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

costs involved. However, typically these are a small proportion of total funding
awards, or at least, they should be. Having said that, as part of the administration, it
is important to evaluate projects. This should be seen as an integral part of the fund’s
administration.
60.11 Advantages & Disadvantages of Environmental Taxation &
Centralised Public Finance
To have a fund/and or organisation which is set-up to offset the impacts of an
increase in environmental taxation is commonplace. It is a gesture which seeks to
soften the impact of the tax increase to the private sector through directly
demonstrating a positive impact the tax increase has had, e.g. the new fund or new
organisation. This use of hypothecated resources can lead to a situation whereby
money is allocated in a far less rigorous way than if it had come from central funds,
where a far wider number of stakeholders would have to understand the value of the
project in order to agree to allocating the money. It has been demonstrated (Section
60.3) that within ongoing funds, and grant-funded organisations, money can be
allocated to the same organisation repeatedly; it often has to be allocated within a
particular timeframe; and the evaluation information widely available is from an
internal source and therefore lacks independence. Although these are broadbrush
generalisations it is fair to say these problems are much less likely to occur where
money is being allocated from a central pot.
There are further issues with setting up an organisation or a fund which is directly
associated with an environmental tax. The likely justification for the establishment of
the organisation will be to combat the environmental problem which is being taxed, in
order to change behaviour in some way. In theory, a sign that the fund has achieved
its overall aim will be the reduction in available funding from the environmental tax,
leading to reducing/ending the fund or downsizing/closing the organisation. However,
as funds and organisations become established this becomes a very unlikely
scenario. Unless the focus of the work funded continually evolves money could be
being spent in highly inefficient ways due to a routine which has emerged.
It is possible that alternative approaches, other than grant-funding, may be strongly
supported by the private sector. For example, a ‘tax shift’ change, which has revenue
neutral implications, uses an environmental tax as a mechanism to encourage a
change in behaviour away from negative actions, whilst encouraging positive actions
through a tax reduction elsewhere, e.g. income tax.
This review has demonstrated the barriers which are commonly in place when trying
to evaluate the funds and has identified some key positive aspects of grant funding.
As such, it is felt that a key approach to ensuring the efficiency and effectiveness of a
grant fund is measurability, and alongside this transparency. The overall aim of the
fund must be clear. In order to know how close the fund is to meeting the overall aim
the action taken must be measurable and strict guidance must be kept to in order to
ensure continuity and accuracy of the measurement. This is fundamental to
understanding the impact that the fund has, in order to then independently evaluate
its success.
926
29/09/09