Environmental Policy in the EU

Environmental Policy in the EU A2 Economics The aims of environmental policy in Europe • According to the EU commission • Protecting the environment is essential for the quality of life of current and future generations. • The challenge is to combine this with continuing growth in a way which is sustainable over the long term. • EU environmental policy is based on the belief that high environmental standards stimulate innovation and business opportunities The environment as a public good • Environmental assets are public goods which are not exchanged on markets, and therefore no price emerges to signal relative scarcity. • The destruction of these endowments is inevitable and inexorable unless there is proper government intervention. Key environmental challenges • Growing municipal and industrial waste • Contribution of EU countries to global warming • Protecting nature and biodiversity • Congestion, noise and air pollution across Europe • Resource depletion • Promote sustainable development, largely through voluntary action in individual countries Pillars of environmental policy • “Making the polluter pay” – the use of taxation to change market prices and incentives • Promoting the development of renewable energy sources • Carbon trading as a means of achieving climate change objectives • Application of the precautionary principle: – i.e. the principle that action should be taken to prevent harm to the environment before full evidence is available. • A degree of fiscal harmonisation within Europe to achieve some environmental goals Three main approaches Environmental Objectives Taxation & Subsidy Command and Control measures Market-based incentives The Economics of Waste and Waste Management Waste in the UK The problem of waste in the EU • Waste generation in the EU is estimated at more than 1.3 billion tonnes per year • This includes waste from manufacturing (427 million tonnes), from energy production and water supply (127 million tonnes), from the construction sector (510 million tonnes), and municipal waste (241 million tonnes) Principles of waste management • (1) Reduction – lower the volume of waste created in the first place • (2) Reuse the product – waste materials are put back into the raw product stream, either as base material, as with glass, plastics and paper, or as reusable product as with returnable milk bottles. • (3) Recycle or compost the product • (4) Recover the energy by incinerating • (5) Disposal of the product using landfill The waste hierarchy External costs of waste • Human costs – Exposure to respiratory diseases – Birth defects • Clean up costs – Collection costs – Cleaning up contaminated land • Pollution – Noise and air pollution – Visual pollution / general dis-amenity • External costs from the transportation of waste products Strategies to reduce waste • EU Directives on recycling and recovery rates – EU packaging recovery targets 2008 – Overall recovery 60%, Overall recycling 55% – Glass 60%, Paper 60%, Metals 50%, Plastic 22.5%, Wood 15% • Possible extension of carbon trading scheme for waste products • Attempts to change producer and consumer behaviour through improved information / moral suasion • Some new taxes on waste – e.g. plastic bag tax in Ireland Strategies • • • • • • • Environmental taxes that have been designed to change prices Environmental charges e.g. for waste water treatment and waste disposal. Environmental subsidies e.g. for recycling initiatives Information, advice and awareness raising Improving producer responsibility Liability and compensation schemes Specific targets – e.g. diversion of biodegradable municipal waste from landfill and disposable of “end of life” consumer products Environmental taxes • Much environmental pollution and natural resource depletion comes from incorrect pricing of the goods and services we produce and consume. • 'Market-based instruments' such as taxes, charges, subsidies and tradable permits help to realise simultaneously environmental, economic and social policy objectives by taking account of the hidden costs of production and consumption to people's health and the environment, in a cost-effective way. • The main advantage of taxes is that the price signals should encourage producers and consumers to change their behaviour. Taxes on products • There are taxes or charges on a range of polluting products – Taxes on batteries in Belgium, Bulgaria, Denmark, Italy, Latvia, Lithuania and Sweden – Tax on plastic carrier bags in Denmark, Italy and Ireland – Tax on disposable beverage containers in Belgium, Denmark, Estonia, Finland, Latvia, Lithuania, Poland and Sweden – Deposit-refund schemes in Austria, Germany and the Netherlands – Taxes on tyres in Bulgaria, Denmark, Finland, Latvia and Sweden – Taxes on disposable cameras in Belgium – Taxes on lubricant oil in Finland, Italy, Latvia, Norway, Slovenia, Spain and Sweden – Landfill tax in the UK – the rate of landfill tax rose to £18 per tonne from 1 April 2005, and by at least £3 per tonne in the following years to reach a medium to long-term rate of £35 per tonne. Waste & recycling in the UK • Households in England produce 25 million tonnes of waste every year. • Over half of this consists of garden waste, waste paper and board, and kitchen waste. • On average every person produces about seven times their own weight in waste a year. • Around 20% of the food we buy off supermarket shelves goes straight to the bin. This means that every household throws away £424 of wasted food each year. • Over 40 per cent of the waste in our bins is retail packaging - some 4.5 million tonnes of it. • If all the aluminium drinks cans sold in the UK were recycled there would be 14 million fewer dustbins of waste each year.