1 The introduction of the Landfill Allowance Trading Scheme (LATS): permits in a public sector environment

This paper presents an overview of a recently introduced tradable permit system in England (the Landfill Allowance Trading Scheme (LATS)) that aims to reduce the costs of meeting the EU landfill Directive. Participants in this market, public sector Waste Disposal Authorities, are ill equipped to manage the risks, costs, and opportunities entailed in trading and there is a fear that the potential gains from the system (lower aggregate costs of landfill diversion) will not be realised, as only limited trading will take place. After the first 18 months of the scheme it is clear that there are a number of issues that need to be addressed to ensure cost savings are achieved