• Where tax is used to influence environmental change it will aim to shift the burden of tax from ‘goods’ to ‘bads’. Taxes represent a means to signal economic activities that should be encouraged or discouraged, and are a way to ensure that the polluter pays.

• The Stern Review, due for publication in autumn 2006, will examine the economics of climate change, including investment in cleaner technologies.

• A Government Review of the UK’s Climate Change programme is due to be published early in 2006. This will further build the evidence base underpinning policies to tackle climate change by evaluating the efficiency and cost-effectiveness of existing policy measures, and assessing the best way to move forward.

• The UK Energy Research Partnership (UKERP), which brings together the public and private sectors to develop a shared vision for energy research and innovation, will be officially launched in January 2006. It will develop a coherent strategy to optimise the environment for energy research in the UK.

• The Government states that the increase in the standard rate of landfill tax is contributing to a move away from the over-reliance on landfill in the UK. The standard rate of landfill tax will increase by £3 per tonne to £21 per tonne in 2006-07.

• In terms of improving local waste management, £260 million has been allocated for a three-year targeted waste performance and efficiency grant for local authorities in England, including £5 million for Defra’s household incentive pilot schemes. Around 50 different approaches to positive incentives for household waste recycling and reduction are being tested by local authorities and their partners between October 2005 and March 2006. The Kelly Review is going to examine the scope for smarter procurement of waste infrastructure.

• The Business Resource Efficiency and Waste (BREW) Programme was launched in March 2005 to return landfill tax receipts to businesses in England in a way that supports them in improving their resource efficiency. BREW has allocated £43 million to nine programmes in its first year. Planning is under way for 2006-07 when BREW will allocate a further £95 million.

• There has been stakeholder support for measures to support innovative waste management options and, in particular, for the proposal of an enhanced capital allowance scheme to support the introduction of new wastes technologies, such as mechanical and biological treatment. One of the barriers to the take up of these types of technology is the lack of markets for the outputs of the process. The Government therefore proposes to develop options for an enhanced capital allowance scheme to encourage investment in developing markets for the outputs (eg refuse derived fuel) of new treatment facilities. CIWM notes, however, that there is no reference to enhanced capital allowance for energy from waste proposals.

• The landfill tax credit scheme (LTCS) redresses some of the environmental costs of landfill by improving the environment in the vicinity of landfill sites. The Government recognises the important contribution made by the LTCS and will announce the value of the scheme for the coming year in Budget 2006.

• The aggregate levy was introduced in 2002 and applies the polluter pays principle. The levy ensures that the external costs associated with the exploitation of aggregates are considered and encourages the use of recycled aggregate. There is strong evidence that the levy is achieving its environmental objectives, with sales of primary aggregates down and production of recycled aggregates up. However, the Government continues to examine aggregate industry claims, and to press for substantiated evidence, that the levy has resulted in increased tipping of lower grade aggregates as waste, with consequent negative environmental impacts.

For a complete copy of the report visit

http://www.hm-treasury.gov.uk/media/FA6/45/pbr05_chapter7_173.pdf