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

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?

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* MC D MC R Percent recycled 1000

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.