WASTE TO “RECYCLABLES” IN COMMODITY EXCHANGE,
AND NOT IN BACKYARDS
by
Dato’ Ir Dr A. Bakar Jaafar[1]
There has been a New Year Resolution that does not easily escape a global attention; the Government of China has announced that from June 1, 2008, all retail outlets including supermarkets and department stores shall charge customers for plastic bags (The Star, 19 January 2008, p. N43). Such a Policy has been contemplated in other parts of the world, but its effectiveness has yet to be fully realized. In Malaysia, as outlined since the 8th Malaysia Plan (2001-2005), “Polluters’-pay” Principle has been contemplated: the more one generates waste, the more one has to pay. This Principle has been successfully implemented in the management of toxic and hazardous waste, where should industrial waste generators find that it would no longer be economical to treat fully their own waste, they have a legal obligation under the Environmental Quality Act of 1974 and related Regulations made there under (www.doe.gov.my) either to export their untreated or partially treated waste to approved facilities in developed countries, and not in other developing countries, or to treat them the fully at the only integrated waste treatment facilities for Peninsular Malaysia operated by Kuaiti Alam Sdn Bhd in Bukit Nenas, Negeri Sembilan.
However, this Principle has yet to be considered in the management of non-toxic and non-hazardous waste, namely, domestic and commercial waste. Even it were to be implemented for the domestic waste particularly, it would raise an equity issue, due to the fact that the poor generate as much, if not more, waste that is largely perishable than the rich do. It would tantamount to the poor would subsidise the rich in waste management. Thus, an innovative economic instrument that is sensitive to the question of equity especially in developing economy, like Malaysia, has to be explored.
This column would advance such an instrument based on the newly proposed “Indifferent Consumers-pay” (ICP) Principle. The focus of this ICP Principle is primarily more on the consumers, like you and I, than on the industries, manufacturers and other producers of goods and services. Under this proposed enviro-economic instrument based on this newly introduced Principle, of mine, consumers have the options: either to recycle their own generated waste, to receive some credit points equivalent in monetary value to a levy, and to redeem these credit points when purchasing new goods; or if not, to pay a certain levy. The immediate effect of this instrument would be translated into a simple practice. One would have three waste bins: the first one for “recyclables”; the second one, for “perishables”; and the third one, for the waste that are “toxic and hazardous”. The “recyclables”can be transported and returned, from time to time, to recycling centres, and the recyclers be rewarded with “handsome” credit points equivalent to predetermined amount of levy. The “perishables” can either be taken away by the designated waste management concessionaire, such as Alam Flora Sdn Bhd, Southern Waste Management Sdn Bhd, or others, or be turned to composting materials, especially by those with landed property.
The success of this proposed Government Policy based on the economic instrument derived from this highly innovative ICP Principle would also depend on a set of other supporting Policy instruments derived from the following “key success” factors:
· firstly, the return by consumers of their own collection of toxic and hazardous waste to any recycling centre would be rewarded monetarily, by having made use of the levy collected or the net proceeds from the sales of such “materials”;
· secondly, the collected “recyclables” be traded in the Malaysia Commodity Exchange[2], and not in the backyards prone to floods and flash floods;
· thirdly, production of new goods must contain certain amount of “recyclables” as much to create demand for “recycables” as to produce cheaper or more competitive new goods containing “recyclables”;
· fourthly, special and higher tariff be given to electricity generated from “renewables”, including the waste that can no longer be economically or technically recycled; and
· last and not the least, in addition to the distinctive role and functions of the new Department of National Solid Waste Management, as a Regulator, and that of the proposed national solid waste corporation, as the “business” arm of the federal Government, there is a need to create another institution: “Blue” Foundation supported by a Non-Private Non-Profit Making Organization (NP2O), whose major function is to manage the collected levy.
The continuing search for an “organized programme” in the past and current 21st Century in tackling the garbage, considered as the long outstanding 18th Century issue, can not easily be dismissed. For instance, in the Malaysia Report to the UN Conference on Human Environment, Stockholm, June 1972 states that “Solid waste collection is satisfactory but the disposal system is largely by controlled tipping and burning. The disposal of solid waste is a problem like those in any countries and an organized programme in this direction is needed. The local authorities in many cases are hampered by lack of trained experienced personnel, financial resources, and knowledge of the effects of health.”
The time has come for Malaysia to face this ever growing problem squarely. “Garbage littered on city streets can be not only unhealthy but also politically hazardous” as currently faced by the City of Naples (The Economists, 12 January 2008, p. 40). Otherwise, it would be a need to establish another body: “Royal Solid Waste Commission”. In Bahasa Malaysia, it would sound very unpalatable, “Suruhanjaya Sampah DiRaja”.
A similar body, Royal Sewage Commission, was created by Queen Victoria in order to establish the cause of so many thousand deaths of Londoners in the 18th Century.
In short, with the proposed Policy in place, any litter in the streets or drains will be picked up by any “poor” soul and be recycled in return for the reward of valuable credit points. Should the value of the levy, and thus, the credit points, be reviewed annually and be increased, the credit points accumulated, if not redeemed would become another “tradable commodity” in the national economy. The only downside of the proposed Policy would be perhaps an increase in petty thefts. However, such a problem could be easily mitigated by having to scan and check the identity and authenticity of every “recycler”, or to limit the nature and extent of recycling among those with MyKad or passports.
As a private remark, I bet the proposed concept would work. When it does, please do not apply to yourself. When contemplating of having a new spouse, please do not think of returning the old one!
Monday, January 28, 2008
New York
[1] Former Director-General, Department of Environment, Malaysia (1990-95).
[2] The Chicago Board of Trade “set up the first electronic bulletin board — accessed by computer — that enables buyers and sellers of trash to find one another. The system lists buy and sell offers for most of the major goods that have recyclable value, including paper (office paper, computer printout paper, newspaper), glass (broken bottles, furnace-ready "cullet") and plastic (soda bottles, milk jugs). These goods meant big business in the year before the exchange opened — roughly $5 billion — according to Edgar Miller of the National Recycling Coalition. Miller was instrumental in creating the exchange.” Edward Field, who lives in Chicago, is a reporter in the Midwest bureau of The Economist. His previous article for Illinois Issues was about federal agriculture policy.
Illinois Issues February 1996 * 35
AND NOT IN BACKYARDS
by
Dato’ Ir Dr A. Bakar Jaafar[1]
There has been a New Year Resolution that does not easily escape a global attention; the Government of China has announced that from June 1, 2008, all retail outlets including supermarkets and department stores shall charge customers for plastic bags (The Star, 19 January 2008, p. N43). Such a Policy has been contemplated in other parts of the world, but its effectiveness has yet to be fully realized. In Malaysia, as outlined since the 8th Malaysia Plan (2001-2005), “Polluters’-pay” Principle has been contemplated: the more one generates waste, the more one has to pay. This Principle has been successfully implemented in the management of toxic and hazardous waste, where should industrial waste generators find that it would no longer be economical to treat fully their own waste, they have a legal obligation under the Environmental Quality Act of 1974 and related Regulations made there under (www.doe.gov.my) either to export their untreated or partially treated waste to approved facilities in developed countries, and not in other developing countries, or to treat them the fully at the only integrated waste treatment facilities for Peninsular Malaysia operated by Kuaiti Alam Sdn Bhd in Bukit Nenas, Negeri Sembilan.
However, this Principle has yet to be considered in the management of non-toxic and non-hazardous waste, namely, domestic and commercial waste. Even it were to be implemented for the domestic waste particularly, it would raise an equity issue, due to the fact that the poor generate as much, if not more, waste that is largely perishable than the rich do. It would tantamount to the poor would subsidise the rich in waste management. Thus, an innovative economic instrument that is sensitive to the question of equity especially in developing economy, like Malaysia, has to be explored.
This column would advance such an instrument based on the newly proposed “Indifferent Consumers-pay” (ICP) Principle. The focus of this ICP Principle is primarily more on the consumers, like you and I, than on the industries, manufacturers and other producers of goods and services. Under this proposed enviro-economic instrument based on this newly introduced Principle, of mine, consumers have the options: either to recycle their own generated waste, to receive some credit points equivalent in monetary value to a levy, and to redeem these credit points when purchasing new goods; or if not, to pay a certain levy. The immediate effect of this instrument would be translated into a simple practice. One would have three waste bins: the first one for “recyclables”; the second one, for “perishables”; and the third one, for the waste that are “toxic and hazardous”. The “recyclables”can be transported and returned, from time to time, to recycling centres, and the recyclers be rewarded with “handsome” credit points equivalent to predetermined amount of levy. The “perishables” can either be taken away by the designated waste management concessionaire, such as Alam Flora Sdn Bhd, Southern Waste Management Sdn Bhd, or others, or be turned to composting materials, especially by those with landed property.
The success of this proposed Government Policy based on the economic instrument derived from this highly innovative ICP Principle would also depend on a set of other supporting Policy instruments derived from the following “key success” factors:
· firstly, the return by consumers of their own collection of toxic and hazardous waste to any recycling centre would be rewarded monetarily, by having made use of the levy collected or the net proceeds from the sales of such “materials”;
· secondly, the collected “recyclables” be traded in the Malaysia Commodity Exchange[2], and not in the backyards prone to floods and flash floods;
· thirdly, production of new goods must contain certain amount of “recyclables” as much to create demand for “recycables” as to produce cheaper or more competitive new goods containing “recyclables”;
· fourthly, special and higher tariff be given to electricity generated from “renewables”, including the waste that can no longer be economically or technically recycled; and
· last and not the least, in addition to the distinctive role and functions of the new Department of National Solid Waste Management, as a Regulator, and that of the proposed national solid waste corporation, as the “business” arm of the federal Government, there is a need to create another institution: “Blue” Foundation supported by a Non-Private Non-Profit Making Organization (NP2O), whose major function is to manage the collected levy.
The continuing search for an “organized programme” in the past and current 21st Century in tackling the garbage, considered as the long outstanding 18th Century issue, can not easily be dismissed. For instance, in the Malaysia Report to the UN Conference on Human Environment, Stockholm, June 1972 states that “Solid waste collection is satisfactory but the disposal system is largely by controlled tipping and burning. The disposal of solid waste is a problem like those in any countries and an organized programme in this direction is needed. The local authorities in many cases are hampered by lack of trained experienced personnel, financial resources, and knowledge of the effects of health.”
The time has come for Malaysia to face this ever growing problem squarely. “Garbage littered on city streets can be not only unhealthy but also politically hazardous” as currently faced by the City of Naples (The Economists, 12 January 2008, p. 40). Otherwise, it would be a need to establish another body: “Royal Solid Waste Commission”. In Bahasa Malaysia, it would sound very unpalatable, “Suruhanjaya Sampah DiRaja”.
A similar body, Royal Sewage Commission, was created by Queen Victoria in order to establish the cause of so many thousand deaths of Londoners in the 18th Century.
In short, with the proposed Policy in place, any litter in the streets or drains will be picked up by any “poor” soul and be recycled in return for the reward of valuable credit points. Should the value of the levy, and thus, the credit points, be reviewed annually and be increased, the credit points accumulated, if not redeemed would become another “tradable commodity” in the national economy. The only downside of the proposed Policy would be perhaps an increase in petty thefts. However, such a problem could be easily mitigated by having to scan and check the identity and authenticity of every “recycler”, or to limit the nature and extent of recycling among those with MyKad or passports.
As a private remark, I bet the proposed concept would work. When it does, please do not apply to yourself. When contemplating of having a new spouse, please do not think of returning the old one!
Monday, January 28, 2008
New York
[1] Former Director-General, Department of Environment, Malaysia (1990-95).
[2] The Chicago Board of Trade “set up the first electronic bulletin board — accessed by computer — that enables buyers and sellers of trash to find one another. The system lists buy and sell offers for most of the major goods that have recyclable value, including paper (office paper, computer printout paper, newspaper), glass (broken bottles, furnace-ready "cullet") and plastic (soda bottles, milk jugs). These goods meant big business in the year before the exchange opened — roughly $5 billion — according to Edgar Miller of the National Recycling Coalition. Miller was instrumental in creating the exchange.” Edward Field, who lives in Chicago, is a reporter in the Midwest bureau of The Economist. His previous article for Illinois Issues was about federal agriculture policy.
Illinois Issues February 1996 * 35
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