From rhetoric to reality on waste

With world leaders gathered in Bali for this week’s climate change summit, it is instructive to look closer to home to see what is happening on the ground.

In Perth, just like in Bali, there is a lot of talk about tackling environmental issues and creating a more sustainable future.

One of the main debating points at the Bali summit is whether world leaders are prepared to match their rhetoric with tough action.

If the politicians are serious about reducing emissions, they need to introduce a mechanism that makes industry, and ultimately consumers, pay a price.

The Carpenter government faces exactly the same dilemmas when addressing local environmental issues.

One example is waste management, which was the subject of new legislation that passed through state parliament last week.

The Waste Avoidance and Resource Recovery Bill includes provision for a mandatory producer responsibility scheme, whereby producers of consumer goods could become responsible for them for the life of the product.

The bill is also designed to reduce the amount of waste going to landfill. In Western Australia, just 23 per cent of waste is recycled, half the national average.

This should not be surprising because WA’s landfill levy, which is designed to discourage the use of landfills, is substantially lower than in other states, and will remain lower even after planned increases are introduced.

The Southern Metropolitan Regional Council is one organisation that has done something about this.

It built a large composting plant at Canning Vale and recently won a 2007 Greenhouse Challenge Plus award for outstanding achievement in greenhouse gas abatement.

Other organisations are trying to follow suit but progress is slow, in part because the market has not been given the right price signals.

Perth company, GRD Ltd, owns one of the world leaders in this field. Its subsidiary Global Renewables has built a large pilot plant for waste recycling in western Sydney and, more significantly, has won a multi-billion dollar contract to build a giant waste recycling plant in the UK.

GRD is confident that Global Renewables has a bright, long-term future, but right now it isn’t making any money.

That means investors do not attach much value to it; investors much prefer GRD’s profitable engineering arm Minproc.

As a result, GRD has appointed an investment bank to review its structure and try to find a better way of extracting value from Global Renewables.

Anaeco Ltd is another Perth company that has been trying for years to commercialise its proven municipal waste treatment technology.

Its technology generates compost and produces bioenergy from the same enclosed vessel.

The Western Metropolitan Regional Council has agreed to use its technology but, despite that, Anaeco has struggled to gain investor support.

It recently extended the timetable for its initial public offering and reduced the minimum subscription level to $3 million – an amount speculative mining companies seem to have no trouble raising.

A third body, the Mindarie Regional Council, which includes the City of Perth, has been trying for more than six years to establish a waste recycling facility.

It has been a tortuous process, complicated by governance arrangements in local councils.

A contract was signed this month for the Mindarie project, which will treat up to 100,000 tonnes of household waste annually and convert about 70 per cent into compost.

However, it only succeeded after the winning consortium gained financial backing from innovative Perth superannuation fund, Westscheme.

In all of these cases, it is easy to criticise the narrow short-termism of investment markets.

It would be better if waste was properly priced, so that innovative recycling projects can compete against landfills.