Transcript Economic Evaluations: Making the Case with Dollars and Sense

Genuine Progress Index for Atlantic Canada
Indice de progrès véritable - Atlantique
The Business Case for Waste
Reduction
Waste Reduction Week
Clean Nova Scotia Breakfast with Minister
Halifax, 20 October, 2004
Waste and Sustainability
• How we manage waste is a significant
indicator of community sustainability
• Capitalizing on use and reuse of waste as a
resource is a key component of the efficient
use of natural resources
• Resource conservation, materials efficiency,
waste prevention, reuse, and recycling are
all integral components of a sustainable
economy
GDP & Waste
• Economic growth indicators do not place a
value on reduced resource extraction and
energy use, decreased landfill emissions and
leachate contamination, or improving the
quality of our air, water, and natural
environment
• As long as economic growth measures remain
the primary benchmark of wellbeing and
prosperity, waste diversion will be seen as a
cost and not as the investment that it is
GPI & Waste
• The GPI recognizes resource extraction,
resource use, and spending to compensate for
environmental damage as costs rather than
gains to the economy
• The GPI counts the value of what remains in
our forests, oceans and other resources, not
just what we extract from them, and so
recognizes waste reduction initiatives as gains
rather than costs to the economy
Can we do it?
Percentage Waste Diversion in Nova Scotia
60
% Diversion
50
40
30
20
10
0
1989 1990 1991
1992
1993
1994
1995
1996 1997
1998
1999 2000
Competitiveness
and Genuine Progress
Tonnes Disposed(per capita)
1989
1999/2000
Diversion
Rate (%)
Cape Breton
0.66
0.45
31
Eastern
0.76
0.40
48
Northern
0.64
0.46
29
Halifax
0.84
0.33
61
Valley
0.65
0.31
53
South Shore/ West Hants
0.63
0.37
41
Western
0.56
0.47
17
0.71
0.38
47
Waste Region
Total
The Nova Scotia GPI
Solid Waste-Resource Accounts
• Are the costs and benefits of the Nova
Scotia solid waste resource system
worth the investment?
• The GPI Atlantic Solid Waste-Resource
report calculates for the first time the
marginal economic, social and environmental
costs and benefits of solid waste-resource
management in Nova Scotia
• The report compares the operating and
amortized capital costs of the province’s
solid waste-resource system in the 1996-97
fiscal year (April 1, 1996 to March 31, 1997)
and the full costs of the solid waste-resource
system in the 2000-2001 fiscal year
• This is the first detailed independent
evaluation of the Nova Scotia solid wasteresource system and the first Canadian
evaluation of a solid waste system using the
full-cost accounting principles of the GPI
Full Cost-Benefit Analysis
Components: Costs
• Operating and amortized capital costs
(including curbside pickup)
• Additional time of some citizens
• Nuisance (handling organic waste)
• Stewardship program costs
• HHW, beverage container recycling,
used tire program costs
• RRFB admin and operating costs
Full CBA Analysis: Benefits
• Greenhouse gas and air pollutant
emission reductions
• Extended landfill life
• Energy savings from recycling
• Direct and indirect employment (part)
• RRFB – diversion credits, programs
• Avoided siting and liability costs
• Export revenue from waste-resource
goods and services
• Additional Tourism
Intangible Benefits
• Indicators excluded from analysis and
therefore not explicitly monetized:
– Aesthetic
– Public health costs from pollutants emitted
from extraction of virgin materials for
manufacturing
– Odours and noise
– Social values such as health
– Community pride (perception/self-image)
and collective and community values
Intangible Benefits ctd.
– Wildlife/nature (greater access to unspoiled,
safe parklands and preserves)
– Biodiversity
– Reduced litter
• All above excluded from CBA due to challenges
of assigning monetary value
• Yet value of these benefits should be
acknowledged
Calculating Value & System Costs
• Cost-benefit assessment compares the
‘base case’ costs (“business as usual” costs
prior to the inception of the new strategy)
with a full cost accounting assessment of
the 2000-01 solid waste-resource system
• FCA analysis determines the marginal
costs and benefits between the 1996-97
fiscal year solid waste-resource system and
the 2000-01 fiscal year solid waste
resource system
Results
• Implementation of the Solid Waste-Resource
Strategy led to an increase in operating and
amortized costs from $48.6 million
($53/capita) in the 1996-97 fiscal year to
$72.5 million ($77/capita) in the 2000-01
fiscal year.
– An increased cost of $24 million
($25/capita) for implementing the
changes
Results
• The new NS solid waste-resource system in
2000-01 produced net savings of at least
$31.2 million, when compared to the old
1996-97 solid waste-resource system
• This translates into savings of $33 for each
Nova Scotian, versus a cost of $25 as
suggested when comparing strictly the
operating and amortized capital costs of the
two systems
Benefits
• Total benefits of 2000-01 system range from $79
million to $221 million =$84-$236 pp, incl:
– $3.3 - $84.3 million in GHG emission
reductions;
– $9 - $67 million in air pollutant reductions
– $18.8 million in extended landfill life
– $28.6 million in energy savings from recycling
– $6.5 - $8.9 million in employment benefits
– $1.2 - $1.9 million in avoided liability costs
– $1.1 - $1.7 million in export revenue of goods
and services
– $187,000 in additional tourism
Energy savings per tonne of waste
recycled
Material
Energy savings
Paper
8.5 million Btu
Plastic
20.1 million Btu
Glass
2.4 million Btu
Steel Cans
18.4 million Btu
Aluminium Cans
166.9 million Btu
Costs
• Total costs of 2000-01 solid waste-resource system
were $96.6-102.7 million:
– $72.4 m. in operating and amortized capital costs
– $14.3 m. for beverage container recycling prog.
– $2.7 million for used tire management program
– $1.6 million in RRFB operating and admin costs
– $5 - $9.5 million to increase participation
– $220,000 - $1.8 million in nuisance costs
Conclusions
1995 NS Solid Waste-Resource Strategy has
led to a considerable net benefit, both in
monetary and non-monetary terms:
1) The solid waste-resource system in
2000-01, despite increased operating
and amortized capital costs, provided a
net savings of between $31 million and
$167.7 million compared to the
operating and amortized capital costs of
the old system
Conclusions
2) Nova Scotia is a leader both
internationally and nationally in solid
waste diversion.
3) The accessibility, comprehensiveness,
and levels of waste being composted and
recycled have all improved since the
introduction of the Solid Waste-Resource
Strategy.
Genuine Progress
– Access to curbside recycling in Nova
Scotia jumped from less than 5% in
1989 to 99% today
– 76% of residents now have access to
curbside organics pickup
– Both are by far the highest rates in
the country
Access to curbside
recycling, NS 1987-2001
Comparisons
• On a per capita basis, Nova Scotia disposes of
39% less waste than Canadian average
• HRM has the highest waste diversion rate of
any municipality in Canada – twice the
average.
• Nova Scotia’s overall waste diversion rate of
46% is also higher than any industrialised
country.
• Nova Scotia's high diversion rate is due in
large part to its composting system.
Organics Diversion
Challenges
• Back-sliding: NS: 1989 = 3% diversion; 2000 =
50%; 2003 = 46%
• HRM decreased from around 50% to 47%.
• Inadequacy of systems for household hazardous
waste and construction and demolition waste
(25-30% of the waste stream)
• Inadequate waste diversion in apartment
buildings and businesses
• Need expansion of waste stewardship
agreements with businesses
What can businesses do?
• Sydney Olympics demonstrated that compostable
coffee cups can be successfully used on very large
scale. In NS, Irving Oil, Just Us use biodegradable
coffee cups. But biggest purveyors of coffee in Nova
Scotia still don’t use recyclable or compostable
coffee cups.
• Litter study found Tim Horton’s and MacDonald’s
alone account for one-third of all litter in NS –22%
and 10.1% resp. Efforts by the NS DEL to encourage
Tim Horton’s to use compostable or recyclable
coffee cups are ongoing
In the long term
• If we really want to reduce waste further,
we need to reduce the amount of waste we
generate in the first place – by reexamining consumption habits and
reducing unnecessary packaging.
• A Zero Waste Council a good first step –
with business, NGOs, government
How we manage our waste
affects the kind of Nova Scotia
we leave our children?
Genuine Progress Index for Atlantic Canada
Indice de progrès véritable - Atlantique
www.gpiatlantic.org