International Review of Waste Management Policy - Department of ...

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� Land use
Some studies have debated whether or not to assess the opportunity cost of
land in the assessment of externalities. 1202 Generally, however, the view tends
to be adopted that land values are reflected in the cost of facilities. 1203 This
has not been included in this analysis.
� Transport
The assumption made is that transport externalities are internalised in fuel
and other transport-related duties. The degree to which this assumption holds
good relates to the significance accorded to (and the approach to valuing)
congestion externalities, if indeed these should be considered as external
costs. It can be argued that a proportion of the costs associated with
congestion are not ‘external’ insofar as transport decisions are made on the
basis of some knowledge as to when congestion is likely to occur. Indeed, in
the waste management case, service providers will be sensitive to congestionrelated
issues in terms of the timing of their collection rounds. However, if
marginal congestion costs are estimated on the basis of marginal additions to
traffic, these can be quite high, and the assumption that existing duties
internalise all externalities almost certainly breaks down. 1204 Notwithstanding
these points, to the extent that the assumption might not be valid, then to the
extent that one is seeking to understand changes in the transport externalities
across different systems, it can reasonably be argued that these changes are
unlikely to have a major influence on the analysis.
63.1.3 Emissions Associated with Energy Generation
All waste management processes consume, and in many cases, generate energy.
Where energy is generated, it can be considered to replace a requirement for
equivalent amounts of power from other sources.
There are climate change and air quality impacts associated with the consumption
and the generation of energy. Emissions from the use of diesel are considered within
1202 For example, a Dutch study attributed significant externalities to landfill related to these costs (E.
Dijkgraaf and H. R. J. Vollebergh (2004), Burn or Bury? A Social Cost Comparison of Final Waste
Disposal Methods, Ecological Economics, 50, 233-247).
1203 This includes most, if not all, studies other than that cited in the previous footnote, including a
recent Dutch study which discussed Dijkgraaf and Vollebergh’s approach (H. Bartelings, P. van
Beukering, O. Kuik, V. Linderhof, F. Oosterhuis, L. Brander and A. Wagtendonk (2005) Effectiveness of
Landfill Taxation, R-05/05, Report Commissioned by Ministerie von VROM, November 24, 2005).
1204 For example, work for the then DETR looks at the marginal costs of congestion using linear (with
respect to vehicle quantities) speed-flow curves, and assuming that the value of time should be valued
at something close to the average wage rate (see T. Sansom, C. Nash, P. Mackie, J. Shires and P.
Watkiss (2001) Surface Transport Costs and Charges: Great Britain 1998, Report for DETR, July
2001). All these (and other) assumptions are open to question to a degree. This approach tends to give
high marginal costs for congestion. It gives highest costs for dense urban areas at peak hours,
arguably the very time when most people are likely to internalise these costs into their decision-making
processes. From this point of view, it is questionable whether the attribution of congestion costs as a
‘marginal externality’ is necessarily correct, albeit it is an accepted approach in the literature.
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