The Disposal of Waste - Case Study Example

The initial proposal recommended a tax of 30-50% on the price of disposal paid. The low taxation rate affects the rate of recycling and reuse of waste material.

Discussion
Extensive research has been carried out regarding the economics of landfill taxation. It has emerged that economic instruments such as collection and disposal charges are very efficient in internalizing the externalities of the disposal of waste. This will reduce the amount of waste going to landfills through the recycling process and minimization of waste. According to Coopers and Lybrand (1993), the tax could be justified since it reflects the wider scope of the environmental cost of the landfill and promotes recycling and minimization of waste.

An increase in the rate of taxation by 50% would have some major impacts on this sector. An increase in taxation is likely to arise from tighter planning controls, a reduction of the quantity of waste that requires being disposed of, and a reduction in competition in this sector after the smaller operators have been forced out (Environmental Resources Ltd, 2002). The increase in cost is likely to stabilize the current rate of £20-£25/t making it more competitive in comparison to the landfill. The quantity of waste that goes to landfill is likely to be affected significantly but in the end, it will shift towards incineration.
The increase in the taxation rate will help to achieve the polluters’ pay principle and also ensure proper pricing of landfill waste. This will help to increase the proportion of waste management.

Another important impact of the increase in the taxation rates is the consequential reduction in administrative costs hence raising the standards of waste management. There is also likely to be a reduction in the demand for local materials hence reducing the mining activities carried out which usually have a very negative impact on the environment (HM Customs and Excise, 2005). The construction firms would be forced to move the inert materials and rubble between projects and this is likely to force the smaller practitioners to either comply or quit. However, an increase in the taxation rate will result in a significant drop in the cost of recycled materials.

To deal with this problem, it is recommended that the government should publish green papers regularly to keep the parties involved at par with the new developments. The government should also set up policies on taxation with the minimum rates being set for inert wastes and ash. The rates of taxation can b split by sector and this will help in achieving maximum recycling of the waste materials. Finally, the taxation policies can be exported to all parts of the country to minimize the inter-border transfer of waste. This way, the landfill can be managed efficiently. Read More