Why it pays to charge for waste by weight

John FitzGerald: For even bigger savings, we should rethink how waste firms compete

Archaeologists have been thriving on the waste left behind by our ancestors thousands of years ago. Sorting through the Viking landfills in Dublin has provided vital information about lifestyle a millennium ago: what people ate and the goods they produced.

Pity the archaeologists, in 1,000 years' time, looking at our dumps. Although our landfills will certainly provide lots of evidence, the sheer volume of rubbish will be a major headache, just as it is for us today. Compared with my childhood, the volume of waste has dramatically increased. Much more food goes to waste in households today, as it's affordable to do so. Packaging waste has also increased dramatically. Packaging has increased partly for branding reasons but also to reduce damage on the journey from producers to consumers. Much of the extra packaging serves to reduce the amount of food spoilage.

When the Soviet Union collapsed, one of the major advantages of a move to a market economy was that modern packaging was introduced. Only a minor proportion of food produced in Soviet times reached consumers in good condition. After a few years of market economics and good packaging, the overall volume of waste was dramatically cut. This had major environmental benefits: increased packaging waste was more than offset by the advantage of less wasteful production.

In Ireland, higher-income households generate more waste than those on lower incomes

Studies of waste generation in Ireland suggest economies of scale in household size: larger households generate less waste per head than smaller households. Obvious exceptions are households with children under three – nappies are numerous and bulky.

But in Ireland, in contrast to most other countries, higher-income households generate more waste than those on lower incomes. Rising incomes in the Celtic Tiger years contributed to rising volumes of waste.

The best and most environmentally acceptable approach is to reduce waste. A pilot study in Clonakilty, in Co Cork, by the Economic and Social Research Institute in 2003 found that, when households moved to a pay-by-weight system of waste disposal, they cut their waste by 45 per cent. A more recent study, covering a more extensive geographical area, reproduced this result.

This shows that a pay-by-weight regime cuts waste by roughly half.

The proposal to relate waste charges to weight is welcome and reflects the evidence that this changes behaviour. But regional differences in costs mean the rates charged need to be regionally differentiated. It’s important that the charging regime encourages environmentally friendly behaviour, especially recycling.

The Clonakilty study also found general acceptance of the pay-by-weight system: two-thirds of households felt it was fair, and 80 per cent said that it was better than paying for waste disposal through income tax.

Dublin waste firms have reported instances of customers placing contaminated items in green bins to avoid charges

The ready availability of recycling options, such as household green bins, is very important for reducing waste. To encourage recycling, however, charges for green bins need to be lower than those for unrecyclable waste; otherwise there would be little incentive to recycle.

The reverse issue can be a problem also, clearly. Dublin waste companies have reported instances of customers placing contaminated items, such as nappies, in green bins, to avoid charges.

Landfill gives rise to its own environmental problems, with expensive treatment required to tackle contaminated-liquid run-off. By 2000 it was clear that we were running out of regulated landfill capacity. (There were a significant number of illegal dumps.) In the longer term, even with reduced waste generation, Ireland needed to move to incineration.

Here economies of scale are particularly important. Small incinerators are expensive to operate, and to regulate to high standards.

Waste policy needs to be co-ordinated at a regional if not at a national level, rather than being left to each council. Building a large incinerator is a major investment. Without a reasonable guarantee that it would capture a sufficient slice of the waste, it is challenging to secure finance for an incinerator project.

As local authorities moved out of providing waste services directly, the approach to contracting waste services was unco-ordinated and lacked joined-up thinking. The appropriate response would have been a co-ordinated move to competitive tendering for the supply of waste-management services, which would have minimised the cost to society.

Only two other countries in Europe, Poland and Kosovo, use the Irish approach of competition between companies on the same collection routes, rather than competition to operate particular routes. This reflects the fact that this approach is inherently more expensive, with multiple bin lorries visiting the same street. This approach needs to be revisited.