Thank you very much for inviting me to come and speak at the launch of your report this morning.
I congratulate Policy Exchange on producing a piece of work that will be extremely helpful in taking forward the debate on how we should address the important issue of waste.
The title of the report is a good one. For too long the UK has lagged behind our EU partners in the way we have addressed waste. We have regarded waste as a problem that is best dealt with by dumping it in holes in the ground and then forgetting about it.
This addiction to landfill has not only been immensely damaging for the environment; it has also meant that we have wasted valuable resources by burying them under a mountain of rotting rubbish. We have failed to capitalise on the opportunity to reuse, recycle or generate energy from waste and to create new jobs and investment on the back of modern waste disposal methods.
And for a country that aspires to lead the world in seeking action on climate change, it is inexcusable that Britain appears to have been exporting toxic waste to Brazil - an issue which I am today raising with the Environment Secretary.
The current policy of the Government is neither desirable nor sustainable. Today I am going to set out a new approach - one that sees waste not as a problem but as a potential resource for materials and energy, and that has the bold ambition of turning Britain into a zero waste society.
<h2>The Government's record</h2>
I would like to begin by scrutinising the Government's record, which to coin Policy Exchange's phrase should be regarded as a wasted opportunity. Over the last decade there have been endless consultations and strategies, including reports with predictably corny titles such as 'A Way With Waste' and 'Waste Not Want Not', but precious little leadership.
The UK produces 335 million tonnes of waste a year. Shockingly, the majority of this is sent to landfill. It costs about £10 billion every year to deal with this staggering amount of rubbish. The Environment Agency has estimated that British industry is putting 8 per cent of its gross profit into the ground.
While the amount of municipal waste that is recycled or composted in England has increased from 12 per cent at the turn of the millennium to 34 per cent today, this is still far below other EU nations. Germany and Austria recycle or compost over 50 per cent of their waste. Most lamentably of all, the UK's reliance on landfill is so great that the rate even exceeds the average for the EU27.
The record of our capital city over the last 10 years is hardly exemplary. In 2007/8, London only recycled or composted 22 per cent of its municipal waste, compared with 37 per cent in the South East as a whole. London will also export over 25 million tonnes of waste by 2025 to its surrounding counties - including over 2.5 million tonnes to my own county of West Sussex - adding to their own waste disposal burden.
It is simply unacceptable that London exports so much waste to landfill. So I applaud Boris Johnson's programme to turn around London's lacklustre recycling record and help the capital go green.
If only the Government would show the same leadership. According to the most recent Sustainable Development Commission report, only 34 per cent of all of Defra's own departmental waste is currently recycled or composted, which is over a fifth lower than the household recycling and composting rate for the highest performing council in England. If the department charged with driving waste reduction has such a poor record, it is little wonder that the Government has failed to deliver.
Both the National Audit Office and the Public Accounts Committee have taken Defra to task for its slow response to the emergence of the Landfill Directive in 1999. In October 2007, the Public Accounts Committee reported that "Departmental officials would have known about the proposed Directive a long time before 1999, but no effective action was taken before 2003."
Earlier this year, the National Audit Office stated that prior to 2003, "the Department's strategies lacked practical plans for reducing reliance on landfill" and that consequently the market for waste infrastructure projects was slow to develop. The NAO also found that only two of the new infrastructure projects that have been developed over the last ten years have finished building all of the assets that they had planned for.
And Defra's failure to lead means that we are now in danger of missing the 2013 Landfill Directive target - to reduce the amount of landfilled biodegradable municipal waste to 50 per cent of 1995 levels - which would mean a fine from Brussels totalling hundreds of millions of pounds and higher council tax rates for taxpayers.
This failure has also resulted in the UK missing out on the chance to capitalise on the development of new waste technologies. Where other European countries have become world leaders in green waste technology, Britain has been left behind. And in now seeking to catch up, we are using the technology pioneered in other countries. The new closed-loop bottle recycling facility in Dagenham is impressive, but the equipment is Austrian, not British.
In the same way that Labour has missed the opportunities over the last decade to push ahead with investment in renewable energy technology, we have also missed out on the jobs and markets that could have come from a more ambitious commitment to modern waste disposal methods.
The Government has not only dithered and delayed on developing a new approach to waste, but the action that it has taken has been fundamentally misguided. Instead of rewarding people for doing the right thing, Labour's approach has been to punish them, as their proposed bin taxes demonstrated.
Of course, we should be seeking to increase recycling rates and to ensure that as much waste is diverted from landfill as possible, but when households are already over-taxed, and council tax in particular has - as a former Labour Housing Minister tacitly conceded - reached the limit of acceptability, additional charges are bound to backfire.
<h2>A new approach</h2>
Conservatives instinctively favour a different approach, one that seeks to offer people incentives rather than the prospect of punitive charges or fines. We want to make it easier for families to go green.
Our ambition should be to realise the potential value of our resources rather than thinking in terms of how they can be disposed of in the cheapest way possible. And this will require both a change in mindset from current practices and a new lead from government.
Now that the revised Waste Framework Directive has formally incorporated the five stage waste hierarchy, ranging from prevention to disposal, we need a strategy that reflects this and drives waste as far up the hierarchy as possible. The Local Government Association recently conducted a study that found that local authorities could save over £600 million if they were to reduce the amount of waste sent to landfill to a similar level in Germany. There are clear economic, as well as environmental, benefits to reducing the amount of rotting rubbish that we send to landfill.
And the environmental case against landfill is striking. We have taken it as the easy option for too long. But no one should underestimate just how damaging landfill is. Due to the production of methane - a gas 20 times more damaging than carbon dioxide - landfilling rubbish, especially in the way we currently do it, with plenty of food and other biodegradable waste thrown in, is without question the most environmentally damaging waste disposal method.
And even if we were not convinced of the alternatives, we would need them anyway. Landfill capacity in England is running out - in all but two English regions, landfill capacity will run out in less than seven years' time and in London itself by the end of 2010. If we remain addicted to landfill, we will need to open new sites - hardly a palatable prospect.
The continuing use of landfill should not be an option. But this cannot just be hoped for - we need alternatives that deliver, and we need to begin by reducing demand for waste disposal in the first place.
<h2>Reduce and re-use waste</h2>
Waste minimisation, or reducing the amount of waste produced by a person, a business or society, is a simple and logical idea. The fewer materials are used, the less waste is produced.
But if the concept is straightforward, its execution has been more problematic. Businesses and consumers ought to see the savings from minimising waste. But frequently they do not. Food waste costs the average household £420 a year. Yet it continues.
For businesses, waste minimisation may require investment. It is likely to be easier for larger companies to pursue a strategy of resource optimisation than smaller ones. And there may be strong competitive disincentives to action like reducing the size of packaging.
I do not believe that a regulatory approach will succeed in addressing these obstacles. We will not regulate waste out of existence. Instead, voluntary agreements should play a greater role. They have many advantages over legislation, including faster implementation and increased flexibility to changes; better design, since they are usually drawn up by individuals with a detailed understanding of the relevant sector; and most importantly they engage, rather than impose, upon market leaders.
There are already both UK and European examples of voluntary agreements that focus on waste. In Europe, voluntary agreements are in place in the Netherlands, Germany and Austria for materials such as paper and tyres. In the UK, the majority of major retailers signed up to the Courtauld Commitment on packaging waste reduction in 2005. The Ashdown Agreement in the building sector seeks not only to cut plasterboard waste sent to landfill, but also to increase the recycling of this waste to be used again in the manufacture of new board.
The success of the Courtauld Commitment can be seen in the fact that after being in operation for three years, it produced zero growth in packaging, despite an increase in sale volumes - an encouraging result. But it is important that its successor agreement is more ambitious by focusing higher up the packaging supply chain rather than just its end.
This will require a change in the mindset of government to move away from seeing legislation and regulation as the principal options for dealing with our waste. So last year, David Cameron asked Archie Norman to form a working group to look at how an ambitious new responsibility deal on waste could be developed. As a former Shadow Environment Secretary and former Chief Executive of ASDA, Archie is particularly well placed to lead this work, and he will publish his report later this year.
Next, we must drive up our recycling rates from their current levels. Recycling saves energy, reduces the amount of raw materials that have to be extracted and helps to cut CO2 emissions. The Waste and Resources Action Programme (WRAP) has calculated that current levels of recycling save more than 18 million tonnes of CO2 a year, equivalent to taking 5 million cars off the road or closing down three coal fired power stations.
Recycling is a popular activity. More and more people are doing it, and as a concept, it has always had an instinctive appeal to many. For this reason, for decades there has been a significant minority committed to recycling in some form and many who now do it almost religiously.
The task is to persuade others to change their behaviour, because our recycling rates are still too low. We should at least be matching the performance of our peer group countries in the EU. But we are not going to reach household recycling and composting rates of 50 per cent by 2020 - as set out in Defra's 2007 Waste strategy - by bullying the public. We have to take people with us, making it easier and more attractive to do the right thing.
This is why last year George Osborne indicated our support for the Recyclebank scheme that has proved so effective in America by paying the public to recycle. It also has the added advantage of not affecting public expenditure in any way.
Indeed, this initiative increased residential recycling rates by 90 per cent in Northern Virginia. The Recyclebank scheme is now being trialled by Windsor and Maidenhead Council, working with Veolia, where people will receive rewards such as M&S vouchers for recycling.
Similarly, bottle deposit schemes - called for both in today's Policy Exchange report and in their earlier Litterbugs report, published in March - also fit with our philosophy of using incentives rather than penalties. New York State has had a bottle bank scheme in place since 1983, paying people to recycle their plastic or glass bottles. Since its introduction this has reduced container litter by 70-80 per cent and recycled 90 billion items.
A number of companies, including Tesco and the Royal Mail, have introduced schemes which pay people for their old mobile phones. Innovative ideas like these show the importance both of incentivising people to recycle and also making it easier. This principle should make us sceptical of the idea that government should mandate kerbside sort as the sole method of collection by local authorities. Clearly it is important that we seek to get the highest value possible from the recyclables that are collected, but advances in technology should mean that this can still be achieved with co-mingled collection. Co-mingling also has the obvious benefit of not overburdening the public with an array of boxes and bins.
Kerbside sort is also highly problematic to implement in areas with a large number of flats, due to the shortage of space for the different numbers of receptacles, but works better in suburban and rural areas where there are not such constraints on space. There is currently a role for both co-mingling and kerbside sort, but it should be for local councils to decide what collection system works best for them.
<h2>Energy from waste</h2>
Finally, after seeking to prevent, reuse and recycle as much waste as possible, we must do more to try to capture the potential of energy from waste. Again the story is one of the UK being slow to recognise the potential benefits of energy from waste while other EU nations forge ahead. In 2000, 9 per cent of England's municipal waste went through energy recovery processes, but after nearly a decade this has only risen to 11 per cent.
Under the EU Renewables Directive the UK will need to generate 15 per cent of its electricity from renewable sources by 2020, yet currently we only generate around 5 per cent. As the Policy Exchange report argues, given the potential energy challenges in the years ahead, any means which could help towards meeting the nation's security of supply, decarbonising the economy and shielding the UK from the impact of downturns in global energy markets is to be welcomed.
National Grid has predicted that biogas production has the potential to be a large source of fuel for the UK and could meet almost 50 per cent of residential demand. The Institute of Mechanical Engineers has also suggested that energy from waste could produce at least 10 per cent of UK electricity by 2020 and even up to 17 per cent.
Our Low Carbon Economy paper earlier this year, which so impressed the Government that they have lifted many of its proposals, recognised the great potential of anaerobic digestion. It set out a proposal to enable biogas produced from farm and food wastes to replace up to half of residential gas heating by changing the regulatory regime for the gas grid and introducing 'feed-in tariffs'.
This new biogas will also be used to supply heat to community heating schemes which, by lowering energy lost in power generation, will greatly cut costs for residents that take part. But again we are behind our European partners. While Germany already has over 2,500 anaerobic digestion plants, as Policy Exchange shows there were only 23 in the UK generating electricity as of May 2008.
Where there is community consent, there is also a place for energy recovery plants for non-recyclable material. But these plants must provide efficient energy recovery meeting at least the EU's proposed energy efficiency thresholds and must meet appropriate emissions standards on the basis of transparent emissions reporting.
<h2>A framework for action</h2>
But what do we need to do in order to deliver our vision for waste where we truly act in accordance with the waste hierarchy? I believe that there are six key factors.
1. The right fiscal framework
First, we should aim for a fiscal framework which encourages the behaviours on waste which we want and discourages those which we don't. One way in which we do that most clearly already is through landfill charges. When it was first introduced in 1996, the landfill tax was designed to feed back some of the revenue in the form of reductions in national insurance for businesses and income for community projects. While the tax has increased under Labour, the original design has been altered so that it no longer benefits companies and communities to the same degree. But landfill tax does embody the polluter pays principle, and it has a valuable role to play.
So I announced at the Futuresource Conference last month that a Conservative Government will put a floor under the 2013 level of landfill tax at £72 per tonne until 2020. In other words, the tax is here to stay and it will continue to rise. That will give businesses certainty for the next decade, as well as sending a strong message to companies that they can invest in new forms of waste disposal with confidence.
Policy Exchange's report also proposed that the landfill tax should be reformed into a broader waste disposal tax. We need to think about how the fiscal and regulatory regime in waste should reflect the waste hierarchy. Clearly landfill is the most unacceptable form of waste disposal and should be penalised accordingly. But how can we also ensure that materials which should be recycled do not end up being used to generate energy - and how do we measure which is the better treatment of that waste in any case?
2. Measuring the environmental impact of waste
This leads me to my second point. We need a proper assessment of the different methods of utilising waste which reveals their impact upon the environment. This would help to maintain public confidence in recycling - which has come under pressure in recent months due to stories about recycling mountains - and guard against accusations that the environmental impact of recycling is limited. But equally, recycling cannot simply be an article of faith in which the public have no idea whether they are being green or not.
Measuring the environmental impact of different ways to deal with waste will not be straightforward. A carbon metric alone will not be sufficient - we need to consider factors such as the toxicity of waste and its lifespan, too. Logically, we need to consider the whole life cycle of a product, which adds to the complication. We should not let the best be the enemy of the good. But without some kind of environmental measure of waste, we risk making random and wrong policy choices.
3. Focusing on commercial and industrial waste
Third, we need to address the key concern of how better to drive commercial and industrial waste away from landfill and towards more environmentally friendly methods of disposal. Municipal waste is the focus of most EU and UK targets on diverting waste from landfill, but it only accounts for around 9 per cent of all UK waste, whereas commercial and industrial (C&I) waste totals around 25 per cent. But apart from the landfill tax there aren't many drivers to divert C&I waste from landfill.
Currently, local authorities have a duty to provide a trade waste collection. However, this does not extend to them providing a recycling service. And much of this waste is similar to municipal and could be recycled or have energy recovered from it. So I believe that the Policy Exchange report is right to raise the issue of the boundary between municipal and C&I waste. We will need to consider carefully whether incorporating the two waste streams is the right approach, or if a market based solution would be more effective. But in any case, there is no doubt that the focus on municipal waste has tended to eclipse the much bigger issue of C&I waste. We will not make Britain greener and deal with landfill unless we address both sources.
4. Co-ordinating local action
Fourth, we need local buy-in. We are committed to the agenda of localism. We do not believe that government should usurp local decision making on planning and compel local authorities to have waste infrastructure projects. Nor do we accept that in order to make real progress on waste we should go through the disruptive and costly process of radically altering the structure of local government responsibility for waste management. Of course we see the case for co-ordinated action and the simplification of waste strategy, and the potential economies of scale in delivering infrastructure that this would enable. But we are naturally more drawn to the successful examples of voluntary enhanced co-operation between local authorities to manage their waste collectively, as for instance in Hampshire.
The role of central government should be to show leadership, set the framework that gets the incentives right and then let the market work. We should avoid reaching for regulatory solutions except as a last resort, and we should be especially wary of 'big bang' solutions which rest on the ideal that if only government at all levels was re-organised - and where necessary, democracy abolished - it would deliver more.
5. Incentivising the right behaviour
Fifth, we need to incentivise the right behaviour in individuals, businesses and local authorities. For the last three years the Conservative Party has been setting out a philosophy of social responsibility, recognising the obligations which government, businesses, institutions and the individual have to society as a whole when we take decisions. We believe that enabling the right choices to be made by people and communities will be more powerful and effective than central dictat, targets or regulation.
Across the country, individuals and organisations are buying in to recycling because they want to. Major companies are announcing drives to minimise their use of landfill as part of their corporate social responsibility. Villages have instituted voluntary schemes to avoid the use of plastic bags. Over nine out of ten people say that recycling is important. They feel a sense of responsibility to avoid waste. Or they see the benefit in reducing it. Either way, we should be encouraging, rewarding and extending this behaviour before we reach for the next tax or law.
We should look beyond incentives for households to go green by recycling. For instance, it would be attractive for communities to share the benefits of energy from waste. Some companies are already proposing discounts on electricity produced in this way. Policy Exchange's report suggests that reforms could cut household waste bills, currently around £100 per household per year, by up to half. If we want to improve our national performance on waste, we should aim for the public, as well as businesses, to benefit from the value in waste which can be unlocked.
6. A higher ambition
But defining the role of government should not be to limit its ambition. So finally, and most importantly, we need a government that has a real determination to do better and not simply to carry on with the failed status quo. We cannot go on being one of the dirty countries of Europe. We should be ashamed that we still lag behind our peer group nations when it comes to going green.
Around the world, we can see that it is possible to have a higher ambition to deal with waste.
Kamikastsu in Japan has a Zero Waste Declaration, meaning no waste to landfill by 2020. They have already achieved household recycling rates of 75-80 per cent. New Zealand has a zero waste by 2020 goal, with a strong preference for voluntary instruments to achieve it. San Francisco aims to have 75 per cent of waste diverted from landfill by next year and zero waste to landfill by 2020. They have a recycling rate of 67 per cent of all wastes, including industrial and commercial.
By comparison, the UK currently recycles only a third of our municipal waste and our target - reflected in Defra's Waste Strategy 2007 - is for 75 per cent recovery (including recycling and energy from waste) of municipal waste by 2020.
Even if the current Government strategy could succeed in delivering this target, we would still be landfilling a quarter of our waste in ten years' time. That is not a zero waste policy. It is a zero ambition policy.
We need a higher aspiration - to eliminate landfill altogether, except perhaps for inert, non-recyclable waste. But only if we join together will that be achieved. So we will consult with businesses, the waste industry, local authorities and interested groups about when the goal of zero waste to landfill can realistically be met.
From Disraeli's third Public Health Act of the nineteenth century, which required councils to provide clean drinking water and sanitation, to the Clean Air Act of the 1950s, which cleared up our cities' smogs, Conservatives have a proud record in pioneering measures to improve the quality of the local environment.
Now a similarly enlightened and determined approach is needed to deal with a contemporary environmental challenge, the waste produced by an affluent society. And that will be an important component of our response to global warming.
It is time for a new approach that incentivises the public to do the right thing, regards waste not as a problem but as a potential resource, and drives forward towards the goal of a zero waste society.