Why is "economic waste" important?

to mainatin the prices

to safe environment and cost

The economic benefits of the recycling of waste can be calculated

Interest in determining costs and benefits is increasing in the environmental field. The possibilities for performing cost-benefit analyses in the waste area depend, however, on what is known about the actual emissions or discharges associated with waste disposal methods and their effects on the environment and health. Political decisions are rarely implemented on the basis of original investigations of the costs and benefits of various measures. The question, therefore, is whether and possibly how it is possible to use estimates from existing valuation studies. The advantages of this approach are that it is rapid and cheap. The disadvantage, though, is that it can yield imprecise unit damage costs.

Background and objective

Recycling or incineration?

The effect of different types of waste treatment on the environment and health has been under debate in a number of western countries during the 1990s. Especially the question of whether recycling or incineration of waste arisings is more preferable has been central to the debate. Many of the studies carried out so far, have been descriptive or have involved a physical statement of emissions and residues from the different types of waste treatment. Compared to other fields of research, only a few studies which included an economic valuation of the socioeconomic effects of waste treatment have been carried out in the waste area. The primary objective of this project has therefore been to review the international literature on valuation methods in order to find out which methods are used in other countries for valuating the benefits of waste recycling. Furthermore, the project examined the potential for deducing unit damage costs of waste recycling in Denmark on the basis of the literature.

The study

International literature

The project report describes some of the central, international studies of environmental and health effects associated with waste recycling. The report includes the socioeconomic effects of waste recycling, which are called “externalities” by environment economists, i.e. those damage costs for the environment and health, which are not immediately reflected in treatment prices associated with the different treatment options.

Main conclusions

Putting a price on waste treatment options and effects is necessary

If the socioeconomic effects of waste recycling in Denmark are to be calculated more precisely, it is necessary to make an economic valuation of the effects associated with the different treatment options, based on lifecycle studies. It appears from existing literature that it is important to include the effects of chemicals that are harmful to health and the environment in the calculation of externalities from waste incineration. Furthermore, it is important to assess the externalities from the extraction of virgin materials, with a view to making a collective lifecycle analysis of the different waste treatment options. It is therefore essential for a comparison of the effects of recycling, landfilling, and incineration that either a waste treatment perspective or a system/lifecycle perspective is chosen as point of departure.

It is not possible to establish a set of Danish unit damage costs for the recycling of waste on the basis of the existing international studies. In order to make calculations more precise, it is therefore necessary, in the long term, to develop Danish unit damage costs for use in socioeconomic analyses in the environmental area.

Project results

Lifecycle assessment of recycling is standard procedure in the EU

Internationally, there has been increasing focus on valuating the benefits of recycling throughout the 1990s. There seems to be agreement today that a valuation should be based on a thorough lifecycle assessment (LCA), describing and quantifying impacts of the different alternatives.

The combination of lifecycle assessment and economic valuation of the effects of waste treatment has not been applied to cost-benefit analyses until very recently. The method termed ’The Multiple Pathway Method’ is considered standard in the studies on waste carried out for e.g. the European Commission.

In this connection, it is important to note that an LCA-approach provides a more detailed survey of the environmental impacts of the different alternatives, than do the environmental impact descriptions that so far have been used in Danish studies. The LCA-approach is more detailed in especially two respects. Firstly, the LCA-approach means that the environmental impact from extraction of virgin raw materials must be calculated when assessing recycling versus landfilling and incineration. When waste is recycled, effects from renewed extraction are avoided. Several of the studies note that the extraction of virgin materials often involves extensive energy consumption, which has significance for the assessment of total externalities. Secondly, this approach means that the calculation of relevant externalities is developed after the same systematics used in LCA, and thus the calculation also includes a number of substances dangerous to the environment. This will significantly improve the environmental impact description, making it more complete and systematic.

Sensitivity analyses are important

In connection with the implementation of the lifecycle study, it is also important that sensitivity analyses of the most significant unit damage/calculation assumptions are carried out. For example, the assumption about how energy would alternatively have been generated, if it were not being displaced by energy generated from waste incineration, can have decisive influence on the assessment of the costs and benefits of waste incineration.

Other sources

The assessment of the end-treatment taxes on waste in the Nordic countries - economic valuation and evaluation, Nordic Council of Ministers, Copenhagen, 2001, by Dengsøe, Niels. Report prepared by the products and waste (PA) working group under the Nordic Council of Ministers, www.norden.org/pub/miljo/miljo/sk/UtanSlutbehandlingsafgifterRapport.pdf

Table 1: Costs and benefits of waste recycling.

A cost-benefit analysis of recycling requires significantly more information than information about the direct emissions and residues associated with waste recycling . Many of the benefits gained from waste recycling consist in avoiding the damage costs of having to landfill or incinerate the waste, and the damage costs of having to extract virgin materials. A description of the effects of recycling should therefore as a minimum include:

I. Damage costs incurred from recycling:

from separation, collection, and transport

from reprocessing/treatment

II. Damage costs avoided due to alternative treatment:

from collection and transport

from landfilling and incineration, including final landfilling of residues (slag and fly ash)

III. Damage costs avoided due to the manufacture of new raw materials :

from extraction and manufacturing

Transport

Summary:

The economic benefits of the recycling of waste can be calculated

Interest in determining costs and benefits is increasing in the environmental field. The possibilities for performing cost-benefit analyses in the waste area depend, however, on what is known about the actual emissions or discharges associated with waste disposal methods and their effects on the environment and health. Political decisions are rarely implemented on the basis of original investigations of the costs and benefits of various measures. The question, therefore, is whether and possibly how it is possible to use estimates from existing valuation studies. The advantages of this approach are that it is rapid and cheap. The disadvantage, though, is that it can yield imprecise unit damage costs.

Facts:

Project title:

Benefits of recycling – a literature study of international investigations of the socioeconomic effects of the recycling of waste

Performing organization(s):

National Environmental Research Institute, Niels Dengsøe

Printed publication:

No printed publication available

Electronic publication:

Gevinster ved genanvendelse (Benefits of recycling ), Environmental Project No. 774, Danish EPA, 2003,

www.mst.dk/udgiv/publikationer/2003/87-7972-502-3/html/

Only available in Danish

Financing:

Danish EPA

Further information:

Economy Division, Danish EPA. Phone: +45 3266 0100

The evaluations in this project article are the responsibility of the performing organisation(s). They do not necessarily reflect the opinion of the Danish EPA.

Printed publications are available from Frontlinien, Rentemestervej 8, DK-2400 Copenhagen NV, tel. + 45 70 12 02 11, , e-mail: Frontlinien@Frontlinien.dk

Fakta:

Projekttitel:

"Gevinster ved genanvendelse" - et litteraturstudie af internationale undersøgelser af de samfundsøkonomiske effekter ved genanvendelse af affald

Udarbejdet af:

Danmarks Miljøundersøgelser, Roskilde, Niels Dengsøe

Trykt publikation:

Der findes ingen trykt publikation

Elektronisk publikation:

"Gevinster ved genanvendelse", Miljøprojekt nr. 774, Miljøstyrelsen, 2003,

/udgiv/publikationer/2003/87-7972-502-3/html/

Finansiering:

Miljøstyrelsen

Yderligere oplysninger,

Økonomikontoret, Miljøstyrelsen, tlf. 32 66 01 00