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News : Irish Last Updated: Mar 8, 2010 - 4:15:12 AM

Inconvenient Truths: ESRI responds to criticism of Irish waste management policy report; Gormley commissions new report from high fee lawyer on incinerator plan for his constituency
By Michael Hennigan, Founder and Editor of Finfacts
Mar 5, 2010 - 2:36:12 AM

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Inconvenient Truths: The ESRI (Economic and Social Research Institute) last month published a report which said that policy on Irish waste management and on incineration in particular, has “no underlying rationale” and is likely "to impose needless costs on the economy."  While the institute did not make a direct charge of gombeenism against the Minister for the Environment, Heritage and Local Government, John Gormley, Finfacts said it appeared that national waste policy was 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. Today, the ESRI responds to criticism of its report. On Thursday, a day in advance of the ESRI's latest intervention on evolving waste management policy, Minister Gorrmley commissioned a high fee lawyer to carry out "an independent report in relation to the various risks and implications of the proposed incinerator to be located on the Poolbeg peninsula."

Dublin City Council claims to be implementing national waste management policy while John Gormley is heading for three years in office and is still commissioning reports, at a time of public spending cutbacks, to show him what to do or to find a fig-leaf justification to prevent an incinerator being built in his constituency. So on Thursday, it was announced that John Hennessey, a senior counsel and qualified accountant, has been appointed pursuant to Section 224(2)(a) of the Local Government Act 2001, to prepare a report for the Minister relating to the nature and extent of the financial and related risks and consequences which may be faced by Dublin City Council in connection with its participation in the public private partnership to build the proposed facility. Hennessy is being asked to assess the financial risks should Dublin City Council and the three other Dublin local authorities be unable to meet the volumes of waste committed to in the ‘put-or-pay’ clause of the contract.

On Thursday, the ESRI defended its report, which Gormley had dismissed as deficient, misleading and not based on the facts, and the institute said its role is not to please the Minister. The ESRI admitted it made an error by assuming emissions from the Poolbeg incinerator would be covered by the EU Emissions Trading Scheme (ETS).

Prof Paul Gorecki, the lead author said the roadmap for municipal waste management policy set out in the report, An Economic Approach to Municipal Waste Management in Ireland, remains unchanged after a careful review of the comments and criticisms made since the report was launched on February 3, 2010. Gorecki said the concerns identified do not change the substance of the report or its central conclusions. So rthe institute is providing an amendment to the report and not withdrawing it.

The report's recommendations include:

  • a cap and trade system should be introduced to meet the EU Landfill Directive targets for 2013 and 2016;
  • the imposition of levies per tonne of municipal waste, depending on the method of waste disposal. The levies are based on the unpriced environmental and disamenity impact of the particular waste disposal method; and,
  • competitive tendering for household waste collection in each region, which would address any market power problems.

The ESRI said the only valid criticism of any significance arising from the comments is that incinerators are exempted from the Emission Trading System (ETS), when the contrary was assumed the contrary in the report. When this correction is made, the waste levy per tonne for incineration for an urban incinerator increases from €4.22 to 5.07 per tonne to €9.80 to 10.70 per tonne. The ESRI says these numbers are still much less than the €26 per tonne (plus non-GHG pollutant related taxes) recommended in the International Review carried out for the Department of the Environment, Heritage and Local Government. Consequently, such a revision does not alter the substance of the proposed roadmap.

The ESRI report, was commissioned by Dublin City Council, and it found that Gormley’s policies aimed at diverting waste from incineration had “no underlying rationale” and were likely to impose “needless costs on the economy”.

It criticised the International Review report that was commissioned by Minister Gormley and produced by UK company Eunomia review, as “severely flawed”. It noted the review must be “considered a failure” in terms of“setting residual waste levies, per capita targets for reduction in residual waste and guidance on the appropriate mix of waste technologies”.

John Gormley said he welcomed the fact that the ESRI had corrected the report’s “significant errors.” However, he added he was somewhat surprised the organisation had decided that they did not need to amend the report’s conclusions. The Minister said he would look at the report as he would“any report commissioned by a vested interest.”

The Minister himself appears to be another vested interest with his own political interest competing with the national interest. On Planet Bertie, the Minister appoints a lawyer to review isssues far beyond legal competence while the independent publicly funded think-tank, the ESRI, with a staff with a wide range of competetnces, is derided because it tells some inconvenient truths!

ESRI's response to criticisms of its report.

Responses to some of the other criticisms are as follows:

  • The International Review argues that external costs of non-GHG air pollutants should be included in the waste levies for incinerators, despite already being subject to direct regulation. This would lead to needless duplication of regulation and excessive administrative and compliance costs. Still more important, it would amount to discrimination among polluters. Environmental emissions have the same environmental impact irrespective of the source, so it is not appropriate to select incineration for special treatment when other sources, such as cement kilns and electricity generating stations, are not included. Consistency could be preserved by applying a similar levy to the much larger emissions of some substances from electricity generating stations, but we have noted that this would raise energy prices substantially and place Ireland at a competitive disadvantage.
  • Projections of future municipal waste growth that rely on simple international benchmarking, such as those published by SLR Consulting on behalf of the Irish Waste Management Association (IWMA), should be regarded with caution. International benchmarking can be useful in predicting future patterns of activity, but it needs to take proper account of national differences in economic and demographic conditions to be convincing. This SLR did not do.
  • The ESRI report includes baseline municipal waste projections that draw upon extensive research previously undertaken in the ESRI into likely future developments in the Irish economy and in the related production of waste. The IWMA's criticisms of the report's projections of waste, both at the national and Dublin levels, are unfounded. For example, the IWMA states that the report used a recycling rate of 39% rather that the 41% recorded in 2008. This is incorrect. The report did not specify what rate was used, but did use 41%. The IWMA also states that no account was taken of the incinerator at Carranstown in Meath. This is incorrect as reference to the report (p. 30) makes clear.
  • The IWMA argues that the report appears to be abandoning recycling in order to justify building the Poolbeg incinerator. The ESRI says this is incorrect. The projections of waste sent for recycling represent a baseline prior to the imposition of any new policies, construction of new recycling facilities or adoption of extra collection arrangements (also discussed on p.30). If efficient policies are put in place, this will provide incentives for efficient levels of recycling activity.
  • ESRI comments on the alternative waste management roadmap put forward by the Department of the Environment, Heritage and Local Government also remain unchanged. The ESRI report questions whether the proposed Section 60 policy direction to cap incineration provides a coherent and feasible basis on which to develop waste policy. Arbitrary limits on incineration and consequent expansion of mechanical biological treatment (MBT) are not appropriate. The International Review's setting of residual waste levies suffers 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 would minimise the economic cost to Ireland of waste disposal or meet the EU Landfill Directive targets.

The lead author of the report, Dr Paul K Gorecki, commented: "We welcome the vigorous debate following the release of our report. It is only through such debate and dialogue that waste management policy can be improved thus enhancing the welfare of Irish society. We hope that the independent research that we have published, drawing on existing research from the ESRI, the Competition Authority and others, will make a positive contribution in that respect."

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