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Feedback on consultation
Public Consultation Drafts
On-line
consultation forum
Finalisation of fee structure
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November-December 2004
Analysis of submissions
Responses were separated into the following sub-groups:
Comments on the process
The following improvements to the process were recommended:
- Several submissions requested more detail on the cost of the
proposed licence fee structures. This will be available in the
next stage, and we will consult again at that time.
- Diffuse sources of pollution not captured in the licence fee
structure (e.g. motor vehicle exhaust emissions). The new licence
fee structure applies to licensed sites only, to cover the costs
of EPA management of licences.
- Request for differential fees based on commercial licensees
vs. not-for-profit clubs, councils, or ability to pay. Licence
fees will be determined equitably for all licensees. Differential
fees will be based on factors relating to environmental risk
and impact.
- Evaluation criteria relating to the provision of an economic
incentive to reduce pollution were queried. It was felt that
the level of economic incentive needed to justify the required
technology precludes licence fees as an economic incentive for
major emission reductions. However, licence fees may drive behavioural
change.
- Several organisations requested that they be invited to join
the LFS Reference Group.
Representatives from the following organisations/groups have
been added to the Reference Group:
- community
- Waste Management Association
- South Australian Farmer's Federation
- Department of Trade and Economic Development
All comments on the process
(88KB PDF).
Comments on revenue recycling
1. Summary of submissions:
- Support revenue recycling: 13% (11 submissions)
- Do not support revenue recycling: 45% (38 submissions)
- No indication of whether revenue recycling is supported or
not: 42% (35 submissions)
2. Arguments for revenue recycling:
- Additional funding is available for environmental improvement.
- EPA cost recovery is achieved (the primary objective of the
LFS).
3. Arguments against revenue recycling:
- Funds are raised from all licensees, while only some would
receive grants (those whose projects are approved to receive
funding). Licensees would rather spend their own funds than
apply for their 'own' funds again via a grants program. Concerns
re who would benefit-larger licensees suspect smaller licensees
would benefit, while smaller licensees suspect larger licensees
would benefit. Some licensees were concerned that they would
not benefit. Cross-subsidisation of licensees.
- Some respondents felt that if improvements are required, industry
should fund this outside of the licence fee.
- Concerns re efficiency losses in distribution of funds (i.e.
additional costs to administer the system).
- May reduce opportunities for innovative solutions by industry.
- Revenue recycling-also known as hypothecation-may not result
in the 'next most worthwhile application' receiving funds. Grants
may be given to those best resourced to apply for them, not
those where the potential environmental improvement is the greatest.
Difficult to ensure equity.
4. Other points raised:
- Several respondents thought that the funds would be used to
bring licensees into compliance. However, the proposed intent
was to direct the funds to improvements which go beyond compliance.
- Request for funding for environmental improvement from general
revenue, or via a levy on consumers.
- Proposal that short term volatility between licence fee revenue
and cost recovery can be dealt with by means of subsequent year
adjustments to the licence fees.
- Proposal that cost recovery is met by environment management
fees, and the load-based performance fees are in addition to
cost recovery.
- Need to ensure equity and transparency, and that projects
achieve environmental improvement.
5. Alternative use for funds from revenue recycling proposed:
- Funds to be used for resources (e.g. officer) to advise on
environmental improvements, environmental research, monitoring
of environmental impact, or seed money for environmental improvement.
- Use funds for enforcement, public participation, community
programs, remediation, etc.
- Return funds to local community-based organisations such as
revegetation or conservation groups in an 'environmental off-setting'
scheme.
- Improvement of regulatory practice (i.e. EPA resources and
efficiency), innovative pollution control practices and non-licensed
pollution control issues, environmental dispute resolution,
and resourcing non-industry stakeholders (i.e. community conservation
groups).
- Return funds directly to all licensees in proportion to the
total costs of their licences.
6. Discussion
Several concerns have been raised about the revenue recycling
proposal-for example, efficiency losses, cross-subsidisation of
licensees, and the difficulty of ensuring equity in the distribution
of funds.
Some respondents have proposed alternatives to the revenue recycling
proposal, for example:
- short term volatility between licence fee revenue and cost
recovery can be dealt with by means of subsequent year adjustments
to the licence fees
- meet cost recovery by environment management fees, and the
load-based performance fees are in addition to cost recovery.
Several alternatives for the use of revenue recycling funds were
also proposed, such as community programs, additional EPA resources,
or the return of funds directly to all licensees.
7. Outcome
Revenue recycling was not selected as a feature of the new licence
fee structure.
All comments on revenue recycling
(85KB PDF).
Comments on the options for a conceptual
licence fee structure
1. Summary of submissions received
- Support Option 1: 1% (1 submission)
- Support Option 2: 25% (20 submissions + 2 who prefer
2 or 4)
- Support Option 3: 8% (6 submissions + 1 who prefers 3 or 4)
- Support Option 4: 32% (25 submissions + 1 who prefers
3 or 4 + 2 who prefer 2 or 4)
- Do not support any of the proposed four options: 10% (8 submissions)
- No indication of which option is supported: 25% (21 submissions)
2. Comments on Option 1
2.1 Arguments for Option 1:
- Fixed fee is suitable for some scheduled activities.
2.2 Arguments against Option 1:
- Lack of financial incentives to licensees to improve environmental
performance
- May be unfair to some licensees.
3. Comments on Option 2
3.1 Arguments for environment management fee only:
- Cost-reflective of EPA regulatory effort. 'User pays' scheme.
- Some incentives for environmental improvement are incorporated
in this fee structure.
3.2 Arguments against environment management fee only:
- Environmental risk may be highly subjective.
- EPA regulatory effort may depend on the number of complaints
even when complying with general environmental duty.
3.3 Other issues raised:
- Licensee self-assessment of environmental risk was proposed.
- Concern regarding factors to be used in determining environmental
risk, e.g. proximity to sensitive receptors, number of complaints.
Risk assessment may be subjective. Concern re double penalty
for a single transgression (courts and licence fees).
- Factors relating to emissions should be included.
- Some councils were concerned about potential increases in
residential rates they are able to charge.
- Concern that regulatory effort does not necessarily relate
to environmental risk.
- Concern re potential for increase in costs due to expansion
in regulatory activity (under Options 2 and 4).
- Some licensees would like to see incentives offered to all
licensees, not just the 50% of licensees that would have a variable
environmental management component.
4. Comments on Option 3
4.1 Arguments for load-based performance fee only:
- Incentive for large polluters to reduce their emissions.
- Those who pollute more should pay more. Reflects costs of
damage from emissions.
- In line with recommendations made by the Environment, Resources
and Development (ERD) Committee of Parliament in 2000.
- Some felt that this option was the most consistent with the
primary and secondary objectives of the new licence fee structure,
and most consistent with the selection criteria.
4.2 Arguments against load-based performance fee only:
- This option could be unfair towards some licensees.
- Pollutant loads provide only one aspect of environmental performance,
and may not reflect the potential for a licensee to cause environmental
harm.
- Load-based fees do not reflect EPA regulatory effort.
- Fees may create a significant impost on those licensees with
large emissions.
- Quantum reductions in emissions may only be possible by significant
(and very costly) changes in technology for some of the larger
polluters. The economic incentive offered by EPA licence fees
is insignificant compared with such a large expense.
- Discharge load may not be related to environmental harm.
4.3 Other issues raised:
- Concerns about the accuracy of data for load-based performance
reporting (e.g. NPI emission factors).
- A load-based performance fee would only capture licensed polluters
and ignore, for example, diffuse sources of pollution such as
motor vehicle emissions.
- Impact between competing industries when some competitors
operate in countries with poor environmental controls, or low
environmental fees.
- Continued reduction in emission limits should be retained.
- Some licensees prefer fees based on emission limits in licences,
rather than actual emissions.
5. Comments on Option 4
5.1 Arguments for combined environment management and load-based
performance fees:
- Provides an incentive to reduce the amounts and types of pollutants.
- Best relates environmental impact to licence fee. Provides
an incentive to improve environmental performance.
- The EPA primary responsibility is environment protection and
improvement-best achieved with Option 4.
- In line with recommendations made by the Environment, Resources
and Development (ERD) Committee of Parliament in 2000.
- Consistent with 'polluter pays' principle.
- Consistent with objectives of the Environment Protection
Act 1993, particularly section 10 (1)(b)(vi), which states
'to allocate the costs of environment protection and restoration
equitably and in a manner that encourages responsible use of,
and reduced harm to, the environment with polluters bearing
an appropriate share of the costs that arise from their activities,
products, substances and services'.
- Refer also to comments under Options 2 and 3.
5.2 Arguments against combined environment management and
load-based performance fees:
- Load-based performance fees may not be appropriate for all
scheduled activities.
- Reduction in certainty when emissions may fluctuate.
- Refer also to comments under Options 2 and 3.
5.3 Other issues raised:
- Concern that large industrial licence holders could be levied
with large fees for both the environmental management and the
load based performance components.
6. Discussion
Based on submissions received, there is clear support for a load-based
fee to be included in the final licence fee structure. The responses
indicate that the load-based fee should not just be a reflection
of regulatory effort (which would be the intent of a load-based
component under Option 2), but should reflect the impact of the
discharges and emissions on the environment.
7. Outcome
Combined environment management and load-based performance fees
were selected as the licence fee structure.
All comments on options (256KB
PDF).
Other comments
Other comments (75KB
PDF).
Finalisation of fee structure
The licence fee structure has now been finalised and information
is available here.
This page was last modified 20-11-2007
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