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4628.0.55.001 - Completing the Picture - Environmental Accounting in Practice, May 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 10/05/2012  First Issue
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CHAPTER 8-SOLID WASTE MANAGEMENT
Introduction
What is a waste account?
How can a waste account assist?


INTRODUCTION

Australia's National Waste Policy was released in November 2009. The purpose of the policy was to set a
"clear direction for Australia over the next 10 years, toward producing less waste for disposal, and managing waste as a resource to deliver economic, environmental and social benefits."
(footnote 1)

Specific aims of the policy are to:

  • avoid the generation of waste
  • reduce the amount of waste going to landfill (including hazardous waste)
  • manage waste as a resource
  • ensure that waste management, disposal, recovery and re-use are undertaken in a safe, scientific and environmentally sound manner

In addition, it is envisaged that this policy will also complement and contribute to:
  • a reduction in greenhouse gas (GHG) emissions (energy conservation and energy production)
  • water efficiency
  • productivity of the land
  • supporting jobs
  • investment in future long term economic growth

These policies address economic, environmental and social issues, and are in synergy with other environmental themes such as climate change, water, energy reduction and land productivity

Waste management is a complex issue and poses a number of measurement challenges. The production and use of materials, goods and services have a range of environmental and economic consequences. Waste management is a broader area than provision of waste services - recovery of materials, recycling, disposal to landfill, etc. which are provided primarily by the Waste Management Industry(footnote 2) . Government, businesses and households are all involved in waste generation and waste management - either by actively reducing, reusing, recovering, recycling materials, or paying others to recover or to dispose of unwanted materials.

While the issue of waste measurement is complex, simple indicators have been sought for policy development and evaluation. Environmental-economic accounts provide a systematic way of compiling information from disparate sources from which indicators may be calculated.

Indicators should have several properties; timeliness, underpinned by good-quality data; unambiguous better and worse directions (e.g. higher numbers are worse; lower numbers are better), and the ability to be interpreted by the general reader(footnote 3) . For waste the total mass of solid waste generated could be an indicator of the environmental impact of production and consumption patterns. Other indicators could be derived from the hazards posed by different types of waste and be used to evaluate changes in the dangers waste poses to human health and the environment.

In addition, the relationship between Australia's economy and the environment can be further explored by integrating conventional socio-economic data with measures of environmental pressure. Figure 8.1(footnote 4) highlights potential interconnections between economic growth and waste generation. Greenhouse gas emissions, water consumption, energy consumption, and waste production all represent measures of environmental pressure; population and Gross Value Added (GVA)(footnote 5) provide socio-economic indicators.

8.1 Measures of Australia's progress(a) - 1997-2010
Graph: 8.1 Measures of Australia's progress(a)—1997–2010


Figure 8.1 shows that the majority of indicators of environmental pressure increased between 1997 and 2009. The population of Australia rose by 18% over this period, while gross value added increased by 51%. Energy consumption rose 21%, while greenhouse gas emissions increased by 19%. Waste production in Australia increased by 93% between 1997 and 2007, while in contrast, water consumed by industry decreased by 39%.

The System of Environmental-Economic Accounting (SEEA) Central Framework integrates information on the environment and economy and could provide a useful conceptual basis for assessing many waste policy objectives. The Australian Bureau of Statistics (ABS), in consultation with a range of stakeholders, is specifically developing an experimental waste account to test the usefulness of this particular component of the SEEA accounts to provide information for developing and reviewing waste policy objectives.
WHAT IS A WASTE ACCOUNT?

A waste account provides information on 'solid waste' only; discarded materials that are no longer required by the owner or user. It has become standard practice internationally, including in the SEEA, to include liquid waste under the heading of solid waste(footnote 6) ; for international consistency, the ABS follows this practice. Solid waste excludes wastewater (such as sewage and industrial effluent) and small particulate matter and gasses released into the atmosphere, which are a part of water and air emissions accounts, respectively.

A waste account would contain a series of tables showing information on the generation of waste, the disposal of waste to landfills or to recycling facilities, and the supply of recycled materials in the economy. It would also incorporate related financial flows of waste, such as payments for waste disposal, taxes, subsidies and revenues associated with waste management, as well as disposal and recovery costs.

Data in the waste account would be linked to the System of National Accounts (SNA) along with other relevant information. Proposed tables for inclusion in the Australian waste account are presented in the Appendix.

Figure 8.2 links the proposed waste account tables to the relevant part of the waste process it is representing, namely:
  • Waste generated ('000 tonnes) - represents Australia's total supply of solid waste. It shows the physical volume and types of waste being generated, by industry and sector (including imports).
  • Waste management ('000 tonnes) - captures the physical volume of various waste types recovered, treated or disposed, by industry and sector (including exports).
  • Waste services used ($'000) - shows spending on waste management services in Australia, by source.
  • Waste services supplied ($'000) - shows provision and value of waste management services, by source.
  • Recovered products supplied ($'000) - identifies the value of recovered material/products that is supplied back to the economy, by source and material type (including imports).
  • Recovered products used ($'000) - shows the amount of recovered material used, by source (including exports).
8.2 Waste account linked to waste generation and flow through the economy (see appendix)
Diagram: 8.2 Waste account linked to waste generation and flow through the economy (see appendix)


This physical-monetary integration of waste data enables analysts to examine the economic and social drivers and pressures linked to physical changes. The waste account will complement the National Waste Report(footnote 7) and assist in analysing the effectiveness and impact of waste policies, particularly from an economic perspective.
HOW CAN A WASTE ACCOUNT ASSIST?

One of the National Waste Policy's key areas is providing evidence, with the objective of developing "capacity to effectively collect consistent, accurate and meaningful national waste and resource recovery data to inform policy and decisions".

The planned ABS waste account would be consistent with this objective. It would complement the National Waste Report by linking waste data to the main source of national economic information, the national accounts, as well as information on other environmental issues (e.g. water and energy use by industry and households). A waste account would also help to identify data gaps and deficiencies and provide a framework to help underpin integrated waste data by using consistent concepts, terminology and classifications.

For example, the waste accounts could be used to:
  • examine the generation of waste in relation to economic performance and how this changes over time (e.g. tonnes of waste generated per $1000 of industry valued added)
  • examine the effectiveness or efficiency of waste management expenditure (e.g. tonnes of waste disposed per $1000 of waste management expenditure)
  • assess the economic impact on industries affected by changes to waste management policy
  • determine the amount of waste diverted from landfill and the contribution of recycling to the economy (e.g. contribution of recycling to GDP and mass and value of recycled materials supplied to the economy)
  • identify gaps and deficiencies in waste measurement data
  • provide data that may be used to model the impact of changes in the economy on waste generation (e.g. growth of the economy or changes in the price of waste disposal)

Some specific policy aims and objectives, identified in the National Waste Policy 2010, are presented below together with discussion of how a comprehensive waste account could assist in addressing these policies.Measuring the management of waste

In 2009, "98% of Australian households participated in some form of recycling and 86% of households reused waste"(footnote 8) .

According to the ABS' 2009-10 survey of the Waste Management Services industry, the main materials recovered or reprocessed at facilities other than landfills were metals (2.2 million tonnes), and paper and cardboard (1.7 million tonnes). Figure 8.3 shows the amount of different materials recovered as a proportion of total amounts of these materials received at waste management facilities, excluding landfills. Ninety percent of paper and cardboard received at these facilities is recovered, compared with less than 10% of rubber and tyres. Overall, nearly one quarter of the materials received at these facilities (just over 4 million tonnes) is finally disposed to landfill.

8.3 Material recovery, Facilities other than landfill(a) - % of materials recovered - 2009-10
Graph: 8.3 Material recovery, Facilities other than landfill(a)—% of materials recovered—2009–10


Over time a waste account would be able to answer questions such as:
  • is the level of different materials sent to landfill increasing or decreasing over time?
  • which industries are the main sources of waste production?
  • is materials recovery increasing? If so, which materials?
  • what are the size and composition of the material recovery industry?
  • who is bearing the cost of waste disposal and material recovery?
  • is the value of recovered materials increasing? If so, of which materials?
  • are more recovered materials returned to the economy and who is using them?

As the industry groupings and accounting concepts used in a waste account are consistent with those used in national accounting, several economic efficiency indicators may be derived. For example, 176 tonnes of waste were received by the waste management industry at landfills for each $m of gross value added in 2009-10(footnote 9) (Note that gross value added here includes income from all the activities of the waste management industry, not just land filling). Changes in this figure may indicate changes in income of the waste management industry from other sources, such as recycling. In the same year, there were 1.5 employees per 1000 tonnes of waste disposed of. Those industries with high expenditure on waste disposal, relative to their other production costs, have strong economic incentives to reduce their waste generation in order to reduce their waste disposal costs. As such, they would be more likely to respond to efforts to assist them in reducing waste generation, to decrease their waste disposal costs. A waste account would help to identify these industries.Supporting the reduction of waste

The ABS publication, Waste Management Services, Australia, 2009-10(footnote 10) , identified factors that significantly hampered the ability of businesses in the waste management industry to increase resource recovery. The main factors were: cost of development or implementation (14.4%), lack of customer demand (12.8%), and lack of facilities or infrastructure (12.2%). Almost 83% of private and public trading sector businesses reported at least one factor. For the general government sector, the main factors were: lack of access to additional funds (50.5%), lack of facilities or infrastructure (49.3%), and cost of development or implementation (47%) (see figure 8.4).

8.4 Constraints in efforts to increase recovery(a) - 2009-10
Graph: 8.4 Constraints in efforts to increase recovery(a)—2009–10


A waste account would provide consistent economic and physical data on:
  • the waste 'market' and, in particular, which sectors (i.e. private or government) and industries are providing these services
  • what services are being provided and the value of these services
  • which industries have the greatest demand for waste services
  • whether waste recovery is becoming more profitable

The data collated in a waste account would provide policy makers with detailed information on different streams of waste (e.g. construction waste, hazardous waste, paper and cardboard etc.). This would aid in the understanding of industry dynamics to meet specific policy goals. The National Waste Report makes special mention of waste from construction and demolition projects(footnote 11) . Waste accounts could be used to examine the costs of waste disposal and the income received by the waste industry from different streams of waste e.g. construction and demolition. Comprehensive regular waste accounts could show how these relationships change over time, and explore in further detail issues such as revenue for recyclables per tonne, by waste source.

Other ABS data would also complement a waste account. The activities undertaken by waste management industry businesses are shown in Figure 8.5. There are significant differences between the public and private trading sector and the general government sector. Within the public and private trading sector, more businesses undertake transport of recycling than operate landfills or transfer stations.

8.5 Activities by businesses in the waste management industry - 2009-10
Graph: 8.5 Activities by businesses in the waste management industry—2009–10

          Note: Tpt. waste represents collection and transport of waste; Tpt. recyc. represents collection and transport of recyclables; Tpt. Green represents collection and transport of green waste; Landfill represents landfill operation; Transfer stn. the operation of a transfer station or waste depot ; Recyc/alt the operation of a recycling or alternative waste treatment facility; and Liq. treatment the treatment of liquid waste.
Producing an integrated measurement framework

The National Waste Policy 2010 identifies the need to produce a comprehensive nationally integrated system for identification, classification, collection, treatment, disposal and monitoring of hazardous substances and waste that aligns with international obligations.

This framework is required to:
  • monitor amounts of hazardous waste and who is generating it
  • report the cost of managing hazardous waste and who bears this cost
  • understand how hazardous waste is disposed of: domestic treatment, landfill or export

Better management of hazardous waste, including a reduction in the hazardous content of waste, is a central component of the National Waste Report(footnote 12) . In 2009, most (82%) households disposed of hazardous waste by including it with the usual (non-recycled) municipal garbage(footnote 13) .

Using a waste account, the relationship between economic output and hazardous waste generation could be evaluated at an industry-level. Policy can be appropriately targeted at industries with high levels of hazardous waste generation, and/or increasing (or non-declining) hazardous waste intensity. By linking information on waste to the System of National Accounts aggregate, indicators of waste intensity can be produced (e.g. tonnes of waste per $million GDP).

Example 1 of European intensities on hazardous waste by industry(footnote 14)
Data for Australia are not yet available but an example from the European Union is shown in Figure 8.6. It shows that hazardous waste generated per unit Gross Value Added is decreasing in the industries presented. This type of break-down of intensity by industry could assist policy makers targeting the reduction of hazardous waste generation. The high rate of hazardous waste generation by the mining and quarrying industry would appear to make it an important target for policies to reduce hazardous waste generation.

8.6 Hazardous Hazerdous waste intensities, EU-27
Graph: 8.6 Hazardous Hazerdous waste intensities, EU–27

Pursuing sustainability

A Waste account could monitor the levels of organic material going to landfill, and measure expenditure and revenue in relation to recovered organic material. It could also be integrated with greenhouse gas emissions accounts, water accounts and energy accounts to better assess overall 'sustainability'.

Compilation of a waste account at regular intervals would provide a measure of the size and value of the waste "industry" and, in particular, help to identify and monitor the growth of the "recycling industry". Exports relating to recovered products would also be measured and allocated to the appropriate categories.

8.7 Selected environmental and economic data for three industries

Gross Value Added
Water Use
Energy Use
Greenhouse Gas Emissions
Waste Generation
Recycling Rate
Industry
$M
ML
PJ
Mt CO2(e)
kt
%

Agriculture, Forestry and Fishing
28 764
6 987 334
109
nya
nya
nya
Mining
96 105
489 313
543
nya
nya
nya
Manufacturing
107 707
658 312
1 034
nya
nya
nya

nya not yet available
Source: Table values taken from Australian National Accounts, Table 33 (ABS cat. no. 5206.0); Energy Account Australia (ABS cat. no. 4604.0); Water Account, Australia (ABS cat. no. 4610.0).


Figure 8.7 presents information on the use of natural resources along with information on the generation of greenhouse gas emissions and solid waste generation, to provide a broader picture of each industry's environmental impact. Where relative impact is important, indicators of intensity (i.e. relative to economic output) could also be derived, as shown in figure 8.8.

8.8 Environmental Intensity Measures: derived from Figure 8.7

Water Intensity
Energy Intensity
Greenhouse Intensity
Waste Generation Intensity
Waste Landfill Intensity
Industry
L per $ of gross value added
MJ per $ of gross value added
tonnes of CO2(e)
kg per $ of gross value added
kg to landfill per $ of gross value added

Agriculture, Forestry and Fishing
243.0
3.8
nya
nya
nya
Mining
5.1
5.7
nya
nya
nya
Manufacturing
6.1
9.6
nya
nya
nya

nya not yet available


Other related indicators, such as hazardous waste intensity or electricity consumption per unit of economic output, could be derived. The accounting framework affords flexibility to derive indicators and to combine data from different accounts. Tables such as expenditure on waste per $1000 of output for each industry could be aggregated. It is possible for waste intensity to decrease, while the absolute level of waste generation increases. While measures of intensity can be analytically valuable they must be considered in conjunction with the total amount of waste generation.Extensions to waste accounts: Input-output analysis

A potential sophisticated use of a waste account would be an input-output analysis, whereby each industry's use of other industries' products is examined. Products may be consumed in the production of other goods and services, e.g. wood, glue and varnish may be used in making a table - this is termed intermediate consumption; or they may be used as final consumption by households, governments or not-for-profit institutions. Input-output analysis serves to distinguish between the two types of consumption and to trace total intermediate consumption in production of a good or service, since most goods and services use many goods and services that are themselves produced from other intermediate inputs. Applied to waste, input-output analysis may be used to distinguish the total waste generated through the supply chain in production of particular goods and services, or of particular industries.

For example, many different industries use waste collection and disposal services. More importantly, Input- output analysis also includes indirect usage, through goods 'embodied' in other goods they use, since waste generation may occur before the final stage of a manufacturing process or service delivery. Monetary input-output analysis is undertaken regularly by the ABS. A Waste Account would provide physical units of waste generation, which could be used as a basis for input-output analysis of waste generation (using mass units).

Example 2: Results of a physical input-output analysis in Portugal
Figure 8.9 shows waste generation - including indirect waste generation - by selected industries in Portugal, relative to their economic output. It shows that in some cases, e.g. the metals industry, a large majority of waste generation is indirect, i.e. it is generated in the manufacture of inputs to production. For example, a steelworks may not generate very large quantities of waste, but the extraction of ore and coal, and the manufacture of chemicals used as inputs to the production of steel by the steelworks all result in waste generation: waste from these activities would be included in the indirect figures below.

8.9 Tonnes of Waste generated per million Escuados of GVA - 1992
Graph: 8.9 Tonnes of Waste generated per million Escuados of GVA—1992


In summary, the SEEA framework provides a consistent structure for presenting data on waste. It allows the generation of waste and its treatment at materials recovery facilities or disposal at landfills to be analysed. Waste accounts also present monetary information in parallel with the physical (mass, tonnes) information: the costs of waste disposal and the economic structure of the waste industry. This facilitates analysis by policy makers and allows stakeholders to better understand who is generating, treating and disposing of waste as well as who bears the costs of waste treatment. Waste accounting, consistent with the principles of the System of National Accounts ensures that the data are compiled in a way that is useful for economic modelling.
1 National Waste Policy 2010. Department of Sustainability Environment Water Population and Communities. <back
2 The ABS defines the Waste Management Industry as those businesses whose primary activity is provision of waste services; some businesses with other primary activities (e.g. construction) also provide waste services. <back
3 "What Makes a Good Progress Indicator?", 2010. Measures of Australia's Progress, 2010 (cat. no. 1370.0). <back
4 Detailed sources: ABS Water Account 2009–10, 2008–09, 2004–05, 2001–02, 1993–94 to 1996–97. (cat. no. 4610.0); Measures of Australia's Progress, 2010. (cat. no. 1370.0) (data sourced from Hyder, 2009 Waste and Recycling in Australia – 2009, for the Department of Environment, Water, Heritage and the Arts); Australian System of National Accounts 2010–11, (cat. no. 5204.0). Table 5; Australian Demographic Statistics, June 2011. (cat. no. 3101.0); Energy Account, Australia 2008–09. (cat. no. 4604.0); The Department of Climate Change and Energy Efficiency, Australian National Greenhouse Gas Accounts (April 2011), National Greenhouse Gas Inventory – Accounting for the Kyoto Target, December Quarter, 2010, <back
5 Gross Value Added used in place of Gross Domestic Product (GDP) to ensure consistency with other datasets such as the intensity measures, which use GVA in their composition. <back
6 System of Environmental–Economic Accounting 2012, section 3.84. <back
7 Environment Protection and Heritage Council, 2010. National Waste Report. <back
8 Environmental Issues: Waste Management and Transport Use, March 2009. (ABS cat. no. 4602.0.55.002) <back
9 Waste Management Services, Australia, 2009–10, (ABS cat. no. 8698.0). <back
10 Waste Management Services, Australia, 2009–10, (ABS cat. no. 8698.0). <back
11 National Waste Policy 2010. Department of Sustainability Environment Water Population and Communities. <back
12 National Waste Policy 2010. Department of Sustainability Environment Water Population and Communities. <back
13 Environmental Issues: Waste Management and Transport Use, March 2009. (cat. no. 4602.0.55.002). <back
14 Industry classification following the Nomenclature statistique des activiés économiques dans la Communauté européenne (NACE or the Statistical Classification of Economic Activities in the European Community) <back

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