Iranica Journal of Energy & Environment 2 (2): 104-116, 2011ISSN 2079- - PDF document

Iranica Journal of Energy & Environment 2 (2): 104-116, 2011ISSN 2079-2115 IJEE an Official Peer Reviewed Journal of Babol Noshirvani University of TechnologyBUTCorresponding Author: Pollutions COSTBUSTER model The EUROPE modelINTRODUCTIONhas similarities with fires in stored waste fuels, particularlyThebaling technique has been shown to be the mostgive an emission higher than the annual emission frompromising method for the storage of waste intended forall the waste incinerator plants in Sweden [5]. Thisuseas a fuel [1]. In Sweden, the storage of baled wasterepresents emissions in a solid (sol) form.fuels has recently increased and a substantial increase inLeachate Iranica J. Energy & Environ., 2 (2): 104-116, 2011105regardingthe relevant emissions is obsolete. Thisofrecycled, this policy implying substantial social costrepresents emissions in a gaseous (g) form.savings even though certain uncertainties exist, howeverEnvironmental and safety aspects of seasonalbeing of minor importance.and long-term storage of baled municipal solid wasteThisreview of the state of the art of the field of(MSW) to be used as fuel for energy production (wasteresearch in question points at a substantial need tofuel)in the cold season have been investigated.combine economic tools related to the daily use inaExperimentshave also been carried out on the burning ofbusiness administration context, with waste managementbales [7, 8].matters. In particular, the prospect looks beneficial forLiteraturesearch performed shows that earlier studiesstudying possibilities to improve the financial situationwithin the current field have dealt with, for example, thefrom an environmental point of view with emphasis on theproblem of translating polluting emissions into monetarypractical MSW baling reality.units. Thereby,shadow prices, defined as: “the marginalTherefore,the main objective ofthis sub-schemereduction cost at the emission target level”, are elaboratedstudy is to apply the WAMED and COSTBUSTER modelsand quantified for various environmental impact[14, 15] specifically to baling units, being a component incategories characterised by equivalents for certainSWM schemes which end with, for example, incinerationsubstances [9].in general, to evaluate and improve their ecological-Alsoemission externalities, defined as: “the costseconomic efficiency (ECO-EE) related to the impact of theandbenefits that arise when the social or economicexpected emissions of the baling units on the SWMactivities of one group of actors (people/firms) affectcompanies’ corporate economy regardless of the currentanother group of actors and the effects are outsideextent of the emissions from the object of study. In(‘external’) the pricing system”, are estimated in economicparticular, a decision-making tool is developed forunit values per-kg-of-pollutant for both landfill andappraisal of the costs of potential investments in balingincinerator. Thereby, the final phase of the life cycle of afacilities within a SWM scheme ending with, for example,product- the disposal - is addressed since all alternativeincineration the main ambition being to study a balingstrategies of waste disposal result in externalities insub-system within a major plant, such as a landfill thatvarious forms and levels [10].provides the baling machinery with the necessary rawInparticular the baling-wrapping technology ismaterial that also may be delivered from far away.studied as regards the physical, chemical and biologicalThisstudy is constricted to accidental and unwantedprocesses of a MSW landfill with respect to mainly thepollution phenomena that sometimes in an exceptionalenvironmental impact of the emission of gases andway interfere with the operation of a baling scheme andleachate. Up to a certain maximal size, plastic-wrappedhave impact on the decision to invest in the scheme or notbales are found to be a promising option from anaccording to the principle ofmanagement by exception.environmental point of view which resolves the problemsThesystem-boundary encompasses the rather smallof leachate and biogas generation [11].baling-plant unit of interest only, not a whole landfill andTsilemouand Panagiotakopoulos [12] have studiedpossibly situated next to a power plant for production ofthe general problems of cost estimation for planningheat and electricity. Thus, the methodology is not appliedMSW management systems, in particular in the light ofon the emissions from the final burning of the bales withinonly fragmented data available. Thereby, initial capitala scheme ending with incineration since this stagecost and operating cost functions are generated relevantrepresents the final phase of a regular, industrial processforthe following types of MSW treatment facilities: (i)thatcan be controlled by, for example, commonly usedwaste-to-energy; (ii) composting; (iii) anaerobic digestionsmoke-absorbing devices to comply with the current lawsand;(iv) landfilling.and regulations. Also, if the monetary value of theCost-benefit analysis (CBA) is defined as a techniqueemissions from the incineration of the bale-fuel inawhich attempts to set out and evaluate the social cost andcombined heat and power plant is calculated and thensocial benefits of investment projects to help to decidecompared with the emissions from the baling equipmentwhether or not the projects should be undertaken. Thus,and the very process for just producing the bales, thenCBA has been used to estimate the social cost of certainthe latter emissions will be neglect able from anMSW disposal systems.environmental point of view and not worth studying.Forexample, the Danish deposit system for singleThis effort promotes the energy supply in the form ofuse drink containers has been studied by Vigsø [13].electricity production from incineration of solid waste inThereby,the cans are suggested to be incinerated insteadcombined heat and power (CHP) plants of 30 MW or Iranica J. Energy & Environ., 2 (2): 104-116, 2011106above and an interest of 6% or below, this way ofannoyances (g) from the odour at a SWM baling plantproducing electricity being outstanding from a costper kWh point of view if all taxes and other fees arededucted [16]. In doing so, the EUROPE model [17],based on the equalityprinciple [18], is applied tocommon and unusual emissions and pollutions fromsuch a baling plant in order to develop methods, basedon financial incentives, to reduce the unwanted andsometimes harmful substances and to provide a tool forinvestment appraisal. In this context, the main questionto be answered is what the potential investor shoulddo with surplus money if the opportunity occurs tobuy a baling-plant to be built, for example, withinalandfill; what are all the different costs, including theenvironmental ones, in order to obtain a properdecision-basis to enable deciding to invest in sub-schemebaling-equipment or not? Previously, the EUROPEmodelhas been applied to residuals from producingindustry [18], the construction sector [17] and wholelandfills [14] the general theory for the latter beingoutlined in co-operation with Moutavtchiet al [15]. Asregards the process of development of models for wastemanagement purposes, the foundation was presented byStenis [17] and later combined with the works ofMoutavtchi et al, in particular the WAMED model [15],soto analyze the applicability of these two models onlandfilling in general [14] and finally, in the present paper,to the emissions from baling-units.METHODOLOGYInthis article, a cost structure is proposed forevaluating and improving the ECO-EE of SWM baling-units, for example, with emphasis on the sub-schemeemissionsfrom fires in bales (sol), from the leachate (liq)andfrom the odour (g). The system-limit of the study issetto the baling-plant itself only and not the wholeintegrated SWM scheme wherein it possibly is located.An introduction touches upon mainly practical difficultiesin decision-making when implementing such a plant-unit.Relevant cost structures are then explored to enableevaluation and improvement of the ECO-EE of investingin complementary production of baled solid waste fuelata SWM baling plant employing the previouslyintroducedWAMEDand COSTBUSTER models whichare compatible with the developed theories of the equalityprinciple and the EUROPE model which hence areintroduced and applied in this context. Thereafter, themonetaryconsequences, i.e. the impact on the corporateeconomy of the emissions (sol) from the accidentalburning of bales, pollutions (liq) from the leachate andare exploredafter a description of the used method.The case study that follows concerns a cost-basedevaluation approach exemplified by data taken primarilyfrom a power and district heating plant in Sweden and abaling-machine manufacturer, also in Sweden. Thereby,the environmental costs, the future remediation costs andthe social costs are quantified in practice by the use of theaccounting system of the company in question, itsbudgetingsystem and CBA respectively. The externalmonetarydamages of various environmental loads arecalculated for gaseous emissions by using the concept ofEmission Factors (EF), for the leachate and stormwaterfrom plants by data from the operation of real world plantsandfor the impact of odour by estimations based on theauthors’ professional experience. More precisely, inpractice the damage stemming from baling plants areshown for gaseous emissions by the use of the profit andloss account of the company in question, for the impactof leachate and stormwater by data from relevant literaturebased on the study of real world plants during operationand for the expected impact of odour by the study ofcorporate forecasts, the realistic outcome when applyingthe models in the case study pointing on the favourablegenerality of this approach. After a discussion section,the theoretical provisions of evaluation of the ECO-EE aresummarized in a conclusions and recommendationssection. The evaluation of the ECO-EE of SWM schemesis based on CBA that employs the cost structuredeveloped here and takes into consideration therecommendations of the full cost accounting (FCA)methodology.EVALUATION OF THE COST STRUCTUREDue to its rationality and flexibility, the FCA methodis considered suitable as the basis for the cost structuretheory build-up in the present work and as a part of anECO-EE tool [14]. In this context, the FCA method isapplied to integrated SWM plants considering the wholelife cycle of solid waste by offering a certain set ofelements.The Waste Management Efficient Decisionmodel - the WAMED model [14, 15] - for evaluation of theECO-EEof a SWM scheme is a single-purpose, complexandshort-period model for use on municipal and regionallevels. The WAMED model evaluation procedure of theECO-EE of such a SWM scheme as presented in Figure 1takesinto consideration the recommendations of the FCAmethod for SWM [19, 20] and could be presentedaccording to Equation (1) that is modified afterMoutavtchiet al. [15]. Iranica J. Energy & Environ., 2 (2): 104-116, 2011107Fig.1: Elements of an integrated solid waste management schemeTheWAMED model is based on CBA theory, theVariable Costs (VC)essential difference between CBA and ordinaryinvestment appraisal methods used by firms being theC=Operating costs;stress on the social costs and benefits. Thereby, the aimC=Costs for extensive and routine repairs;is toidentify and measure the losses and gains inC=Costs for creating engineering networkseconomic welfare which are incurred by society asa(infrastructure);whole if the particular project in question is undertaken.C=Costs for creating the transport scheme servicingThus, CBA is considered to be suitable for encapsulatinga SWM plant;themajority of the different cost items, also intangibles,C=Costs for investment project services;that is relevant to consider when evaluating the ECO-EEC=Costsfor actual monetary damage, includingof a SWM plant.externaland relative ad hoc taxes specificallyC = C = C + C + C + C + C + C + C + C+ C + Cpollution of the environment;jctaxoprentiecfeerem+ C,C=Costsfor environmental punishment fees for(1)prohibited actions;WhereC=costs for remuneration of the public to make themC =costs for implementation of a SWM plant;accept pollution, e.g. lawsuits;Fixed Costs (FC)j=c, op, … , oC=capital outlays;Formost countries, the cost structure presented inC=costsfor general, standardized and fixed,(1) is regarded as normal and convenient in the practicaltaxexternal, environmental taxes; andimplementation of SWM schemes.basedon actually occurring damage, caused byfeeremC=Other costs [14] Iranica J. Energy & Environ., 2 (2): 104-116, 2011108The total cost, C, can be deducted from the current orAnapproach that is termed the “equality principle”estimated total plant revenue giving the gross profit.Aplant for incineration of waste directly at the reception ofthe waste is the main technical alternative to a balingplant. The gross profits of these main alternatives maythen be compared in order to estimate the relative profitabilities for the investment alternatives to facilitateinvestment appraisal. The size and extent of the current SWM plant can beexpressed in relative terms by Equation (2). Such anindicatorcompares the size and extent of the currentSWM with the total size of the average budget of a SWMactor of a certain kind and is based on generallyapplicable statistical facts for the size and extent of “C”.Thus, for purposes of facilitating SWM project appraisal,the additional information obtained about the relative sizeof the costs of the studied plant could be useful in orderto obtain an adequate basis of information for enablingreliable decision-making.R = C / Tc(2)avgwhereR=Relative size and extent of the current balingplant of a certain kind; C = sum of the sub-costs of the studiedbaling actor of a certain kind and;TC=Total cost of the average baling actor ofaavgcertain kind chosen, if possible including itsmonetary value of damage, according to theneeds of comparison of the current task [14];j=c, op, … , oEquation(2) is termed the COmpany STatisticalBUSiness Tool for Environmental Recovery indicator (theCOSTBUSTER indicator). This mathematical indicatormodel representation is based on the WAMED model andexpresses its implications for SWM plant relativisticstudies. The acronymic name of the indicator(COSTBUSTER) mirrors the ambition of the authors toreduce the internal costs for the company in question aswell as the costs for improving the environment.In the WAMED model, evaluation of the ECO-EE ofa SWM plant expresses, in an explicit form, assessment ofthe monetary damage that appears by degradation oflands,pollution of surface water, groundwater and theatmosphere,spreading of diseases (among the populationand the personnel) and disturbance of landscapes. Theobligatory inclusion of these in the calculation is the mainfeature of the model [14].[18]forms the basis for the forthcoming discussion. Thisprinciple induces a shift in paradigms that involvesequating industrial waste with normal products in terms ofthe allocation of revenues and costs. Otherwise, theprocessof achieving an environmentally sound industrycan be unacceptably slow. Thus, a new way of looking atwaste is needed. Thereby, the waste fractions studied are regarded as acompany’s output. This approach is mathematicallyconsidered in equation (3) and used for theadditionalallocationof revenues and fixed as well as variable coststo acertain waste fraction through multiplication by thecosts or revenues in question that are to beadditionallyallocated by splitting them up in their proper proportions.Thus, equation (3) constitutes the mathematicalexpression of theequality principle. The shift inparadigms imply the allocation of also fixed costs to theresidual products, this mirroring the novel attempt toenhance the status of the residuals in financial terms tothe same level as regular products.PF = X / (Y + Z)(3)wherePF=The proportionality factor;X=Thequantity of a certain waste fraction produced;Y=The quantity of normal product output and;Z=The sum of the quantities of all the different wastefractions produced.Asuitable production or administrative unit must bedefined, depending on the circumstances, when applyingequation (3) that represents the economic implications ofthe equality principle and is termed the model for EfficientUse of Resources for Optimal Production Economy(EUROPE) [17]. In this context, the term optimal refers toa simultaneous optimization of the production economy,the technology used and the environmental impact of theproduction process in question.Here,it is proposed that C, the costs forimplementation of a SWM baling plant, isadditionallyallocated to the accidental emissions from open burning(sol), from leachate pollution (liq) and from the odours ofsolid waste bales (g), through the creation of additionalshadow pricesshadow costs, obtained bymultiplication of C with PF. By adding the shadow coststothe total costs of the plants, a kind of punishment isobtained for not managing the business optimally in an Iranica J. Energy & Environ., 2 (2): 104-116, 2011109environmentally sense. Otherwise, if no addition hadusing the concept introduced here is to providetaken place, the application of the EUROPE model wouldmanagement with a tool to improve the efficiency in thejust mean a common redistribution of costs within theutilization of the inputs of the company in question and,company’s total output. That would not induce the sameat the same time, monitoring the improvement of thiseconomic incentives to improve the ecological footprintprocess, the obtainedshadow costs being mainly a virtual,of the plant in question in particular during its operation.financial construction to achieve the goal of an improvedThereby, the shadow costs are added to the original totalECO-EE and increased profits. Thus, what can be termedcostsof the businesses in order to increase the economic“environmental shadow prices” [17] should be used inincentives to improve the environment by making thecombination with the cost allocation principle in definingproductionprocess more efficient in terms of the baling-environmental standards. As always, the personalmachinery, the logistics for handling of the bale-heapsjudgement of managers is crucial, in the case of applyingand the environmental conditions that may be improvedweight factors depending on the manager’s ability toby,for example, additional wrapping of the bales in orderemploy different factors that level the differentshadowto decrease the emissions [2, 5, 7, 11]. In practice, thecosts in order to finally obtain a set of shadow costs thatshadow costs are supposed to be applied throughout thearecomparable without any major deviations. Toaccounting system of the firms; they should occur in theconclude, the previous works by Stenis [17, 18] are hereestimations, in the budgets and the forecasts, yescombined with the recent modelling-efforts byeverywhere where the unwanted pollutions show up inMoutavtchiet al. [14, 15] in order to provide the tooltheinternal economic system of the company.presented here for enabling estimation of the monetaryThus, this approach induces economic incentives forvalue of the emissions and pollutions from a baling unit ifthe reduction of solid, liquid and gaseous emissions, onesuchequipment is necessary to evaluate as regards costpossible case being schemes that end with incineration.when a decision must be made whether to invest in suchTherefore, the terms according to Equation (3) hereequipment or not.denote the following phenomena on an annual basis:X=Monetary damage value of a certain emissionAND POLLUTIONS produced;Y=Monetary value of the SWM plant’s regularAccidental Open Burning (SOL): In the case ofoutput in normal operation; andaccidental fire in bale storages, open burning emissionZ=Monetary damage value of all the differentdata may be applied when performing calculations onemissions produced.emission impacts. Emission data from open fires can beThe general process of evaluation of the ECO-EE inform ofthe mass of pollutant emitted per unit mass ofmonetary terms that is applied here for baling at a SWMmaterial burned [8, 21]. The EFs are listed in Table 1 forplant, is summarized by Moutavtchi et al. [14]the relevant open burning solid waste sources. Mainly,However, this study proposes thatweighting can bethe data for costs per kg stem from the Norwegian studyused to adjust the costs associated with a particular typeECON (1995), later applied in the ORWAREmodel [21].of waste to its environmental impact, based on scientificIn Chapter 5, the principles are described of how to applyevidence and/or in terms of overall societal aims. Forthe EFs in combination with the EUROPE and theexample, a factor of 1.2 can be used in combination withWAMED models.theinitially obtained additional shadow costif a certainemissionor pollution, by the authorities or the company’smanagement, is considered being so harmful to justifya20% mark-up to provide an extra incentive to reduce itsexistence. Also, weighing may be applied in order to makecertain resulting shadow costs comprehensible enough tobe used together withshadow cost for other kinds ofemissions and pollutions than the one having such a largeshadow cost that theshadow costs of other substancesare almost neglect able. However, the major point withMEASURMENTS OF EMISSIONS presented, for example, as emission factors (EFs) in thePollutions (liq) from Leachate: At the baling-plantlevel, the severity of the environmental impact ofthe leachate can be classified according to thetreatability and the polluting impact of the leachate(Table2). Thereby, the monetary values for a baling-unitunder certain levels of environmental impact of theleachateare estimated through the use of data from thedailyoperation of real world plants for the treatment ofwaste waters. Iranica J. Energy & Environ., 2 (2): 104-116, 2011110Table 1:Criteria pollutant EFs (g/kg) and the connected monetary values (€/unit) (€1 = SEK9.2, July 2006) for the main pollutants from open burning ofsolid wasteSolid waste sourceParticulateSOxCOTOCmethNOxEF (g/kg) [21]830.56.5€/kg (mean value)12.234.170.131.263.86EF * €(€/kg)97.832.095.348.2011.58Table 2:Estimated monetary values (€1 = SEK9.2, July 2006) for the environmental impact in monetary terms (€/m3) of the leachate from baling schemes [23]Impact category:No. 1No. 2No. 3No. 4Possible to direct theEnvironmentally based Moderate to highleachate and stormwatermethods for local treatmentconcentrationsSevere pollution Characteristics of theto municipal sewageof the leachate and stormof polluting leachateby leachate and impact category leveltreatment plantswaterand stormwaterstormwaterMonetary value of the €1/m3€1.5–2.0/m3€3–5/m3€7–15/m3impact level for one solid waste baling scheme plantTable 3: Estimated monetary values (€) (€1 = SEK9.2, July 2006) for the impact of the smell from baling schemesImpact category:No. 1No. 2No. 3No. 4Characteristics of the No smell at allReasonable smell requiring:·Severe smell requiring Very severe smell requiringimpact category level5information meetings withreconstruction with filter plant closure, causing higheradvertisements work stoppage·installationselectricity priceat certain wind directionsMonetary value of the impact 0200/labour hour400/information meetings, 50,0002,000,000level for one solid waste advertisements and expert talkbaling scheme plant estimated by the authorsEmissions (g) from Odours: At the baling-plant level, thePF = (EF *€ * the amount of the studiedseverity of the environmental impact of the smell can beclassified according to the strength of the public reaction(Table 3). Thereby, the presented monetary values for theimpact of smell from a baling-unit are based on theextensive professional experience of the authors.CALCULATION OF THE ENVIRONMENTAL LOADWhen the environmental load in monetary terms fromgaseous (g), liquid (l) and solid (s) emissions from a sub-scheme baling unit is calculated, the following procedureis applied: The WAMED model provides C = the sum of thecosts for implementation of the SWM baling scheme(Equation 1). The COSTBUSTER indicator (Equation 2) is appliedon the current SWM baling scheme, so to investigateits relative size compared with the average scheme inthe relevant branch and plant-category. The EUROPE model (Equation 3) provides theProportionality Factor (PF) for the gaseous (g), liquid(l) and solid (s) emissions and pollutions ofimportance from the sub-scheme baling unit inquestion according to equation 4.xxxsubstance * the risk factor) / (monetary value of theSWMplant’s regular output in normal operation+monetarydamage value of all the different emissionsproduced at the plant) (4) Multiplication of the different PFs with C, the sum of the costs, provided by theWAMED model gives the monetaryshadow costvalues to additionally allocate to the emissions andpollutions of different kinds from the plant inquestion. Monetary values, related to the differentkinds ofemissions and pollutions, areallocatedper unit (C * PF / unit) in order toobtain the final shadow costs to additionallyallocate to the current units of emissionsand pollutions so to initiate extra economicincentives to reduce the existence of these unwantedsubstances. If considered necessary, weight factors (wf) areapplied in order to make certainshadow costscomparable to the majority of the obtainedshadowcosts for enabling of its practical use. Iranica J. Energy & Environ., 2 (2): 104-116, 2011111Thusthe final formula reads as follows to obtain thesimplifies the presentation. A probability of 27% for fireadditionally allocatedshadow cost per unit of theunwanted emission or pollution from the current plant.The shadow cost per unit (€) = C * PF / unit = (C *EF * € * the amount of the studied substance * the riskfactor / unit * wf) / (monetary value of the SWM plant’sregular output in normal operation + monetary damagevalue of all the different emissions produced at the plant)(5)WhereC=The sum of the costs for implementation of thebaling plant (Eq. 1).PF=Proportionality Factor = X / (Y + Z) (Eq. 3)EF=The Emission Factor for a certain substance€ =The monetary value connected to the criteriapollutant (EF)wf =The weight factorCASE STUDYCBA forSolid Waste Baling Schemes: The theoryintroduced in this paper is tested in practice by the use ofinformation from a power and district heating plant and abaling machine manufacturer, both in Sweden. The lattersupplies the former with equipment.Thetheoretical basis of the “cost” approachevaluation of the ECO-EE of the MSW managementplants, according to the WAMED model concept, hasenabled evaluation of the cost items for the year 2006.This data is used to construct a fictional butrepresentativeexample of a combined heat and power(CHP) plant of 50 MW giving approx. 20 GWh ofelectricity annually. Accordingly, even though the systemboundary of the current study encompasses the veryequipment of the baling-plant unit itself in question only,dueto the emissions, this fictional plant example isassumed to be supplied by a baling plant providing thenecessary fuel in the form of annual production of 20,000round bales, each weighing 800 kg and consisting ofindustrial waste to be incinerated.The calculations are performed for the fire-relatedemissions SO and NO, because of the big generalattention in the public debate to these substances incombination with their relatively large EF and their largeconnected monetary value according to US EPA [21] andSundqvist [22] pointing in the direction of SO and NObeing important substances to study. Calculations basedon data for two gaseous substances only (SO and NO)are considered sufficient to demonstrate the generalusefulness of the approach that is introduced here andaccidents is applied as a most extreme and very unlikely,worst case, this figure being representative for all Swedishlandfills during 2002, mainly due to self-ignition [24]. Aweightfactor of 1/100,000 is applied for specifically thefire-related emissions to make its allocated shadow costscomparable to the other studied substances.Also,it is assumed that it is possible to direct theleachate and the stormwater to municipal sewagetreatmentplants. A local annual precipitation of 500 mmover the plant area of 4000 m is assumed to give rise tostorm water and leachate. This gives an assumed, maximaltotal annual storm water and leachate volume of 2000 m.Furthermore, as regards emissions of odours, a stateof “reasonable smell” is assumed. Finally, four weekswork stoppage is assumed annually during summertimebecauseof this “reasonable smell”. An exchange rate of€1 = SEK 9.2 (July 2006) is assumed throughout.Application of the WAMED model, according toEquation (1), to the fictional SWM scheme, gives thefollowing estimate (k€) on an annual basis: C = sum of the costs for implementation of theSWM baling scheme = C + C + C + C + Cctaxopren+ C + C + C+ C + C + C =tiecfeeremo = 73 + 0 + 247 + 65 +1 + 0 + 16 + 11 + 0 + 9 + 16 =438;Fixed Costs (FC)C=Capital outlays for land acquisition, constructionof the main facilities, buildings and groundworks, machinery and trucks and intangibles,such as software = 73;C=Costs for environmental, fixed, external andtaxstandardized taxes (combustion and landfill tax)=0, as such taxes are not referable to the balingactivity specifically; andVariable Costs (VC)C=Operatingcosts such as those for energy,salaries,insurances, leakage and air pollutioncosts, plus k€139 for annual depreciation = 247;C=Costsfor repairs and maintenance of balingmachinery and front loaders = 65;C=Costsfor creating engineering networks such astechnical installations (light, sewerage, etc.) = 1;C=costsfor creating the transport scheme servicingaSWM baling scheme = 0 (no lorries to be usedin this specific case); Iranica J. Energy & Environ., 2 (2): 104-116, 2011112C=costsfor project services such as research and PF for 2000 m leachate for case No. 1 (Table 2)design,local EPA permissions and certification=(€1/m stormwater and leachate * 0.5mand training of the personnel = 16;precipitation/ m * 4000 m total area) / (k€652+C=costsfor actual damage, including costs fork€39) = k€2 / (k€652 + k€39) = 0.003pollutionand cleaning of water and leachate and PF for case No. 2 (Table 3) = (((€200 / labour hourplantcleaning plus insurance cost increases due*4 weeks labour lay down * 5 days/week * 8 hoursto accidents = 11;/ day) + (€400 / information meeting, advertising andC=costs for environmental punishment fees = 0;expert talk * 1 event)) / €1000 / k€) / (k€652 + k€39) =feeC=Costsfor remuneration of the local population tok€32 / (k€652 + k€39) = 0.046remmake them accept pollution, e.g., lawsuits = 9;C=Othercosts for estimated miscellaneous expensesThus, the following total amountsof= 16money are to be additionally allocated to thej=c, op, … , ofourdifferent kinds of emissions and pollutionsApplicationof the COSTBUSTER indicator to thecurrent SWM baling scheme, to investigate its relative a)Amount to allocate to the SO fire-relatedsize, yields:emissions (sol) = PF * C = k€5.71 C = C + C + C + C + C + C + C + C+ C + Cemissions (sol) = PF * C = k€31.69jctaxoprentiecfeerem+ C = k€438 = total annual cost of the current fictional Amount to allocate to the pollution (liq) fromSWM baling scheme;stormwater and leachate = PF * C = k€1.26Tc=current total annual cost of the averagePF * C = k€20.28avgSwedish SWM baling scheme, excluding itsmonetary value of damage, (at a productionThus, the following amounts of money, related to therate of20,000 bales / year weighing 825 kg /three different kinds of emissions and pollution,bale @ €20/tonne) = k€330; andrespectively, are to be allocatedper unit to the differentR =k€438 / k€330 = 133%.substances in the waste management scheme.InEquation (3), Y = k€652 (20,000 bales produced a) Amount to allocate per kg SOfor the SO fireannually at a revenue of €32.6 (SEK 300) each), while Z =emissions (sol) = (PF * C = (k€9 / k€691) * k€438approx. k€39 (all the five fire-related emissions takinga= 0.013 * k€438 = €5705 / (0.5 g SO (EF) / kg waste /27% fire risk and a weight factor of 1/100,000 into account:1000 g / kg * 20,000 bales * 800 kg / bale) = €0.71 perk€5.4; leachate pollutions: k€2; and odour emissions:kgSO. Alternatively: the amount to allocate perk€32). Equation (3) gives the following results for: (a) thetonne of waste for the SO fire emissions = (PF SO and NO related emissions (sol) from a fire, (b) the* C) / (20,000 bales * 800 kg / bale / 1000 kg / tonne)pollution (liq) from leachate and (c) the emissions (g) of= €0.36 per tonne wasteodours. b) Amount to allocate per kg NO for the NO fire a PF for the SO emissions, as an example (Table= 0.072* k€438 = €31693 / (3 g NO(EF) / kg waste /burning1) = ((0.5 g SO/ kg waste * €4.17 / kg waste / 1000 g1000 g / kg * 20,000 bales * 800 kg / bale) = €0.66 per/kg waste / €1000 / k€ * 20,000 bales / y * 800 kg /kg NO. Alternatively: the amount to allocate perbale) * 27% fire risk) / (k€652 + k€39) = k€9.0 / (k€652tonne of waste for the NO fire emissions = (PF + k€39) = 0.013* C) / (20,000 bales * 800 kg / bale / 1000 kg / tonne) bPF for the NO emissions, as an example= €1.98 per tonne wasteburning(Table1) = ((3 g NO/ kg waste *€3.86 / kg waste / Amount to allocate per m leachate for the pollution1000 g / kg waste /€1000 / k€* 20,000 bales / y * 800(liq) from the leachate = PF * C = (k€2 / k€691) *kg / bale) * 27% fire risk) / (k€652 + k€39) = k€50.0 /k€438 = 0.003 * k€438 = €1268 / (4000 mtotal area *(k€652 + k€39) = 0.0720.5 m precipitation / m/ year) = €0.63 per m leachateleachateodoursrespectively.burning b)Amount to allocate to the NO fire-relatedburningwater Amount to allocate to the emissions (g) of odours =odoursburningburningemissions (sol) = (PF * C = (k€50 / k€691) * k€438burningburningleachate Iranica J. Energy & Environ., 2 (2): 104-116, 2011113 Amountto allocate per tonne waste to the emissionspollutants adapted to the corporate realities of the internal(g) of odours = PF * C = (k€32 / k€691) * k€438 =economy of a company that the application of theodours0.046 * k€438 = €20284 / (20,000 bales * 0.8EUROPE model makes possible. Also, the EUROPE modeltonne/bale) =€1.27 per tonne wasteconstitutes a tool for monitoring the progress of the workDISCUSSIONwhichin the baling plant context can be used forThebasic thrust of this study has been to providemeasuring of the process.thefoundation of a practically useful tool in economicSpanish studies [11] of the baling-wrapping processterms when decisions are needed about whether to investare in favour of rectangular bales compared toincomplementary solid waste baling equipment or not.conventional landfills. Unit costs per tonne for plastic-Thereby, the ECO-EE is evaluated in monetary terms inwrapped bales and landfills are estimated. In Greece, theorderto review the existing or expected costs to considercost structure of selected types of solid waste treatmentbased on CBA that stresses social costs and benefits. anddisposal facilities, relevant to European states, haveBaling, of course, is a subsystem among others inbeenestimated [12]. Danish studies [13] based on CBAMSW management schemes. The system limit in questionhave compared the social costs and environmentalrestricts the study to a more manageable size and enablesbenefits of the deposit system with the municipal wastethe estimation of the environmental impact of, for example,disposal system with emphasis on certain consumergaseous emissions from burned material, leachate andfacilities in order to decide whether the costs in theodours also in economic terms.deposit system are justified from an environmental benefitIn this respect, the objective of the study to applypoint of view.theWAMED and COSTBUSTER models to SWM plantsHowever, these three latter studies do not employaingeneral to evaluate and improve the ECO-EE is fulfilled,framework for estimatingshadow costs that givethestrength and novelty of the methodology being itsincentives to improve the environmental performance, norgeneral adaptability to the circumstances at hand and thedothey provide a comprehensive cost review to base, foraggregation level of the current plant. Thereby, theexample, an investment decision on or to monitor theapplicationof weight factors on pollution-phenomena ofbusiness activities which the cost allocation bycertain need enables management to elaborate the span ofapplication of the EUROPE model enables. Thus, theshadow cost so to achieve reasonable and comparablepresent study represents a novel and useful approach assizes for the resulting shadow costs.The shortcomings ofregards evaluating and optimizing the ECO-EE of a balingthe model mainly lie in the wide span of the input data andplant-unit in economic terms. The case study providesmonetary values used for estimating the environmentalrealistic results when the WAMED model and theimpact of the emissions and pollutions in monetary terms.COSTBUSTER indicator are applied. The latter modelHowever, the applied concept of weighting alleviates thisgives a 133% relative size for the scheme studied,deficit.showing that this plant is rather large, however nottooEarlier investigations as regards monetary evaluationlarge to deter from possible investments. In case theofemissions in, for example, the Netherlands [9] haveCOSTBUSTER indicator indicates an unreasonable largestudiedoptimal levels of pollution and its correspondingbaling-unit to build, the manager in charge shouldshadowprice for the major environmental impactseriously consider resizing the intended investment. Ascategories. Israeli studies [10] highlight the costs ofalways, the personal judgement is crucial for a successfullandfilland incineration externalities and the mainmanagement.polluting substances.When applied to the emissions and pollutionsHowever, these attempts to express thestudied, theequality principle and the EUROPE modelenvironmental damages in monetary terms do not providealso produce reasonable and consistent results as regardsthe CBA approach of this study based on the listing of allthe additional monetary amount to allocate to thethekinds of costs encompassed in the WAMED modelemissions and pollutions studied. Therefore, if appliedwhichprovides a sufficient cost review as a decisionandintegrated in practice in the companies’ internalbasis when estimations for possible investment optionsaccounting, budgeting and forecasting systems etcetera,in SWM plant schemes are made. Neither do these earlierthese additionalshadow costs give managementaworks enable the allocation ofshadow costs to thepractically useful tool to monitor their company’sfor a better environment expressed in monetary unitsquantifying this development and hence enables Iranica J. Energy & Environ., 2 (2): 104-116, 2011114environmental performance over time in monetary terms. Local authorities, such as local EPAs, wanting toIn this context, the allocation of alsofixed costs toapply environmental legislation;residuals is a novelty. It should be noted that a linear National governments wanting to design newrelationship exists between the sum of the costs (C) for aenvironmental legislation;baling-plant and theshadow costs that are allocated to Environmentalcourts that fix punishments related tosuch plants by applying the EUROPE model inthe current environmental impact and;combinationwith the WAMED model according to the Plant owners wanting an investment appraisalpresent findings.tool about,for example, a baling plant that takesThe suggested methodology also inducesinto account views of the plant neighbourhood,shadow cost-based economic incentives that wouldto avoid, for example, protest actions and massact to reduce substantially the emissions andhysteria;pollutions to which management, by using theEUROPE model, might attribute extra importance.CONCLUSIONS AND RECOMMENDATIONSIn this context, the possibility of applying weightsallows the authorities, as well as management, forThis paper is aimed at studying the economics ofexample, to take into account certain concerns aboutSWMbaling plants and it shows utility when, in practice,reducing, in particular, the existence of certain negativefocusing on economic and emission- and pollution-relatedphenomenaby allocating even more economic incentives,aspects of SWM. The developed methodology induces ahence creatingshadow costs for these unwantedmore efficient and sustainable use of natural resourcesphenomena.through providing economic incentives that promotesThe possibilities of using this methodology on thewaste reduction at the source.The main features of theregional and even global scales should be investigatedresearch performed are as follows:andthe methodology made to encompass, for example,the environmental impact on air, soil and water due to It decreases the negative impact of solid waste onsignificant pollutants. This would be possible objectivesthe environment and the health of the population byforfurther research. Moreover, the developedreflecting an integrated approach to solving thesemethodology may be adapted to estimation of theproblems simultaneously.economic value and environmental impact of waste It provides a generally applicable investmentmanagement schemes in the perspective of resourceappraisal support tool for the implementation ofeconomy optimisation on the societal and global levels.SWMprojects through increasing the economicAlso, it should be investigated if the methodology can bebenefits at both the corporate, municipal and regionalused for estimating the proper amounts of carbon dioxidelevels.tax and similar expressions of the human ecological It enables the carrying out of the comparativefootprintsin the SWM context. However, carbon dioxideanalysis, in monetary terms, of the estimated, actualis mainly of importance for the climate debate, butand prevented monetary damages from theprecisely this aspect could be considered within theimplementation of a sub-scheme plant unit.scope of another study, not in the context of minor baling- It increases the efficiency of the use of naturalunitmachinery plants. Thus, further research can also beresources, in particular as regards the utilization,performed concerning how the WAMED model, therecycling and reuse of material and immaterialCOSTBUSTER model and the EUROPE model can beresources such as energy.applied on the emissions from the combustion from the It provides a performance indicator for the project invery bale-burning itself.question in terms of its economy, the efficiency ofPossibleEnd Users for the Methodology and the Relatedimpact through the development by time of theMajor Aspect of Importance Would Be as Follows: Parties wanting to estimate and monitor the ECO-EEof a SWM baling plant with respect to the estimated,occurringand prevented emission and pollutionlevels, expressed in monetary terms;thetechnology used and the project’s environmentalcurrentshadow costs. A linear relationship exists between the total sum ofthecosts (C) of a baling-scheme and theshadowcosts that are allocated to the related emissions andpollutions from the baling-unit in question byapplication of the WAMED and the EUROPE models. Iranica J. Energy & Environ., 2 (2): 104-116, 2011115 TheEUROPE model can, when combined with theREFERENCESWAMED model, be applied to landfilling in generalandthe emissions and pollutions from, for example,sub-scheme baling-units as well as to producingindustry and the construction sector. The case study performed, investigating thepractical application of economic models on a SwedishSWM baling plant-unit, shows utility for evaluation of theECO-EE of the studied unit. In particular, the results fromthe case study point in the direction of promisingpossibilities for the allocation ofshadow costsemissions and pollutions from a SWM baling plant, basedon use of the EUROPE model, which in turn is based ontheequality principle, in combination with the WAMEDmodel.Based on the Analysis Performed, the FollowingRecommendations Are Made: Application of the WAMED and COSTBUSTERmodels to SWM schemes as well as to sub-schemescosting is recommended in general. When deciding to invest in SWM sub-scheme plantunits, in particular baling equipment, the EUROPEmodel is recommended for economic estimation ofthe emissions from accidental burning of bales,pollutionby leachate and odour at a SWM balingschemein order to, by induced economic incentives,reduce such unwanted and sometimes harmfulsubstances. 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