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Reducing Landfill: A Landfill Allowance Scheme Consultation

3 ALLOCATION OF ALLOWANCES

ALLOCATION OF ALLOWANCES TO LOCAL AUTHORITIES

3.1 The principles underpinning the method of allocating allowances are:

• Fairness and equity: the system should be as fair and equitable as possible. In particular, it should ensure that all local authorities make a fair contribution to meeting the EC targets for 2010, 2013 and 2020 and the Executive’s own target for 2006.
• Credibility and feasibility: the scheme should be credible and feasible to those it affects. The method of allocation should ensure a smooth introduction to the scheme. It should take into account the different starting points of local authorities and avoid creating big winners and losers at the outset.
• Transparent: The system must be open and transparent both to those it will affect and to other interested parties. It should also be based on administrative simplicity, avoiding unnecessary bureaucracy.
• Certainty: The system must deliver a high degree of certainty in order to inspire confidence and to give local authorities the information they need to encourage longer term investment and innovation.

3.2 The methods below relate to scheme years up to and including 2009/10, as we propose to review the scheme after the 2009/10 target year. After the review, either one of these methods or another method will be used to allocate allowances for years 2010/11-2019/20.

3.3 The landfill allowance scheme will set limits on the landfill of BMW. Local authorities will also include targets for reducing BMW in Integrated Waste Management plans that will be produced following a Ministerial Direction.

POSSIBLE ALLOCATION METHODS

3.4 There are four options for allocating allowances to individual local authorities:

i. 1995 data (BMW landfill rates or municipal waste arisings);

ii. Current (2001/02)¹⁰ BMW landfill rates;

iii. Current (2001/02) municipal waste arisings;

iv. A combination of methods ii and iii.

3.5 These options consider the allocation of allowances for the first year of the scheme and for the 2009/10 target. Whichever option is chosen, the allocations in the interim years for each local authority will be based on a smooth progression between the previous and next target year allocations. In detail, the four options are:

(i) 1995 data

This would involve allocating allowances as a proportion of each local authority’s BMW landfilled or waste arisings in 1995.

The difficulties associated with this method are:

• data for 1995 are not sufficiently comprehensive at a local authority level to ensure that allowances could be set accurately and fairly; this would jeopardise the credibility of the scheme;
• there could be large movements in local authorities’ levels of landfilling or waste arisings since 1995 that would create significant disruption in the early years of the scheme.

(ii) Current (2001/02) BMW landfill rates

This would involve allocating allowances as a proportion of each local authority’s (2001/02) BMW landfill rates.

The benefits of this method are:

• it is simple and easy to understand;
• no local authority would have to achieve large reductions in landfill in the first year of the scheme allowing local authorities to get used to the system without attracting financial penalties;
• there would be no big winners or losers at the outset of the scheme.

The drawbacks of this method are:

• this would be very inequitable because local authorities which are currently performing well and diverting a large proportion of their BMW away from landfill would always have to divert a greater proportion of BMW from landfill in the future than those which are currently performing badly;
• basing the entire system on current landfill rates would be accepting a situation which is close to the status quo and would do little to encourage trading. This would make the system less cost effective.

(iii) Current (2001/02) waste arisings

This would involve allocating allowances as a proportion of each local authority’s current (2001/02) waste arisings.

The benefits of this method are:

• it is the most equitable method of allocation because each local authority would be making the same level of contribution to the Scotland targets as a proportion of the total amount of municipal waste that arose in their area in 2001/02;
• in comparison with options (i) and (ii), it takes account of the fact that some local authorities have made efforts to divert waste recently;
• allowances will not be allocated according to current landfill need making it necessary for trading to take place from the beginning of the scheme which will ensure greater cost efficiency.

The drawback of this method is:

• as with basing allocations on 1995 data, it would create big winners and losers at the beginning of the scheme. Local authorities that currently landfill a high proportion of their waste arisings will not have sufficient allowances and local authorities that currently landfill a very small amount of their waste arisings would have surplus allowances that they do not need. A smooth introduction to the scheme would be more appropriate.

(iv) Combining methods (ii) and (iii)

This would be a scheme with the following features:

a) Allocations for 2004/05: would be based on each local authority’s current (2001/02) BMW landfill rates.

b) Allocations for 2005/06-2008/09: each local authority’s proportion of the total allowance for Scotland in this period would gradually shift between its proportion of the total allowance in 2004/5 and its proportion of the allowance in the EC target year 2009/10.

c) Allocations for 2009/10: would be allocated as a proportion of each local authority’s current (2001/02) waste arisings.

The benefits of this method are:

3.6 This method meets the Executive’s objectives for the scheme as stated in paragraph 3.1 and considered below.

• Fairness and equity: The major disadvantage of basing both initial and target year allocations on current (2001/02) BMW landfill is that this would be inequitable. Local authorities which are currently landfilling most would have least incentive to change their disposal methods. However, the combination method of allocation would provide a gradual movement towards a ‘level playing field’ by 2009/10, when all local authorities would have to make a fair contribution, proportionate to their level of waste arising, to Scotland’s targets.
• Credibility and feasibility: Although it would be more equitable and encourage an early start to trading if early allocations are made on the basis of current waste arisings, the Executive’s view is that it is necessary to acknowledge the fact that all local authorities have undertaken different levels of diversion. Basing initial allocations on current BMW landfilled takes account of each local authority’s different starting point and allows a smooth transition into the scheme without creating big winners and losers. Although this would mean accepting the status quo in the early years, it would make the scheme more credible and feasible for local authorities.
• Transparent: Information about the amount local authorities they landfill and their waste arisings is available, which should make the system of allocations clear and transparent.
• Certainty: The proposed method would base all allocations on fixed start points and will give local authorities certainty about their position right through to 2010.

The drawback of this method is:

• one consequence of the proposed allocation method is that where a local authority has already achieved substantial diversion rates e.g. through incineration or recycling, its allocation of allowances in target years could be greater than allocation in the early years of the scheme. This is opposed to the aims of the scheme and the Executive proposes that it will not allocate allowances at a higher level than a previous year for any local authority.

Q10: Is method (iv) preferred?

Q11: Is it appropriate to ensure that no local authorities are allocated a higher level of allowances than in a previous year?

TOTAL ALLOCATION OF ALLOWANCES FOR SCOTLAND

3.7 The total allocation of BMW allowance for Scotland in 2004/05 (likely to be a pilot year) will be 1.89 million tonnes. In the scheme year 2006/07 the total allocation will be 1.5 million tonnes of BMW, to meet the Executive’s target. The total allocation for Scotland in 2009/10 is covered in Annex A. The total allocation for Scotland in the remaining years up to the first target year (2005/6, 07/08, 08/09) would be based on a straight line transition from the previous allocation, as described, to the next.

NON-MUNICIPAL WASTE

The targets set by the EC relate very specifically to biodegradable municipal waste only (see the definition in Annex C). For the purpose of administering the landfill allowance scheme, all waste collected by local authorities will be assumed to be municipal waste except for clearly defined exceptions. The proposed exceptions by class of waste are the collection of abandoned vehicles and road planings/scarified materials. Local authorities shall also be able to treat industrial wastes as non-municipal wastes, where these are separately collected and managed from identifiable sites.

Q12: Is it appropriate to operate the definition of municipal wastes in this way?

Q13: How much impact will this have on individual local authorities?

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