Topic Area: Waste Reduction Taxes
Geographic Area: Denmark
Focal Question: Are national taxes an effective way to reduce waste disposal and increase the reuse and recycling of household, industrial and construction materials?
(1) Andersen, M.S., 1998. "Denmark's Waste Tax." Environment, 40(4): 11-15, 38-41.
Reviewer: Casey K. Hufnagel, Colby College '99

Limitations in land fill space and growing per capita waste output have become a major area of concern in Denmark and a growing problem throughout the world. In the 1980's, Denmark's per capita generation of waste was higher than many of its neighbors in Europe and projections showed that its landfill space was quickly running out. This problem coupled with growing concern over air pollution from incinerators led Denmark to adopt a strict waste management program. Included in this program is a substantial waste tax which has more than double the cost of disposal since its inception in 1987.

Danish law has put tight restrictions on waste management, giving regional municipalities the control of waste collection and of the operation of landfills and incinerators. These municipalities, under law, must collect and dispose of household waste in areas of more than 1,000 residences. In less populated areas where collection is not mandatory and for commercial institutions the municipalities are given the responsibility of issuing instructions as to where the waste can be disposed of. When pricing waste collection municipal authorities are only allowed to charge enough to cover their costs. Under Danish law however, no regulations are put on the pricing system that the authorities use. Frequently these municipalities use pricing systems based on the volume of waste produced rather than on its weight.

On 1 January 1987, a waste tax was put into effect in Denmark which places charges on the disposal (dumping/landfilling and incineration) of non-hazardous waste according to weight. It is a fiscal environmental tax (revenue from this tax can be used to finance budget deficits or shift taxes from labor to resources) whose purpose is to reduce waste generation and to increase recycling and the reuse of household, industrial and construction materials.

From its start, this tax has been enlarged and expanded several times to increase its effectiveness. At the beginning, it levied a tax of 40 kroner (about $5.80) per ton on all taxable waste delivered to municipal waste facilities. In 1990 this tax was enlarged and extended to cover waste delivered to private landfills. In 1992 the tax was restructured to decrease the cost of waste brought to incinerators under the cost of that brought to landfills. Again in 1997 the tax was restructured to lower the rate of waste delivered to incinerators with electrical and heat recovery capacity under the cost of waste brought to incinerators with just heat recovery. Today waste delivered to landfills is taxed at a rate of 335 kroner ($48.60) per ton. Waste delivered to incinerators with only heat recovery is taxed at a rate of 260 kroner ($37.70) per ton and that delivered to incinerators with both electrical and heat recovery is taxed at a rate of 210 kroner ($30.45) per ton.

In ten years of existence, the tax has largely decreased the amount of waste delivered to both public and private sites throughout Denmark. From 1987 to 1997, the amount of waste collected has decreased by almost 26 percent. A study done in 1993 showed that household waste decreased 16 percent, construction waste by 64 percent and mixed waste by 22 percent.

Accompanying the remarkable decreases in waste collection there has also been a significant rise in the recycling and reuse of varying types of household, construction and industrial materials. The recycling and reuse of construction materials has risen over 100 percent, a jump from 800,000 tons in 1991 to over 1.6 million tons in 1995. The composting of organic household waste has increased some 580 percent from 86,000 tons in 1990 to 500,000 tons in 1994. The recycling of paper and cardboard has expanded over 77 percent, a rise from 300,000 tons in 1986 to 531,000 tons in 1995. Glass recycling has expanded over 50 percent and the reuse of fill has also greatly increased.

Although these results are promising, they cannot fully be linked to the waste tax. Shortly before the waste tax was adopted, recycling was made mandatory. There was also an increase in the availability of recycling centers. Throughout the existence of the tax there has been a growing market for used construction materials which makes it easier to sell them before they are deemed as waste. Even though these conditions can account for some of the behavioral change in the general publics, they can not account for it all. When asked, over 70 percent of municipal authorities said that the waste tax had an important role in their waste management decisions.

Over the last ten years, Denmark has greatly reduced the amount of waste brought to landfills and incinerators and has drastically increased the amount of materials reused and recycled. Although the above results can not completely be accounted for by the national waste tax, the data does show that it has had an impact. The Danish EPA believes that the largest effect of this tax has been seen in the substantial increase in the reuse of demolition and construction waste. If Denmark is able to convince many more municipal authorities to switch to a pricing scheme based on weight (like the pricing scheme of the tax) rather than volume of waste, more individuals and companies will realize the savings they can obtain by becoming more waste conscious. In this way the effects of the tax will have an even great impact on a broader range of institutions and materials.

Through this case study it has been shown that the use of national taxes can be an effective was to reduce waste disposal and increase the reuse and recycling of waste material. In the United States waste disposal is a community based matter and waste reduction is also largely handled at this level. For such a tax to work in the U.S. it must also be coupled with laws changing the pricing system of waste from one based on volume to one based on weight. If this can be accomplished the impacts of such a tax could be astronomical.

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