (leakage!) vs Incineration (air pollution!) Hazardous waste Recycling Prevention 5
Material flows: waste policy
6 Firms Resources Illegal Dumping/ Pollution Capital Labor Energy Households Waste Firms WasteF WasteH Collection Collection Landfill Final Waste Disposal TF TMW
Waste policy: Dutch approach Tax I
Municipalities responsible Requirements (by law): collection households once a week collection firms by contract organize curbside for larger pieces (including waste from buildings) Payment through so called Waste Charge Households: charge (‘afvalstoffenheffing’) Firms: separate regime by contract (‘reinigingsrecht’) 7
Waste policy: Dutch approach Tax I
Tax Object Waste Charge for households: All lots (area of land where people live) within municipality for which a collection responsibility holds Note: independent of number of inhabitants Tax Subject: those who actually use the lot Tax Base: cost of collection and final waste disposal Tax Rate (excl VAT) : Uniform until 1995 (to prevent illicit dumping) Possibility for differentiation after 1995 For uniform tax rate monitoring problems very limited (= lump-sum tax!) 8
Waste policy: Dutch approach Tax I
Tax rate = collection + final waste disposal cost Real cost per household (€ 2003) 9 ?
Snelle stijging kwam door (i) omschakeling storten naar verbranden, investering in verbrandingsinstallaties die veel duurder waren en (ii) EU richtlijnen met veel meer eisen aan storten en verbranden waardoor verwerking veel duurder werd en (iii) meer kosten voor gescheiden inzameling en verwerking ‹#›
Material flows: waste charge + landfill tax
10 Firms Resources Illegal Dumping/ Pollution Capital Labor Energy Households Waste Firms WasteF WasteH Collection Collection Landfill Final Waste Disposal Incineration TL TMW TF
Waste policy: Dutch approach Tax II
Netherlands: small and densely populated; high risk of leakage (water and soil contamination) Final waste policy 1990s aims to reduce landfilling Introduction ‘Waste Tax’ in 1995 part of broader regulatory packageto reduce overall waste, stimulate recycling and incineration Tax Object: all waste delivered to waste removal establishment for final disposal Note: also includes disposal of ‘own production of waste’ 11
Waste policy: Dutch approach Tax II
Tax Subject: waste removal establishment (waste firms licensed by government and subject to strict regulation) Tax Base: weight of waste in 1000 kg Tax Refund: recycled material (e.g. organic waste) Tax exemption for dredgings Tax Rate (excl VAT) : High of €106.49/ton if mass/volume ratio < 1100 kg/m3 Low of €16.79/ton if mass/volume ratio > 1100 kg/m3 Monitoring problems (e.g. waste manipulation) 12
Lage tarief is tevens van toepassing op: straalgrit, afvalstoffen die afkomstig zijn van de afgraving van een oude stortplaats indien m.b.t. die stortplaats door de belastinginspecteur een vergunning is afgegeven voor toepassing van dit tarief, de zogenoemde monostromen (door minister VROM & FIN bij ministeriele regeling aan te wijzen afvalstoffen die niet verbrandbaar en niet herbruikbaar zijn, die onvermengd zijn met andere afvalstoffen en die rechtstreeks door de producent worden aangeboden). ‹#›
Waste policy: Dutch approach Tax II
Final Waste Disposal in kton 13
Aside: social cost-benefit analysis in Dutch case
Note: in €/ton 2000 (for details see Dijkgraaf & Vollebergh, 2004) 14 Landfilling Incineration Emissions to air 6 17 Emissions to water 0 0 Chemical waste 3 29 Land use 18 + 0 + Gross environmental costs 26 46
Aside: social cost-benefit analysis in Dutch case
Note: in €/ton 2000 (for details see Dijkgraaf & Vollebergh, 2004) 15 Landfilling Incineration Emissions to air 6 17 Emissions to water 0 0 Chemical waste 3 29 Land use 18 + 0 + Gross environmental costs 26 46 Environmental cost savings: Energy function (WTE) 4 23 Materials function 0 – 6 – Net environmental costs 22 18
Aside: social cost-benefit analysis in Dutch case
Note: in €/ton 2000 (for details see Dijkgraaf & Vollebergh, 2004) 16 Landfilling Incineration Gross private cost 40 103 Private cost savings Energy function 4 21 Materials function 0 – 3 – Net private costs 36 79
Aside: social cost-benefit analysis in Dutch case
Note: in €/ton 2000 (for details see Dijkgraaf & Vollebergh, 2004) 17 Landfilling Incineration Gross private cost 40 103 Private cost savings Energy function 4 21 Materials function 0 – 3 – Net private costs 36 79 Net environmental costs 22 18 Overall costs 58 97 Both options face strictest environmental regulation in world (includes ‘tax’ to finance clean up fund)!!!
Material flows: incentive taxes
18 Firms Resources Illegal Dumping/ Pollution Capital Labor Energy Households Waste Firms Recycling WasteF WasteH Collection Collection Landfill Final Waste Disposal Incineration TL T’MW TF TD RD TMW
Waste policy: Dutch approach Tax III
Municipalities requirement: Households: in 1990s also obligation to collect specific waste streams seperately (e.g. organic; paper) Freedom in organizing collection and disposal some collect mixes, others invest effort in separation some opt for incentive regulation using Waste Charge Additional tax/fiscal incentives: Tax on packaging Disposal charge on electric appliances Deposit-Refund 19
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