Innovative market-based policy instruments for waste management: A case study on shredder residues in Belgium

Abstract

In an increasingly complex waste market, market-based policy instruments, such as disposal taxes, can give incentives for sustainable progress while leaving flexibility for innovation. However, implementation of disposal taxes is often criticised by domestic waste handlers that fear to be outcompeted by competitors in other countries. The article discusses three innovative market-based instruments that limit the impact on international competitiveness: Tradable recycling credits, refunded disposal taxes and differentiated disposal taxes. All three instruments have already been implemented for distinct environmental policies in Europe. In order to illustrate how these instruments can be used for waste policy, the literature review is complemented with a case study on shredder residues from metal-containing waste streams in Belgium. The analysis shows that a conventional disposal tax remains the most efficient, simple and transparent instrument. However, if international competition is a significant issue or if political support is weak, refunded and differentiated disposal taxes can have an added value as second-best instruments. Tradable recycling credits are not an appropriate instrument for use in small waste markets with market power. In addition, refunded taxes create similar incentives, but induce lower transactions costs.

Guiding Future Research on the Valorisation of Shredder Fine Residues: A Review of Four Decades of Research

“…However, the general applicability of the findings, irrespective of the region of focus in the study, is an ad- Studies focusing on regulatory conformance of valorisation measures: (Allen and Fisher, 2007) and (Johansson et al, 2017). Studies focusing on policy implications of valorisation measures: (Nayak and Apelian, 2014) and (Dubois et al, 2015). vantage of typical top-down macro-level policy studies.…”

“…vantage of typical top-down macro-level policy studies. For example, the insights created on policy instruments such as disposal tax, tradeable recycling credits, and refunded disposal tax could be generally considered as a means for increasing the competitiveness of local recyclers (Dubois et al, 2015). Additionally, such studies can compare the driver-and barrier-effects of policy between regions, e.g.…”

Can we go circular? : On the multifaceted challenges of facilitating shredder fines valorisation in the Swedish context

“…In conjunction with the regional policies, Sweden has introduced administrative legislative instruments, such as the landfill ban of organic-rich waste (Sveriges Riksdag, 2001) and landfill tax (Sveriges Riksdag, 1999). Previous fines research concerning policy and legislation (Dubois et al, 2015;Nayak and Apelian, 2014) is confined to a top-down perspective. However, as far as the actual practice of managing fines is concerned, it is important to understand how the actors (shredding companies) interpret and react to different policy impetuses.…”

“…Therefore, in order to justify such investments in fines valorisation, policy measures such as excessive taxing of fines disposal could be inferred as the avoided costs of disposal would then become substantial. Given that the possible valorisation of fines is new, exogenous (policy) support is also needed via market instruments such as tradeable credits based on amounts recycled, pre-charged disposal taxes that shall be refunded upon the recycling of residues, taxed primary resources (Dubois et al, 2015;Tekie, 2017), and even investment support, which could make fines valorisation anchor as an industrial activity, and fines-derived SRMs be competitive in the marketplace.…”

“…The institution-level aspects are primarily two fold. Formal-institutional aspects (governmental aspects) such as administrative instruments (Nayak and Apelian, 2014) and local-authority regulation (Johansson, 2018) would provide the overall governance of applications based on fines valorisation, while market instruments (Dubois et al, 2015) could be used to provide external stimulation for such applications. Markets for secondary raw materials (SRM) are informal institutions.…”