A week ago I went to visit my friends in Switzerland. I love Switzerland: chocolate, cheese, the Alps, Roger Federer and … exemplary waste management. That’s right, today’s story is about rubbish.
You see, as an economist, I could not help but applaud the Swiss home recycling programme, now introduced in almost every area of the country.
In Lausanne the new tax on waste disposal has been introduced in January 2013. Under the new rules, food scraps for compost and items for recycling are collected for free. Any other waste will only be collected by the council if it is left outside in specifically designated bags. A small bag costs 1 Swiss franc (a large bag costs 4 francs).
"What a rip-off!” - I hear you say, but think about how clever this scheme is. If the government’s objective is to incentivise people to recycle, then surely you can see how this tax on waste disposal is doing just that. Suddenly, Swiss citizens pay more attention to packaging and religiously collect banana peel.
If you don’t believe me, consider this report on how effective the waste tax scheme has been. In the first 6 months since its introduction, glass recycling increased by 12%, paper and cardboard recycling improved by 27% and fruit and vegetable waste recycling increased by 61%. Non-recyclable waste left outside went down by 41% and overall waste decreased by 9%, which represents a whopping 3,140 tons.
The reason the Swiss waste tax works so well is because it affects marginal decision-making. Conversely, in London recycling is voluntary and it’s up to your own good consciousness to do your bit for the environment. The council tax charged in London includes rubbish collection services, but it does not affect a marginal decision of whether one should separate waste or dump everything into the same bin. Once the lump-sum council tax is paid, there is no economic incentive to recycle.
I should add that a well-constructed tax scheme would also be expected to do better at earning tax revenue and paying for (hopefully better) government services.
We don’t often praise policy-makers, but this is an example of a government job very well done indeed.
In Lausanne the new tax on waste disposal has been introduced in January 2013. Under the new rules, food scraps for compost and items for recycling are collected for free. Any other waste will only be collected by the council if it is left outside in specifically designated bags. A small bag costs 1 Swiss franc (a large bag costs 4 francs).
"What a rip-off!” - I hear you say, but think about how clever this scheme is. If the government’s objective is to incentivise people to recycle, then surely you can see how this tax on waste disposal is doing just that. Suddenly, Swiss citizens pay more attention to packaging and religiously collect banana peel.
If you don’t believe me, consider this report on how effective the waste tax scheme has been. In the first 6 months since its introduction, glass recycling increased by 12%, paper and cardboard recycling improved by 27% and fruit and vegetable waste recycling increased by 61%. Non-recyclable waste left outside went down by 41% and overall waste decreased by 9%, which represents a whopping 3,140 tons.
The reason the Swiss waste tax works so well is because it affects marginal decision-making. Conversely, in London recycling is voluntary and it’s up to your own good consciousness to do your bit for the environment. The council tax charged in London includes rubbish collection services, but it does not affect a marginal decision of whether one should separate waste or dump everything into the same bin. Once the lump-sum council tax is paid, there is no economic incentive to recycle.
I should add that a well-constructed tax scheme would also be expected to do better at earning tax revenue and paying for (hopefully better) government services.
We don’t often praise policy-makers, but this is an example of a government job very well done indeed.
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