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News : Irish Last Updated: Feb 4, 2010 - 3:22:47 AM

ESRI slams Gormley's gombeenism on incineration; Irish waste policy has “no underlying rationale”; Likely to impose “needless costs on.. economy"
By Michael Hennigan, Founder and Editor of Finfacts
Feb 3, 2010 - 4:46:17 AM

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Figure 5.3: Actual and projected shares of final demand for BMW (biodegradable municipal waste) generation in Ireland (data through 2008 are actuals)

The ESRI (Economic and Social Research Institute) in a report published today says policy on Irish waste management and on incineration in particular, has “no underlying rationale” and is likely "to impose needless costs on the economy."  The institute does not make a direct charge of gombeenism against the Minister for the Environment, Heritage and Local Government, John Gormley, but it appears that national waste policy is being dictated by the minister's desire to thwart the plans of Dublin City Council to build a waste incinerator in his political constituency of Dublin South-East, on the site of the former Poolbeg power station.

The ESRI says its report An Economic Approach to Municipal Waste Management Policy in Ireland, provides"a roadmap for managing municipal waste in an efficient way that minimises the costs to society."

The report says the minister’s policy to set a cap of 30 per cent on the incineration of municipal waste could damage Ireland’s reputation as a place to do business and “will thus harm economic development and competitiveness”. It says says the cap “may well be effective” and would result in more waste being diverted to landfill, thereby making it “much harder and more costly” to comply with the EU landfill directive.

Three years ago next month, Gormley spoke at the Green Party's annual conference on what he called "Planet Bertie... a very strange place. On a green version of Startrek they might say:  'It's life, Jim, but not as we Greens know it.' On Planet Bertie you can sign blank cheques because everyone does it, apparently. On Planet Bertie you can spend the average industrial wage on make-up. On Planet Bertie you can get loans from people that you don't have to pay back. On Planet Bertie you can save €50,000 without a bank account. And on Planet Bertie, climate change doesn't exist...On Planet Bertie there's a strange cult called Fianna Fáil, a type of religion without vision or values; and every year in August they go on their annual pilgrimage to one of their sacred sites, the tent at the Galway races, where they pay homage to their gods and the gods bestow them with gifts for doing their bidding."

It was bad enough for him to enter a Faustian Bargain with the inhabitants of Planet Bertie but embracing its stroke politics, completes the stygian journey to probable political oblivion.

The ESRI report, which was commissioned by Dublin City Council says that the Government intends to disadvantage incineration by banning local authorities entering into contracts that direct waste to incineration and that contain “take or pay” contracts while landfill levies are to be structured in such a way as to not advantage incineration. The report says since the local authority may be best placed to assume certain risks through a take or pay contract, removing this option is likely to be economically inefficient and needlessly raise costs. Levies should be set to reflect the externalities - - environmental and other damage - - which may or may not result in landfill paying a higher levy than incineration.

The report says on the incineration cap, that it is a command and control measure as opposed to an economic instrument such as a levy. Command and control mechanisms are likely to impose needless costs on the economy, particularly where, as in the present case of incineration, there is no underlying rationale for the 30% target selected. Much better in the ESRI view would be to ensure that the private cost of using each waste processing option will be set at a level reflecting the externalities it causes. Setting such prices requires detailed information as to the costs and benefits.

Research professor Paul Gorecki, who is the lead author of the report has warned that abandoning incineration would result in public compensation and an international review, commissioned by Gormley, at a cost of several million euros, is completely silent on the issue of the merits of Mechanical Biological Treatment (MBT) over incineration, except to say that some countries seem comfortable with high usage of incineration.

The ESRI report says there is no "coherent or compelling reason" not to use incineration, and that it is "extremely unlikely" that ambitious recycling targets will be met. The ESRI charges Gormley's department with "distorting" the outcome of the international review by stating that incineration should be discouraged and that alternative waste treatments used instead.

The ESRI says it is "extremely unlikely" that Ireland will meet ambitious targets to recycle 70% of all household waste. More than 1.1 million tonnes of waste will be sent to landfill this year -- far above the targets in the EU's Landfill Directive. The European Commission may begin levying fines from July.

The ESRI report states that Ireland is at an important junction in municipal waste management policy. Significant progress has been made in encouraging the use of recycling as an alternative to landfill. Ireland has to meet legally binding EU Landfill Directive targets that will become increasingly difficult to meet in 2013 and 2016.

The report argues that markets do not always work well in waste management so government intervention is merited and should be directed at improving the way markets work. If successful, this will enhance Ireland's economic development and competiveness. It suggests two ways in which waste markets do not work well:

- in handling greenhouse gas emissions such as methane and disamenities such as dust and noise; and,
- in addressing the potential for market power, particularly in household waste collection.

Since geographical markets for waste services such as collection are local or regional, policy making should allow for local variations as well as co-operation for where markets are wider.

The roadmap for municipal waste policy developed in the Report recommends:

(i) a cap and trade system be introduced to meet the EU Landfill Directive targets for 2013 and 2016;

(ii) the imposition of levies per tonne of municipal waste, depending on the method of waste disposal:

- Landfill: €44.24 to €54.89 per tonne
- Urban Incineration: €4.22 to €5.07 per tonne
- Rural Incineration: €0.42 to €0.50 per tonne
- Mechanical Biological Treatment (MBT): €0.92 to €1.45 per tonne.

The levies are based on the unpriced environmental and disamenity impact of the particular waste disposal method; and,

(iii) competitive tendering for household waste collection, which would address any market power problems.

The Department of the Environment, Heritage and Local Government is also proposing a new waste management policy. Two vital ingredients in that policy are:

- the proposed Section 60 policy direction to cap incineration and other matters; and,
- the international review of waste management policy, which contains twenty-five recommendations.

The report questions whether these ingredients provide a coherent and feasible basis on which to develop waste policy. Arbitrary limits on incineration and consequent expansion of MBT have no place in waste management policy. The international review's setting of residual waste levies is flawed, suffering from both double regulation and double counting, with the result that some of the proposed levies are much higher than is appropriate. It does not provide the basis for a waste management policy that will create jobs, enhance competitiveness, and meet the EU Landfill Directive targets.

In a nutshell, this is another chapter in the same gombeen politics that brought ruin to the economy. Gormley of course will not be held to account on the issue.

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