Here is news of a thought-provoking report from Denmark‘‘s Environmental Assessment Institute (EAI) - an independent institution under the Danish Ministry of the Environment.

There is an increasing need to couple environmental and economic considerations within waste management. Consumers and companies alike generate ever more waste. The waste-policy challenges of the future lie in decoupling growth in waste generation from growth in consumption, and in setting priorities for the waste management. This report discusses the criteria for deciding priorities for waste management methods, and questions the current principles of EU waste policies.

The environmental damage caused by waste depends on which type of management we choose. Also, the methods differ in price. Must we always opt for the solution that is least detrimental to the environment or should we also take into account the costs of the solution?

In this report, a number of economists offer their vision of the criteria that they think should underlie the future EU waste policies. The experts are:

· Frank Ackerman - Tufts University, author of "Why do we recycle?"
· Richard Porter - The University of Michigan, author of the "The Economics of Waste"
· David Pearce - University College London and Imperial College London
· Elbert Dijkgraaf and Herman Vollebergh - Erasmus University Rotterdam (SEOR and the Rotterdam School of Economics)

The basis for the discussion is the so-called waste hierarchy which has dominated the waste policy in the EU since the mid-1970s. The waste hierarchy ranks possible methods of waste management. According to the waste hierarchy, the very best solution is to reduce the amount of waste. After that, reuse is preferred to recycling which, in turn, is preferred to incineration. Disposal at a landfill is the least favourable solution.

The results of the report indicate that the waste hierarchy must be considered a very general and flexible guideline for formulating waste policies.

Recommendations

A number of specific recommendations for achieving cost-effective waste policies can be made based on both the US experience presented by Ackerman and Porter and on the analysis of European waste management presented by Pearce and Dijkgraaf & Vollebergh. The results of this project relate to both the target setting and the regulatory implementation of waste policy in the EU.

The main recommendations for future waste policies in the EU and Member States are:

The waste hierarchy must be considered a very general and flexible guideline for formulating waste policies. What is environmentally desirable is not always a preferred solution, when considered from a socio economic perspective. The reason is that some environmental benefits may come at a comparably socially high cost. The marginal costs and benefits will vary depending on material and locality. It is recommended that social costs and benefits of new recycling schemes should be analysed and that a critical assessment be made on to determine if further steps are in fact socially desirable.

Regulation by fixed target-setting in waste policy is currently the preferred method of regulation at the EU level. Examples are the packaging waste Directive with fixed target rates for recycling. Instead of current strategies, price-based policies are recommended, since they have the ability to change the demand for disposal methods and potentially change the material used towards more sustainable choices.

There are two reasons for this recommendation:

· there is no upper boundary to the costs related to reaching the fixed targets
· fixed targets are bad at encouraging recycling, since they have insignificant effects on demand for the environmentally desirable solutions and materials

Institutional factors and non-economic reasons can be very imp