A Lifecycle Assessment and Economic Valuation of Recycling

The financial costs of recycling schemes fail to account for external costs and benefits such as environmental pollution, road congestion and accidents. This paper compares the environmental and social impacts of a kerbside collection scheme for recyclable household waste, with a bring scheme, using lifecycle assessment. Economic valuation is used to assign relative weights to these impacts. A second comparison examines the relative external costs of recycling and landfill disposal of waste. The results show that the kerbside collection scheme has a lower external cost than the bring scheme, but this is of less importance than the benefits to be gained within the manufacturing system by using secondary materials. It is concluded that the combination of lifecycle assessment and economic valuation is an effective means of evaluation to direct the sustainable development of waste management.     

Ecosystem Management on Public Lands: An Application of Optimal Externality to Timber Production

While there are increasing numbers of non-consumptive forest uses on public lands, some silvicultural management systems provide little flexibility for the realization of non-commodity values. Traditional economic decision-making tools, such as net present value, are often applied in a manner which inadequately accounts for the full value of the resource. As a result, sub-optimal management practices are often implemented. By applying a marginal analysis of the optimal externality of different silvicultural systems, it is possible to identify the optimal timber management strategy in terms of the total costs of the timber harvest under alternative uses. Although difficulties arise in valuing non-consumptive uses, contingent valuation with averting costs estimates can establish a lower bound on society's willingness to pay for foregone timber harvesting. Low impact harvest operations and “new forestry” techniques, such as selection harvest cuts, are helpful in reducing the external costs of timber cutting. Therefore, the implementation of such systems may actually increase the socially optimal area of public lands to be harvested under a multiple-use designation.     

Efficient management of marine resources in conflict: An empirical study of marine sand mining, Korea

This article develops a dynamic model of efficient use of exhaustible marine sand resources in the context of marine mining externalities. The classical Hotelling extraction model is applied to sand mining in Ongjin, Korea and extended to include the estimated marginal external costs that mining imposes on marine fisheries. The socially efficient sand extraction plan is compared with the extraction paths suggested by scientific research. If marginal environmental costs are correctly estimated, the developed efficient extraction plan considering the resource rent may increase the social welfare and reduce the conflicts among the marine sand resource users. The empirical results are interpreted with an emphasis on guidelines for coastal resource management policy.     

Social norms and illicit behavior: an evolutionary model of compliance

Economists have viewed the presence of externalities and other market failures as leading to a private equilibrium that would not be Pareto optimal. In the exploitation of common-pool resources, especially biological resources, this would lead to the much-discussed 'tragedy of the commons'. A challenge to this traditional view has emerged from a careful study of the theory and practice of the exploitation of common-pool resources. The existence of a social norm may provide an individual with information on the extent of external costs associated with a behavior, and thus provides an imperfect means of internalizing the external costs. In this paper we propose an evolutionary model of compliance that allows for the existence of a social norm. The impact of the social norm on public policy towards externalities is examined.     

Economic valuation of urban forest benefits in Finland

Urban development projects may cause loss of amenity values of green areas, which should be taken into consideration in planning. Therefore, quantitative information on residents' valuation concerning urban forests is needed for assessing urban land use. The purpose of this investigation was to study the valuation of urban forests in two different urban environments Joensuu and Salo, Finland. The aims were to study the attitudes towards and benefits related to the use of urban forests and, in particular, to measure the valuations in monetary terms using contingent valuation, i.e. measure the residents' willingness-to-pay for larger wooded recreation areas and for small forested parks. Urban forests were seen in both towns as clearly producing positive benefits rather than causing negative effects. The negative features of forests were related to the management of the areas rather than their existence. The main values were related to nature and social functions of forests. In contrast, timber production achieved a distinctively low priority in both study towns. The results stress the importance of defining urban forest policies for municipalities in Finland. More than two-thirds of the respondents were willing to pay for the use of recreation areas. Good location and active management raised the average WTP. Moreover, approximately half of the respondents were willing to pay for preventing construction in urban forests. The results also show that the monetary value of amenity benefits in recreation areas is much higher than the present maintenance costs. The examples concerning the advantageousness of construction on green areas suggest that a limit could be found where the infill of housing areas is not worthwhile from the point of view of society, if the losses of green space benefits are taken into account.     

Can market-based policies accomplish the optimal floodplain management? A gap between static and dynamic models

The purpose of this short article is to set static and dynamic models for optimal floodplain management and to compare policy implications from the models. River floodplains are important multiple resources in that they provide various ecosystem services. It is fundamentally significant to consider environmental externalities that accrue from ecosystem services of natural floodplains. There is an interesting gap between static and dynamic models about policy implications for floodplain management, although they are based on the same assumptions. Essentially, we can derive the same optimal conditions, which imply that the marginal benefits must equal the sum of the marginal costs and the social external costs related to ecosystem services. Thus, we have to internalise the external costs by market-based policies. In this respect, market-based policies seem to be effective in a static model. However, they are not sufficient in the context of a dynamic model because the optimal steady state turns out to be unstable. Based on a dynamic model, we need more coercive regulation policies.     

Green taxes, blue taxes

Central governments are facing increasingly stringent demands to lead the clean-up of public resources. Historically, governments have chosen legislation and regulation to address these concerns and achieved mixed results, but another tool of public policy holds significant promise and is gaining ground in the policy debate: 'green' taxes. The potential of a tax system to mitigate environmental externalities is explored. The theory of pollution tax is reviewed and a comparison of two country cases where taxes have been designed explicitly to reduce industrial effluents and improve the quality of fresh water resources is presented. If structures to approximate social costs are federally mandated and regionally implemented, a comprehensive tax system can constitute an integral part of an effective response to private spoliation of the commons.     

Willingness to pay for waste management improvement in Dhaka city, Bangladesh

We employed the contingent valuation method to estimate the willingness to pay of the respondents to improve the waste collection system in Dhaka city, Bangladesh. Our objective was to estimate how WTP differs between respondents who received or did not receive door to door waste collection. The methodology consisted of asking people directly about their willingness to pay an additional waste collection service charge to cover the costs of a new waste management project. The mean value of WTP for areas that received waste collection service areas was higher than for residents of areas that did not but the difference was not statistically significant. The aggregate value of WTP of the respondents in Dhaka city was 7.6 million Taka (USD0.1 million).     

Public–Private Partnerships for Solid Waste Management Services

The increasing cost of municipal solid waste (MSW) management has led local governments in numerous countries to examine if this service is best provided by the public sector or can better be provided by the private sector. Public–private partnerships have emerged as a promising alternative to improve MSW management performance with privately owned enterprises often outperforming publicly owned ones. In Lebanon, several municipalities are transforming waste management services from a public service publicly provided into a public service privately contracted. In this context, a regulated private market for MSW management services is essential. The present study examines a recent experience of the private sector participation in MSW management in the Greater Beirut Area. The results of a field survey concerning public perception of solid waste management are presented. Analysis of alternatives for private sector involvement in waste management is considered and management approaches are outlined.     

Public-private partnerships for solid waste management services

The increasing cost of municipal solid waste (MSW) management has led local governments in numerous countries to examine if this service is best provided by the public sector or can better be provided by the private sector. Public-private partnerships have emerged as a promising alternative to improve MSW management performance with privately owned enterprises often outperforming publicly owned ones. In Lebanon, several municipalities are transforming waste management services from a public service publicly provided into a public service privately contracted. In this context, a regulated private market for MSW management services is essential. The present study examines a recent experience of the private sector participation in MSW management in the Greater Beirut Area. The results of a field survey concerning public perception of solid waste management are presented. Analysis of alternatives for private sector involvement in waste management is considered and management approaches are outlined.     

Intelligent Databases Assist Transparent and Sound Economic Valuation of Ecosystem Services

Assessment and economic valuation of services provided by ecosystems to humans has become a crucial phase in environmental management and policy-making. As primary valuation studies are out of the reach of many institutions, secondary valuation or benefit transfer, where the results of previous studies are transferred to the geographical, environmental, social, and economic context of interest, is becoming increasingly common. This has brought to light the importance of environmental valuation databases, which provide reliable valuation data to inform secondary valuation with enough detail to enable the transfer of values across contexts. This paper describes the role of next-generation, intelligent databases (IDBs) in assisting the activity of valuation. Such databases employ artificial intelligence to inform the transfer of values across contexts, enforcing comparability of values and allowing users to generate custom valuation portfolios that synthesize previous studies and provide aggregated value estimates to use as a base for secondary valuation. After a general introduction, we introduce the Ecosystem Services Database, the first IDB for environmental valuation to be made available to the public, describe its functionalities and the lessons learned from its usage, and outline the remaining needs and expected future developments in the field.     

Determining the socially optimal recycling rate

What municipal recycling rate is socially optimal? One credible answer would consider the recycling rate that minimizes the overall social costs of managing municipal waste. Such social costs are comprised of all budgetary costs and revenues associated with operating municipal waste and recycling programs, all costs to recycling households associated with preparing and storing recyclable materials for collection, all external disposal costs associated with waste disposed at landfills or incinerators, and all external benefits associated with the provision of recycled materials that foster environmentally efficient production processes. This paper discusses how to estimate these four components of social cost to then estimate the optimal recycling rate.     

Is Municipal Solid Waste Recycling Economically Efficient?

It has traditionally been argued that recycling municipal solid waste (MSW) is usually not economically viable and that only when externalities, long-term dynamic considerations, and/or the entire product life cycle are taken into account, recycling becomes worthwhile from a social point of view. This article explores the results of a wide study conducted in Israel in the years 2000–2004. Our results reveal that recycling is optimal more often than usually claimed, even when externality considerations are ignored. The study is unique in the tools it uses to explore the efficiency of recycling: a computer-based simulation applied to an extensive database. We developed a simulation for assessing the costs of handling and treating MSW under different waste-management systems and used this simulation to explore possible cost reductions obtained by designating some of the waste (otherwise sent to landfill) to recycling. We ran the simulation on data from 79 municipalities in Israel that produce over 60% of MSW in Israel. For each municipality, we were able to arrive at an optimal method of waste management and compare the costs associated with 100% landfilling to the costs born by the municipality when some of the waste is recycled. Our results indicate that for 51% of the municipalities, it would be efficient to adopt recycling, even without accounting for externality costs. We found that by adopting recycling, municipalities would be able to reduce direct costs by an average of 11%. Through interviews conducted with representatives of municipalities, we were also able to identify obstacles to the utilization of recycling, answering in part the question of why actual recycling levels in Israel are lower than our model predicts they should be.     

Benefits Transfer and Low Flow Alleviation: What Lessons for Environmental Valuation in the UK?

Use of environmental valuation and benefits transfer in a recent legal ruling in the UK between Thames Water Utilities and the Environment Agency over water abstraction costs appeared to set an unfortunate precedent. In the first attempt to fulfil its statutory duties, the Agency was thwarted in its use and interpretation of non-market valuation techniques, in particular, the vexed issue of how to aggregate the results of valuation studies in original sites or those to where values might be transferred. The ruling has broader implications for water pricing and resource development by the industry. Far from being a blow for either cost-benefit analysis or environmental valuation, the decision highlights some of the research imperatives for the derivation of non-market values by economists and their translation for use in government decisions.     

Household Demand for Waste Recycling Services

Municipalities everywhere are coping with increasing amounts of solid waste and need urgently to formulate efficient and sustainable solutions to the problem. This study examines the use of economic incentives in municipal waste management. Specifically, we address the issue of recycling, if and when this waste management option is—on social welfare grounds—a preferred solution.A number of studies have recently assessed the monetary value of the externalities of alternative solid waste management options. In the present context, these subsidies could be interpreted as the implicit value of the benefits from reducing environmental externalities associated with landfilling as perceived by local government authorities. We surmise that the difference between mean households willingness to pay (WTP) for recycling services, via the purchase of a subsidized waste disposal facility, and the above (proxy) value of externalities reflects the difference between private and public perception regarding the negative externality associated with landfilling. We believe that this information is useful in determining the level of subsidization needed (if at all) to sustain any recycling program.The study is unique in the sense that its conclusions are based on revealed household behavior when faced with increased disposal costs, as well as information on WTP responses in hypothetical but related (and, therefore, familiar) scenarios. The article also explores the influence of the subsidization schemes on recycling rates. It was found that with low levels of effort needed to participate in a curbside recycling program, households participation rates are mainly influenced by economic variables and age, and households are willing to pay a higher price for the recycling scheme. When the required effort level is relatively high, however, households would pay a lower price, and the rate is influenced mainly by their environmental commitment and by economic considerations. We found that in both cases a subsidy would be required in order to achieve an efficient level of recycling. The median price that households are willing to pay for recycling devices is found to be about NIS 370 (New Israeli Shekel, approximately $90).     

Better than their reputation: enhancing the validity of contingent valuation mail survey results through citizen expert groups

Although contingent valuation is the dominant technique for the valuation of public projects, especially in the environmental sector, the high costs of contingent valuation surveys prevent the use of this method for the assessment of relatively small projects. The reason for this cost problem is that typically only contingent valuation studies which are based on face-to-face interviews are accepted as leading to valid results. Particularly in countries with high wages, face-to-face surveys are extremely costly considering that for a valid contingent valuation study a minimum of 1000 completed face-to-face interviews is required. This paper tries a rehabilitation of mail surveys as low-budget substitutes for costly face-to-face surveys. Based on an empirical contingent valuation study in Northern Thailand, it is shown that the validity of mail surveys can be improved significantly if so-called Citizen Expert Groups are employed for a thorough survey design.     

Environmental accounting for waste management: A study of local governments in Australia

Local governments in Australia, especially in large urban areas, have faced a challenge of the growing quantity of waste generated and the diminishing space for waste disposal in recent years. The central government has demonstrated the importance of developing strategies to make full environmental costs and impacts of waste disposal and material recovery accountable for waste management decision-making. However, research into this field is limited. This paper investigates environmental accounting practices in local government waste management. From a survey conducted with local government authorities in New South Wales (NSW) Australia, it is found that overall the level of direct waste flow and activity accounting is higher than the level of hidden and external environmental cost accounting, though local governments tend to identify and use more physical information associated with waste flows and activities than relevant monetary information. External environmental impacts of waste disposal are often overlooked and show the lowest level of practices. The survey results also indicate that urban local governments have taken more environmental information into account than rural local governments, but such difference is not significant between local governments of different sizes. The complexity of waste technical services and operations is confirmed to have a positive and significant effect on the level of environmental accounting for waste management across local governments surveyed.     

Investigating household preferences for kerbside recycling services in London: a choice experiment approach

Recent developments in national and European Union waste management policy have prompted considerable interest in alternative waste management programs, such as recycling, which could divert a portion of the municipal solid waste stream from landfills. This paper examines household preferences for kerbside recycling services and uses a stated preference choice experiment method to estimate households' valuation of such services. Using a sample of 188 households in the London area, the empirical analysis yields estimates of the willingness to pay for the number of 'dry' materials collected, the collection of compost, textile collection and the frequency of collection.     

On accounting for sustainable development and accounting for the environment

Economic sustainability or intergenerational equity entails maintaining social well-being by decisions about investments in different types of assets. Under certain conditions, consumption can be sustained by depleting resources, or various kinds of natural capital, while building up other kinds of capital. Theoretically, the choices involve the use of a set of accounting prices. The question becomes one of finding and implementing accounting prices that express the roles of the various capital goods in achieving the objective of the economy.Hartwick's rule holds that an economy can be sustained if the value of the total, net investment in the economy, evaluated at those accounting prices, is zero. The rule applies to a special, abstract economic model which expresses a social objective different from the discounted-utilitarian objective on which national accounting is based. Different objectives give rise to different accounting prices. Because the prices may not be right, the zero net-investment rule using available national-accounting prices cannot generate a condition for sustaining an economy.Still, environmental accounting is a tool which, used prudently, can make an important contribution to social decision-making. This paper expands upon these ideas by discussing the incorporation of natural resource and intangible environmental costs and benefits into green accounting at the firm as well as the economy level. Common techniques of mine valuation and standard corporate accounting are the bases for this extension to the valuation of and accounting for decisions concerning the environment.     

The health and visibility cost of air pollution: a comparison of estimation methods

Air pollution from motor vehicles, electricity-generating plants, industry, and other sources can harm human health, injure crops and forests, damage building materials, and impair visibility. Economists sometimes analyze the social cost of these impacts, in order to illuminate tradeoffs, compare alternatives, and promote efficient use of scarce resource. In this paper, we compare estimates of the health and visibility costs of air pollution derived from a meta-hedonic price analysis, with an estimate of health costs derived from a damage-function analysis and an estimate of the visibility cost derived from contingent valuation. We find that the meta-hedonic price analysis produces an estimate of the health cost that lies at the low end of the range of damage-function estimates. This is consistent with hypotheses that on the one hand, hedonic price analysis does not capture all of the health costs of air pollution (because individuals may not be fully informed about all of the health effects), and that on the other hand, the value of mortality used in the high-end damage function estimates is too high. The analysis of the visibility cost of air pollution derived from a meta-hedonic price analysis produces an estimate that is essentially identical to an independent estimate based on contingent valuation. This close agreement lends some credence to the estimates. We then apply the meta hedonic-price model to estimate the visibility cost per kilogram of motor vehicle emissions.