Most people will be able to give you an example of "the law of unintended consequences" where the expected beneficial actions of a person, group, organisation or government turn out to have unexpected and unhelpful effects. For example, the town of Quelimane in Mozambique had a rat problem which they tried to solve by offering a bounty for every dead rat - unfortunately, this led to a profitable business opportunity breeding rats! Or, maybe that was an apocryphal story and it really happened in Hanoi, Vietnam? A similar anecdote involved cobras in Delhi, India (The Cobra Effect).
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Photo 1: Does an Increase in Minimum Wage mean Job Losses? TL:DR No! |
We are about to have the first Budget of the new Labour Government on Wednesday 30th October 2024. There is expected to be an inflation-busting increase in the minimum wage and we can expect some economists and political reporters to raise this old chestnut as an example of the law of unintended consequences: any increase in the minimum wage (designed to alleviate poverty) will lead to higher unemployment (i.e. make poverty worse). The connection between higher minimum wages and higher unemployment was debunked many years ago by Card & Kreuger, 1994; Leonard et al., 2014; Hafner et al., 2016; Forth et al. 2020.
Which brings me nicely onto a real example of the law of unintended consequences related by this story on the BBC website.
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For millennia, we have disposed of our waste by digging holes and burying it in
waste pits. For a long time this wasn't too much of a problem as much of the waste would be hardware (e.g. broken pottery) and very little would be organic (e.g. food waste) because anything unsuitable for human consumption would be used as
pigswill. It is now illegal in the UK to feed food scraps to farm animals following outbreaks of foot and mouth disease in the 1990s. In addition, the proliferation of convenience foods along with the forgotten art of reusing food
leftovers has increased the percentage of food waste (residential and commercial) disposed of in
landfill sites.
Hence, our first unintended consequence - the decomposition of food and organic waste under the anaerobic conditions of a landfill site producing
methane, a greenhouse gas some
85 times worse global warming potential compared to carbon dioxide over a 20-year period. In 1996, the UK Government
increased landfill tax from £7 per tonne to about £84 per tonne to incentivise a reduce/reuse/recycle behaviour in the population.
By making the disposal of waste via landfill expensive, it has given rise to a proliferation of energy from waste (EfW) incinerators and anaerobic digestion (AD) plants. There are good arguments for both waste disposal methods but their proliferation has resulted in unintended consequences.
More than half the UK's waste is now incinerated and there are plans for this percentage to increase if all the proposed incinerators are built. If you recall, the problem with landfill was the production of methane from the anaerobic decomposition of organic waste. By diverting the organic (e.g. food) waste from landfill to EfW incinerators, the operators could claim to be the 'green' option because CO₂ is a less potent greenhouse gas than CH₄. Unfortunately, for the environment at least, the amount of organic waste in our general waste has decreased (diverted to AD plants or composted?) and been replaced, to a large extent, by plastic. Strange as it may seem, the best place to dispose of plastic waste (assuming you cannot reuse, re-purpose or recycle it) is a landfill site where it will remain buried & unchanged for decades/centuries.
Another drawback to both incinerators and AD plants is the need for a steady consistent feedstock supply. Once built and operating, this disincentivizes other 'disposal' methods such as waste reduction/recycling/reuse. Local authorities sign long-term contracts (25 years) with an agreed tonnage supply of waste and penalties if they do not meet those targets.
So, in a nutshell, the original aim of increasing the landfill tax was to reduce the overall amount of waste. This could be achieved in many ways: e.g. dispensing with unnecessary packaging, repairing rather than throwing away, re-purposing, reusing and recycling, car-sharing clubs, etc. Instead, we have ended up with the dirtiest form of electricity generation through a series of unintended consequences.