Clause 6 - Borrowing and banking of landfill allowances
Waste and Emissions Trading Bill [Lords]
4:30 pm
Mr Michael Meacher (Minister of State (the Environment), Department for Environment, Food and Rural Affairs; Oldham West and Royton, Labour)
They will take account of the factors of which I am about to tell the Committee. Fortunately, that intervention came just before the point in my speech at which I am to set out the safeguards that will prevent us from getting into that position. The regulations that permit borrowing may place limits on the use that waste disposal authorities can make of borrowing from future years—we have the capacity to regulate that. Let me make it clear that banking and borrowing will not be a way for waste disposal authorities to evade their responsibilities.
The Bill puts in place a number of measures to ensure that the system cannot be abused. Most importantly, banking and borrowing across or into target years is will not be permitted. That removes the potential danger of a waste disposal authority using up all its allowances in the first three years of the scheme, and possibly causing the UK to fail to meet interim targets. Such an authority would certainly be liable for penalties in future years.
There are other safeguards. For example, regulations may provide for limits on the number of allowances that may be used inter-year, or specify conditions that have to be met. Ultimately—as some politicians like to say, this is the killer point—each waste disposal authority will know that if it landfills more than its allowance because it has borrowed and utilised it in previous years, it will be liable to a financial penalty and to a supplementary penalty where that failure contributes to the UK as a whole missing its landfill directive targets. That collection of safeguards is more than adequate to prevent abuse of the flexibility.
The amendments would scrap the part of the trading scheme that allows inter-year use of allowances. That would be a wasted opportunity as regards the UK showing that it pursues policies at the forefront of sustainable waste management which combine the maximum flexibility with ensuring that the landfill directive targets are achieved. Moreover, meeting the targets would be a much more painful process if there were no
flexibility to allow investment to be made; that takes some years to come on stream. The situation would be much more difficult for individual waste disposal authorities and, indeed, the UK as a whole. Again, we have tried to get right the balance between providing as much flexibility as we can, and ensuring that that cannot be abused and that the country as a whole can meet its targets.