Landfill taxes and Enhanced Waste Management: Combining valuable practices with respect to future waste streams

• Landfill taxes and EWM can both mitigate the scarcity issue of landfill capacity.
• Difficult balance: high landfill taxes might erode incentives for EWM.
• Dynamic optimisation model analyses how both concepts can reinforce each other.
• EMW practices significantly postpone the moment of landfill capacity exhaustion.
• Practical choice between increased taxation levels or complete commitment to EWM.

Both landfill taxes and Enhanced Waste Management (EWM) practices can mitigate the scarcity issue of landfill capacity by respectively reducing landfilled waste volumes and valorising future waste streams. However, high landfill taxes might erode incentives for EWM, even though EWM creates value by valorising waste. Concentrating on Flanders (Belgium), the paper applies dynamic optimisation modelling techniques to analyse how landfill taxation and EWM can reinforce each other and how taxation schemes can be adjusted in order to foster sustainable and welfare maximising ways of processing future waste streams. Based on the Flemish simulation results, insights are offered that are generally applicable in international waste and resource management policy. As shown, the optimal Flemish landfill tax that optimises welfare in the no EWM scenario is higher than the one in the EWM scenario (93 against €50/ton). This difference should create incentives for applying EWM and is driven by the positive external effects that are generated by EWM practices. In Flanders, as the current landfill tax is slightly lower than these optimal levels, the choice that can be made is to further increase taxation levels or show complete commitment to EWM. A first generally applicable insight that was found points to the fact that it is not necessarily the case that the higher the landfill tax, the more effective waste management improvements can be realised. Other insights are about providing sufficient incentives for applying EMW practices and formulating appropriate pleas in support of technological development. By these insights, this paper should provide relevant information that can assist in triggering the transition towards a resource-efficient, circular economy in Europe.