Tag: waste

The Minister for the Environment has made another announcement on municipal waste policy.

There are two components. One is not new: There is to be a cap on incineration. There is no rationale for creating an artificial scarcity, as explained by Gorecki and Lyons. Using both price and quantity instruments is double regulation. Tinbergen (1952) shows that this is unnecessarily costly.

The new element in the latest announcement is that the incineration levy is not constant, but increases with the size of the incinerator. Both the ESRI and the Eunomia report recommend an incinerator levy, albeit at different levels. However, they recommend the same levy, per tonne, regardless of the size of the incinerator — although one could argue that larger incinerators burn cleaner and therefore should have a lower levy.

There is no economic or environmental rational for putting a higher levy on larger incinerators.

UPDATE: Story in the Irish Times

UPDATE2: PJ Rudden says the proposed levies may be illegal. I’ve heard say that it would be anti-competitive to put one levy on a small incinerator in Cork and another levy of a big incinerator in Dublin, but as inter-county trade in waste will be verboten too, I’m not convinced that that argument holds.

UPDATE3: RTE looked at the letters between the City Manager of Dublin and the Minister for the Environment; they are not particularly friendly to one another.

In today’s Examiner, PJ Rudden estimates the costs of changing government waste policy (as opposed by the ESRI) at around 2.5 billion euro and warns that environmental quality may deteriorate too. As Rudden points out in Friday’s Times, his cost estimate omits the damage to Ireland’s reputation should the government decide not to honour the contract with Covanta, and indeed the cost of breaking the contract.

Olivia Kelly had a remarkable sense of precognition in yesterday’s Irish Times. The Independent, the Examiner and Irish Times report again today. See also FinFacts.

Paul Gorecki sums it up nicely: There was only one valid criticism of the report and it did not change the substance of the report or its conclusions.

Here’s the abstract:

The report sets out an economic approach to municipal waste management policy in Ireland and then applies that framework to two recent policy developments. First, the proposed Section 60 policy direction to cap incineration and other matters, and second, the international review of waste management policy. These complementary policy developments sponsored by the Department of the Environment, Heritage and Local Government are designed to provide a roadmap for a new municipal waste management policy. The report questions whether these developments provide a coherent and feasible basis on which to develop waste policy. Indeed, apart from some unexceptional lessons which are consistent with current waste management policy, implementation of these proposals and recommendations is likely to lower societal welfare and increase the chances that Ireland will miss important Landfill Directive targets with consequent EU fines. The report puts forward a number of suggestions consistent with raising societal welfare while at the same time meeting the Landfill Directive targets.

The report was previously discussed here.

Update: The IWMA still does not accept the ESRI waste projections (even though EPA and DEHLG do).

Update2: Dr Dominic Hogg of Eunomia continues to think that the ESRI is wrong.

Update3: Minister Gormley argues that the international review is flawless.