International Review of Waste Management Policy - Department of ...

8.8 Social and Distributional Consequences
PBU for waste comes with a risk that low income households can be inordinately
penalized. If this is the case then the ‘distribution’ of the incentive lacks equality
across the social makeup of society.
The available evidence suggests the absence of a clear link between household
income and waste arisings. If this were the case then the social consequences would
be much reduced. Instead however, the strongest relationship concerning waste
arisings (perhaps unsurprisingly) is most probably related to household size.
The absence of such a link between income status and waste generation suggests
the potential for the impact of charging to be regressive. A number of means to offset
the regressive nature of charging exist. These include:
1) Dealing with any perceived increase in hardship through adjusting existing
instruments of redistributive policy;
2) Dealing with any perceived hardship through locally implemented redistributive
policies;
3) Dealing with perceived hardship through the charging system itself. Here, there
are essentially three options:
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A) Reducing the fixed rate tariff;
B) Reducing the variable rate tariff;
C) Offering a levy-free element to the service (e.g. free emptyings in a frequency
based system).
In practice, 2) and 3) tend to be used more widely, with 3) probably being the most
favoured approach owing to the relative administrative ease with which it can be
implemented. In economic terms, 1) would be considered the most efficient policy.
Other options exist to offer reduced charges to compliant households. A number of
municipalities in Denmark and Italy charge households a reduced fee for those
engaged in home composting. Some municipalities allow a lower collection frequency
of residual waste for households with 2 persons. Municipalities with summer
residences have less frequent collection during part of the year. Fees are also
typically lower for households in multi-storey buildings compared to households in
areas of lower density housing (single-family-housing, rural, semi-detached, detaching
housing), because collection costs are lower from higher density housing.
From the above, it should be clear that the implications of pay-by-use for income
distribution are dependent upon the details of the scheme itself, but also, the nature
of the scheme it replaces. The net outcome cannot be determined in the absence of
knowledge of these effects. However, it is clear that:
� Where residual waste treatment / disposal costs are high; and
� Where the system has a strong effect on waste prevention; and
� Where the system has a strong effect in improving recycling,
then on average, households are likely to be better off as the overall cost of providing
the service shows considerable potential to be lowered, at least where the avoided
29/09/09