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

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� There are concerns that the mass balance approach encourages local
authorities to collect large quantities of garden waste, and that the way the
accounting process works encourages ‘waste generation’ and discourages
home composting. Defra is considering the potential for incorporating an
adjustment, related to home composting into the mass balance scheme.
� The definition of municipal waste in the UK is clearly enabling some authorities
to generate ‘assets’ from their allowance allocations, based on grandfathering,
by simply ceasing trade waste collections. The initial proposal for the scheme
proposed an allocation on household numbers;
� Some WDAs, in areas where Government has planned for major new housing
developments, have argued, not unreasonably, that their allocation of
allowances should reflect their changing circumstances. Defra and the other
administrations are giving the matter some consideration. The initial proposal
for the scheme proposed an allocation on household numbers, with
adjustments made periodically on the basis of WDAs’ share of total
households;
� Crucially, in England, where allowances are tradable, the availability of
information of ‘market relevance’ has been limited. This is, perhaps, less
problematic where the number and magnitude of trades is small, and when
prices for allowances are understandably low. If the market tightens, however,
there will be heightened concern regarding the quality of the market-relevant
information, not least since local authority officers may be required to make
substantial financial outlays through trades. It remains to be seen whether the
LATS Trading Floor (and electronic trading floor) can provide this information;
and
� In the trading system, it may have been wiser to ensure that targets were set
such that rules regarding banking and borrowing were the same in all years.
The existing system effectively changes the rules in ‘target years’ (2009/10,
2012/13 and 2019/20). This forces the market for allowances into a clearing
situation when in other years, banking and borrowing gives flexibility. Arguably,
this prevents any form of meaningful price formation for future years, reducing
the efficiency and liquidity of the market for trading allowances in those future
years.
55.13 Prerequisites for Introduction
Pre-requisites for the scheme’s introduction are:
� Targets are set upon those who can reasonably be said to have responsibility
for delivery against the targets;
� A clear method for allocation, and for each WDA, a more or less clear schedule
of allowances over time;
� Clear rules around trading, banking and borrowing;
� Crucially, sanctions to support the drive to meet targets;
� Clarity about the way the WDAs’ performance would be assessed under the
LASs (see Figure 55-1);
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