Waste not want not - States Assembly

Box 23: Recently announced increase in landfill tax in Finland
The Finnish government has proposed doubling its landfill tax over the next three years. A newly
approved national waste plan, covering the years 2002 to 2005, stresses the need for urgent
measures to improve waste management practices in Finland as progress has been slow. Under
the plan, waste taxes are to rise in steps from their present level of €15.14 per tonne of waste to
€30 per tonne by 2005. Revenue is to be used to increase government spending on research
and development and other investments in waste management.
6.51 Like businesses, a rise in landfill tax will
provide local authorities with an incentive to
fund alternative ways of managing and
disposing of waste. For example, increasing
recycling through civic amenity sites and bring
sites – the lowest cost ways of recycling – would
become economically attractive options.
6.52 It is not envisaged that the operation of
the tradable allowances scheme (Box 24) will be
adversely affected by increases in the landfill
tax. It supplements the effect of the tax by
providing an additional incentive to ensure that
targets under Article 5 of the Directive relating
to biodegradable municipal waste will be met.
However, significant rises in landfill tax rates to
those approaching the highest rates in Europe,
could remove the incentive for local authorities
to trade allowances as the net cost of diverting
waste to alternative waste management options
falls.
Box 24: Tradable landfill allowances for local authorities
The Waste and Emissions Trading Bill was published on 15 November 2002. Part 1 of the Bill sets
up a system of tradable landfill allowances. This is believed to be the first of its kind in Europe. If
an active trading market develops, this system should help to ensure that the targets in Article 5
of the Landfill Directive are met in the most cost efficient and effective way for the UK as a
whole.
Waste disposal authorities will be able to send to landfill biodegradable municipal waste only up
to the levels of the allowances which they hold. Local authorities that divert more waste away
from landfill (e.g. though more recycling) will be able to trade their unused allowances with a
local authority that does not hold enough allowances to cover the amount of waste it plans
to landfill.
The key advantage of tradable allowances is that they allow the Landfill Directive targets to be
met at less cost. This is because those authorities with high costs of diversion from landfill will
wish to buy allowances from those with lower costs of diversion so that they can continue to
landfill. Lower cost diverters will be incentivised to over-achieve their targets and receive an
income from selling the surplus allowance.
ECONOMIC AND REGULATORY FRAMEWORK
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