At the request of the Dutch Ministry of Finance, the Netherlands Environmental Assessment Agency (PBL) has analysed a series of options for a tax on waste designed to generate € 100 million revenue and reduce environmental impacts. The options with the greatest environmental benefits are a tax on residual waste from households and businesses and a tax on waste incineration.
In isolation, a landfill tax yields too little revenue
On its own, introduction of a landfill tax will almost certainly fail to yield € 100 million for the Treasury and has only limited environmental benefits. This tax would amount to around € 75 per tonne, which, while encouraging recycling, would also lead to undesirable behaviour such as fly-tipping.
Tax on residual waste or incineration is most effective
Of the measures investigated, a tax on residual waste from households and businesses and a tax on waste incineration yield the greatest environmental benefits. These kinds of measures will encourage local authorities, businesses and households to separate more waste, allowing more materials to be recycled. Both these options can also be combined with a landfill tax. None of the options examined are anticipated to have major environmental benefits, however, although a tax on waste will certainly mean that less waste is landfilled or incinerated. PBL also identified several exemptions that may lead to greater environmental gains, but such exemptions generally make tax regimes more complex to administer.