Guide to COST-BENEFIT ANALYSIS of investment projects - Ramiri

- Waste Management Hierarchy rules on the export for recovery of certain waste (European Parliamentand Council Regulation (EC) No 801/2007). Waste management strategies must aim primarily toprevent the generation of waste and to reduce its harmfulness. Where this is not possible, wastematerials should be re-used, re-cycled, or used as a source of energy. As a final resort, waste should bedisposed of safely (by incineration or in authorized landfill sites). In project analysis, an option onprevention of waste generation or waste re-use and re-cycling will be systematically presented tocompare the difference in costs between prevention, recycling and final waste disposal facilities. In anycase, the choice of an incinerator or a landfill should be argued by the existence of very large costsoccurring in waste prevention and recycling options.- the proximity principle: waste should be disposed of as close to the source as possible, at least with theobjective of self-sufficiency at Community level and if possible at Member State level.The project will measure the distance between the area of production of the waste and the localization ofthe plant and the related costs of transport. High transport costs or long distances should be explained byspecific reasons, such as the nature of the waste or the type of technology used.3.2.1.3 Feasibility and option analysisSome scenarios have to be set up for the purpose of choosing the best option from different availablealternatives. The potential scenarios are as follows:- a BAU scenario;- some available alternatives;- global alternatives to the project (for example the study of an incinerator as an alternative to a landfill,or a separate collection centre for recycling in place of a final disposal plant as a landfill).Against the BAU scenario, the project analysis will give the reasons for the choice of ‘doing something’instead of maintaining the status quo option. The arguments will focus on the economic, social andenvironmental benefits of the project and should emphasize the resulting cost for the status quo option interms of economic costs, environmental and human health impacts.In the second case, the feasibility study will expose the technical alternatives to the option selected. Itcould be for an incinerator, for example, the type of furnace or the adjunction of a steam boiler for energyrecovery.Eventually, for the global scenario the study will focus on the different methods for waste management inthe context of the project. The project should distinguish one alternative focusing on the prevention, there-use, the recycling or the recovery to be compared with the option chosen. The aim is to fulfill thehierarchy principles and initiate their concrete integration into waste management project analysis.Demand analysisThe demand for waste recovery and disposal is a key element in the decision concerning the building of awaste treatment facility. The estimation will often be based on:- the evaluation of the production by type of waste and by type of producer, in the geographical area ofthe project;- present and expected changes in national and European norms in waste management.The evaluation of the future demand for municipal waste management will take into account thedemographic growth and the migratory flows. For industrial waste, the key parameter will be the expectedindustrial growth in relevant economic sectors. In any case, it is important to bear in mind the possibleevolution in waste producer behaviour, such as the increase in consumption correlated with the standardof living, the increase in recycling activities or the adoption of clean products and clean technologies (withtheir potential consequences on waste streams), variation in the type of waste produced and the decreaseor increase in waste production.87