Servizio Comunitario di Informazione in materia di Ricerca e Sviluppo - CORDIS

Economic sustainability assessment methodology for waste management planning

The objective of the Work package 4 (WP4) was to identify economic sustainability criteria of municipal solid waste management (MSWM) systems and to develop indicators to quantify economic performance of MSWM systems.

The system in question here is the MSWM system. The time horizon of the system is two generations (about 50 – 60 years). The viewpoint is that of the Municipality, while the City Council is the basic decision-maker. There can of course be additional (supplementary) viewpoints, such as Regional, National, Global (depending on the chosen environmental and social indicators). The objective refers to a sustainable MSWM system, taking into consideration social, environmental and economic dimensions.
In our case, with the municipal MSWM system, the objectives might be “satisfaction of citizens”, “protection of the environment”, “reduction of waste”, “minimization of social unrest”, “minimization of citizens’ fees”, etc.
As for the depth of the analysis (level of detail), one would logically expect the “same” level for all parallel modules (environmental, economic, social). Yet, this is not practical for several reasons. An approximation in the order of 10 or 20 % in economics has a specific meaning and it is measurable. This is not so for social or for environmental aspects. It would be less than desirable to be very specific and “accurate” in the economic indicators and leave rather “loose” the other two piers of the analysis. Such an approach could convey wrong messages to the decision-makers and might defeat the very objective of the project.

According to the above, some definitions or explanations of terms are in order:
- Economic sustainability is related (and refers) to a specific system, a specific time horizon and a specific decision-maker.
- A system operates in an Economically Sustainable manner if it covers all its expenses and it expects to do so over the horizon of the analysis.
- If it is covering its expenses through subsidies, it could be considered sustainable only if there is a guarantee that these subsidies will continue to be available “for ever”.

Economic sustainability also implies the least expensive waste management system for all interested parties (served clients a/o financers) over the complete operation period, provided that it generates enough income a/o profit to ensure an economically sound and continuous operation as well as coverage of all aftercare expenses for a period stipulated by law (certainly not less than 30 years after closure).

The selected economic sustainability criteria and indicators are grouped as follows:

- Criterion 1: Efficiency at both the Municipal level (Indicators: Cost per ton or per household or per person, Revenue from recovered material and energy, MSWM system Cost as % of GNP of the city, Diversion between revenue and expenditures for MSWM),
- Criterion 2: MSWM subsystems efficiency (Indicators: Cost per ton or per household or per person for every subsystem (Temporary storage, Collection, Transport, Incineration, Aerobic Mechanical Biological Pre-treatment, Anaerobic Mechanical Biological Pre-treatment, Land filling, Anaerobic Digestion, Composting, Sorting, Hazardous Waste Treatment)),
- Criterion 3: Equity (Indicators: Cost per person as % of minimum wage per person, Cost per person / income per person),
- Criterion 4: Dependence on Subsidies (Indicator: Subsidies or grants per person).

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