Dr Dominic HoggDirector

Eunomia Research & Consulting

� Work with European partners for theEuropean Commission� LDK (Greece)� ZREU (Germany)� HDRA (UK)� Scuola Agraria del Parco di Monza (Italia)

� Role of Cost / Benefit Analysis in Policy /Decision-making

� Costs And Benefits Of Separate Collection

� Effectively Comparing With Other Options(for Landfill Diversion)

� Composting Analysis �Under-developed�

� Looks at Net Private Costs of Changes�� And Seeks to Monetise the Impacts,

Positive and Negative, for the Environment� Then� You Add Them Up� It�s Easy�..� NO IT�S NOT

� The Following are ALWAYS True� Science is Never �Certain� in All Aspects� Methodological Approach Questionable on

Epistemological Grounds� The Move From �Impact� to �Monetised

Impacts is Fraught With Difficulty� External Costs are Never �Certain�, Always

Incomplete and Usually Plagued WithUncertainty (though this is not alwaysacknowledged)

� The Following is True� The Net Costs of the Same Facility in Different

Countries Varies, and not Just Because ofVariation in Costs of Labour, (Capital,) Land

� Policies, Regulatory and Otherwise, Affect theCosts and Revenues Associated WithTreatments

� Costs are Member State Specific� Full Analysis of �European� CBA Has to

Compromise Between �Local� Diversity andManageability of Study

� The Proliferation in Economic Instruments�for the Environment��

� and� The Member State-specific Nature of

These�� Makes it Increasingly Difficult to

Distinguish Between Costs Which arePrivate and Costs Which are External

COST-BENEFIT ANALYSIS WASNEVER EASY AND IT�S GETTINGMORE DIFFICULT

� Private Costs� See Ricci (forthcoming)� Also, ask yourselves � It�s Not Rocket Science

� External Costs� Lots and Lots of Transport� But�..

0.021 � 0.0320.033 � 0.0440.0160.028Total excl. Injuries and Fatalities

0.041 � 0.0520.068-0.0790.0360.063Total incl Injuries and Fatalities

NqNqNqNqCongestion

0.013 / 0.0240.013 / 0.0240.0080.008Track Costs

0.0200.0350.0200.035Injuries and Fatalities

0.0080.0200.0080.020Air pollution and noise

RuralUrbanRuralUrban

24 tonne vehicle7.5 tonne vehicleCategory of External Cost

�0.01 - �0.025/km/tonne for a 7.5 tonne vehicle and �0.004 ��0.014/km/tonne for a 24 tonne vehicle.

0.00860.00510.00770.00320.00570.019924t RCV0.02640.01570.02370.01000.01770.06137t van

SloveniaPolandHungaryEstoniaCzech RepublicUK0.01220.00950.00700.00640.01340.009024t RCV0.03760.02910.02160.01970.04120.02777t van

SwitzerlandSwedenSpainPortugalNorwayNetherlands0.00660.01050.00840.00650.009824t RCV0.02020.03230.02600.02000.03037t van

LuxembourgItalyIrelandGreeceGermany0.00950.00850.00900.00750.007324t RCV0.02940.02600.02760.02320.02267t van

FranceFinlandDenmarkBelgiumAustria5.5724t RCV

1.25107t van

Payload (t)Fuel consumptionVehicle

In Only One Case Does Fuel Duty NOT Cover �Lower End�Externalities � In Most Cases, Fuel Duty is Close to HigherEnd Externalities

24VOCs371Ammonia11N2O983CH4

350,000CO2

g/tonne of wastecomposted

Gas

1.3E-05 Zinc

6.9E-07 Mercury

8.5E-07 Lead

1.1E-07 Chromium

9.4E-07 Cadmium

ND Ammonia

1E-08 Dioxins/furans (TEQ)

0.00073 Halogenated HC and PCBs

0.0023 HC

0.033 H2S

0.0021 HF

0.011 HCl

2.5 SOx

0 N2O

10 NOx

0 CH4

440,000 CO2

329 kWh/t waste151 kWh/t wasteHeat exported for CHP option (80% of that recovered)

412 kWh/t waste189 kWh/t wasteHeat recovered for CHP option (70%)

176 kWh/t waste81 kWh/t wasteElectricity for export (70% of elec. gen)

252 kWh/t waste116 kWh/t wasteElectricity generated (30% efficiency)

840 kWh/t waste385 kWh/t wasteCalorific value of biogas

60%55%Percentage methane

140 m3 /t waste70 m3 /t wasteBiogas yield

High ValueLow ValueParameter

3% Discount Rate IT

Low High

Greenhouse Gases

Carbon Dioxide (process) -8.56 -9.01

Carbon Dioxide (post application) -3.13 -3.30

Methane -0.44 -0.48

Nitrous Oxide -0.09 -0.16

Other Air Emissions -0.02 -0.07

Energy Use (kWh) 50 -0.85 -1.53

Fuel Emissions (litres) 1 -0.36 -0.80

Total External Costs -13.46 -15.34

NB � Discount Rate Affects Analysis

IT

Low High

Greenhouse Gases

Carbon Dioxide (pr -9.78 -10.30

Carbon Dioxide (po -3.13 -3.30

Methane 0.00 0.00

Nitrous Oxide 0.00 -0.71

Other Air Emissions -0.08 -0.18

Landfill Leachate

Avoided External Costs From Energy Generation

Electricity 1.38 5.38

CHP 1.97 7.72

Total external costs, no displaced burdens -12.99 -14.48

Total external costs, displaced burdens from electricity Electricity -11.61 -9.10

Total external costs, displaced energy from CHP CHP -11.02 -6.76

3% Discount Rate IT Low HighGreenhouse Gases

Carbon Dioxide -16.31 -17.16Nitrous Oxide -0.97 -1.68

Avoided Burdens (Energy Production)Electricity 5.57 10.03CHP 12.73 22.92

� Hydrogen Sulphide, HCl, HF, mercury, zinc,PCBs

� Disamenity (odour, vehicle movements etc.)� Partly controllable through positive management

� Emissions to Water (AD? - Excess WaterAssumed to be Used in Composting Process)

� Bioaerosols� Partly controllable through positive management

� Those Related to Plant Construction� Ammonia Damages (through maintenance? So

internalised?)

Amount of displaced N: year by year / overall

58.440.9

28.620.0 14.0 9.8 6.9 4.8 3.4 2.4

58.4

128.0148.0

162.1171.9 178.8 183.6 186.9 189.3

99.4

0.020.0

40.060.080.0

100.0

120.0140.0160.0

180.0200.0

1 2 3 4 5 6 7 8 9 10

year

kilo

s/ha

Amount of displaced N at year X Cumulative

2

N replaced by 10 tonnes compost (kg)

N2O emissions @ 0.05% (tonnes, low)

N2O emissions @ 0.5%

External Benefit (� per tonne

External Benefit (� per tonne

58.44 1.10E-06 1.10E-05 0.03 0.3840.91 7.71E-07 7.71E-06 0.02 0.2628.64 5.40E-07 5.40E-06 0.01 0.1920.05 3.78E-07 3.78E-06 0.01 0.1314.03 2.65E-07 2.65E-06 0.01 0.099.82 1.85E-07 1.85E-06 0 0.066.88 1.30E-07 1.30E-06 0 0.044.81 9.08E-08 9.08E-07 0 0.033.37 6.35E-08 6.35E-07 0 0.022.36 4.45E-08 4.45E-07 0 0.02

NPV@3% � 0.08 � 1.12

� Phosphorous and Potassium (benefits notfully quantified)

� Also, Phosphogypsum and ProcessWastewater Disposal (benefits crudelyquantified)

� Also, Issue of N-leaching � N More TightlyBound In Humified Compost (benefits notquantified)

Y% (20% to 30%)

X% (15% to 25%)

Mineralised (Carbon Dioxide)

COMPOST

Humus Stable Organic

Matter

Readily Available Organic Matter.

C% (1% to 5%)

Z% (1% to 1.5%)

OM concentration in the soil

0

1

2

3

4

5

6

7

8

9

10

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96 101

106

111

116

121

126

131

136

141

146

151

156

161

166

171

176

181

186

191

196

201

206

211

216

221

226

231

236

241

246

251

256

261

266

271

276

281

286

291

296

year

OM

con

cent

ratio

n %

soi

l wei

ght

0 tonnes/ha.yr 5 tonnes/ha.yr 10 tonnes/ha.yr 15 tonnes/ha.yr

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49

Year

Frac

tion

of T

otal

Car

bon

Min

eral

ised

/ R

emai

ning

CarbonMineralised

CarbonRemaining

After 50 years,13% of carbon

remains

Pesticide reduction Assumed 20%Unit externality (low, � per kg a.I.) 12.8Unit externality (high, � per kg a.I.) 19.2Country Arable and

horticultural land incl. Set aside (1000 ha)

Average crop value 1992-1994 (million �)

Average quantity of pesticide purchased 1993-1995 (tons a.i.)

kg a.i. per hectare

External benefit per hectare (low, �)

External benefit per hectare (high, �)

Austria 918 1481 3669 4.00 10.2 15.3Belgium 747 2600 10282 13.76 35.2 52.9Denmark 2460 1921 4277 1.74 4.5 6.7Finland 999 1516 1180 1.18 3.0 4.5France 15865 22061 88492 5.58 14.3 21.4Germany 11359 12283 29350 2.58 6.6 9.9Greece 2111 5914 9260 4.39 11.2 16.8Ireland 155 532 2523 16.28 41.7 62.5Italy 8464 20969 78394 9.26 23.7 35.6Luxembourg 58 38 253 4.36 11.2 16.8Netherlands 839 7224 11284 13.45 34.4 51.6Portugal 1578 1362 9426 5.97 15.3 22.9Spain 12888 13099 29501 2.29 5.9 8.8Sweden 1394 739 1621 1.16 3.0 4.5U.K. 5186 6722 33240 6.41 16.4 24.6

3% Discount Rate IT

Low High

Total External Costs -13.46 -15.34

External Benefits from Nutrient Displacement 0.13 1.74

External Benefits from Pesticide Reduction 0.40 0.60

External Benefits from avoided nitrous oxide emissions 0.04 0.65

External Benefits from avoided process wastewater disposal 0.01 0.03

External Benefits from avoided peat extraction 0.36 0.52

Net Externality -12.52 -11.80

Net Externality (no CO2) 4.19 5.36

Memorandum Items

Private savings from avoided fertiliser use 0.77 1.93

Private savings from avoided pesticide use 1.00 1.00

IT

Low High

Total external costs, no displaced burdens -12.99 -14.48

Total external costs, displaced burdens from electricity Electricity -11.61 -9.10

Total external costs, displaced energy from CHP CHP -11.02 -6.76

External Benefits from Nutrient Displacement 0.12 1.67

External Benefits from Pesticide Reduction 0.40 0.60

External Benefits from avoided nitrous oxide emissions 0.04 0.65

External Benefits from avoided process wastewater disposal 0.01 0.02

External Benefits from avoided peat extraction 0.36 0.52

Total external costs, no displaced burdens -12.07 -11.02

Total external costs, displaced burdens from electricity -10.70 -5.64

Total external costs, displaced energy from CHP -10.10 -3.30

Memorandum Items 0.00 0.00

Private savings from avoided fertiliser use 0.58 1.45

Private savings from avoided pesticide use 1.00 1.00

ITLow High

External BenefitsRaw Score 12.04 21.91Raw score plus incinerator disamenity 24.54 65.66Raw score plus avoided burdens (energy production)

Electricity only 6.47 11.88CHP -0.69 -1.01

Raw score plus avoided burdens and incinerator disamenityElectricity only 18.97 55.63

CHP 11.81 42.74

� The external benefits of switching from landfill to composting are generallyquite small (of the order �1 - �4 per tonne);

� They are larger for the switch from incineration to composting (of the order�12 - �25 per tonne);

� When anaerobic digestion is used to treat separately collected waste insteadof composting, the external benefits of switching away from either landfillor incineration are higher;

� However, the difference is not very large (�2 - �5 per tonne when switchingfrom landfill to anaerobic digestion, and �13 - �29 per tonne whenswitching from incineration to anaerobic digestion);

� The additional benefit improvement is less than the increase in costs whicha resort to anaerobic digestion appears to imply;

� The external benefits of the switches away from landfill vary significantly(across countries) as a proportion of the costs of the change. This is due tothe fact that the charges for landfilling vary significantly across countries(as well as within them). It is expected that there will be someharmonisation in gate fees as the implementation of the Landfill Directiveprogresses over time. This will increase the costs of landfilling and reducethe costs of the switch in those countries where the costs of switching arenot already negative;

� The external benefits of the switches away from incineration are generallymore significant. The private costs of incineration also vary significantlyacross countries, though they are nowhere as low as landfill gate fees are insome countries.

� Under specific circumstances, private costs are likely to benegative whilst external benefits are always positive. Inscenarios where private costs are assumed to be at thehigher end, costs exceed the quantifiable benefits;

� The total value of the benefits is relatively small for thewhole of the EU and Accession States as depicted in thesescenarios partly because it is assumed that many countrieswill be proceeding along this path to a greater or lesserdegree anyway;

� External benefits increase (and potentially, net benefitsalso) as the rate of growth in municipal waste increases.However, it must generally be hoped that growth is lower.To this end, it is worth speculating on the role which sourceseparation may play in sensitising citizens concerningwaste issues, and enabling a more positive application of�pay-as-you-throw� systems for waste collection (thoughthis is legally forbidden in some countries at present).

(@500 kW

h/t)Electricity

-30

-25

-20

-15

-10 -5 0AU

BED

KFI

FRG

EIT

LUX

NL

SPSW

UK

Country

Impact of Energy Revenues on Costs of Waste Incineration (� per tonne waste)

�13

-10000

-8000

-6000

-4000

-2000

0

2000Paper HDPE PET Glass Steel Aluminium Textiles

Material

GHG

Impa

ct o

f Sw

itchi

ng fr

om In

cine

ratio

n to

Rec

yclin

g (k

g C

equ

per t

onne

Mat

eria

l)

Electricity onlyCHP

Ash Treatment

0

5

10

15

20

25

30

35

AU DK FR GE IT LUX UK

County

Cos

ts o

f Ash

Tre

atm

ent p

er T

onne

of W

aste

Ash Treatment�25.6

(@ 250kg Bottom ash, 40kg fly ash / APC)

0

20

40

60

80

100

120

140

160

AU BE DK FI FR GE GR IR IT LUX NL PO SP SW UK

Country

Tota

l Cos

t Inc

ludi

ng T

ax (�

/t)

TaxCost (Gate fee)

�120

� generates 1,500kWh of electricity, if combusted in a browncoal power plant, substituting 1,230kg of brown coal

� generates 1,500kWh of electricity, if combusted in a hardcoal power plant, substituting 550kg of hard coal

� delivers heat to produce 4,080kg of clinker, if combustedin a cement works, substituting 550kg of hard coal

� generates 520kWh of electricity, if combusted in amunicipal solid waste incinerator, substituting theequivalent amount by public power generation.

Brown Coal fire d power plant

Hard Coal fired power plant

Ce ment work MSW Inc

Globa l warming ■■■■ ■■■■ ① ■■■■■■■■■■ ■■■■■■■

Summer smog ■ ■ ① ■

Acidifica tion ① ■■ ■■ ■■■■

Nutrifica tion (te r.) ■ ■ ① ■■■

Human toxicity

Cancerogenic risk ■■ • ① ••

Mercury emissions

■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■

■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■

■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■

①

Foss il Resources ① ■ ■

■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■■■■■■■■ ■■■

� Many Benefits Unquantified� Some Costs Unquantified (main ones

are probably bioaerosols, ammonia,disamenity � also, application of heavymetals to soils)

� Unless �New Science�, Suggests:� Emissions from Compost Relatively

Benign� Complies With Strong Sustainability

Objectives

Contact:Dominic Hogg

Eunomia Research & Consulting120 Cotham Bow

CothamBristol

BS6 6ARUK

dominic@eco.u-net.com