The costs of alternative policies

Abstract

After decades with landfill and incineration as the most common waste treatment methods, the current main waste policy strategy has changed toward recycling. Also, most governments declare that source reduction, to reduce the generation of waste, is the best choice, while in practice few steps have been taken in this direction. In order to improve the understanding of optimal policies for paper and plastic waste reductions we compare the costs of the four alternatives recycling, incineration, landfill based on a combination of US and Norwegian data, and source reduction implemented by a tax on material inputs. This study supports the ranking of source reduction as the most efficient alternative. Price incentives directed towards reducing material use and waste is more efficient than rectifying the damages of already generated waste. While a tax on waste generating materials actually involves net benefits, all the other alternatives involve net costs. Furthermore, in an environmental as well as economic perspective the heavy emphasis on recycling may well be misleading, as the environmental and the economic costs exceed the costs of incineration and landfill in most cases. Higher environmental and economic transport costs from recycling more than outweigh the emission costs and conventional costs from incineration and landfill plants in our analysis. Recycling is the least costly alternative for commercial paper waste, due to relatively low pickup costs and high commercial value of recycled paper. Keywords: Incineration, landfill, paper waste, plastic waste, recycling, waste taxes.