PROGRAMACIÓN DEL SUBSISTEMA RECEPTOR

The Tellus packaging study is important for pointing the way to an improved combined life cycle inventory and economic valuation analysis (LCI-EVA). Unfortunately, it is seriously flawed, both in its choice o f control cost methodology, and in the application o f that methodology. An examination o f the claims o f Schall (1993) reveals that although the ‘waste hierarchy’ may appear to be on a firm technical, economic and environmental foundation in the limited case o f the three East Coast States, it is not a generally applicable conclusion. Thus, re-examining his analysis in a European context is likely to lead to a similar conclusion to that reached in Chapter 6: the ‘waste hierarchy’ is not universally applicable, but rather depends on regional or even local conditions.

2.

Economies of Waste Management: A Theoretical

Overview

2.1

OPTIMAL WASTE GENERATION

It cannot be seriously asserted that the average individual derives much direct utility from waste generation, excepting the occasional ‘serial litterer*. The demand for waste services can be more realistically described as a derived demand, resulting from the consumption o f commodities, or from the conversion o f inputs into products. The first law o f thermodynamics dictates that matter in a closed system cannot be reduced, while the second law o f thermodynamics dictates that the conversion o f materials from one form to another cannot be 1 0 0% efficient; a residual will result. This means that the production o f products, or the consumption o f commodities, will inevitably generate a residual, or waste, which is unrecyclable, thus creating a demand for waste services.

Although source reduction, or the reduction o f waste, is ranked first in the ‘waste hierarchy’ (see Chapter 1, section 1.4), there is little guidance as to how much o f a reduction is required, or, more seriously, why we should reduce our waste. Consideration o f this issue raises the question: Is there an optimal level o f waste? - and if the answer is affirmative, can it be ascertained?

Before answering these questions, it might be prudent to review the categories o f waste that are relevant for this study. The primary concerns o f this thesis are those issues that relate to solid waste and the more narrowly defined ‘controlled waste’, with a particular focus on municipal solid waste (MSW). The term ‘controlled waste’ includes several sub-categories, e.g. household waste, commercial waste, industrial waste, etc, where MSW is household waste and often some waste from small businesses. Each o f these sub-categories is defined by a number o f differing characteristics, the main one being the source o f the waste. However, the types o f waste also differ in the way their disposal is financed. The disposal o f industrial waste, for example, is financed by its generator, through a fee directly related to the

quantity o f waste being disposed. The disposal o f MSW, on the other hand, is typically financed indirectly through property taxes, other loczil taxes or, if directly, by a flat fee. Whatever the form o f funding, the common factor is that the cost to the household is very rarely related to the quantity o f waste being disposed of. This is worthwhile keeping in mind as the focus o f this thesis is on MSW, which consists mainly o f household waste, but also some trade waste from offices and small businesses.

In order to achieve the optimal demand for waste services, individuals need to be made aware o f the full social cost o f producing waste. There appears to be two options; the costs could either be reflected in the prices o f materials or products they consume, or alternatively, they could be charged directly for the waste they produce. The first option would be optimal from the theoretical vantage, explicitly recognising the derived nature o f waste generation and providing households with a clear signal in respect o f the waste that will be engendered by their purchasing decision. However, in the United Kingdom, and in most other developed countries, it is a variation o f the second option that is generally employed with consumers paying for waste services through local taxes. There are three problems to this approach; the first is theoretical, overlooking as it does the derived nature o f waste generation, and concentrating on the production o f waste alone. Secondly, tax payers and consumers are not identical sets, and thirdly, taxes tend to be unrelated to waste generation, i.e. tend not to be related to the amount o f waste generated by the household. In effect, this implies that the marginal cost, or price, to the household o f creating waste, or using solid waste services, is zero.

Figure 2.1 illustrates the demand curve for waste services. Thus, if households face a zero marginal cost to producing waste, then they will produce excess quantities o f waste and demand an excessive quantity o f waste services. If individuals were faced with the marginal social costs o f their actions (P*), assuming for simplicity o f exposition that P* is a generic price o f waste services that will not be affected by any change in individual behaviour, then they would reduce their production o f waste accordingly to W*. Thus, the figure clearly illustrates how the current

practice o f charging households a zero unit price leads to an over-consumption o f waste services, resulting in a welfare loss to society equal to the shaded area, L (see Jenkins (1993) for a fuller exposition).

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