4.4.3. Hazardous Waste Taxes
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A 1998 survey identified 30 states that impose taxes on the generation or management of hazardous wastes. (Hoerner. 1998). Some of these states have higher tax rates for landfilling than for incineration, and several states impose no tax on incineration. In some states, taxes vary according to the type of waste or whether the waste was generated outside the state, or both of these factors. In addition, on-site disposal of hazardous waste is exempt from taxes in some states. Vermont and California each levied taxes of more than $100 per ton for land disposal of hazardous waste, and six other states levied taxes of more than $50 per ton. The mean tax level for all states, including those with no tax, was $21 per ton. To put these taxes into perspective, in the late 1980s a middle-of-the-range estimate of the costs associated with the disposal of hazardous waste was $132 per ton.
California levies fees on both the generation and disposal of hazardous waste. As shown in Table 4-8, California imposes taxes on hazardous waste disposal that range up to $220 per ton. Generation fees vary by quantity generated, with rates fixed within a given range of tons per year. (See Table 4-9.)
Table 4-8. Hazardous Waste Landfill Fees in California
Source: California Department of Toxic Substances Control.
Table 4-9. California Hazardous Waste Generation Fees
| Weight of Waste Generated (t/yr) | Fee ($) | Middle Range of Rates ($/ton) |
| Less than 5 | $0 | $0 |
| 5 to 25 | 169 | 11.3 |
| 25 to 50 | 1,348 | 35.9 |
| 50 to 250 | 3,371 | 22.5 |
| 250 to 500 | 16,855 | 44.9 |
| 500 to 1,000 | 33,710 | 44.9 |
| 1,000 to 2,000 | 50,565 | 33.7 |
| More than 2,000 | 67,240 | <33.7 |
Source: California Department of Toxic Substances Control.
According to the California Department of Toxic Substances Control, the two fees are intended to raise revenue and to encourage waste minimization. The tonnage of hazardous waste sent to landfills has declined in the last 10 years. It is difficult, however, to determine to what extent this decline is due to the fees, as many other factors could influence generation and disposal practices.
Hazardous waste is also subject to numerous other administrative fees in California. Efforts are currently being made to simplify the existing fee structure, which is widely viewed as too complicated. (Larson. 1996).
The findings of several studies suggest that taxes on hazardous waste have had an impact on disposal. Two engineering studies, one by the Congressional Budget Office (1985) and the other by EPA (1984), concluded that such taxes significantly reduced the disposal of hazardous waste in landfills. By 1987, 10 states had taxes exceeding the level at which EPA predicted a 60% reduction in landfill disposal. Another study examined empirical evidence on the effects of a twofold rise in hazardous waste taxes in New York in 1985. It found that the quantity of hazardous waste disposed of in the state decreased significantly. Because taxes on incineration remained constant in this case, the amount of waste incinerated rose, but it did not increase as much as the amount of waste sent to landfills declined. (Deyle and Bretschneider. 1990).
Sigman (1996) studied the impact of landfill and incineration taxes on the generation of four types of chlorinated solvent wastes from metal cleaning. Using data from the 1987 - 1990 Toxics Release Inventories, the study included a cross-section analysis of generation across states and used a number of independent variables, including disposal taxes in the state of generation and in neighboring states. It also studied the impact of disposal taxes and other factors on the choice of disposal method. The study reached two conclusions. First, elasticities of waste generation with respect to these taxes on disposal were in the range of -7 to -22, meaning that the quantity of hazardous waste sent to landfills or incinerators was very sensitive to the tax. Second, the taxes encouraged generators to choose incineration or other treatment options as their waste management method, instead of landfilling. However, the estimated impact of these taxes was minor because the fees were low in comparison to the total costs of waste management.
Although “[s]tates’ experience suggests that taxes may provide an alternative to the standard-based policies now used for most hazardous waste regulation,” Sigman found, the design and implementation of such taxes pose several potential problems, including the determination of tax levels. To maximize the efficiency of these taxes, they should reflect the social cost of hazardous waste generation. This cost, however, depends on the type of waste, the method of disposal, the geographic location, and various other factors that are difficult to assess and incorporate into tax structures. If, on the other hand, taxes are too high, they could encourage illegal dumping, of which even a small amount could cause enough environmental damage to offset the increased efficiency achieved by taxes. “In the presence of illegal dumping,” the study states, “a deposit/refund program may be substantially less costly than a waste-end tax.”
Because current federal regulations impose high costs on generators of hazardous waste, there may already exist sufficient incentives to reduce the generation of hazardous waste. If existing regulatory incentives are sufficient, taxes could raise the costs of waste disposal to a level that is higher than what is socially desirable.