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

28.10 Effect of the Policy on Pricing of Resources / Services
Where the packaging tax has been implemented in co-ordination with a life cycle
analysis, resources are valued in relation to the damage they impact upon the
environment. In principle, this should be a positive development and is aligned with
standard economic theory in terms of improving the efficiency of the functioning of
markets. Arguably, the Danish approach is more ‘correct’, since it does not confine
itself to climate change-based externalities only.
Even so, this pricing has drawn criticism by some groups (e.g. Beverage Can Makers
Europe) as the life cycle analysis is seen as having the ability to ‘distort’ decisionmaking.
Industry does, however, have a habit of criticising instruments which seek to
bring about change in materials use on the basis of their being ‘distorting’ even where
they set out earnestly to reflect – however imperfectly – the externalities associated
with material use. The system has also been criticised in Denmark, where there is no
distinction between recycled aluminium and virgin product. 605 This would seem to
ignore the benefits of recycling aluminium in this tax system.
In the Netherlands, the relative tax rates seek to account for the way in which a given
material is managed in the country’s waste management system. This itself presents
problems since, in principle, as the management routes change, so the relative tax
rates ought to change too. If, on the other hand, the measure is not intended to
change these management routes, then arguably, it loses its potency as an
instrument, although it still raises revenue.
This brief discussion highlights two points:
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a) the intention of packaging taxes is to “distort” decision making, if by this,
one understands the intention to change decisions on packaging
b) a critical issue is the boundaries for the analysis and how the tax rates are
met. Clearly, applying uniform rates for virgin and recycled materials does
not reflect the environmental impacts of the packaging
28.11 Evasion and Enforcement
In Denmark the packaging tax has created some issues for importers of packaged
products in that they need to know the packaging material and packaging weight of
all the goods which they import. Some importers have found it difficult to obtain
accurate information from their suppliers and have struggled to comply with the
regulations. The de minimis level applied in the Dutch tax should make enforcement
relatively more straightforward since this reduces the number who are targeted by the
policy.
605 ECOTEC in association with CESAM, C. U. (2001) Study on Environmental Taxes and Charges in the
European Union and its Member States, Final report for the European Commission, April 2001.