AGEC/FNR 406 LECTURE 28

Municipal Waste in Indiana

The Waste Generation

Where to put it all?

Symptom: technical solutions

Disease: waste addicts

Amount of waste dumped in Indiana is increasing, most comes from Indiana

Materials generated in MSW by weight, 1996(Total weight = 209.7 million tons)

Paper & paperboard

Yard trimmings

Glass

Metals

Plastics

Wood

Food

Other

What is it?

Where is it?

Number of landfills is falling…

But average size is increasing…

Capacity is trending up.

Where does it come from?

Faulty Signals

The basic problem is that private costs of waste generation don’t equal social costs of waste

generation

An additional problem is that the externalities associated with waste disposal can be “exported” to

other states.

One view...

private benefits = social benefits private costs NE social costs

SMC = PMC + MD

Q Q

P

PMC

PMB=SMB

Q*

P*MD

A new twist on the externality problem

Standard approach: find optimal level of output for the externality-generating activity, i.e. the socially optimal level of waste.

New problem: must also find socially efficient method for disposing of waste, i.e. what to do with it?

What do we do with it?

Management of MSW in U.S, 1996 (Total weight = 209.7 million tons)

Recovery forrecycling

Combustion

Landfill, other

Why does MSC > MPC?

1. Aesthetic damages

2. Water contamination

3. Leachate

Some improvement in (2) and (3) in recent decades.

Is Recycling the Solution?

Benefits:

1. Less extraction of virgin material

2. Less accompanying externality

3. Less energy use (potentially)

4. Less waste to dispose of

Is Recycling the Solution?

Compounding issues:

1. Cost may exceed value

2. Start-up may be difficult

3. Economies of scale

4. Development of markets

Dumping vs. Recycling

R*

P*

MCD MCR

Percent recycled

1000

Materials recovery for recycling, 1996 (by weight)

Yard trimmingsand food wastes

Metals

Glass

Plastics

Paper andpaperboard

All others

NIMBYism, NOPEism, and BANANAism

Not

In

My

Back

Yard

Not

On

Planet

Earth

Build Absolutely Nothing Anywhere Near Anyone

Some waste-reduction policies

Deposit refund system

- works well when cost of recovery is low

Packaging tax

- works if location doesn’t matter

Producer liability

- works to create incentives for producers

Marginal cost pricing

- efficient way to encourage recycling (Why?)

Some additional issues

Brownfields (abandoned urban sites) - often (not always) contaminated (uncertainty)- liability issues typically a problem- role for government intervention (insurance)

Superfund (Federal law to deal with “deadbeats”) - “Insurance Fund”- largely a failure (why?)- Currently, 37 sites in Indiana are listed on the

EPA Superfund National Priority List.

http://www.epa.gov/superfund/sites/npl/in.htm