Chapter 4. Policy instruments for waste and materials management

This chapter reviews a range of policy instruments that OECD countries have put in place for waste and materials management: regulatory instruments, economic instruments, extended producer responsibility (EPR), green public purchasing, public information, monitoring and reporting and enforcement mechanisms. It highlights good practices identified in the Environmental Performance Reviews.

    

“The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

This chapter reviews a range of policy instruments that OECD countries have put in place for waste and materials management and highlights good practices identified in the Environmental Performance Reviews (Box 4.1). In particular it reviews the following types of policy instruments: regulatory instruments, economic instruments, extended producer responsibility (EPR), green public purchasing, public information, monitoring and reporting and enforcement. The various types of instruments discussed in this chapter – together with financing (described in Chapter 5) – need to be combined in an effective mix appropriate to the policy challenges. Policy documents such as waste management plans can provide a context for establishing and updating the mix of instruments to address policy needs.

In Israel, for example, the 2006 Sustainable Solid Waste Management Master Plan identified priorities, set objectives and led to the introduction of new instruments, notably Extended Producer Responsibility schemes as well as economic instruments such as a landfill levy; the 2010 Recycling Action Plan further developed the mix of policy instruments, stimulating separate collection and recycling of household waste.

Korea has applied a successful mix of instruments to address food waste, a priority area for attention in national waste policy. Korea introduced a ban on landfilling of untreated food waste in 2005 and a ban on ocean dumping in 2012, together with mandatory separate collection, starting in 2010, and a volume-based waste fee for waste not going to recycling or composting. The government also signed voluntary agreements with key economic sectors generating food waste such as restaurants and hotels, and launched campaigns as well as public-private initiatives to raise awareness of this issue. At the same time, funding and loans supported separate collection and recycling of food waste.

In another example, Poland and Slovenia adopted the EU’s strict landfill standards and closure requirements on the Union. In parallel, the availability of EU funds helped to finance the closure of old landfills not meeting the standards and investment in separate collection and new waste management facilities for their replacement. Stronger enforcement helped to ensure that new landfills and facilities met requirements.

Box 4.1. Examples of good practices for policy instruments

Regulatory instruments

• Linking regulatory instruments with economic instruments and awareness raising to create a strong policy mix (Netherlands landfill ban).

• Product standards to support recycling and the circular economy (EU Directive on end-of-life vehicles).

• Capacity-building measures where necessary to ensure that key bodies can implement tasks (Poland MSW management reforms).

Economic instruments

• Use of pay-as-you-throw pricing models for MSW services to encourage waste reduction and separation (as seen in volume-based pricing for MSW services in Korea and parts of the Netherlands).

• Full recovery of waste management costs to implement the polluter pays principle (Netherlands, Norway).

• Ongoing refinement of pricing of MSW services to improve cost recovery and avoid perverse incentives (Colombia).

• The use of revenue raised through MSW service delivery to build the capacity of municipalities for their MSW management functions (Poland).

• Differentiating disposal taxes according to the environmental harm associated with different types of waste treatment (Norway, prior to 2010).

• Using environmental product fees discourage the use of environmentally damaging products (Hungary).

Extended producer responsibility

• Consolidation of producer responsibility organisations (PROs) to ensure efficiency and economies of scale (Netherlands and Korea).

• Clearinghouse mechanisms to co-ordinate multiple PROs (Denmark, cited in the Review for Estonia).

• Certification of PROs to ensure they meet environmental standards (Norway).

• Advanced disposal fee for small waste streams for which a take-back programme would be too costly (Korea).

• Setting of fees so that the full end-of-life costs of products are recovered, thereby incorporating the polluter pays principle and creating incentives to reduce the harmful impacts of products (many OECD countries).

• Consultation with stakeholders during the establishment of schemes and their ongoing operation to secure the engagement of industry and relevant authorities (Netherlands).

• A portfolio approach to implementing EPR schemes, ensuring key aspects such as recycling targets are in place to ensure effectiveness (Colombia). Flanking policies, such as landfill taxes, can also ensure that EPRs are part of a transformational shift in waste management.

• Discouraging free-riding by holding retailers and distributors responsible for product take-back when manufacturers or importers fail to meet their obligations, thereby encouraging retailers to ensure supplier compliance (Czech Republic).

Green public purchasing

• Use of eco-labels to guide public procurement choices (Korea).

• Promotion of waste reduction within government (Norway).

• Setting targets for the implementation of GPP (Netherlands).

• Use of procurement as a tool for the circular economy: supporting recycled goods and ‘circular procurement’ (Netherlands).

• Monitoring of green public procurement to hold purchasing agencies accountable (Czech Republic).

Public information and awareness raising

• Including waste reduction and recycling in environmental education programmes (Colombia).

• Encouraging and supporting non-governmental organisation (NGO) activities for public awareness, such as clean-up actions (Estonia, Colombia).

Monitoring and reporting

• Comprehensive monitoring and reporting of waste generation and treatment to support the development and review of policies (Norway).

• Introducing advanced information systems to track industrial and other waste (Korea).

• Development of information systems, indicators and material flow accounts to understand the development of circular material flows in the economy (Japan).

• Addressing information gaps to improve understanding of international flows of materials, such as flows of raw materials embodied in traded goods (Japan since 2010 review, Netherlands).

Enforcement and compliance promotion

• Co-ordination mechanisms among enforcement bodies (Israel, Poland).

• Capacity building for enforcement bodies to strengthen enforcement (EU IMPEL network).

• Compliance promotion to ensure awareness among polluters and waste management actors (Norway).

• Risk-based approach to inspections, targeting activities where there is a higher risk of non-compliance to ensure efficient use of enforcement resources (Korea, Norway, Poland).

• Covenants with companies with strong compliance records to focus enforcement on high risk activities (Netherlands).

• Specialised units to investigate and prosecute major waste violations (Colombia, Norway).

• International co-ordination of enforcement bodies, particularly for waste shipments.

4.1. Regulatory instruments

Most OECD countries have a broad framework of regulations to govern key aspects of waste management. These include technical definitions for the main categories of waste, including hazardous waste, and requirements for waste handling and treatment to ensure safety and environmental protection. The OECD Council Recommendation on the Environmentally Sound Management of Waste sets out aspects that waste regulatory frameworks should take into account to ensure environmentally sound waste management (Box 4.2). It includes a list of core performance elements to be in place in waste management facilities such as environmental management systems, occupational health, staff training and plans for closure and after-care. Some key elements of this Recommendation that are specifically relevant to regulatory instruments are summarised below.

Box 4.2. OECD Council Recommendation on the Environmentally Sound Management of Waste

The OECD Recommendation C(2004)100 sets out a number of elements that may be necessary in a country’s regulatory framework to ensure the environmentally sound and economically efficient management of waste. These include:

• An adequate regulatory and enforcement infrastructure at an appropriate governmental level, consisting of legal requirements such as authorisations/licences/permits, or standards.

• Practices and instruments that facilitate the efforts of competent authorities to monitor the performance of facilities in line with core performance elements (CPEs), control waste management activities and carry out enforcement activities. Facilities that meet fulfil these CPEs may be provided with incentives or relief measures.

• Ensuring that waste management facilities are operating according to best available techniques and continually improving environmental performance.

• An environmental liability regime for facilities that carry out risky or potentially risky activities to ensure adequate measures upon definite cessation of activities and to prevent environmental damage.

OECD countries that joined the EU in 2004 experienced significant changes to the regulatory framework through their accession to the EU environmental acquis. These countries were required to transpose the Landfill Directive (1991/31/EC as amended), whose rules cover controls to protect water and soil near landfills, gas controls to reduce methane emissions, and closure requirements to ensure ongoing protection after operations end: for many of the new EU Member States, this directive brought major changes in their regulatory frameworks. The Environmental Performance Reviews of the Czech Republic, Estonia, Hungary, Poland and Slovenia highlighted these countries’ efforts to put in place these standards, including the proper closure of many landfills that did not meet them, including those for MSW (Box 4.3). This challenge is also faced by countries outside the European Union who are seeking to strengthen their regulatory frameworks for waste management. For example, in Colombia, where there are challenges in ensuring significant landfill capacity, there are concerns about the environmental safety of existing landfills, with the Environmental Performance Review reporting that 30% of landfills in the country do not meet environmental standards. Regulatory measures taken in 2005 and new technical standards in 2012 have sought to address this problem.

Box 4.3. Closing substandard landfills in the new EU Member States

Several Environmental Performance Reviews report progress of OECD countries that joined the EU in meeting landfill requirements. In Slovenia, eight public landfills for MSW out of 60 met the EU requirements in 2010, 28 were in the process of upgrading the remainder were closed. In Poland, the 2003 Environmental Performance Review highlighted this issue; the original target date of 2007 had to be extended by five years: the 2015 review reported that all landfills not meeting EU standards had been closed. In Estonia, the last of about 150 small landfills for MSW were closed to meet these requirements, and five new landfills had been constructed.

Further rules may affect the siting of waste treatment facilities. In Colombia, as in many OECD countries, facilities are not allowed in protected areas. For OECD countries in the European Union, the Landfill Directive sets requirements for the location of these facilities, their safe operation and their closure. Israel improved environmental and sanitary standards for landfills in the review period; the Environmental Performance Review called for further strengthening of these requirements.

In line with the OECD Council Recommendation on the Environmentally Sound Management of Waste, OECD countries also set rules for waste service operators, such as companies handling and treating hazardous waste. In Japan, regional prefectures as well as large cities license and regulate waste management companies in their territories. Colombia created a register of hazardous waste operators.

Several OECD countries have established bans on landfilling, either for specific waste streams or more broadly for MSW, as part of efforts to improve recycling and recovery. The European Union, for example, has banned the landfilling of tyres and waste batteries and accumulators (whose incineration moreover is also banned). Israel envisaged a ban on landfilling tyres starting in 2013, and also planned a 2020 ban on landfilling of packaging waste.

Korea has worked to reduce and recycle food waste: among the policy instruments, it introduced a ban on direct landfilling of food waste in 2005 (followed by a 2012 ban on dumping of all organic waste at sea); this ban was accompanied by voluntary agreements with industry, awareness raising and other actions to address food waste. In 2009, Norway has banned landfilling of all biodegradable waste with a total organic carbon content above 10%; this built on previous bans of certain types of organic waste, starting in 1992. Despite the 2009 ban, at the time of the Environmental Performance Review about 40% of biodegradable waste received exemptions as alternative treatment facilities were still under development.

Among the countries with broad-based landfill bans, the Netherlands in 1995 banned the landfilling of 35 categories of waste, in particular waste streams that could be recycled or recovered for energy, except in locations that lacked alternative treatment facilities; this was accompanied by a landfill tax, to encourage construction of recycling and incineration plants. In the year prior to the landfill bans, national rules required separate collection for household organic waste. The Czech Republic will ban the landfilling of unsorted mixed municipal waste and recoverable waste from 2024, and require the separate collection of glass, paper, plastic, metal and biodegradable waste in all municipalities.

OECD countries have used a range of other regulatory instruments for waste management. Some, such as Korea, have required separate collection of household and municipal waste to promote recycling. EU legislation calls for the pre-treatment of all waste going to landfills.11 In Israel, quarries are required to accept construction and demolition waste, in proportion to their production levels.

In addition to legal standards and OECD work, international standards in areas such as environmental management and occupational health and safety can help to ensure proper operation of waste facilities. In Israel, for example, the state-owned companies operating the country’s main hazardous waste disposal facilities complies with several of the standards developed by the International Standards Organisation (ISO).

Finally, product standards can play a role in encouraging the shift to a circular economy. EU legislation on end-of-life vehicles, for example, bans the use of several hazardous materials in automobiles (lead, mercury, cadmium and chromium), to improve their recyclability. The Environmental Performance Review of the Netherlands called on the government to consider a range of policy instruments to support the circular economy, including minimum quality standards and legal requirements on the reparability of products. In most cases, this is an area under development: it may be a valuable topic for future Environmental Performance Reviews.

4.2. Economic instruments

Economic instruments can be an effective policy tool in the prevention, minimisation and sound management of waste. Fees and charges are economic instruments that can be used to recover the costs of waste management and support the principle of user pays, helping to ensure the financial sustainability of waste management services. Economic instruments such as taxes and extended producer responsibilities support the principle of polluter pays by internalising environmental and human health costs. This is in line with OECD recommendations on environmentally sound waste management, which recommend that OECD countries seek the “internalisation of environmental and human health costs in waste management” (OECD, 2004). Finally, economic instruments can be useful in encouraging the behaviour changes (for example, waste reduction or investment in improved waste treatment technology) necessary to achieve waste policy objectives. A typology of economic instruments that may be used in waste management policy is based on the OECD’s database on Policy Instruments for the Environment (OECD, 2017a) (Box 4.4).

Other economic instruments used in waste management policy might include greenhouse gas emissions trading schemes for emissions from landfills and incineration facilities, financial reserves for remediation of former landfills, or feed-in tariffs for the generation of electricity from waste incineration.

Often these measures allow for the collection of revenue. How this revenue is used can be important in setting the right incentives for waste reduction and responsible waste management.

Box 4.4. Key types of economic instruments for waste management and circular economy

• Taxes increase the cost of polluting products or activities, and thereby discourage their consumption or production. In waste policy, they are used to internalise the environmental costs of waste treatment and disposal, making more environmentally harmful treatment methods more costly and creating incentives to use alternative treatment methods such as recovery and recycling, such as landfill and incineration taxes. In policies supporting a circular economy, taxes may be used to discourage the consumption of natural resources, including biological resources, minerals and raw materials.

• Fees and charges are used to recover the costs of providing goods or services. Unlike taxes, fees and charges are a requited payment, meaning that the person paying gets something in return in proportion to the payment, whereas taxes are unrequited payments. In waste management this may include items such as municipal waste service charges or landfill gate fees.

• Deposit-refund systems place a surcharge on the price of a product likely to pollute the environment. In waste management, this may include measures used to internalise the environmental costs of end-of-life products, such as product levies, advanced recycling fees and extended producer responsibility measures (the latter are covered under Section 4.3).

• Subsidies can be used in environmental policy to directly or indirectly reduce the use of something that has a proven, negative effect on the environment. In waste management, subsidies may be used to encourage better waste management, waste reduction and investments in improved waste management, and may take the form of direct subsidies or tax exemptions.

• Tradable permit schemes can be used to allocate emission or resource exploitation rights. In waste management. There is some use of such measures in waste policy, for example, the United Kingdom’s Landfill Allowance Trading Scheme. They may also be used to support circular economy objectives by discouraging the over-exploitation of natural resources, for example, in fisheries management.

4.2.1. Municipal waste service charges and cost recovery

With most households in OECD countries paying a charge for the collection and transport of MSW, municipal waste service charges are one of the most commonly employed economic instruments in waste management. Effectively setting these charges so that they cover the costs of service delivery is challenging for authorities. As noted in the Korea performance review, fee-setting requires the balancing of multiple objectives: the polluter pays principle; the cost-effectiveness of waste management systems; and the need to keep fees for essential public services at socially acceptable level.

Authorities apply a number of different methods in calculating MSW charges (Box 4.5), and these methods may vary from municipality to municipality within the same country. Often, municipalities set these charges themselves. Guidance on how fees should be set may be provided in legislation or in a methodology prepared by national authorities. Fee-setting methods are often based on volume of waste generated, the size of the household, either in terms of area or number of residents, or set according to another variable (for example, household water consumption, as seen in Poland).

Box 4.5. Fee-setting arrangements for MSW services

Colombia Sanitation fees set according to detailed national methodology, with each household in the same service area and same socio-economic category pays the same fee, with cross-subsidies according to socio-economic categories (estratos).

Czech Republic Municipalities have three options for setting fees: pay-as-you-throw; annual fee based on household size; or a contractual fee. Around 15% of municipalities use the pay-as-you-throw option.

Estonia Estonian households pay waste service companies directly for MSW services.

Hungary Fees are set centrally by the national authority according to a national standard. The method does not guarantee full cost recovery and may result in cross-subsidisation between municipalities.

Israel Fees are set according to the size of a household or business. The fee is included in municipal property taxes. However, the waste portion of the tax is not identified and does not cover the full cost of collection and treatment.

Japan Just over half of Japanese municipalities charge for MSW services; however, the performance review does not describe how these fees are set.

Korea A volume-based waste fee system applies to the collection of mixed household waste and, since 2010, food waste. Separate collection of recyclable waste is free.

Netherlands Almost all municipalities impose a MSW fee, which may be a fixed amount, set according to the size of the household, or based on the volume of waste (diftar, or differentiated tariff). In 2013, 53% of municipalities used a levy based on the household size, 40% used diftar systems and only 7% charged the same rates to each household.

Norway Fees vary according to the costs of service delivery in a community, with only limited progress in differentiating fees according to the amount of waste generated.

Poland Municipalities can choose between three nationally determined approaches – fees can be set per head; by area of home; or on the basis of water consumption. Fees are lower for households that separate waste.

Slovenia At the time of the performance review, the national environmental authority was preparing a methodology for setting fees, and municipalities use various approaches to setting fees, for example, per capita, or by volume.

Volume-based charges integrate the polluter pays principle into municipal waste management, and create an incentive to reduce waste generation and increase the pre-collection separation of recyclables. Volume-based charges can be seen in some municipalities in the Netherlands (Box 4.6), the Czech Republic and in most administrative districts in Korea (Box 4.7).

Box 4.6. The Netherlands diftar scheme

In the Netherlands, municipalities have responsibility for setting MSW fees, with the fee-setting approach varying across the country. Fees can be a fixed amount, set according to the size of the household, or based on the volume of waste (the diftar scheme). In 2013, 53% of municipalities used a levy based on the household size, 40% used the diftar approach and only 7% charged the same rates to each household. Use of the diftar system has expanded steadily, up from only 13% of municipalities in 1998. Municipalities use a number of different approaches in calculating the differentiated tariff, with the size of waste bins, the frequency of collection or the amount of unsorted waste often providing the basis for fee setting.

The performance review suggests that the diftar approach has been more efficient and more environmentally effective, with separate collection much higher in areas where a diftar is in place (60%, compared to as low as 7% in areas where a different fee setting approach is used).

Box 4.7. Volume-based waste fee, Korea

Korea applies a volume-based waste fee to the collection mixed household waste and, since 2010, food waste. Combined with free collection of separated waste, this system has been instrumental in reducing waste generation and landfilling, with landfill rates decreasing to 15% in 2015, and recovery rates reaching 59%.

• Sophisticated methods are available to administering authorities (local administrative districts) for the calculation of fees.

• A system based on radio frequency identification-based billing, which uses electronic tags to record the collection of waste containers and calculate the fee according to weight.

• A payment chip or sticker, attached to waste containers.

• A designated garbage bag system – the most common system – where the management fee is included in the price of disposal bags used by generators. The fee for the bags can be adjusted by local governments according to local circumstances.

However, the fee-level is relatively low and may be losing its incentive effective. Efforts to increase the fee in 2008 were unsuccessful, due to a reluctance to increase household costs during the recession. Concerns about the continued effectiveness of the scheme suggest a need for ongoing improvement efforts and progressive increases to the fee amount.

While, there is considered to be a risk that volume-based charges may induce illegal waste dumping (OECD, 2007); no evidence of such an effect was found in the Environmental Performance Reviews for countries where they were in place. While illegal dumping is a concern in Korea, it was reported to be declining in recent years despite the introduction of a volume-based fee system. Israel has been exploring the possibility of introducing volume-based fees, as recommended in the Performance Review of 2011. OECD Environmental Performance Reviews have also suggested the adoption of incentive pricing for municipal waste management in France.

Recovery of the costs of managing municipal waste is considered important in two respects. First, it assists in ensuring the financial sustainability of municipal waste management activities. Secondly, it supports the polluter pays principle by ensuring that waste management costs are borne by those who are responsible for generating waste. Setting the appropriate fee is not easy – authorities may exhibit reluctance to set fees too high due to political concerns. In addition, accurate or complete data on the full costs of waste services may be difficult to obtain.

Full recovery of MSW management costs was rare in the countries reviewed, with only the Netherlands and Norway reporting almost full cost recovery. While not all countries reported the level of cost recovery; the performance reviews that did include this information suggest low levels of cost recovery, with Israel recovering around 10% of MSW management costs, around one-third of costs in Korea, and on average 70% of costs in Czech Republic. In some countries, the government has included a goal of full recovery of waste management costs in policy (Colombia, Slovenia) or legislation (the Czech Republic, Norway, Poland). Nonetheless, in most countries, costs were not fully recovered and MSW management costs were subsidised by other areas of the municipal budget, transfers from the central government budget or other sources, such as EU funds, development assistance. These sources of funding tend to be used for capital investments and institutional capacity building. The performance reviews for Japan and Israel recommended that MSW charges be used to improve the rate of cost recovery.

It is often municipal authorities that are tasked with setting and collecting MSW fees, often in the face of significant challenges. While this arrangement can help to ensure that fees are set at levels that reflect local waste management costs, municipalities may lack experience in setting fees, they may not have a strong information basis for fee-setting, or they may struggle to set fees at a socially acceptable level while also covering the costs of service delivery. In other cases, legal arrangements may mean that municipalities may lack the autonomy to set fees at a level sufficient to recover costs.

The challenges of fee-setting at the municipal level was seen in Poland and Slovenia, where national authorities were required to support municipalities when fee-setting functions were delegated to municipal authorities.

In Poland, following the 2013 reforms to municipal waste management, municipalities were tasked with setting and collecting fees from households and small businesses for municipal waste services. In this case, fee setting was particularly challenging, as the situation prior to the reforms was based on households directly contracting with companies for waste services, meaning there was no historical data to work with. Fees varied significantly between municipalities, and with some city councils reluctant to set high fees, it is likely that fees do not address the full costs of services. The Polish environment ministry undertook a number of capacity building actions and waste revenue was used to provide training to municipalities via the National Fund for Environment Protection. The Polish performance review also recommended that Poland establish a mechanism to support and monitor municipalities in their waste management roles, particularly in tariff-setting.

In Slovenia, the transfer of pricing responsibility to local communities in 2009 led to a substantial increase in fees with no consistency in how fees are set. In Slovenia, at the time of the review, national authorities were preparing a fee-setting methodology to support municipalities.

Often authorities do not set fees that are high enough to fully recover costs due to concerns about the social and political acceptability of increasing MSW fees. As noted in Box 4.7, such concerns have prevented Korea from increasing fees. Consequently, the performance review for Korea recommends that the volume-based waste fee be progressively increased to ensure greater cost recovery. In Colombia, a highly defined system for water and sanitation charges is in place, whereby households in higher socio-economic categories subsidise the water and sanitation costs of households in lower socio-economic categories. This may support an equitable approach to pricing, but undermines the incentive effect of MSW fees, as the volume of waste generated is not a factor in the prices paid by individual households. Furthermore, the fee is too low to achieve cost recovery. In recent years, the Colombian Government has taken measures to progressively refine the fee-setting approach to support better cost recovery and provide incentives for waste reduction and separation.

Central government involvement in fee-setting and payment of contractors can help to improve consistency in fees and improve oversight of waste operations; however, it may also undermine the principles of cost recovery and polluter pays. In Slovenia and Israel, local authorities require central authority approval for changes to MSW fees. In Israel, this was reported to be a barrier to full cost recovery. This suggests that there is a need for countries to balance ensuring autonomy for local authorities in setting fees according to local waste management costs with the need to support the capacity of municipalities in fee-setting. In Hungary, fee-setting and contractor payment functions were recentralised in 2016 to address wide discrepancies in fees across different municipalities. However, the Environmental Performance Review noted that this has the potential to undermine the ability of municipalities to recover the full costs of MSW management. The national standardisation of fees may result in cross-subsidisation of MSW services between municipalities, undermining the polluter pays principle. The performance review noted the need for an evaluation of the new system to optimise institutional arrangement and ensure cost recovery.

In cases where municipalities find it challenging to set fees at a level that ensures cost recovery, or struggle to contain cost growth, an improved understanding of costs may help authorities to manage costs and set fees at an appropriate level. This was noted in France, where waste management expenditure has increased despite waste generation levels remaining relatively stable. This was found to be due in part to improved management methods, but insufficient control over the costs of collection and treatment were also a factor. The Environmental Performance Review noted that the French environmental agency had developed a reference framework for waste management costs. The review recommended that this framework should be incorporated into a cost accounting system for waste and the development of cost tracking indicators for annual municipal waste management reports.

4.2.2. Taxes on waste treatment and disposal

Taxes on waste treatment and disposal can be used to internalise the environmental costs of waste treatment, and help in diverting waste away from the most harmful treatment methods (landfill, incineration without energy recovery) by making these methods more costly. With the exception of Colombia, the performance reviews for all focus countries reported that taxes were in place for waste treatment and disposal. These taxes tend to cover landfilling, with some countries also taxing waste incineration (Box 4.8).

Box 4.8. Disposal taxes in the focus countries

Czech Republic A landfill tax applies, with a low tax applied to general waste and a significantly higher tax imposed on hazardous waste.

Estonia Waste disposal tax applied to landfilled waste, calculated according to the hazard level.

Hungary Tax is applied to landfill of MSW and industrial waste.

Israel Levy applied to landfilled waste, calculated according to the type of waste.

Japan A landfill tax on industrial waste is applied in 27 (of 47) prefectures, and one city.

Korea Currently local authorities can impose a charge on landfilling to cover operational costs and post-closure costs. The new Framework Act on Resource Circulation will apply a disposal tax to waste that is landfilled or incinerated without energy recovery.

Netherlands Disposal tax applied to landfilling and incineration of waste, calculated according to the treatment method and type of waste.

Norway Final disposal tax was applied to incineration22 and landfilling of waste, with taxes differentiated according to the environmental harm.

Poland Tax applied to landfilling of waste.

Slovenia Tax applied to landfilling of waste.

In some countries, the Environmental Performance Reviews found that the taxes had been effective in diverting waste away from landfill (Figure 4.1). In Estonia, it was noted that the waste disposal tax had made other treatment options more competitive and resulted in a significant decline in landfilling. Similarly, in Norway, landfilling declined following the introduction of the final disposal tax. Nonetheless, taxes were often set too low to fully incentivise recovery and recycling. This was noted in relation to the tax rate for incineration in the Netherlands, and in relation to the landfill taxes in the Czech Republic,33 Hungary, Poland and Slovenia. Data from the OECD’s recent Green Growth Indicators study (OECD, 2017c), presented in the figure below, suggests a link between higher landfill taxes and lower landfilling rates.

Incineration taxes may be based on the nature and volume of the waste incinerated (the Netherlands) or the emissions from the waste (Norway, prior to its abolition in 2010). The performance review for the Netherlands recommended the government consider an emission-based tax, noting that this approach would more effectively provide incentives to incinerators to reduce the emissions from their facilities.

Figure 4.1. Countries with high landfill taxes tend to have low landfill rates

Municipal waste landfilling and tax rates, 2013

Note: Tax rates refer to Flanders for Belgium, to Catalonia for Spain, and to New Jersey, North Carolina, Mississippi and Indiana for the United States.

Source: OECD, Municipal waste landfilling and tax rates, 2013, Green Growth Indicators, 2017.

 StatLink https://doi.org/10.1787/888933976042

Box 4.9. The final disposal tax in Norway

Norway introduced a final disposal tax for the landfill and incineration of waste in 1999. Reduced tax rates are applied to incineration with energy recovery and landfills with good environmental practices. Hazardous wastes were initially exempted from final disposal tax to avoid incentives for illegal treatment.

Following a 2003 review that suggested that incineration tax rates did not effectively cover the full environmental costs of emissions from incineration, the incineration tax was based on emissions, rather than amount of energy recovered.

The Norway performance review reported that the tax has decreased the amount of waste landfilled and led to a reduction of emissions from incinerations. Nonetheless, the incineration tax was abolished in 2010 due to increasing exports of waste to Sweden for incineration, where taxes were not in place.

Differentiation in taxes based on a risk assessment of the waste was seen in most countries. Some countries further differentiated taxes according to the environmental impacts of the treatment method. For example, in Korea, under the new legal framework, taxes will be highest for landfilling of waste and incineration of waste without energy recovery. Such differentiation helps ensure that the taxes more accurately internalise the environmental costs of waste and set the right incentives for waste treatment. Nonetheless, some countries choose to fully or partially exempt particularly hazardous forms of waste from final disposal charges to ensure that it is not disposed of illegally in unsafe sites. This was seen in Norway (Box 4.9), where hazardous waste was initially exempt from the final disposal tax, and in Estonia, where asbestos is subject to a lower tax rate. As waste disposal taxes are specifically focused on internalisation of the environmental costs of disposal and to create incentives to divert waste away from more environmentally harmful treatment methods, they are often imposed in conjunction with other fees, such as landfill gate fees that aim to recover the immediate costs of disposal. In some cases, landfill prices aim to cover both aspects, but will need to be based on a sound understanding of both the environmental costs of waste disposal and the costs of providing treatment services. This challenge is seen with the landfill levy in Israel, which aims to both cover the costs of providing landfill services and internalise the environmental costs of landfilling. However, at the time of the performance review, it was set too low to recover disposal costs much less any broader environmental costs.

Figure 4.2. The policy mix of landfill tax and landfill bans was effective in diverting municipal waste from landfills in Sweden

Treatment of MSW, Sweden, 1994-2012

Note: a) Waste collected by or for municipalities, including household, bulky and commercial waste, and similar waste handled at the same facilities. Includes hazardous waste from households (i.e. impregnated wood and asbestos), b) At constant 2005 prices.

Source: Avfall Sverige (2013), Swedish Waste Management; OECD (2014), OECD Environment Statistics (database).

 StatLink https://doi.org/10.1787/888933976251

The Environmental Performance Review for Sweden provides an example of how economic instruments can be used as part of a broader policy mix to achieve waste policy goals. The introduction of producer responsibility in 1994 appears to have supported a shift away from landfilling. From 2000 landfill taxes were combined with regulatory instruments – in this case, bans on the landfilling of combustible and organic materials – to reduce the landfilling of waste to less than 1% of municipal waste treatment by 2012 (Figure 4.2).

It should be noted that the imposition of taxes on individual waste treatment methods can create the potential for perverse outcomes. The contribution of landfill taxes to overinvestment, and resulting overcapacity, in other treatment methods, particularly incineration and Mechanical biological treatment (MBT), was reported in Estonia. Similar challenges were reported in the Netherlands and a future risk of locking-in incineration waste noted in the Czech Republic. While these methods may be less environmentally harmful than landfilling, an overemphasis on MBT and/or incineration (even with energy recovery) can mean that opportunities to improve recycling and resource recovery are missed. This suggests that when costs are internalised into waste treatment methods, there is a need to ensure that the pricing of all treatment methods is considered at the same time.

To be fully effective in internalising costs, and shifting incentives, disposal taxes should be passed on to waste generators, including generators of municipal waste. In Israel, it was reported that municipalities have been unable to pass on landfill levy costs due to the requirement to obtain central government authorisation for fee increases and concerns about the social acceptability of such increases. In other countries, disposal taxes are not applied to mixed domestic waste, which limits the potential to internalise environmental costs into MSW fees.

4.2.3. Incentives, subsidies and product fees

Governments frequently use incentives and subsidies to induce certain behaviours among firms and households. In particular, subsidies and tax exemptions are often used to promote investment in improved waste management infrastructure (discussed in further detail in Chapter 5). A number of countries also used product taxes and advanced disposal fees as a part of EPR schemes (discussed in further detail in Section 4.3).

Other incentives reported in the performance reviews included measures taken by (usually national) governments to encourage certain practices at other levels of government. These include financial payments to municipalities and treatment facilities that improve the efficiency of waste treatment (Colombia), subsidies for prefectures that implement a waste management plan (Japan), and the payment of “host fees” to local authorities that agree to host a landfill in their municipality, calculated per tonne of waste disposed of at the landfill (Israel).

Other incentives include payments to firms or households to encourage recycling and sound waste management practices. These include preferential interest rates for firms from the national development bank according to the firm’s environmental rating, which included waste management practices as a factor (Japan), subsidies for home composting in the form of reduced waste collection charges or reduced-price compost bins (Norway), and the consideration of cash incentives for households who recycle waste in cities with particularly low recycling rates (the Netherlands). Spain introduced a deposit fee system for construction and demolition waste.

Product fees are a further economic instrument that may be used in waste management to shift incentives away from products that are more likely to result in environmental damage, such as increased waste. These can be seen in Hungary, where environmental product fees are applied to a number of products including tyres and single-use plastic bags. The performance review noted that these fees have been important in reducing the use of plastic bags. However, there is a risk that these fees can be used as revenue-raising instruments without environmental benefits. This was also observed in the performance review for Hungary, where it was noted that the recent extension of the fees to new product categories, such as photovoltaic panels, may undermine environmental objectives. It was also noted that a relatively limited portion of revenue from product fees (between 22% and 31%) is used for end-of-life product management costs.

4.2.4. Resource taxes

Resource taxes can support the objectives of a circular economy by encouraging more efficient resource use. Where rates are low, however, these taxes will mainly have a revenue-raising function.

In Colombia, natural resource royalties are levied on oil and mining as a percentage of production. The Environmental Performance Review observes that the overall tax on minerals is low, relative to other countries, and that taxes could be raised and focus more on profits, rather than production. In Estonia, mining companies pay a tax for the extraction and use of resources. Given the size of the oil shale industry in Estonia, this potentially amounts to a significant source of revenue; however, the Environmental Performance Review noted that a methodology for setting taxes on the estimated value of resources was in place, and taxes had recently been reduced significantly to assist the industry in light of lower oil prices. These factors could undermine the effectiveness of the resource tax in promoting resource efficiency. Similarly, in Hungary, a mining fee applies to the extraction of virgin construction material, but was not implemented for environmental purposes and is set too low to promote the use of recycled materials. In Norway, oil and gas extraction and hydropower production are subject to resource rent taxes, in addition to ordinary company taxes. This amounts to a relatively high marginal tax rate (78%) for oil and gas production, which is taxed at a higher rate than hydropower production.

The Environmental Performance Reviews recommendations highlight opportunities to increase the use of resource taxes to promote resource efficiency. In Poland, where a mineral extraction fee for copper ore is already in place, the review recommended assessment of economic instruments to enhance material productivity, including strengthening the incentive effect of taxes on the extraction of minerals and aggregates. Similarly, in Slovenia, the review recommended that a tax on the use of primary aggregates be considered as a means for improving the recovery and recycling of construction and demolition waste. Tax breaks and subsidies may undermine the effectiveness of resource taxes, as noted in the performance reviews for Colombia and Israel. It is also important to maintain the incentive function of resource taxes, as noted in the Performance Review for Sweden, where the tax rate for virgin aggregates (natural gravel, which is scarce in much Sweden) has been progressively raised to encourage use of substitutes.

4.2.5. Revenue use

While MSW fees tend to be used to fund ongoing service provision, countries take differing approaches in how they use the revenue from waste disposal taxes, resource taxes and other waste-related taxes (e.g. advanced disposal fees). These taxes can be absorbed into the government’s central budget, which occurs in Norway. However, they are more often earmarked for investment in waste management. Landfill taxes are often used for managing the post-closure costs of landfills (Korea, the Netherlands) or municipal waste management costs (Estonia, Israel, Slovenia). Often some revenue is directed to a specific environmental fund or centre that carries out or funds projects related to waste management (Estonia, Israel, Poland, Korea).

Earmarking revenue for waste management can create complications. As noted in the performance review for Israel, there is a risk that earmarking of revenue creates dependency on funds from harmful activities and locks-in inefficient spending commitments. For example, in Estonia, where municipalities are dependent on landfill taxes to fund their waste management activities, declining landfilling rates have resulted in significant budget shortfalls. Earmarking may also contribute to perverse incentives. For example, in Slovenia, until 2010 municipalities were able to avoid paying disposal taxes by directing an equivalent amount to capital investments. This undermined the disincentive effect of the landfill tax, and could become a source of revenue for municipalities in the absence of strict oversight of how such funds were spent. This perverse incentive was abolished in 2010.

4.3. Extended producer responsibility

With the increased adoption of EPR schemes globally since 2001 (OECD, 2016), many OECD countries have now adopted EPR schemes. The OECD updated its guidance on EPR schemes for policy makers in 2016 (Box 4.10). The principle of EPR is focused on internalising some of the end-of-life costs of products, included waste management costs and environmental impacts, by extending producer responsibility to the end of a product’s life-cycle. Typically, EPR schemes are established by legislation that makes producers responsible for the collection and final treatment of end-of-life products. EPRs typically represent a mix of policy instruments – take-back requirements, recycling targets, producer fees – that, collectively, make producers responsible for products at the end of their life. Depending on how the scheme is established, producers may be able to meet this responsibility by contributing financially through producer fees to these activities, or by taking over these activities. In many cases, producers can work collectively to collect and treat end-of-life products, for example, through a PRO. To ensure that EPR support decreased landfilling of waste, EPR schemes can include recycling targets and/or treatment requirements for end-of-life products. At their core, EPR schemes rely on producer fees, as well as penalties in cases of non-compliance, to extend responsibility to producers.

Box 4.10. Extended Producer Responsibility: OECD Guidance

In 2016, the OECD updated its 2001 guidance for policy-makers on developing EPR schemes, reflecting on the lessons learned from approximately 400 schemes now in place worldwide. The guidance notes the need for policy-makers to take into consideration the following aspects when developing and implementing EPR schemes:

• The design and governance of EPR, including: the need to periodically review and adjust policies; the important role of enforcement in mandatory schemes; the need for adequate and sustainable resourcing; the need to harmonise schemes to the extent possible; and the challenge of addressing free-riding.

• The need to address competition policy issues in EPR schemes, including the need to address collusion among producers and to consult competition authorities during the design phase of EPR systems.

• Providing incentives for design for environment, which may require ensuring producers’ fees are closely linked to the actual end-of-life costs of products, for example, through weight-based rather than unit-based fees.

• The importance of integrating informal workers in EPR systems, particularly in emerging and developing countries. While challenging, it is important to ensure that the role of the informal sector is taken into account in the design of EPR systems in emerging and developing countries.

4.3.1. Schemes in place in the focus countries

All focus countries had some type of EPR measures in place (Table 4.1). Consistent with the findings of previous studies (OECD, 2013), EPR measures tended to focus on a limited number of waste streams, with waste electronics, packaging waste and batteries featuring most prominently (each of these product categories were subject to EPR requirements in eight of the focus countries). Vehicles, used tyres, and used oil were also covered by EPR requirements in most of the focus countries. Other EPR measures targeted construction materials (Norway), pesticides (Colombia), and medicines (Colombia, Hungary).

In some cases, focus countries have led the development of EPR measures. For example, Norway became the first European country to implement a take-back scheme for waste electronic equipment in 1998. Norway also operates the world’s only EPR measure for sulphur hexafluoride (SF₆). The waste streams targeted tended to focus on products where landfilling carries particularly high environmental risks and where there are a large number of consumers of the product, making collection challenging (for example, electronic waste, tyres). In some cases, EPR measures reflect national concerns about certain waste streams. Colombia’s EPR measure for pesticides reflects concerns about hazardous waste from the agriculture sector.

There are a number of policy instruments that can be used to implement the principle of EPR. These include take-back requirements with recycling targets, or economic instruments, such as deposit-refund schemes or advanced recycling fees. While the policy instrument used for each EPR measure was not always identified in the Environmental Performance Reviews, take-back schemes seemed to be the most prevalent. Advanced deposit fees were also found in the focus countries (in Japan for packaging, vehicles and some appliances; in Korea for a number of small waste streams; and in the Netherlands for packaging and vehicles; in Slovenia for used vehicles and tyres).

Table 4.1. Coverage of EPR schemes, 11 focus countries
	WEEE1	Packaging waste2	Batteries	End-of-life vehicles	Used tyres	Used oil	Construction materials	Other
Colombia	✓		Partial3		✓			Pesticides; Medicines
Czech Republic	✓	✓	✓	✓	✓	✓
Estonia	✓	✓	✓	✓	✓			Waste agricultural plastic
Hungary	✓	✓	✓	✓				Medicines
Israel		✓			✓
Japan	✓4	✓	Partial5	✓			✓	Food
Korea	✓	✓	✓		✓
Netherlands	✓	✓	✓	✓	✓	✓
Norway	✓	✓	✓	✓	✓	✓	✓	HFCs, PFCs, SF6, TRI, PER, PCB windows
Poland	✓	✓	✓	✓	✓	✓
Slovenia	✓	✓	✓	✓	✓	✓		Medicines; graveside lanterns
Note: 1) Includes lighting and fluorescent lamps. Not all EPR schemes cover the full range of waste electrical and electronic equipment. 2) Includes beverage containers. All countries that had beverage container measures in place also had packaging measures in place. 3) Lead acid batteries only. 4) Covers a limited number of household appliances only: air conditioners, televisions, refrigerators, washing machines, clothes dryers. 5) Rechargeable batteries only.

Most measures involved at least one PRO, paid by responsible producers to collect waste and arrange for sorting, processing and recycling. In some cases, the legislation requires producers to join an accredited PRO (for example, Norway’s Waste Electrical and Electronic Equipment [WEEE] scheme); in other schemes, PROs are set up to deal with small producers and orphan products (the Japanese home appliance scheme). In cases where there is a relatively small number of responsible producers and consumers, there may not be a need for a PRO to co-ordinate activities (for example, the agricultural plastic programme in Estonia). For some specific waste streams (packaging, industrial and automotive batteries, some WEEE) in Hungary, the government modified governance arrangements in 2012 so that PROs could no longer operate. Instead, producers could choose between joining a co-ordination system operated by the central government for a fee, and taking a self-compliance approach with a reduced fee. These changes were intended to facilitate improvements in waste management data and recycling rates. However, the performance review notes that fees collected under this approach are not specifically earmarked for EPR purposes and the incentives for producers to reduce the end-of-life costs of products are limited. The review identified a need to monitor these new arrangements to ensure that negative impacts, such as the directing of funds to other purposes, are avoided.

4.3.2. Challenges and lessons learned

A review of the focus countries reveals challenges and lessons for the implementation of EPR measures. In some cases, shortcomings in the EPR legislation itself undermine the success of EPR schemes. For example, in Colombia, the legislation establishes take-back requirements for producers and collection targets but not recycling targets. As a result, waste collected under EPR programmes is accumulating with no legal requirement for its recycling.

Fee setting can also undermine the effectiveness of schemes. In Japan, where the producers have responsibility for end-of-life home appliances, the fee charged to consumers does not cover the full costs of collecting and recycling. This approach does partially extend producer responsibility, but the costs of recycling are not fully internalised in the product price. In 2008, it was estimated that only half of the household appliances disposed of were taken back. Similarly, in Slovenia, producers do not always bear the full costs associated with the collection of some products (for example, packaging), where municipalities collect the products. Changes in markets for recycled products can also make fee setting challenging (seen in the used tyre programmes in Estonia and Israel).

Certain conditions must also be in place to ensure the success of EPR measures. In Colombia, a key challenge is that the funding and infrastructure is not yet in place to support the recycling of accumulated waste. For some waste streams (for example, packaging), separate collection of household waste is an important precondition for success. This was seen in Poland, where MSW reforms in 2013 were a key factor in the improved performance of producer responsibility for packaging waste. Estonia and Slovenia currently face a similar challenge.

The co-ordination of the multiple actors involved in EPR measures can also be challenging. There is a need to co-ordinate the collection and recycling activities of municipalities and the actors involved in the product chain (brand owners, importers, manufacturers, retailers, etc.). There is also a need for co-ordination in relation to fee setting and collecting, contracting and payments, data collection, reporting to authorities, and communications with consumers.

Co-ordination challenges among the actors in EPR measures were seen in a number of countries. For example, in the Israel used tyres programme, insufficient co-ordination was reported between garages (who are responsible for collecting waste tyres from consumers) and importers and manufactures (responsible for collecting tyres from garages and recycling them). In the early years of the Dutch scheme for packaging materials, a large number of PROs covered separate waste streams, leading to high complexity for authorities and producers. Through the years, the system has evolved so that fewer PROs now operate, and charge producers directly under government supervision. In Korea, to reduce administrative costs, the government merged seven packaging waste PROs into one in 2013. In addition, Korea uses an advanced disposal fee for products that contain hazardous substances, are difficult to recycle, or are likely to cause management problems. In some cases, these products are later incorporated into an EPR scheme, but the advanced disposal fee is also used to internalise management costs for small waste streams for which a take-back programme would be too costly. Co-ordination of PROs remains a challenge in Estonia, while compliance with standards is a challenge in Poland.

An increased role for government authorities can assist in improving co-ordination. Alternatively, a clearinghouse organisation can be useful, as proposed in the performance review of Estonia. Such organisations can include: maintaining a register of responsible producers, setting fees in line with collection rates and costs of collection and processing, collecting data and preparing reports to authorities; a key task, however, can be to balance payments among multiple PROs collecting the same waste stream. Certification of PROs, as occurs in Norway, can help to ensure that they meet environmental standards.

Other challenges include waste leakage, where waste with an inherent value (for example, scrap metal in appliances, end-of-life vehicles) escapes the system, often through the informal recycling sector. While this is noted in the OECD guidance as a particular issue in emerging and developing countries, it is also a challenge in more developed economies, and was reported in the reviews for Japan, Slovenia, Poland and Estonia and also likely in Korea due to the large informal recycling sector. Such leakage is a problem, as goods with higher value are removed from the EPR scheme, leaving low quality waste leading to overall higher costs. Free rider problems often arise, particularly with the rise of online sales from small suppliers (reported in Estonia). While it is unlikely to address the challenges from online sales, the Czech Republic holds retailers and distributors responsible for take-back obligations when manufacturers or importers fail to meet their obligations. This provides retailers with a strong incentive to ensure that suppliers meet their obligations and the review reported that it had been an effective measure against free-riding. Other challenges include: low awareness among consumers (Slovenia); incomplete or inaccurate data collection impeding the ability to measure progress and make improvements (the Netherlands, Estonia); and local opposition to storage sites for end-of-life products (Israel). Sound legal frameworks and enforcement practices are necessary to overcome these challenges.

4.4. Green public purchasing

Government purchasing can encourage markets in recycled products, and more broadly as a key tool to promote the move to a circular economy. The power of public purchasing is recognised in the OECD Council Recommendation on Waste Paper Recovery, which called on member countries to contribute to building demand for recycled paper products by encouraging the use of recycled paper by government agencies. In Estonia, the National Reform Programme calls for resource efficiency considerations in public procurement, a direction supported by the Environmental Performance Review.

In Korea, national legislation requires government bodies to buy products that have received an environmental certification, when possible, in particular the Eco-Label or the Good Recycling mark. The Public Procurement Service has also identified products that meet a ‘minimum green standard’, based on life-cycle assessment. OECD called on Korea to extend its green public purchasing system, including through engagement with producers to develop green products for public sector needs as well as ensuring strict standards for certified products.

Public procurement in Norway must consider “resource implications and environmental consequences”. OECD’s Review encouraged Norway to go further and set targets for waste reduction in government bodies.

The central government in the Netherlands essentially reached a target for 100% sustainable procurement by 2010, though municipal and provincial authorities did not. At the time of the Review, the Netherlands was considering new methods such as circular procurement – ensuring that products are repairable and can be easily broken down into recyclable components at the end of the useable life; OECD encouraged the efforts to use of public procurement as a tool to promote the circular economy.

The Czech Republic effectively made green public procurement mandatory in 2010 for central and local authorities, with the Ministry of Environment monitoring procurement and publishing data annually. The country has since achieved 78% green procurement for ICT equipment and 56% for furniture. Despite this success, challenges in procurement practices generally have hampered further progress green public procurement. A key challenge in green public procurement arises when there is an over-emphasis on price as a criterion in tendering procedures, and purchasing authorities lack the capacity to assess non-price criteria, such as the environmental credentials of products.

4.5. Public information and awareness raising

Public awareness and support are key factors in changing behaviour and thus for the success of many waste policies, including waste reduction and separate collection and recycling.

Educating young people can be a key path to raising public awareness. Several countries have established environmental education initiatives. Colombia’s national government established a Communication and Environmental Agenda (2010-14) that fostered projects across all levels of schools. Israel has a Green Education Project and also provides grants for ‘green schools’ that promote resource efficiency and separate collection of waste streams. Korea’s Environmental Education Master Plan created a network of environmental education centres.

In Poland, the national environment ministry has organised awareness campaigns: Poland’s “Don’t Litter Your Conscience” campaign used the character of a priest who told parishioners to separate recyclable waste and not burn household waste in their gardens or illegally dump it; another campaign encouraged the reuse of toys as a means to encourage resource efficiency. As fly tipping remained an important problem in Poland, the Environmental Performance Review encouraged further efforts, along the lines of campaigns in Ireland to address this issue. Similar campaigns and activities to address illegal dumping are carried out in Hungary, where the Ministry for Agriculture supports the “TsSzedd!” (“Pick up!”) Campaign to raise awareness about sound waste management practices.

Some OECD countries work via local government. In Israel, for example, the Ministry of Environmental Protection funds municipal activities for environmental education and awareness raising, and the country’s 2010 Recycling Action Plan acknowledges the need for further actions to raise public awareness and change behaviour towards separate collection.

Working with business, including PROs, can play an important role in fostering public awareness of recycling. In Korea, voluntary agreements with business include activities to raise public awareness on topics including waste reduction and recycling; the country’s PROs spend between 1% to 5% of their proceeds for information and awareness campaigns (in these initiatives, Korea has responded to a recommendation in the previous, 2006 Environmental Performance Review). In Poland, PROs are required to allocate 5% of their profits each year on public awareness. In the Netherlands, PROs support awareness campaigns for separate collection and recycling. OECD’s Review of Estonia found that consumer awareness of separate collection schemes, such as WEEE, was low: it called for PROs to take a larger role in supporting public awareness of separate collection and recycling.

Civil society organisations can also play an important role in promoting public awareness. In Estonia, “Let’s do it! My Estonia” is an independently organised annual day of community activities, including litter clean-up. In Slovenia, about 200 000 volunteers worked together in 2010 for “Let’s clean Slovenia in one day”, a similar independent day to clean up litter and illegal waste sites, matched with environmental education activities. Colombia’s Ministry of Environment and Sustainable Development teamed up with WWF Colombia to establish the ‘Soy ECOlombian’ campaign, which included a “Let’s clean Colombia” day in ten cities (Colombia limpia, 2018).

Public engagement is particularly important for the move to a circular economy. In Korea, the reduction of food waste has been a key objective: the government broadcast TV advertisements during national holidays and organised public contests to waste reduction methods. Japan has evoked the “mottainai” spirit, a simple lifestyle, to encourage household waste prevention in its 3Rs information campaign. Japan also established a quantitative target for public awareness in its First Fundamental Plan for Establishing a Sound Material Cycle Society: 90% of survey responded should be aware of and trying to put into practice waste reduction and recycling and the purchase of environmentally friendly products.

OECD’s has highlighted that economic actors and the public are often not aware of economic benefits related to resource productivity, and this represents an obstacle in the move to a circular economy.

4.6. Monitoring and reporting

Effective monitoring and reporting is a key tool for effective waste management. In Colombia, for example, efforts to address waste issues are hampered by poor reporting in a range of areas, including non-hazardous industrial waste and construction and demolition waste – as well as waste and other environmental impacts from the country’s small mines and illegal mines. In contrast, reforms have ensured effective reporting (and management) of the country’s medical waste. The OECD Environmental Performance Review called for better enforcement of existing reporting requirements.

In the Czech Republic, the co-existence of two separate, inconsistent information systems for waste data has led to duplications, gaps and discrepancies in the information base. This has undermined the ability of authorities to monitor policy implementation, measure performance against targets and plan investments in waste treatment. The review highlights the importance of ensure consistent waste classifications, definitions, reporting boundaries and surveying methods.

In Slovenia, while reporting levels for most public waste services and industrial waste producers was strong, data on construction and demolition waste were poor, and the Environmental Performance Review called for better reporting and audits of the mass flows of waste from construction and demolition sites. Estonia strengthened several areas of monitoring, for example a requirement to weigh all waste arriving at landfills, a necessary step to implement the country’s landfill tax. The review for Estonia identified remaining shortcomings, including reporting by EPR schemes, and it called on strengthened data and information systems to address these issues.

Reporting requirements can create an administrative burden for waste producers and operators, which needs to be weighed against the information benefit. In Colombia, generators of less than 1.2 tonnes of hazardous waste per year are not required to report; however, the Environmental Performance Review reported that this may miss up to half of the country’s hazardous waste. Advanced information systems, such as Korea’s Allbaro (Box 4.11), can provide detailed waste information and tracking.

Box 4.11. Allbaro: an advanced waste tracking system in Korea

The Korea Environment Corporation, a government body, manages an online waste information and management system, Allbaro, working with the Ministry of Environment, local governments and the Korea Coast Guard. Allbaro, originally established in 2001 to track hazardous waste, uses radio-frequency identification (RFID) to follow waste movements. The system also provides online preparation of official transfer documents. Most of the waste generated by businesses is covered by Allbaro. The performance review suggested that Korea combine Allbaro data with material flow data to monitor the circulation of materials and waste in the economy and better track and assess circular economy policies. The Review also suggested raising industry awareness of the economic and environmental benefits of the circular economy and resource efficiency, preparing guidance on design for environment and guidance to SMEs on waste minimisation.

Improved reporting can change the perspective on waste streams. In Norway, the amount of hazardous waste increased about two-thirds between 1995 and 2008: the main reason appears to have been better reporting (and collection) of waste streams. Effective information systems are a key tool for policy action. Poland has worked to develop a National Database on Products, Packaging and Waste Management, a project that was delayed at the time of the 2015 Environmental Performance Review, which called for its completion and for further efforts to improve the accuracy of underlying waste data.

Information and reporting is vital to track and implement policies that move towards the circular economy. The OECD Recommendations on Material Flows and Resource Productivity (2004 and 2008) note the importance of data on materials flows, both within and among countries. However, a 2014 OECD Progress Report noted that progress on strengthening this information basis has been limited: the lack of reliable data to target policies and measures and monitor their effects has been an obstacle (OECD, 2014b). Limitations in the information basis for circular economy basis can also be seen in the Environmental Performance Reviews. For example, in both Korea and the Czech Republic, it was noted that while macro-level material flow accounts are available, they are not linked to waste statistics, preventing insights into the impacts between material flows and waste streams and opportunities for improvements. It was similarly recommended in the review for the Netherlands that the authorities improve coherence between waste and material flow statistics.

On the other hand, the Environment Performance Review of Japan noted that this country has been a leader in studying material flows for the economy and use material flow accounts in government policy. The National Institute for Environmental Studies has linked material flows from micro to macro levels. A growing number of companies use eco-efficiency indicators to track their environmental performance. The government and companies work together on the development of these measures through the Japan Environmental Efficiency Forum.

The OECD’s 2014 Progress Report also noted gaps in information on international flows of materials. The Environmental Performance Reviews for Japan noted the need to better assess trade-related material flows; since the 2010 review, Japan has funded further research by the National Institute for Environmental Studies to support trade-related flow and material flow analysis.

4.7. Enforcement and compliance promotion

A range of activities are needed to ensure that waste operators, businesses and households follow waste rules. These include enforcement actions, such as on-site inspections and sanctions for violators, as well as the broader range of compliance promotion activities to ensure that operators and polluters are aware of requirements (and related penalties); these activities can be linked to broader public awareness campaigns (see Section 4.5).

4.7.1. Enforcement bodies: co-ordination and capacity building

Enforcement of waste requirements is usually carried out alongside other types of environmental enforcement. In most OECD countries a range of authorities work on enforcement, including in the waste sector.

Co-ordination is needed across levels of government: in the Netherlands, for example, the national Human Environment and Transport Inspectorate works with provincial authorities, which license and enforce most waste management activities. In Poland, the Chief Inspectorate for Environmental Protection at national level is flanked by Voivodship Inspectorates at regional level. The 2015 Review noted that co-ordination had improved, but further efforts were needed in the country’s multi-level enforcement system.

Several bodies may also be responsible for enforcement. In Israel, the Ministry of Environmental Protection has a force of ‘Green Police’, which works closely with the Environmental Unit of the Israel Police, in particular on enforcement, as the ‘Green Police’ lack the authority to arrest suspects; in addition, the Yahalom enforcement unit under the Nature and Parks Authority is responsible for enforcement of waste offences, in particular related to construction and demolition waste.

Enforcement bodies need adequate capacity to carry out their work. The Review of Israel, for example, said that inspectors needed further training and equipment to carry out multi-media inspections on their site visits. In Norway, the Environmental Performance Review highlighted the need to strengthen capacity for regional and local environmental authorities, including for enforcement work. In Poland, accession to the EU brought new waste requirements, increasing enforcement needs. Enforcement bodies in Poland and other EU Member States have participated in the IMPEL network, which has focused on strengthening enforcement: IMPEL has worked in several areas of waste management, and waste shipments have been a common area of work.

4.7.2. Compliance promotion

Alongside enforcement actions, compliance promotion can play an important role in raising the awareness of potential polluters. Norway’s national Climate and Pollution Agency (KLIF) is responsible for enforcement and inspections; the agency has also carried out compliance promotion campaigns, for example informing SMEs about hazardous waste requirements.

In the Netherlands, an OECD country at the forefront of enforcement work, the national Inspectorate follows a policy of ‘mutual trust’ with organisations it supervises. The Inspectorate has established covenants with companies with a good compliance track record, and the government was exploring systems for private compliance assurance.

4.7.3. Facility inspections

Inspections of waste management facilities – along with waste management at industrial plants and other locations – are a core enforcement activity. OECD countries are increasingly using risk assessments to target inspection activities and resources. In Korea, for example, large incinerators are inspected more frequently than small ones. Poland introduced a risk-based approach in the review period. A leading example was seen in Norway, where the national Climate and Pollution Agency divides facilities into four, risk-based categories: these determine the frequency of inspections and their approaches.

A number of countries carry out unannounced spot checks, in particular for high-risk facilities: this is seen, for example, in Norway.

Some OECD countries have set overall priorities for inspection and enforcement: in Israel, illegal waste sites and illegal dumping were an environmental priority and a focus on enforcement actions. At the same time, the Review highlighted the need for further attention in this area.

4.7.4. Waste shipment inspections

Shipments of waste – and in particular of hazardous waste – are a key area for enforcement attention to ensure compliance with the Basel Convention and related OECD requirements, in particular to ensure proper control of exports to non-OECD countries.

Several OECD countries have raised the profile of waste shipment inspections and enforcement following prominent cases. A key one was the 2006 case of the Probo Koala, a Dutch-operated tanker that delivered waste sludge to Cote d’Ivoire: the case led to strengthened enforcement of waste shipments in both the Netherlands as well as Estonia, where the ship stopped on both its outbound and return journeys. In Japan as well, waste shipment cases highlighted a weakness of controls: here, the Environmental Performance Review concluded that further enforcement was needed alongside Japan’s compliance promotion efforts, such as seminars for stakeholders and customs agents.

Good enforcement of waste shipment rules will require co-operation across government bodies. Poland, for example, strengthened inspections of these shipments – responding to the recommendation of a previous OECD Environmental Performance Review – by developed a co-ordinated system involving the national and regional environmental inspectorates, border guards, customs authorities, the Road Transport Inspectorate and the Rail Transport Office. In Norway, the national Climate and Pollution Agency improved co-operation with Norwegian Customs and Excise Directorate and the Maritime Directorate for greater inspections of waste shipments in ports and at border stations.

OECD countries are increasingly relying on risk-based approaches, as seen, for example, in the Netherlands. The risk-based approach – under which enforcement actions seek to identify and target high-risk shipments – can be vital for areas of high waste trade: in 2010, waste represented an estimated one-fifth of shipments by road from the Netherlands to Germany.

International co-operation has supported enforcement work: for example, the IMPEL network among EU countries has played a key role in strengthening enforcement of waste shipment rules.

4.7.5. Pursuing violations: violations and criminal charges

Even in OECD countries with advanced enforcement approaches, there can be gaps to address. In the Netherlands, the Court of Audit found that in a high share of cases of detected illegal shipments - about 30% - the prosecutor opted not to pursue waste shipment violations. Due to the country’s open economy, waste shipments are frequent and illegal shipments are estimated to be numerous. The Environmental Performance Review called for reinforced efforts to address illegal waste trade, continuing the use of risk-based approaches.

Several countries have established specialised units to investigate and prosecute environmental crimes. In Colombia, the Attorney General’s Office created a Prosecution Unit for Crimes against Natural Resources and the Environment in 2011, with 45 staff and five subnational sections: among its objectives is to address problems arising from illegal mining. Similarly, Norway created the Økokrim unit (Box 4.12).

Box 4.12. Norway’s Økokrim unit

Norway’s Økokrim (the National Authority for Investigation and Prosecution of Economic and Environmental Crime) is both a police unit and a prosecuting authority, with about 150 employees organised in multi-disciplinary teams. It supports police and enforcement agencies. Cases cited in the Environmental Performance Review included importers of electrical and electronic products that did not register with an approved recycling company and the illegal transport and dumping of industrial waste.

References

Ministerio de Ambiente y Desarrollo Sostenible and WWF Colombia (2018), Colombia limpia, www.soyecolombiano.com/ (accessed 8 September 2018).

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Notes

← 1. 1 This requirement was clarified (and, arguably, significantly strengthened) by the recent ‘Malagrotta’ ruling of the Court of Justice of the EU.

← 2. 2 Incineration tax abolished in 2010, after the completion of the Environmental Performance Review.

← 3. 3 The Czech Republic proposes to significantly increase landfill taxes from 2024.

Chapter 4. Policy instruments for waste and materials management