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

The impact of the tax was unevenly distributed throughout the country. In the South of
the country, where natural gravel is scarce, natural gravel deposits were maintained
therefore the tax achieved its main goal. However, in the North of the country, where
natural gravel is more abundant, costs were greatly increased. The overall effect was
unfair to those in the North and had a distorting effect on the market.
Introduction of a tax must always be preceded by consideration of the elasticity of
demand of the product. Aggregate is usually priced at a low rate, but is an expensive
material to transport over any great distance. The higher the level of tax the greater
the likelihood of material being imported from areas where there is no tax. For
example, in the UK trade distortions between Northern Ireland, where a reduced rate
of the tax on aggregates does apply, and Ireland, where there is no tax on aggregates,
have been identified. Coordination across country boundaries would reduce the risk
of this occurring across country borders. 800 Alternatively, if possible, implementation
of border tax adjustments may be feasible but probably only possible at the border of
the EU.
46.9 Complementary Policies
In general terms the tax on aggregates works in conjunction with varying types of
policy throughout the various stages of aggregate use, beginning with extraction all
the way through to disposal.
662
1. At the aggregate extraction stage permit rules work alongside the tax on
aggregates;
2. At the end-use stage, road building standards and material standards (see
Section 47.0 for aggregate standards) work in conjunction with the tax on
aggregates. Public procurement rules could also influence demand for
secondary materials through specifying their use, or using an evaluation
method for tenders which rewards bidders making use of secondary
aggregates. Finally, it might be possible to incentivise secondary aggregate
use in specific projects (see below), though this would seem to be a less
efficient way of addressing the matter;
3. At the aggregate disposal stage, landfill taxes strengthen the economic
viability of recycling so working to achieve the same goal as the tax on
aggregates. In addition, policies which prevent ‘sham recovery’ of demolition
materials will help improve the prospects for recycling of aggregates.
800 European Environment Agency (2008) Effectiveness of Environmental Taxes and Charges for
Managing Sand, Gravel and Rock Extraction in Selected EU Countries, Accessed 23 rd October 2008,
http://reports.eea.europa.eu/eea_report_2008_2/en/Effectiveness_of_environmental_taxes_final_lo
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