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

Mechanisms which operate through the market can ensure that a given
environmental outcome is achieved at the lowest cost to the economy, overall.
A key issue remains the ‘strength of the instrument’ to be applied. As mentioned
above, this ought to consider the marginal environmental damages, or benefits, and
the marginal private costs, but the former are not straightforward to measure, and the
latter are not especially well understood in advance of a measure’s implementation. 44
External costs are tolerably well known for some air pollutants for which the
epidemiological evidence is of high quality, but even here, there remain debates
concerning methodology. The strength of any instrument, whether target or economic
instrument, therefore tends to be set through the political process and by negotiation,
influenced by studies that may be carried out in the context of the development of the
instrument. Lobbying also occurs with the intention of influencing the design of the
instrument.
In essence, therefore, the theory of public policy has not been highly influential in
terms of policy design. That being the case, ex post assessment of policy has much to
recommend it. This can highlight policies with significant potential for environmental
improvement.
However, ex post policy assessments of a high quality are very rare. There is a weak
tradition of policy evaluation, and policies are rarely implemented with a view to
understanding the effects of the policy and learning from it. This is certainly true of
Irish waste management policy, but it applies with some force, also, to other
countries’ waste policies. Quality evaluations seek to understand the effects of policy
against a plausible counterfactual (i.e. what would have happened in the absence of
the policy).
2.3 Key Policy Issues in Waste Management
Waste management problems such as littering, ‘overproduction’ of waste, and levels
of recycling that are considered to be ‘too low’, can be explained, in economic terms,
as resulting from incorrect price incentives. Economic theory suggests that if a waste
management system is to be efficient, then participants, such as producers and
consumers, should at each step, face prices that reflect the marginal social cost (that
is the social cost arising from the production of one extra unit of waste).
For many waste management systems, prices do not accurately reflect marginal
social costs for three key reasons. The first is that waste management often
generates uncompensated external costs that impact upon third parties. The second
is that handling of waste is frequently subsidised by governments who pay a
proportion of the marginal private cost of waste management, though this appears
not to be a strong influence in Ireland. The third is that the pricing used to charge for
44 The main reason for this is that the world is not static. Most ex post assessments are shy of
estimating how learning effects, innovation and technical change might have affected costs.
Consequently, private costs tend to be over-estimated in ex ante policy assessments. In the case of
Irish waste management, this matter is compounded massively by the absence of a solid foundation
from which to launch a meaningful analysis of the costs as they currently stand.
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International Review of Waste Policy: Annexes