The report is part of a programme of work on the case for a landfill levy. The consultants concluded that there are a number of environmental impacts which are not currently reflected in the price (known as 'externalities'). In the case of landfill, the report identifies external costs of between £1 and £4 per tonne, whereas incineration with energy recovery may provide external benefits of approximately £2 to £4 per tonne.
The report was prepared by a team led by Professors David Pearce and Kerry Turner of the Centre for Social and Economic Research on the Global Environment (CSERGE).
Mr Yeo said:'This report is part of our wider examination of the use of economic instruments to achieve environmental objectives. It will be of great assistance to us in coming to a decision about whether or not to introduce a landfill levy.
'But they identify certain costs and benefits which will still be unpriced.' Costs and benefits was only one factor in deciding whether to introduce a landfill levy, said the minister. He explained: 'The report gives us useful information about the extent to which the externalities justify introducing a levy. But there are other factors which could legitimately influence our decision. We need to consider how far we should provide an incentive for people to change their behaviour, and we need to consider the impact not just on incineration with energy recovery but on minimisation and recycling.
'We must also recognise the extra costs that a levy would impose on some, even if bringing an overall benefit. Those considerations would influence the level at which any levy was set. My Department would welcome comments on the report by 7 January 1994.'