DERECHOS AFECTADOS

Various methods can be used to attach monetary values to external costs and benefits. These include dose—response relationships, contingent valuation, and hedonic pricing.4 A dose—response function associates a given level of pollution with a change in output which is then valued at market, revealed/inferred, or shadow prices. For example, dose—response functions have been used in other studies to look at the effect of pollution on health, physical depreciation of material assets such as metal and buildings, aquatic eco-systems, vegetation, and soil erosion. The dose—response functions are then multiplied by the unit value to give a monetary damage function. This approach is not suitable when valuing an externality such as disamenity because there is no direct relationship between the

‘dose’ of landfill/incineration taking place and the resulting disamenity experienced by neighbours to the sites.

More suitable valuation methods would be contingent valuation or hedonic pricing. In the former, people would be asked how much they would be willing to pay not to have an incinerator or landfill in their neighbourhood, or alternatively, what is the least they would be willing to accept (as compensation) for putting up with a waste disposal facility near their home. A hedonic property price study would attempt to measure the effect of the proximity of a waste disposal site on house prices. In the USA a number of studies using hedonic property pricing have been carried out for landfills. These studies, covering both municipal and hazardous waste sites, generally found that house prices rose between 5% and 10% (mile distance)~1 from a site for up to four miles distance from the sites.5^—10 Unfortunately, the study reported here3 was precluded from such analysis due to budgetary and time constraints.

The economic parameter values given in Table 4 are obtained from a range of

4 For a comprehensive survey see A. M. Freeman III, ‘The Measurement of Environmental and Resource Values—Theory and Methods’, Resources For the Future, Washington DC, 1993.

5 A. C. Nelson, J. Genereux, and M. Genereux, ‘Price Effects of Landfills on House Values’, Land Econ., 1992, 68 (4).

6 J. Havlicek, R. Richardson, and L. Davies, ‘Measuring the Impacts of Solid Waste Disposal Site Location on Property Values’, Am. J. Agric. Econ., 1971, 53.

7 J. Havlicek, ‘Impacts of Solid Waste Disposal Sites on Property Values’, Environmental Policy:

Solid Waste, Cambridge, MA, 1985, 4.

8 K. J. Adler, Z. L. Cook, A. R. Ferguson, M. J. Vickers, R. C. Anderson, and R. C. Dower, ‘The Benefits of Regulating Hazardous Disposal: Land Values as an Estimator’, US Environmental Protection Agency, Washington DC, 1982.

9 H. B. Gamble, R. H. Downing, J. Shortle, and D. J. Epp, ‘Effects of Solid Waste Disposal Sites on Community Development and Residential Property Values’, 1982, Institute for Research on Land and Water Resources, Pennsylvania State University.

10 R. Mendelsohn, D. Hellerstein, M. Huguenin, R. Unsworth and R. Brazee, ‘Measuring Hazardous Waste Damages with Panel Models’, J. Environ. Manage., 1992, 22.

Table 4 Economic

£ (Serious injury)~1 74 780

£ (Minor injury)~1 6 080

!Transboundary damage; "Damage to the UK only.

Table 5 Summary of externality values for landfill [£(tonne waste)~1 other than disamenity]

Landfill scenarios* L1 L2 L3 L4

(a) Global pollution

CO2 as C 0.32 0.46 0.32 0.46

CH4 2.36 1.36 2.36 1.36

(b) Air pollution not not not not

applicable applicable applicable applicable

(e) Pollution displacement** 0 0.81 0 0.81

(f) Pollution displacement† 0 1.12 0 1.12

Total (a] b ] c ] d [ e)**

Mean 3.50 1.38 4.11 1.99

Total (a] b ] c ] d [ f)†

Mean 3.50 1.08 4.19 1.76

*See Section 4 of text for definitions of L1—L4.

**Conventional air pollution including damage to the UK only.

†Conventional air pollution including transboundary damage.

These estimates omit any disamenity costs which may well be significant.

different studies which, given the scope of this paper, are not discussed here.11 The physical parameter values of Tables 2 and 3 are multiplied by the economic parameter values of Table 4 to estimate the externality values for landfill and incineration in Tables 5 and 6.

11 For further details and discussion see [4] and D. W. Pearce, C. Bann, and S. Georgiou, ‘The Social Costs of Fuel Cycles’, HMSO, London, 1992.

Table 6 Summary of

*See Section 4 of text for definitions of I1 and I2.

**Conventional air pollution including damage to the UK only.

†Conventional air pollution including transboundary damage.

These estimates omit any disamenity costs which may well be significant.

Tables 5 and 6 summarize the results of the study. The totals reflect the sum of all the externalities, excluding disamenity effects. They indicate that for landfill the lowest external costs, in the order of £1 (tonne of waste)~1 in an European context,12 slightly more in a UK context,13 are associated with urban sites which have low transport impacts and energy recovery (the global pollution costs are less for sites with energy recovery and, in addition, there are pollution displacement benefits). The highest estimate for external landfill cost is for rural landfill sites (high transport impacts) with no energy recovery (high global pollution and no benefit from displaced pollution) and is around £4 (tonne of waste)~1.

For incineration, Table 6 shows estimated overall external benefits as the benefits from displaced pollution resulting from energy recovery outweigh the external costs of global and conventional pollution and transport impacts. When only effects on the UK are taken into account, this net benefit is in the region of £2 (tonne of waste)~1; slightly more for urban incinerators and slightly less for regional incinerators. When effects for the whole of Europe, including Eastern Europe and Scandinavia, are included the net benefits rise to around £4 (tonne of waste)~1; again slightly more for urban incinerators while slightly less for regional incinerators.

12 Including transboundary effects of ‘conventional’ pollutants (NOx and SO2) from transport andsaved transboundary effects from displacement of other energy sources for all of Europe.

13 Effects of ‘conventional’ air pollutants from transport and saved in the context of energy displacement are considered for the UK only.

Thus landfilling causes net external costs while incineration gives rise to net external benefits indicating that based on externalities alone a diversion of waste from landfill to incineration would be beneficial.14 However, it must be kept in mind that (a) these figures are only single points on the cost function for each waste disposal method—as incineration increases, the external benefits might turn into external costs, and (b) external costs are only part of the overall costs of disposal. A further caveat is that no estimation of the disamenity effects of landfill and incineration has been carried out. In some countries there is very strong resistance to the siting of incineration facilities as there are strong fears of the perceived health effects. If this is not matched by an equal resistance to landfills, adding this component to the present results may alter the overall result to the extent that the external costs from incineration exceed those from landfill.

Congestion Costs. One omission in the estimation of impacts of the transportation of waste to the disposal facilities in the CSERGE et al. study was the congestion disbenefit. The other two impacts estimated, air pollution and accidents, were less for urban sites than for rural or regional sites because of the shorter distance between the catchment area and the urban site than between the catchment area and the rural and regional sites. Congestion, however, is generally a greater problem in urban than in rural areas. The question is, how important a problem it is, and whether the congestion costs associated with urban sites would outweigh the advantages of the shorter distance in terms of air pollution and accidents.

A recent study15 estimates the marginal congestion costs for a wide range of roads and conditions, from urban central peak [36.37p (passenger car unit kilometre)~1 (PCUkm)] to other rural roads [0.05p (PCUkm)~1], with a weighted average of 3.40p (PCUkm)~1. To make these data applicable to the transportation of waste, we would need the marginal congestion cost (HGV unit km)~1 (HGVUkm). The numbers we have used to calculate air pollution and accident costs reflect different sizes of HGVs, but as a rough guide we use 2 PCUkm\ 1 HGVUkm.16

Owing to the wide range of values, it is important to ensure that the waste transportation is placed in the right road category. If we assume that the transport of waste to urban landfills and incinerators takes place on central urban roads in the off-peak, we can calculate a congestion cost of £3.65 (tonne of waste)~1 going to landfill and £6 (tonne of waste)~1 going to incineration. If we, alternatively, assume that the transport takes place on roads of the ‘other urban’

category (presumably quiet residential streets), these figures fall to £0.01 and

£0.02 (tonne of waste)~1, respectively.

These figures illustrate that congestion costs can, under certain circumstances,

14 However, in order to make such a comparison, total costs including external as well as financial costs must be compared. As current financial costs of landfill range from $7.5 to $22.5 compared to

$20—30 for incineration, the chances are that even when including the external costs of landfill and the external benefits of incineration, landfill will still in most cases come out as the less costly option.

15 D. M. Newbery, ‘Pricing and Congestion: Economic Principles Relevant to Pricing Roads’, Oxford Rev. Econ. Policy, 1990, 6 (2), pp. 22—38.

16 As suggested in D. M. Newbery, ‘Road User Charges in Britain’, Econ. J., 1988, 98, 161—76.

Figure 4 The inefficiency of recycling targets

add considerably to total external costs, while under other circumstances they would be insignificant. Therefore an accurate estimation of the congestion costs would require careful modelling of the respective transport routes of the waste.

Most (municipal) waste is collected on quiet residential roads (‘other urban’,

‘small town’, and ‘other rural’) but, when taken for disposal, will probably be transported along busier roads to the landfill, incinerator or transfer station.