Ahead of next week’s Autumn Statement from the Chancellor George Osborne, the Environmental Services Association (ESA) has issued a report that calls for a new package of green taxes and fiscal incentives to help stimulate investment in the top end of the waste hierarchy.
In the report, Beyond Landfill: Using Green Taxes to Incentivise the Waste Hierarchy, the ESA also warns that policy makers rely too much on landfill tax to deliver their waste and resources objectives.
As a result, the ESA would like to see:
- A peat levy to help stimulate compost markets
- A packaging levy alongside the PRN system to incentivise the reduction, recycling and recovery of packaging
- Enhanced Capital Allowances for investment in material sorting technologies
- Green Infrastructure Investment Allowances for investment in new waste recovery infrastructure
- A lower rate for Carbon Reduction Commitment (CRC) allowances for recycling and reprocessing activities.
It estimates that these measures could give the UK a green boost and add up to £2 billion to GDP.
ESA director of policy Matthew Farrow said: “Next week the Chancellor has the difficult task of showing how he will reduce the deficit while also helping businesses to grow. Many of us would also like to see him do this in a green way. In our new report, we show how some new thinking around the role of taxes and fiscal incentives in the waste and resources field could allow our industry to make a bigger contribution to the Chancellor’s challenges.
“First, though, the Government must recognise its over-reliance on landfill tax both in policy and revenue terms. We believe landfill tax revenues may fall quickly in the coming years, making deficit reduction harder. At the same time, environmental benefits of the tax will diminish as the focus moves further up the waste hierarchy. And the lack of clarity over the future of the tax post-2014 has created business uncertainty.
“In our report, we show how the easy option of extending the landfill tax escalator beyond 2014 is the wrong option. Instead, we need some new thinking about how to promote investment further up the waste hierarchy. We propose a package of fiscal incentives and new taxes to do this.
“The landfill tax was right for its time, and has been a great success. But I hope our report will start a debate over how we can go beyond the landfill tax and develop a green tax system that can help our sector meet the new challenges of making the waste hierarchy a reality.”