draft for expert review · 1 zero waste business case: final report zero waste business case draft...

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Zero Waste Business Case: Final Report

Zero Waste Business Case

DRAFT for EXPERT REVIEW Submitted to:

Environmental Standards Branch

C/O 3rd floor, 2975 Jutland Rd

Victoria BC

V8W 9M1

Attn: Jennifer Maxwell

[email protected]

Submitted by:

Innes Hood, P.Eng

Innes Hood Consulting Inc.

338 East 14th St

North Vancouver, BC

V7L 2N6

Tel 604 988-0444

Email [email protected]

In association with:

Earthvoice Strategies,

Kelleher Environmental

May, 2013

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Table of Contents Glossary ......................................................................................................................................................... 6

Acronyms ...................................................................................................................................................... 6

Summary ....................................................................................................................................................... 8

Context ...................................................................................................................................................... 8

Scope and Methods .................................................................................................................................. 8

Results ....................................................................................................................................................... 8

Introduction ................................................................................................................................................ 10

Objectives ............................................................................................................................................... 10

Scope of Analysis ..................................................................................................................................... 10

Zero Waste Approach to Increased Diversion ........................................................................................ 12

Provincial Waste Management Hierarchy .......................................................................................... 13

Data limitations ....................................................................................................................................... 14

Report Structure ..................................................................................................................................... 14

Methodology ............................................................................................................................................... 15

Overview of Collection, Recycling and Disposal Process in BC ............................................................... 15

Analytic Framework ................................................................................................................................ 17

Materials Quantification Methodology .................................................................................................. 19

Material Forecast ................................................................................................................................ 19

Disposal by Material (2010) ................................................................................................................ 22

Diversion by Material (2010) .............................................................................................................. 22

Disposal and Diversion Forecast by Scenario ...................................................................................... 23

Incremental Diversion by Material and Scenario (2025) .................................................................... 24

Incremental Diversion by Milestone Period ....................................................................................... 26

Economic Analysis Methodology ............................................................................................................ 28

Assumptions ........................................................................................................................................ 28

Data Sources for Costs and Revenue .................................................................................................. 29

Municipal Costs ................................................................................................................................... 29

Commodity Revenue ........................................................................................................................... 30

Industry Stewardship Costs & Revenues ............................................................................................ 30

Material Diversion in the Zero Waste Scenarios................................................................................. 31

Costs and Revenue by Material and 5Rs Activity ................................................................................ 31

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Calculation of Costs and Benefits........................................................................................................ 34

Employment Impact Methodology ......................................................................................................... 34

Input-Output Multipliers ..................................................................................................................... 34

Reuse-Recycling-Recovery: Jobs-Per-Tonne-of-Material Ratios ......................................................... 35

Energy and GHG Impacts ........................................................................................................................ 36

Human Health and Toxicity Impacts ....................................................................................................... 38

Results ......................................................................................................................................................... 39

Economic Business Case ......................................................................................................................... 39

Distributional Impacts ............................................................................................................................. 41

Sensitivity Analysis .............................................................................................................................. 41

Job Creation and Economic Impact Results ............................................................................................ 42

Direct, Indirect and Induced Impacts .................................................................................................. 42

Downstream Impacts .............................................................................................................................. 44

GHG and Energy Impacts ........................................................................................................................ 45

Zero Waste Business Case Results Summary .......................................................................................... 45

Discussion.................................................................................................................................................... 47

Distributional Impacts ............................................................................................................................. 47

Impact of Increased Diversion on Landfill Costs ................................................................................. 48

Leakage ............................................................................................................................................... 48

Conclusions ................................................................................................................................................. 49

Recommendations .................................................................................................................................. 49

References .................................................................................................................................................. 51

Appendix: Local Government Survey on Waste Management Costs and Practices ................................... 54

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List of Tables

Table 1: Business Case for Zero Waste Summary ........................................................................................ 9

Table 2: Recycling, Reuse and Remanufacturing Sector Categories ........................................................... 18

Table 3: Materials Quantification Task List ................................................................................................ 19

Table 4: Waste Forecast by Sector (2010 – 2025); Business as Usual Scenario ........................................ 20

Table 5: Waste Forecast by Sector (2010 – 2025); 62% Diversion Scenario .............................................. 20

Table 6: Waste Forecast by Sector (2010 – 2025); 81% Diversion Scenario .............................................. 21

Table 7: Disposal Tonnage by Material, (2010).......................................................................................... 22

Table 8: Diversion by Material (2010) , [tonnes] ....................................................................................... 23

Table 9: Percent of 2010 Disposed Tonnes Which Will Be Diverted by 2025 ............................................ 24

Table 10: Scenario Two Incremental Diversion by Category and Segment, 2025 (Tonnes) ...................... 25

Table 11: Scenario Three Incremental Diversion by Category and Segment, 2025 (Tonnes) ................... 26

Table 12: Scenario Two Incremental Diversion by Milestone Year and Material ...................................... 27

Table 13: Scenario Three Incremental Diversion by Milestone Year and Material ................................... 27

Table 14: Economic Impact Analysis Task List ............................................................................................ 28

Table 15: Material Allocation by 5Rs Activity ............................................................................................ 31

Table 16: Unit Costs and Revenues by Material and Activity ..................................................................... 33

Table 17: Calculation of Net Costs & Benefits ........................................................................................... 34

Table 18: Employment Impact Task List ..................................................................................................... 34

Table 19: Input Output Multipliers, (Jobs per $1 million) ........................................................................... 35

Table 20: Input Output Calculation ............................................................................................................ 35

Table 21: Downstream Jobs-Per-Tonne-of-Material Ratios ....................................................................... 36

Table 22: GHG Emissions from Waste Diversion Options Compared to Landfilling, Including Carbon Sinks

(tonnes CO2e/tonne), Scenario 2 and 3 ..................................................................................................... 37

Table 23: Energy Savings from Waste Diversion Options Compared to Landfilling (GJ/tonne), Scenario 2

and 3 ........................................................................................................................................................... 38

Table 24: Human Health and Ecosystem impact by 5R activity [kG/ Tonne material] .............................. 38

Table 25: Calculation of Incremental Economic Benefit (Cost) of Higher Waste Diversion ....................... 39

Table 26: Economic Benefits (Costs) of Higher Waste Diversion Scenarios (Relative to BAU in 2025) ($

millions) ....................................................................................................................................................... 40

Table 27: Summary of Expenditures and Revenues by Scenario (Relative to BAU in 2025) ($ millions)... 41

Table 28: Public Sector versus Private Sector Costs of Higher Waste Diversion ........................................ 41

Table 29: Sensitivity Analysis on Economic Benefit (Cost) ......................................................................... 42

Table 31: Scenario Two Job Creation and Economic Impacts in Material Collection and Processing ........ 43

Table 32: Scenario Three Job Creation and Economic Impacts in Material Collection and Processing ..... 44

Table 33: Full Time Equivalent Job Impacts on Downstream Reuse, Recycling and Recovery Sectors ...... 45

Table 34: GHG and Energy Impacts of Zero Waste Strategy in 2025 [GJ] .................................................. 45

Table 35: Zero Waste Business Case Summary Results (Relative to BAU, 2025)....................................... 46

Table 36: Trends in Cost Shifting from Implementation of Zero Waste Strategies Compared to Landfilling

.................................................................................................................................................................... 47

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List of Figures

Figure 1: Scope of Zero Waste Analysis ..................................................................................................... 12

Figure 2: Zero Waste Economic and Employment Impacts Process Map .................................................. 15

Figure 3: Solid Waste Process Map (Scenario 1) ........................................................................................ 16

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Glossary

Zero waste A solid waste management policy framework that goes beyond recycling to focus first on reducing waste and reusing products and then recycling and composting/digesting the rest.

Reduce The first priority within a “5Rs” waste management hierarchy of reduce, reuse, recycle, plus recover and residual management. The objective of this strategy is to reduce by as much as possible the amount or toxicity of material that enters the solid waste stream and also the impact on the environment of producing it in the first place.

Reuse The second waste management priority is to ensure that materials or products are reused as many times as possible before entering the solid waste stream.

Recycle The third waste management priority is to recycle as much material as possible.

Recovery The fourth waste management priority is to recover as much material and/or energy from the solid waste stream as possible through the application of technology.

Residuals management The fifth waste management priority is to provide safe and effective residual management. This activity takes place once the solid waste stream has been reduced by efforts under the first 4 Rs, through the application of technology primarily in the form of well-designed and secure landfills.

Direct effects Direct effects are the direct impact on wages, GDP and FTEs of increased industry output within that industry. For example, a waste hauler would experience directly the impact of increased output with the Waste Management industry.

Indirect effects Indirect Effects measure the value of additional economic demands that the direct economic activity places on the supplying industries in the region. When firms produce goods or conduct business, they must make many purchases. Some of these are from suppliers in the area.

Induced effects Induced effects accrue when workers in the direct and indirect industries spend their earnings on goods and services in the region. Induced effects can also be called household effects.

Downstream jobs Downstream sectors are those that experience an economic impact due to changes in the flow through of material inputs to their business. In this sense, the reuse, remanufacturing and recycling reliant industries are downstream of the collection, landfill and processing sectors. They see an economic impact due to changes in the availability of collected materials, which represent a throughput for their operations. An example of a downstream company is a glass bottle manufacturer that receives recycled glass to transform into a new product.

Acronyms 5Rs Hierarchy of reduce, reuse, recycle, recovery and residuals management

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BAU Business as Usual CR&D Construction, renovation and demolition EPR Extended producer responsibility FTE Full time equivalent GDP Gross domestic product GHG Greenhouse Gas GJ Giga Joule ICI Industrial Commercial and Institutional MRF Material recovery facilities WTE Waste to energy

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Summary

Context As British Columbians, we recycle more today than we ever have before. We are also throwing more

into the landfill than we ever have before. Based on current trends, by 2025, British Columbians will

generate approximately one million tonnes more landfill waste every year than we do today. That

increase in garbage is expected to raise municipal waste management costs by $120 million per year.

But increasingly, we are finding better ways to extract the value from materials in the waste stream,

which creates new economic opportunities and jobs.

“Zero Waste” is a solid waste management policy framework that goes beyond recycling to focus first on

reducing waste and reusing products and then recycling and composting/digesting the rest. Many

communities across Canada, the US and globally (including many in BC) have explored or adopted zero

waste principles (including Metro Vancouver). This study seeks to answer the question, “Is there a

business case for a zero waste strategy in British Columbia?” It examines the economic, jobs, energy,

greenhouse gas emissions, and other environmental impacts for British Columbia of one business as

usual and two alternative waste diversion scenarios in 2025.

Scope and Methods “Waste” has five possible pathways, known as the waste prevention hierarchy, or the “5Rs”: reduce,

reuse, recycle, recover, residuals management. Residuals management is landfilling in most cases, so

when we talk about “waste diversion” we mean directing waste down one of the other four pathways:

reduce, reuse, recycle, or recover.

This study compares estimated societal costs and benefits of two higher waste diversion scenarios

compared to one business as usual scenario in 2025. The three waste scenarios used in this analysis

were derived from the BC Stats report, Solid Waste Generation in British Columbia 2010 - 2025 Forecast

(2012). The business as usual scenario assumes a status quo approach to waste management in BC with

diversion rates remaining constant at 43% over the study period from 2010 to 2025 and a focus on

recycling as the primary diversion strategy. Scenarios Two and Three are based on diversion strategies

that incorporate the 5Rs. Scenario Two assumes an increased diversion rate to 62% in 2025 while

Scenario Three assumes an 81% diversion rate in 2025.

For each scenario, materials were allocated proportionally across the 5Rs using professional judgment to

arrive at the total target diversion rate. Costing by 5Rs activity and material was developed from primary

research combined with available data sources. Material diversion forecasts were combined with 5R

costs and benefits to estimate the net benefit of implementing the zero waste strategy.

Results This study demonstrates that there is a positive business case for increasing waste diversion. This study also demonstrates that there are significant societal benefits as a result of increased diversion including new jobs, increased GDP, reduced GHG emissions, and reduced environmental and human health risks.

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The key findings of this study are summarised in Table 1 as follows:

The costs to local governments/taxpayers for waste management are projected to increase from $377 million per year in 2010 to $450 million per year in 2025, should the waste diversion rate remain at the current 43%.

There is a positive business case for implementing a Zero Waste Strategy for BC. Depending on how aggressively it is implemented (i.e., 62% vs 81% diversion), by 2025 a Zero Waste Strategy will produce between $56 million and $126 million of annual net economic benefit1; will create between $27 million and $89 million in new annual GDP and generate between $755,000 and $2.5 million in new annual income tax revenue for BC.

Reduce, reuse and recycling produces greater societal benefits than energy recovery or disposal.

The business case for zero waste is strengthened if supporting policies are developed that encourage the creation and retention of remanufacturing facilities within BC, and prevent leakage to other jurisdictions.

Table 1: Business Case for Zero Waste Summary

Summary Projected Net Annual Benefits in 2025

Net Economic Benefit $56 to $126 million

New GDP $27 to $89 million

New Jobs 304 to 1,005

New Revenue to Province (Income tax)

$756,000 to $2.5 million

GHG reductions 1,047 to 2,277 kT/yr

1 The net economic benefit represents the net savings to the waste management system as a whole for scenarios

two and three compared with the business as usual scenario. If the net economic benefit is positive, the overall economic cost of waste management has been reduced relative to BAU. If the net waste management benefit is negative, the overall economic cost of waste management has increased relative to BAU. See “Economic Business Case”, page 38 for a detailed explanation of the calculation of net economic benefit.

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Introduction The BC Ministry of Environment retained Innes Hood Consulting Inc. to develop a business case for zero

waste in British Columbia. One business as usual (BAU) and two alternative scenarios are developed.

The business as usual scenario assumes a status quo approach to waste management in BC with

diversion rates remaining constant at 43% over the study period from 2010 to 2025. Implementation of

a 5Rs strategy is used to achieve increased diversion rates. Scenario Two assumes a diversion rate of

62% by 2025, while Scenario Three assumes an 81% diversion rate by 2025.

Objectives The objective of this analysis is to provide an estimate of the costs and benefits of increasing waste

diversion in BC. The analysis includes financial metrics, employment and environmental impacts,

relative to the business as usual scenario. Specifically, the analysis includes:

Assessment of potential diversion quantities by material and 5Rs strategy:

o Reduction,

o Reuse,

o Recycling,

o Recovery, and

o Residuals management.

Incremental direct solid waste management costs from 5Rs activities.

Incremental direct solid waste management revenues and expenditures from:

o Sale of recyclables,

o Reduction and reuse, and,

o Disposal cost reductions.

Distributional implications of who pays, and commentary on how costs shift from public sector

to private sector.

Energy and GHG impacts for the waste management sector.

Incremental government revenue resulting from waste and material management (personal,

corporate).

Incremental changes in the provincial gross domestic product (GDP).

Employment impacts including changes to wages and full time employment equivalent numbers

for:

o Direct jobs,

o Indirect jobs, and

o Induced jobs.

Scope of Analysis The scope of the analysis is presented in Figure 1. This analysis is bounded spatially within British

Columbia and temporally by materials and financial transactions that occur after a product has been

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consumed and before the material is re-manufactured. Waste streams include residential, ICI and CR&D

sectors. On the downstream side, the analysis is bound once material is sold into secondary markets.

Specifically, the analysis includes:

Costs of waste collection and disposal to define the baseline or business as usual scenario,

Effects on the generation of waste through implementation of reduction and reuse activities,

Industry stewardship collection and processing costs,

Costs and revenues from shifts from local government disposal or recycling of material to

industry stewardship programs, and

Costs and revenues from waste to energy processing of recovered material.

The analysis excludes a number of items such as:

Costs of consuming the original good;

The economic activities arising from re-manufacturing activities that occur primarily outside

British Columbia;

Household time and other household costs for sorting, washing and cleaning diverted material;

The externality cost of extracting and processing virgin material for the manufacturing of goods

and services, however, the energy and GHG impacts of re-use versus virgin material is

addressed;

Wider economic effects, such as impacts of a zero waste strategy on the rate of inflation, effects

on competitiveness and trade patterns; and

Administrative and compliance costs required by the Provincial government to develop and

enforce additional waste reduction and diversion strategies.

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Figure 1: Scope of Zero Waste Analysis

Zero Waste Approach to Increased Diversion A zero waste policy framework has been applied to structure the logic applied within this analysis. Zero

waste is a solid waste management policy framework that goes beyond recycling to focus first on

reducing waste and reusing products and then recycling and composting/digesting the rest. Many

businesses now operate in a zero waste mode, and have found that the efficiencies realized by reducing

waste to a minimum save money and increase efficiency, thereby increasing profitability. Many

Extract Virgin

Material

Primary

Manufacture

Distribution,

Wholesale &

Retail

Consumption Reduce Reuse

Collection

EPR/Recycle Recover Residuals

Landfill/

Incineration

Waste to

Energy

Sale of

Material

Remanufacture

into new

products

Scope of Analysis

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communities across Canada, the US and globally (including many in BC) have explored or adopted zero

waste principles (including Metro Vancouver) which generally include a combination of:

Re-designing the way resources and materials flow through society;

Eliminating subsidies for raw material extraction and waste disposal;

Hold producers responsible for their products and packaging from “cradle to cradle”.

Zero waste generally involves a commitment to three objectives:

Maximizing upstream waste reduction through product re-design; Zero Waste or green

purchasing and producer responsibility;

Maximizing mid-stream longevity (through reuse, repair and durable design) and

Maximizing downstream resource recovery (recycling and composting/digestion) – keeping

material out of landfill and EFW (which Zero Waste proponents oppose)

These objectives are generally achieved through four broad policy instruments:

Incentives and disincentives to encourage waste reduction;

Extended producer responsibility and design for environment (DfE);

Green Purchasing and

Community building.

Provincial Waste Management Hierarchy2

The provincial waste management strategy is based on the “5Rs” hierarchy of reduce, reuse, recycle,

recovery and residuals management. This hierarchy has been used to allocate waste quantities into

diversion streams for each of the zero waste scenarios, to enable estimates of expenditures or revenues.

Consistent with the 5Rs hierarchy, the first priority is to reduce the amount or toxicity of material that

enters the solid waste stream. The second priority is to ensure that materials or products are reused

before entering the solid waste stream. The third priority is to recycle as much material as possible. In

this analysis, recycling activities can occur either through municipal collection programs, financed by tax-

payers, or through stewardship programs funded by industry and producers.

The next priority effort within the hierarchy is to recover as much material and/or energy from the solid

waste stream as possible through the application of technology. This element depends on the nature

and size of the solid waste stream, the availability of technology, demand for its products, political

acceptability and the environmental, social and economic impact of applying that technology. Waste-to-

energy (WTE) facilities achieving greater than 60% energy efficiency are considered recovery. In the

current analysis, for recovery, utilisation of waste-to-energy has been assumed. The final priority is to

provide safe and effective residual management. This activity takes place once the solid waste stream

has been reduced by efforts under the first 4Rs, through use of well-designed and secure landfills or

through incineration (<60% energy efficiency). For certain classes of solid waste, thermal treatment may

first be applied to change chemical properties, reduce volume and/or generate energy.

2 BC Ministry of Environment (1994).

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Data limitations Results of this analysis are based on published data and surveys of a selection of waste management

professionals. It was observed through the course of this study that there are limitations to the data

consistency and quality that impact the accuracy of the results. These limitations are discussed

throughout the report. To address the data limitations, a sensitivity analysis is applied to the results to

assess the impact of data uncertainty on the robustness of the overall conclusions.

Report Structure The remainder of this report is structured into the following sections:

Methodology,

Results,

Discussion, and

Conclusions.

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Methodology This section presents the methodology, data sources and assumptions used to calculate the economic

and employment impacts for each projected waste scenario. A process map to illustrate the tasks

completed is presented in Figure 2. The process defined in this analysis was reviewed for consistency

with the literature.3

Figure 2: Zero Waste Economic and Employment Impacts Process Map

Overview of Collection, Recycling and Disposal Process in BC The waste management sector in BC is complex with a large number of private and public sector players.

The roles of public sector versus private sector players vary by location, making generalisations for the

industry difficult. A high-level process map of the waste management system is presented in Figure 3 to

illustrate the current approach to waste management practices in BC. The services provided by the

waste management industry include:

Collection and transportation of waste and materials;

Operation of transfer stations, recycling facilities and landfills;

3 OECD, (2005).

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Processing ,including composting and anaerobic digestion for organics; and, cleaning, sorting,

grading and baling for other materials; and,

Sale of materials to secondary markets.

There is significant diversity in the collection and diversion practices and responsibilities in different

regional districts throughout the province. Most of the single-family (78%) and multi-family households

(80%) in BC receive curbside collection of solid waste and recyclables from their municipal or regional

government4. The cost of this service is recovered either through property tax or on the basis of a user

fee and may be provided by the local government or contracted out to private sector waste

management firms.

In contrast, industrial, commercial and institutional (ICI) and construction, renovation and demolition

(CR&D) waste collection is handled primarily through private haulers who pick up waste and recycling on

a fee for service basis. Waste that is collected by municipal collection or private haulers is taken to

either landfills or to transfer stations where the material is compacted and sent to landfills. Landfill

ownership may be either public (regional district or municipal) or private. While most landfills are

regulated there are a number of private unregulated landfills in the province for which no data is

available.

Recycled materials collected from both the residential sector and the ICI sector are sent to material

recovery facilities (MRFs) who clean, sort, grade and bale the materials. This material is then sold,

either to markets within the Pacific Northwest or overseas, primarily to China.

Figure 3: Solid Waste Process Map (Scenario 1)

4 Glenda Gies and Associates (2012).

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While this process map covers the majority of material, it is not exhaustive. For example, scrap cars or

heavy duty equipment have not been included within the scope of the current assignment. Leakage

from the system is discussed in later sections of the report. Reduction in consumption and re-use is not

captured within this process map since these activities reduce the material input.

Analytic Framework Recent studies5 identify the value chain for materials diverted from the landfill by three component

industries: recycling industries; recycling reliant industries; and the reuse and remanufacturing

industries (Table 2). Using this value chain, materials flow first through recycling industries (which

collect, process and recover materials); then downstream through either a corresponding recycling

reliant industry (focused on primary production, processing the material into a new form); or through

the reuse and remanufacturing industries. Materials not diverted flow to the landfill, and for the

purposes of this study, recovered materials flow to waste to energy facilities. Based on this model:

Materials that are reduced and no longer flow into the economy represent a reduction in

economic activity and reduce the overall volume in the value chain. This is most immediately

seen in a reduction in collection activities and associated output for this sector;

Materials reused are assumed to flow into reuse and remanufacturing industries;

Materials recycled are assumed to flow into recycling-reliant industries;

Recovered materials flow into waste to energy facilities;

Residual volumes are zero in this analysis since it analyzes the impact of the incremental change

in landfill diversion between the business as usual scenario one and the two zero waste

diversion scenarios, which have higher diversion rates and hence zero incremental residual

volumes.

5 DSM Environmental (2009).

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Table 2: Recycling, Reuse and Remanufacturing Sector Categories 6

Recycling Industries Recycling Reliant Industries (Demand Side)

Reuse & Remanufacturing Industries

Government Staffed Residential Collection

Private Staffed Recycling Collection

Compost/Organics Processor

Materials Recovery Facilities

Recyclables Material Wholesalers

Plastics Reclaimers

Glass Container Manufacturing Plants

Glass Product Producers

Nonferrous Secondary Smelting and Refining Mills

Nonferrous Product Producers

Nonferrous Foundries

Paper and Paperboard Mills/Deinked Market Pulp Producers

Paper-based Product Manufacturers

Pavement Mix Producers (asphalt and aggregate)

Plastics Product Manufacturers

Rubber Product Manufacturers

Steel Mills

Iron and Steel Foundries

Other Recycling Processors/Manufacturers

Computer and Electronic Appliance Remanufacturers

Retail Used Merchandise Sales

Wood Reuse

Materials Exchange Services

6 Ibid.

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Materials Quantification Methodology The tasks to develop the materials forecast are summarised below (Table 3). The results of this analysis

are used as input to the financial analysis and business case preparation.

Table 3: Materials Quantification Task List

Task Description

Compile quantities forecast by segment and material

BC Stats developed a forecast of quantities that includes an estimate of material by sector. The analysis evaluates three diversion scenarios including the business as usual 43% diversion scenario and 2 alternative scenarios (62% and 81% diversion).

Forecast disposal and diversion by scenario

The information above is disaggregated to estimate materials generated, diverted and disposed by

Segment,

Milestone year,

Waste diversion scenario (business as usual - 43%, 62%, 81%

diversion), and

Material category.

Allocate diversion by 5Rs strategy

Allocation of diverted tonnages by 5Rs strategy is provided using available data from the literature on reduction and reuse, recycling, recovery and residuals management, and available program performance information for recycling, organics diversion and disposal.

A description of these tasks is presented below.

Material Forecast

Material quantities by segment, milestone year and diversion scenario have been developed as part of

the BC Waste forecast7. These estimates provide the basis of the current analysis and are presented in

Table 4 to Table 6.

7 BC Stats (a) (2012).

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Table 4: Waste Forecast by Sector (2010 – 2025); Business as Usual Scenario8

Table 5: Waste Forecast by Sector (2010 – 2025); 62% Diversion Scenario

8 Spreadsheet provided by Dan Schrier, BC Stats, November 15, 2012

Table 1 - Scenario One: Status Quo

Tonnes 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Disposal 2,911,510 2,943,938 2,995,723 3,041,572 3,091,659 3,134,815 3,180,175 3,218,388 3,243,954 3,263,630 3,288,795 3,312,212 3,337,599 3,366,728 3,395,050 3,422,322

Residential 1,274,971 1,288,622 1,304,672 1,321,830 1,340,199 1,358,868 1,377,723 1,396,868 1,415,952 1,435,143 1,454,270 1,472,889 1,491,322 1,509,552 1,527,561 1,545,330

ICI 1,141,990 1,158,994 1,179,840 1,198,845 1,220,700 1,238,466 1,257,402 1,272,076 1,282,042 1,288,985 1,297,778 1,304,855 1,313,054 1,322,638 1,332,601 1,343,098

CR&D 494,550 496,322 511,211 520,896 530,761 537,481 545,049 549,444 545,960 539,501 536,747 534,468 533,223 534,537 534,888 533,893

Diversion 1,934,910 1,954,541 1,991,441 2,023,522 1,775,605 1,512,590 1,533,232 1,546,484 1,553,534 1,556,437 1,563,426 1,570,745 1,580,355 1,592,982 1,605,511 1,617,546

Residential 771,200 779,024 793,731 806,518 707,300 602,052 610,268 615,538 618,336 619,482 622,256 625,161 628,980 634,002 638,984 643,770

ICI 992,807 1,002,879 1,021,813 1,038,274 886,381 726,044 735,933 742,030 744,943 745,726 748,604 751,656 755,893 761,684 767,433 772,938

CR&D 170,904 172,638 175,897 178,731 181,924 184,494 187,031 188,915 190,254 191,230 192,566 193,927 195,482 197,296 199,094 200,837

Product Stewardship 242,398 245,241 248,209 251,527 539,124 834,836 846,542 858,255 870,004 881,797 893,590 905,314 916,896 928,364 939,693 950,861

Total Generated 5,088,819 5,143,719 5,235,373 5,316,621 5,406,388 5,482,241 5,559,948 5,623,127 5,667,491 5,701,864 5,745,811 5,788,271 5,834,850 5,888,074 5,940,254 5,990,728

Diversion Rate 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43% 43%

Disposal 2,911,510 2,869,146 2,826,781 2,784,417 2,742,052 2,699,688 2,657,323 2,614,959 2,572,595 2,530,230 2,487,866 2,445,501 2,403,137 2,360,772 2,318,408 2,276,043

Residential 1,274,971 1,255,907 1,236,843 1,217,779 1,198,715 1,179,651 1,160,587 1,141,523 1,122,459 1,103,395 1,084,331 1,065,267 1,046,203 1,027,139 1,008,075 989,011

ICI 1,141,990 1,126,744 1,111,498 1,096,253 1,081,007 1,065,762 1,050,516 1,035,271 1,020,025 1,004,780 989,534 974,289 959,043 943,798 928,552 913,306

CR&D 494,550 486,495 478,440 470,385 462,330 454,275 446,220 438,165 430,110 422,055 414,000 405,945 397,890 389,835 381,780 373,725

Diversion 1,934,910 2,028,324 2,156,054 2,272,557 2,115,317 1,879,809 1,928,546 1,902,227 1,975,536 2,039,337 2,112,061 2,183,297 2,258,614 2,340,254 2,421,162 2,500,770

Residential 771,200 811,286 859,613 906,915 844,331 750,711 770,012 786,005 826,122 864,811 904,918 944,634 985,041 1,026,353 1,067,447 1,108,165

ICI 992,807 1,034,574 1,087,773 1,136,400 1,020,631 861,398 872,674 875,096 902,207 924,308 950,176 974,485 1,001,055 1,030,449 1,060,232 1,090,378

CR&D 170,904 182,465 208,668 229,242 250,355 267,700 285,860 241,126 247,207 250,217 256,967 264,178 272,519 283,452 293,483 302,227

Product Stewardship 242,398 246,249 252,538 259,648 549,019 902,744 974,079 1,046,872 1,060,464 1,073,838 1,087,539 1,101,201 1,114,803 1,128,501 1,141,966 1,155,137

Total Generated 5,088,819 5,143,719 5,235,373 5,316,621 5,406,388 5,482,241 5,559,948 5,623,127 5,667,491 5,701,864 5,745,811 5,788,271 5,834,850 5,888,074 5,940,254 5,990,728

Diversion Rate 43% 44% 46% 48% 49% 51% 52% 53% 55% 56% 57% 58% 59% 60% 61% 62%

21


Table 6: Waste Forecast by Sector (2010 – 2025); 81% Diversion Scenario

Disposal 2,911,510 2,791,967 2,672,423 2,552,879 2,433,336 2,313,792 2,194,249 2,074,705 1,955,162 1,835,618 1,716,074 1,596,531 1,476,987 1,357,444 1,237,900 1,118,356

Residential 1,274,971 1,219,849 1,164,728 1,109,606 1,054,484 999,363 944,241 889,119 833,998 778,876 723,754 668,633 613,511 558,389 503,267 448,146

ICI 1,141,990 1,096,300 1,050,611 1,004,922 959,233 913,544 867,855 822,166 776,477 730,788 685,099 639,410 593,720 548,031 502,342 456,653

CR&D 494,550 475,817 457,084 438,351 419,618 400,886 382,153 363,420 344,687 325,954 307,221 288,489 269,756 251,023 232,290 213,557

Diversion 1,934,910 2,105,399 2,309,720 2,502,765 2,422,268 2,206,020 2,330,829 2,144,140 2,233,176 2,372,730 2,520,232 2,666,140 2,815,864 2,971,258 3,126,184 3,280,180

Residential 771,200 847,296 931,417 1,014,490 987,767 904,141 959,002 944,027 992,432 1,066,242 1,141,249 1,215,845 1,291,079 1,367,076 1,442,921 1,518,481

ICI 992,807 1,064,960 1,148,280 1,226,999 1,141,434 980,789 1,021,900 972,845 996,459 1,047,858 1,102,755 1,156,068 1,211,577 1,269,738 1,328,367 1,387,471

CR&D 170,904 193,143 230,023 261,276 293,067 321,089 349,928 227,268 244,284 258,630 276,229 294,227 313,208 334,444 354,895 374,227

Product Stewardship 242,398 246,354 253,229 260,976 550,784 962,428 1,034,871 1,256,610 1,331,911 1,347,370 1,363,642 1,379,921 1,396,258 1,413,006 1,429,373 1,445,246

Total Generated 5,088,819 5,143,719 5,235,373 5,316,621 5,406,388 5,482,241 5,559,948 5,623,127 5,667,491 5,701,864 5,745,811 5,788,271 5,834,850 5,888,074 5,940,254 5,990,728

Diversion Rate 43% 46% 49% 52% 55% 58% 61% 63% 66% 68% 70% 72% 75% 77% 79% 81%

22


Disposal by Material (2010)

Disposal by material was estimated using Provincial waste estimates (Table 7). These estimates have

been updated to a 2010 baseline based on the change in material disposed between 2006 and 2010.

Table 7: Disposal Tonnage by Material9, (2010)

Material Res

[Tonnes] ICI

[Tonnes] CR&D

[Tonnes] Total, 2010

[Tonnes]

Organics 509,334 314,507

823,841

Paper 215,575 258,682 6,018 480,275

Plastics 172,439 156,857

329,296

Multi-material 103,889 73,335

177,224

Textiles & rubber 71,249 48,313

119,562

Other 67,955 28,542 144,976 241,474

Wood 33,921 103,087 149,644 286,652

Ferrous 33,137 39,536 3,853 76,526

Glass 29,544 35,062

64,606

Renovation 24,830 51,489

76,319

Non-Ferrous 12,513 8,817 12,899 34,229

Haz-waste 7,949 15,547

23,496

Concrete

83,897 83,897

Drywall

53,264 53,264

Asphalt

39,481 39,481

Total 1,282,336 1,133,774 494,033 2,910,142

Diversion by Material (2010)

An estimate of diversion by material was developed for 2010 using diversion estimates published by BC

Stats (Table 8).

9 BC Stats, 2010.

23


Table 8: Diversion by Material (2010) 10

, [tonnes]

Material Diversion Rate [%]

Quantity [Tonnes]

Organics 21% 457,235

Paper11 41% 892,696

Plastics 3% 67,497

Multi-material 0% 0

Textiles & rubber 3% 67,497

Other 4% 78,383

Wood 11% 241,681

Ferrous 7% 148,057

Glass 3% 63,142

Renovation 0% 0

Non-Ferrous 7% 161,121

Haz-waste 0% 0

Concrete 0% 0

Drywall 0% 0

Asphalt 0% 0

Total 100% 2,177,308

Disposal and Diversion Forecast by Scenario

The Provincial Waste Forecast (Table 4 to Table 6) provides an estimate of increased diversion and

extended producer responsibility by scenario (Table 9). This estimate was used to forecast quantities of

waste diverted by scenario and category.

10

BC Stats, 2007 11

Paper is further broken down into newsprint (10.7%, mixed paper (15%), Cardboard & boxboard (15.3%).

24


Table 9: Percent of 2010 Disposed Tonnes Which Will Be Diverted by 2025

Scenario Two Scenario Three

Material

Res Diversion (%)

ICI Diversion (%)

CR&D Diversion (%)

Res Diversion (%)

ICI Diversion (%)

CR&D Diversion (%)

Organics 50 50 - 85 85 -

Paper 35 35 25 70 70 60

Plastics 30 30 - 80 80 -

Multi-material 30 30 - 55 55 -

Textiles & rubber 20 20 - 40 40 -

Other 30 30 25 65 65 60

Wood 10 10 25 30 30 60

Ferrous 10 10 25 45 45 60

Glass 10 10 - 30 30 -

Renovation 15 15 - 35 35 -

Non-Ferrous 10 10 25 45 45 60

Haz-waste 35 35 - 75 75 -

Concrete - - 25 - - 60

Drywall - - 25 - - 60

Asphalt - - 25 - - 60

Total 36 32 30 71 66 60

For some materials (specifically paper grades) the percentage of diversion by material shown for the

base case and Scenario Two has already been exceeded in Greater Vancouver12. Alignment of the

provincial diversion estimates with data available at the regional district is recommended to enhance

the accuracy of subsequent analysis.

Incremental Diversion by Material and Scenario (2025)

The incremental material diverted from landfill was estimated by combining the disposal tonnage by

material (Table 8) with the diversion scenarios provided by the Province (Table 9). The results are

summarised in Table 10 and Table 11. These estimates are within 12% of the diversion scenarios

developed by the Province in its Waste Forecast Study.

12

Metro Vancouver, 2012

25


Table 10: Scenario Two Incremental Diversion by Category and Segment, 2025 (Tonnes)

Material Res

[Tonnes] ICI

[Tonnes] CR&D

[Tonnes]

Incremental Diversion, 2025

[Tonnes]

Organics 254,667 157,254 0 411,921

Paper 75,451 90,539 1,504 167,494

Plastics 51,732 47,057 0 98,789

Multi-material 31,167 22,001 0 53,167

Textiles & rubber 14,250 9,663 0 23,912

Other 20,387 8,563 36,244 65,193

Wood 3,392 10,309 37,411 51,112

Ferrous 3,314 3,954 963 8,231

Glass 2,954 3,506 0 6,461

Renovation 3,725 7,723 0 11,448

Non-Ferrous 1,251 882 3,225 5,358

Haz-waste 2,782 5,442 0 8,224

Concrete 0 0 20,974 20,974

Drywall 0 0 13,316 13,316

Asphalt 0 0 9,870 9,870

Total 465,071 366,890 123,508 955,470

Provincial Estimate of Scenario Two 1,087,000

26


Table 11: Scenario Three Incremental Diversion by Category and Segment, 2025 (Tonnes)

Material Res

[Tonnes] ICI

[Tonnes] CR&D

[Tonnes]

Incremental Diversion, 2025

[Tonnes]

Organics 432,934 267,331 700,265

Paper 150,903 181,077 3,611 335,590

Plastics 137,951 125,485 263,437

Multi-material 57,139 40,334 97,473

Textiles & rubber 28,500 19,325 47,825

Other 44,171 18,553 86,985 149,709

Wood 10,176 30,926 89,786 130,889

Ferrous 14,912 17,791 2,312 35,015

Glass 8,863 10,518 19,382

Renovation 8,691 18,021 26,712

Non-Ferrous 5,631 3,968 7,740 17,338

Haz-waste 5,962 11,660 17,622

Concrete 50,338 50,338

Drywall 31,958 31,958

Asphalt 23,689 23,689

Total 905,832 744,991 296,420 1,947,242

Provincial Estimate of Scenario Three 2,157,000

Incremental Diversion by Milestone Period

A linear extrapolation is assumed for achieving the increased diversion from 2011 through 2025 by

scenario, (Table 12 and Table 13). This represents the incremental diversion relative to business as

usual. Three materials forecasts are used for conducting the economic analysis by combining unit costs

with the incremental diversion estimates summarised in the tables below.

27


Table 12: Scenario Two Incremental Diversion by Milestone Year and Material

Material 2011

[Tonnes] 2015

[Tonnes] 2020

[Tonnes] 2025

[Tonnes]

Organics 27,461 137,307 274,614 411,921

Paper 11,166 55,831 111,663 167,494

Plastics 6,586 32,930 65,859 98,789

Multi-material 3,544 17,722 35,445 53,167

Textiles & rubber 1,594 7,971 15,942 23,912

Other 4,346 21,731 43,462 65,193

Wood 3,407 17,037 34,075 51,112

Ferrous 549 2,744 5,487 8,231

Glass 431 2,154 4,307 6,461

Renovation 763 3,816 7,632 11,448

Non-Ferrous 357 1,786 3,572 5,358

Haz-waste 548 2,741 5,482 8,224

Concrete 1,398 6,991 13,983 20,974

Drywall 888 4,439 8,877 13,316

Asphalt 658 3,290 6,580 9,870

Total 63,698 318,490 636,980 955,470

Table 13: Scenario Three Incremental Diversion by Milestone Year and Material

Material 2011

[Tonnes] 2015

[Tonnes] 2020

[Tonnes] 2025

[Tonnes]

Organics 46,684 233,422 466,843 700,265

Paper 22,373 111,863 223,727 335,590

Plastics 17,562 87,812 175,625 263,437

Multi-material 6,498 32,491 64,982 97,473

Textiles & rubber 3,188 15,942 31,883 47,825

Other 9,981 49,903 99,806 149,709

Wood 8,726 43,630 87,259 130,889

Ferrous 2,334 11,672 23,343 35,015

Glass 1,292 6,461 12,921 19,382

Renovation 1,781 8,904 17,808 26,712

Non-Ferrous 1,156 5,779 11,559 17,338

Haz-waste 1,175 5,874 11,748 17,622

Concrete 3,356 16,779 33,559 50,338

Drywall 2,131 10,653 21,306 31,958

Asphalt 1,579 7,896 15,793 23,689

Total 129,816 649,081 1,298,161 1,947,242

28


Economic Analysis Methodology The tasks used to develop the cost and revenue analysis are summarised in Table 14.

Table 14: Economic Impact Analysis Task List

Task Description

Compile unit costs and revenue by activity and material

A spreadsheet capturing unit cost estimates for the materials identified in the materials quantification forecast was developed. Unit costs are estimated for 5Rs activities. The analysis applies an incremental cost approach to capture the difference in costs between the BAU scenario (assumed to be disposal or recycling) and the zero waste diversion scenarios (assumed to have higher diversion rates and moving up the waste management hierarchy).

Forecast province-wide costs and revenues

The unit costs and revenues are applied to the materials forecast at the provincial level to provide an estimate of incremental waste management costs and revenues by waste management activity and material.

Sensitivity analysis Sensitivity analysis is completed on a range of data inputs such as costs as well as commodity values to assess the robustness of the results.

Assess distributional impacts

The trends regarding costs on 5Rs are identified within the zero waste scenarios at a qualitative level.

Estimate energy impacts Energy impacts include changes in trucking, as well as opportunities for waste to energy in the zero waste scenarios.

Estimate incremental tax revenues

Incremental provincial government tax revenues, personal and corporate, resulting from waste and material management under diversion scenarios two and three are estimated based on estimates of employment impact and changes to private sector activity using input-output results.

Forecast changes in the Provincial GDP

The incremental changes to provincial GDP under diversion scenarios two and three are estimated using Provincial input-output multipliers.

Assumptions

Assumptions have been applied to simplify the analysis as necessary. Where assumptions are made,

they are generally conservative in nature to limit perceived bias of the results. Sensitivity analysis is

completed to assess the impact of these assumptions on the results. Simplifying assumptions made in

completion of the economic analysis are summarised below:

Unit costs and revenues are assumed to be constant across the period 2010-2025. Available

unit cost and revenue figures were gathered from a wide variety of sources as explained above;

as far as reasonably possible they were obtained for 2011, but some are for 2010 and others for

2012. As a result the cost and revenue estimates over the period 2010-2025 are approximately

equivalent to being calculated in real 2011 dollars; there is no discounting.

Transportation costs are assumed to be included in collection costs.

Depot and transfer costs are assumed to be included in processing costs.

Promotion and education costs are assumed to be included in EPR collection and processing

costs.

Administrative costs are assumed to be included in collection, landfilling and processing costs.

29


Reduction and reuse related costs are reflected as cost savings from avoidance of the need to

manage materials within traditional waste management systems.

Avoided costs are a combination of collection, landfilling, processing and waste-to-energy costs

depending on the waste diversion strategy assumed adopted for a given material type.

Recovered materials flow to waste-to-energy facilities which provide a revenue source from the

sale of thermal energy.

Municipal and private sector costs associated with collection, landfill, and processing are used as

proxies for industry revenues. However, due to confidentiality, it was not possible to fully

define costs by actor.

Revenue from the sale of recyclables is typically shared between the client (local government or

a private sector company in the case of the ICI or CRD sectors) and the waste management

company collecting the recyclables. However, due to confidentiality, it was not possible to

obtain accurate data on the average revenue split. For the purposes of this study, it has been

assumed that the waste management company retains 50% of the proceeds from the sale of

recyclables which increases its revenues. The other 50% is returned to the client thereby

reducing its costs.

Industrial structure and linkages are based on 2004 and 2008 data respectively (the most recent

data available). This assumes that the technology of producing goods and services, input

patterns and relative prices of goods and services remain unchanged, and that there are no new

products that might require a different production technology or input mix.

Data Sources for Costs and Revenue

Estimates of waste management costs by material and activity were developed from publicly available

reports supplemented by data gathered from a representative sample of regional districts and

municipalities across BC and commercial commodity value research. The data sources reviewed to

develop the cost analysis are summarised in the references. In addition to the literature review, waste

management experts and service providers were contacted to provide pricing and market insights, and

are footnoted throughout the document.

Municipal Costs

Local governments representing approximately 70% of the province’s population were surveyed to

provide costs and insights regarding collection, processing and recycling costs and practices. The survey

tool used to interview local government staff is presented in the Appendix. Responses were obtained

from the following jurisdictions representing approximately 45% of the province’s population:

Abbotsford

Capital Regional District

Kamloops

Surrey

City of North Vancouver

District of North Vancouver

West Vancouver

30


Vancouver

Regional District of Nanaimo

It is recognised that these jurisdictions represent urbanised areas of the province, and that more remote

locations may have different cost structures. This uncertainty is reflected in the sensitivity analysis

completed in subsequent sections of the report. Notwithstanding these limitations, utilisation of data

obtained directly from municipalities ensures a robust data set. As part of this survey, it was confirmed

that landfill post closure and siting costs are incorporated into tippage fees provided.

Commodity Revenue

Commodity revenues are volatile as they are dependent on global markets which fluctuate for

unpredictable reasons over time. For example, by mid-summer of 2012, prices for paper in particular

had dropped by 50% from the values reported in the winter of 2011. This rapid and substantial change

illustrates the volatility of materials markets which must be taken into consideration in the long term

projection of impacts of different diversion scenarios. Interviews with stakeholders in the preparation

of this document further emphasized the need to use a standardized commodity revenue source based

within the Pacific Northwest. As such, a combination of pricing sources has been used to address price

volatility, including:

Estimates of commodity prices for recyclables,13

Data from a recent Recycling Marketing Study carried out for Metro Vancouver,14

Ontario metal prices (given that metal prices are reasonably consistent across Canada),

Ontario Blue Box program costs (because per material costs are broken out by activity based

costing research, and will not be substantially different to BC, even though BC has a deposit

return system for beverage containers and Ontario does not) 15, and

Encorp Pacific program costs16.

To capture the volatility experienced from late 2008 to summer 2011, data from the years 2007-2012

was used (where available) to identify average unit commodity revenues. As noted previously, these are

assumed to be constant throughout the period 2010-2025. In addition, sensitivity analysis has been

performed on commodity values.

Industry Stewardship Costs & Revenues

EPR collection and processing costs for printed paper and packaging were based on the estimates used

in setting the 2012 fees for the Ontario residential printed paper and packaging Blue Box program which

are based on 2010 cost inputs17. The rationale for using this information is it provides accurate and

comprehensive data split out by material from an ongoing residential printed paper and packaging EPR

program. The per material costs are allocated through activity based costing studies carried out at a

13 recyclingnetworks.net

14 Metro Vancouver, (2012).

15 Stewardship Ontario. (2012).

16 Encorp Pacific. (2012)

17 Stewardship Ontario. (2012).

31


number of single stream and multi stream residential recycling programs throughout the province of

Ontario and show that costs for collecting and recycling some residential plastic packaging materials are

substantially more than the costs of managing paper and metals. Collecting and recycling PET and HDPE

is economically attractive, as solid, high value markets are available for both these materials.

A major new EPR program for residential printed paper and packaging is being launched in BC in May,

2014, whereby producers will finance the full cost of the residential printed paper and packaging

collection and recycling system, thereby taking the costs away from taxpayers and municipal budgets.

Material Diversion in the Zero Waste Scenarios

Incremental diversion activity by material for the zero waste scenarios is presented in Table 15.

Incremental diversion assumes that in the business as usual scenario, the material would have gone to

landfill, whereas, within the zero waste scenarios, that material is being diverted into a 5Rs stream.

Increased diversion is achieved through reducing and reusing organics and other materials, combined

with increased industry stewardship for printed paper and packaging (residential and ICI) and any other

materials. The allocation of material by 5Rs stream is based on an assessment of material and diversion

strategy. This diversion strategy was reviewed and updated by the Client to ensure consistency with

waste management objectives. Changes to the diversion strategy have a significant impact on the zero

waste business case. Further analysis to optimise the zero waste business case is recommended.

Table 15: Material Allocation by 5Rs Activity

Reduce Reuse Recycle Recover Residuals management

%

Organics 25% 75%

Paper 10% 90%

Plastics 10% 90%

Multi-material 10% 20% 70%

Textiles & rubber

10% 10% 80%

Other 100%

Wood 20% 60% 20%

Ferrous 10% 90%

Glass 10% 10% 80%

Renovation 10% 40% 50%

Non-ferrous 10% 90%

Haz-waste 30% 20% 50%

Concrete 10% 90%

Drywall 10% 90%

Asphalt 10% 90%

Costs and Revenue by Material and 5Rs Activity

Table 16 shows the unit costs and revenues derived from the above sources and used in the financial

model. The sensitivity analysis assesses the impacts of variations in these costs. The table shows that

32


diversion of high value plastics (PET and HDPE), office paper and metals (particularly aluminum)

contribute to the business case for the zero waste strategy. In a fully costed and allocated analysis,

diversion of mixed plastics contributes a net high cost to the system. Diversion of residential plastic

packaging will become part of a full residential industry stewardship program for printed paper and

packaging in May, 2014. A range of industry stewardship programs were reviewed to assess costs and

revenues. Due to the diversity in program structure, there is significant variation in the costs of industry

stewardship programs.

Average multi-material collection and processing costs have been assigned to all plastics, paper and

metals collected in multi-material programs, as these materials will be picked up together. In a fully

costed and allocated system, collection and processing costs are actually different for each material

based on density and level of processing required to make the materials suitable for sale to end

markets.

33


Table 16: Unit Costs and Revenues by Material and Activity

Landfill Costs ($/tonne) Industry Stewardship Programs ($/tonne)

Collect-

ion Landfill

Fees BAU, Total

Collect-ion Costs Costs Revenue

Industry Steward

ship, Total

Industry Steward

ship Savings (Costs)

Relative to

Landfill

Organics - Leaf and Yard Waste $98 $107 $205 $98

Organics - Food Waste and Kitchen $98 $107 $205 $98

Plastic- PET $92 $107 $199 $117 $325 $422 -$97 $296

Plastic HDPE $92 $107 $199 $117 $325 $435 -$110 $309

Plastic - Other $92 $107 $199 $117 $325 $0 $325 -$126

Aluminum $92 $107 $199 $68 $325 $2,433 -$2,108 $2,307

Non ferrous metals Other $92 $107 $199 $68 $325 $3,294 -$2,969 $3,168

Wood Contaminated $44 $60 $104 $44 $103 $0 $103 $1

Wood Clean $44 $60 $104 $44 $103 $0 $103 $1

Paper - ONP $92 $107 $199 $112 $325 $73 $252 -$53

Paper - MWP $92 $107 $199 $112 $325 $86 $239 -$40

Paper - Clean Office Paper $92 $107 $199 $112 $325 $179 $146 $53

Paper - OCC $92 $107 $199 $112 $325 $107 $218 -$19

34


Calculation of Costs and Benefits

The unit costs and recycling revenues are combined with incremental materials forecast to estimate

incremental waste management benefits (cost savings) from implementation of the zero waste strategy.

Benefits (costs) are calculated as follows:

Table 17: Calculation of Net Costs & Benefits

BAU total = BAU collection + BAU landfill costs

Industry stewardship total = Industry stewardship costs – Industry stewardship revenue

Industry stewardship net benefits (costs) = BAU total – Industry stewardship total

WTE net benefits (costs) = BAU collection – WTE cost – recycling collection

Employment Impact Methodology The tasks undertaken to estimate employment impacts from implementation of the zero waste strategy

are summarised in Table 18. Employment is assumed to result from the flow of materials into B.C.

materials management streams and recycling streams both within and outside of B.C.

Table 18: Employment Impact Task List

Input-Output Multipliers

Input-output multipliers assess the effects on the economy of an exogenous change in final demand for

the output of a given industry. The input-output multipliers yield data on the direct impacts of

increased industry output on wages, GDP and full time equivalent (FTE) jobs, as well as the indirect

impacts on upstream suppliers and induced impacts as a result of employee spending. Indirect effects

measure the additional economic value generated for industries that are suppliers to the waste

management and remediation sector within B.C. Induced effects are a result of employees spending

their earnings on goods and services (assumed to be in BC).

An example of a company that may experience indirect effects of increased output within the waste

management industry would be the vehicle mechanics that service the waste hauler's trucks. There are

numerous examples of companies that may experience induced effects of increased output within the

Task Description

Select input-output

multipliers

Input-output multipliers are applied to expenditures. Direct, indirect and induced wages as well as GDP and full time equivalent jobs were determined for each material type.

Assess and apply Jobs-per-

tonne-of-material ratios

Jobs-per-tonne-of-material ratios are assessed to estimate the downstream

impacts of recycled materials re-entering the economy that are not captured

using the input-output analysis. These ratios were applied to the volumes of

materials quantities to estimate downstream employment impacts associated

with the reuse, remanufacture, recycling or incineration of each material.

35


waste management industry, as employees are free to spend their income where they choose. One

possible example is local restaurants, where employees may wish to spend incremental income.

Downstream sectors are those that experience an economic impact due to changes in the flow through

of material inputs to their business. In this sense, the reuse, remanufacturing and recycling reliant

industries are downstream of the collection, landfill and processing sectors. Downstream sectors receive

an economic impact due to changes in the availability of collected materials, which represent a

throughput for their operations. An example of a downstream company is a glass bottle manufacturer

that receives recycled glass to transform into a new product.

The input-output multiplier for waste management and remediation services used for this analysis is

presented in Table 19. It includes waste-to-energy services. These multipliers do not capture all of the

downstream impacts of the zero waste strategy. Specifically, reuse, remanufacturing and recycling-

reliant industries are not captured. For those impacts, a jobs per tonne of material estimate has been

used, as described in the next section.

Table 19: Input Output Multipliers, (Jobs per $1 million)18

Wages GDP FTEs

Direct 0.31 0.63 6.41

Indirect within Province

0.11 0.2 2.56

Induced (with Safety Net)

- 0.1 1.5

In general, input-output multipliers are applied to output or revenue data for a given industry sector in

order to estimate associated impacts on wages, GDP and jobs. For this study, a proxy has been

developed to approximate incremental industry revenues for collection and processing activities (Table

20).

Table 20: Input Output Calculation

Approximate incremental industry revenues

=

(Incremental Collection Cost) + (Incremental Landfill Cost) + (Incremental Industry Stewardship Collection and Processing Cost) +(Incremental Waste-to-Energy Cost) + 50% * (Incremental Revenues from the Sale of Recyclables)

Reuse-Recycling-Recovery: Jobs-Per-Tonne-of-Material Ratios

Reuse, remanufacturing and recycling-reliant industries as well as recovery are downstream of the

collection, landfill and processing sectors. These sectors receive an economic impact due to changes in

the availability of collected materials, which represent a throughput for their operations. These sectors

are different in many ways from traditional waste management industries as they may not purchase

their materials from industries that can increase or decrease their production according to demand.

18

Stats Canada (2008)

mailbox://C:/Users/Mark/AppData/Roaming/Thunderbird/Profiles/0a8abmk4.default/Mail/pop.earthvoice.ca/Inbox?number=65309853

mailbox://C:/Users/Mark/AppData/Roaming/Thunderbird/Profiles/0a8abmk4.default/Mail/pop.earthvoice.ca/Inbox?number=65309853

36


Furthermore, the industry structures for remanufacturing or recycling-reliant industries vary a great deal

from the structures of their counterparts that rely on virgin materials or traditional approaches.

As a result, employment impacts in the reuse, remanufacturing, and recycling-reliant industries are not

well represented by input-output analysis. Instead, estimates for these impacts are established by

utilizing ratios for jobs per tonne of material, developed by assessing other recycling studies.19,20,21.

Multipliers are applied to data for tonnage of materials in the two zero waste diversion scenarios. In

order to maintain a conservative estimate in cases where multiple data sources exist, the lower value

has been selected (Table 21). These ratios are then applied to the data for tonnage of diverted materials

that are recycled under each scenario.

Table 21: Downstream Jobs-Per-Tonne-of-Material Ratios

Activity Reuse &

remanufacture Recycling Reliant

Study # 1 2 3 1 2 3

Organics n/a n/a n/a - 0.4 -

Paper n/a n/a n/a - 1.8 4.16

Plastics - - 20 - 9.3 10.3

Multi-material - 6.2 - - - 2.5

Textiles & rubber - 8.5 7.35 - - 9.24 / 2.5

Other - - - - - 2.5

Wood - 2.8 2.8 - - 2.8

Ferrous - - 20 - - 4.2

Glass - - 7.35 - 2.6 7.85

Renovation - 6.2 - - - -

Non-Ferrous - - 20 - - 4.12

Haz-waste - - - - - -

Concrete - - - 0.02 - -

Drywall - - - - - -

Asphalt - - - - - -

Note: Study #

1 Morris & Morawski (2011),

2 Institute for Local Self-Reliance (1997),

3 Tellus Institute (2011)

Energy and GHG Impacts Two approaches were utilised to estimate energy and greenhouse gas emissions. A simplified analysis

was developed to estimate the direct impacts of the 5Rs strategy. In this approach, energy and

emissions that occur within BC are estimated based on changes to trucking of material under the

different diversion scenarios. In accordance with IPCC guidelines, CO2 from landfills is greenhouse gas

neutral. In addition, since the Province requires methane capture in all landfills with more than 10,000

tonnes per year of disposal, the methane from additional material is assumed to be zero.

19

Morris & Morawski (2011), 20

Institute for Local Self-Reliance (1997) 21

Tellus Institute (2011)

37


The second approach to calculating GHG emissions uses a lifecycle perspective that also captures the

upstream benefits of using recycled material instead of virgin resources. Emission factors for

greenhouse gas emissions and energy were extracted from Environment Canada’s WARM model 22. This

model provides a streamlined life-cycle approach to characterise GHG and energy impacts of waste

management activities. The incremental GHG emissions are presented in Table 22. Incremental energy

impacts are presented in Table 23. These factors were combined with tonnage by material to estimate

GHG and energy impacts.

Table 22: GHG Emissions from Waste Diversion Options Compared to Landfilling, Including Carbon Sinks (tonnes CO2e/tonne), Scenario 2 and 3

Material Reduce Recycling Recovery

Newsprint 0 -1.53 1.16

Fine Paper 0 -4.38 -1.22

Cardboard 0 -3.54 -0.33

Other Paper 0 -3.98 -0.75

Aluminum 0 -6.51 0

Steel 0 -1.2 -1.04

Copper wire 0 -4.11 0

Glass 0 -0.12 0

HDPE 0 -2.29 2.87

PET 0 -3.64 2.15

Other Plastic 0 -1.82 2.65

Food Scraps -1.04 0 -0.78

Yard Trimmings 0.09 0 0.34

White Goods 0 -1.48 -0.27

22

ICF, 2005

38


Table 23: Energy Savings from Waste Diversion Options Compared to Landfilling (GJ/tonne), Scenario 2 and 3

Reduce Recycling Recovery

Newsprint 0.9 6.5 2.7

Paper 2.4 15.8 2.2

Cardboard 1.7 8.5 2.3

Other Paper 1.6 9.5 2.2

Aluminum 0.04 87.4 0.07

Steel 0.04 12.6 11.0

Copper 0.04 71.7 0.05

Glass 0.04 1.7 0.04

HDPE 0.04 64.4 6.5

PET 0.04 85.3 3.4

Food Scraps 1.7 0 0.7

Yard Trimmings 0.8 0 0.9

White Goods/Electronics

23.9 8. 7

Human Health and Toxicity Impacts A range of human health and eco-system impacts occur from generation, diversion, transport,

processing, and disposal of waste. Impacts include common air contaminants (CO, SOx, NOx,

particulate, VOCs and NH3). In addition, hazardous air pollutants such as mercury, dioxins and furans

occur from a range of waste management options. In general, reduce and re-use have negligible human

health or toxicity impacts, while, recovery and residuals have the highest human health impacts. To

quantify human health and ecosystem impacts, multipliers developed by Metro Vancouver23 have been

used.

Table 24: Human Health and Ecosystem impact by 5R activity [kG/ Tonne material]24

Human Health Impact (eToluene)

Ecosystem Impact (Herbicide equivalents)

Recycling & Composting -945 -2

Landfill 60 <0.1

WTE 105 2

23

Metro Vancouver, 2011 24

A detailed description of the human health and environmental impacts is presented in the Metro Vancouver (2011) report.

39


Results This section presents results from the economic and job impact analyses of the implementation of

higher waste diversion scenarios.

Economic Business Case The economic business case is calculated using the equation in Table 25. Benefits are summed across

material types to arrive at the net economic benefit (cost) for the waste management system at the

provincial level within the province of BC in 2025. The net economic benefit represents the net savings

to the waste management system as a whole for scenarios two and three compared with the business as

usual scenario. If the net waste management benefit is positive, the overall economic cost of waste

management has been reduced relative to BAU. If the net waste management benefit is negative, the

overall economic cost of waste management has increased relative to BAU.

Table 25: Calculation of Incremental Economic Benefit (Cost) of Higher Waste Diversion

Incremental economic benefit (cost) of higher waste diversion

=

incremental diversion of material x [ % reduced x net reduction benefit (cost) +% reused x net reuse benefit (cost) +% diverted to Industry Stewardship x net Industry Stewardship benefit (cost) +% diverted to WTE x net WTE benefit (cost )]

Table 26 shows the financial benefits (costs) for scenarios two and three. Implementation of scenario

two will have an annual net benefit of $56 million by 2025. Implementation of Scenario Three will have

an annual net benefit of $126 million by 2025.

It should be noted that the fundamental difference between industry stewardship and other programs is

who pays for the program, and who manages the program. In all cases where diversion is achieved

through industry stewardship programs, costs of existing programs are generally shifted to producers

and consumers and away from municipalities and tax payers. There is an assumption that producers

who pay for industry stewardship programs will endeavour to make them as economical as possible

because of competitive pressures while meeting environmental and other performance targets.

Based on this analysis the following observations are made:

1. Those materials with the most significant economic benefit in support of zero waste include

organics, high value plastics (PET and HDPE) and non ferrous metals. All papers are also an

important focus because of the volumes involved and anticipated demand from end markets

over the long term. Focusing policy tools on these materials is recommended in development

and implementation of policies at the provincial level.

2. A number of jurisdictions have implemented organics recycling programs throughout BC.

Evaluation of these initiatives is recommended to understand program costs and impacts.

40


3. Implementation of the PPP is scheduled to commence in 2014 and will cover plastics and non-

ferrous metals. Program monitoring and evaluation by the stewardship agencies is

recommended to ensure costs are comparable to other jurisdictions.

4. Average residential printed paper and packaging EPR costs have been applied based on available

data. This has a significant impact on the business case for industry stewardship programs in

general and for plastics in particular. It is recommended the industry stewardship costs for PPP

be explored in more detail to confirm the assumptions used in the current analysis.

Table 26: Economic Benefits (Costs) of Higher Waste Diversion Scenarios (Relative to BAU in 2025) ($ millions)

Material Scenario Two

[$ millions] Scenario Three

[$ millions]

Organics $34.7 $59.1

Paper $1.1 $2.2

Plastics $16.2 $43.1

Multi-material -$1.5 -$2.8

Textiles & rubber $1.8 $3.5

Other -$8.2 -$18.9

Wood $0.7 $1.8

Ferrous -$0.5 -$2.0

Glass -$0.3 -$0.8

Renovation $0.2 $0.5

Non-Ferrous $13.3 $43.1

Haz-waste -$5.7 -$12.3

Concrete $1.7 $4.0

Drywall $1.3 $3.2

Asphalt $0.8 $1.9

Total $55.6 $125.6

41


A breakdown of expenditures and revenues by scenario is presented in Table 27.

Table 27: Summary of Expenditures and Revenues by Scenario (Relative to BAU in 2025) ($ millions)

Scenario Two [$ millions]

Scenario Three [$ millions]

Expenditures

Solid Waste Collection $53 $114.6

Tippage $98.4 $198.8

Recycling Processing -$20.4 -$35.4

Industry stewardship Costs -$131 -$298.5

Total Expenditures (1) -$0.2 -$20.5

Revenue

Material Revenue $56.4 $147.7

WTE -$0.6 -$1.6

Total Revenue (2) $55.8 $146.1

Net Revenue (1+2) $55.6 $125.6

Distributional Impacts Allocation of the benefits of the two waste scenarios between public sector and private sector is

summarised in Table 28. Implementation of Scenario Two will reduce public sector costs by $33 million

per year (in 2025), while implementation of Scenario Three will reduce public sector costs by $70 million

per year (in 2025).

Table 28: Public Sector versus Private Sector Costs of Higher Waste Diversion

Direct Economic Benefits (Costs)

BAU, 2025 Scenario Two, 2025 [$ millions]

Scenario Three [$ millions]

Public sector ($450) $(417) $(380)

Private sector ($750) $(727) $(694)

Total ($1,200) $(1,150) $(1,086)

Net Benefit (Cost) relative to BAU

$55.6 $125.6

Sensitivity Analysis

Sensitivity analysis was carried out to determine which factors caused a significant change in the

forecast results if their values were varied. Table 29 below shows the results of the analysis compared

to the base case. Based on this analysis, the business case remains positive for all variables tested.

Furthermore:

The model is insensitive to changes in commodity values and collection fees. For example, for

scenario two, a -25% change in commodity values causes net costs to increase by $0.2 million

compared to the base case

42


The model is sensitive to changes in landfill fees. The impact of landfill fees rising to $184/tonne

was explored since this is expected to occur by 2015 for Metro Vancouver due to the impact of

reduced landfill volumes driven by increased recycling and the banning of organic waste from

landfills25. For scenario two, instead of net costs of $55.6 million there would be a net benefit of

$108 million.

The model is moderately sensitive to processing costs with a 25% change resulting in a 29%

change in the benefits.

The model is relatively insensitive to changes in WTE costs which are not shown for that reason.

Table 29: Sensitivity Analysis on Economic Benefit (Cost)

Base Case

Commodity Values (-25%)

Commodity Values (+25%)

Landfill Fee =

$184/tonne

Collection Fees

(+25%)

Processing Costs

(-25%)

Processing Costs

(+25%)

Scenario Two $55.6 $55.3 $55.8 $108 $50.5 $72.8 $38.2

Scenario Three $125.6 $124.8 $126.5 $225 $112 $162 $89.1

Job Creation and Economic Impact Results

Direct, Indirect and Induced Impacts

Implementation of a zero waste strategy has a positive benefit in terms of wages, GDP and jobs. By

2025 Scenario Two annually stimulates $12.2 million in additional wages, $27 million in additional GDP

and over 300 full time jobs. Scenario Three produces approximately three times that impact26, with $40

million in additional wages, $89 million in incremental GDP and over 1,000 additional jobs. In all cases,

direct impacts are roughly two thirds of the total, while indirect impacts are roughly 25 percent, and

induced impacts make up the remaining 10 percent. Impact on wages, GDP, full time employment,

output and provincial income taxes are shown in Table 30 and Table 31.

25

Sinoski, K. 26

The relationship is non-linear because the percentage composition of the different material types varies from Scenario 2 to Scenario 3 and the economic impact per tonne of incremental diversion varies by material type. For example, organics make up a higher percentage of the incremental diversion in Scenario 2 than in Scenario 3. Hence in Table 26, although the total volume of incremental waste diverted roughly doubles, the economic benefit from organics only increases by about 50% since the volume of organics incrementally diverted only increases by about 50%.

43


Table 30: Scenario Two Job Creation and Economic Impacts in Material Collection and Processing

2015 2020 2025

Direct impact

Wages [$ million] $3.0 $6.0 $9.0

GDP [$ million] $6.1 $12.2 $18.3

FTEs 62 124 186

Indirect impact

Wages [$ million] $1.1 $2.1 $3.2

GDP [$ million] $1.9 $3.9 $5.8

FTEs 25 50 74

Induced impact

Wages [$ million] $- $- $-

GDP [$ million] $1.0 $1.9 $2.9

FTEs 15 29 44

Total impact

Wages [$ million] $4.1 $8.1 $12.2

GDP [$ million] $9.0 $18.0 $27.0

FTEs 101 203 304

Provincial Taxes [$ million] $0.25 $0.50 $0.76

44


Table 31: Scenario Three Job Creation and Economic Impacts in Material Collection and Processing

2015 2020 2025

Direct impact

Wages [$ million] $9.9 $19.8 $29.7

GDP [$ million] $20.1 $40.3 $60.5

FTEs 205 410 615

Indirect impact

Wages [$ million] $3.5 $7.0 $10.6

GDP [$ million] $6.4 $12.8 $19.1

FTEs 82 164 246

Induced impact

Wages [$ million] $- $- $-

GDP [$ million] $3.2 $6.4 $9.6

FTEs 48 96 144

Total impact

Wages [$ million] $13.4 $26.8 $40.3

GDP [$ million] $29.7 $59.5 $89.2

FTEs 335 670 1005

Provincial Taxes [$ million] $0.83 $1.66 $2.50

Downstream Impacts The Jobs-Per-Tonne-of-Material ratios allow an analysis of the downstream impacts of materials

diverted from landfill and entering the reuse, recycling and recovery sectors. Only direct job impacts are

assessed in this case (Table 32). By 2025, Scenario Two leads to more than 2,000 additional jobs in

downstream sectors. This is almost seven times greater than the corresponding impact of the diversion

strategies on direct jobs in the collection and processing sectors. Scenario Three leads to more than

4,800 jobs, almost five times the corresponding direct jobs impact in collection and processing.

Many more jobs are estimated to be created in the downstream sectors because the reuse,

remanufacturing and recycling-reliant industries are much more labour-intensive than the collection,

landfill, processing and waste-to-energy sectors. The 2011 Tellus Institute study27 examined the impact

of recycling on the US economy. It reports that waste disposal is the least labour intensive of the

various waste management activities, generating the fewest jobs per ton of waste (0.1 jobs per 1,000

tons). This is due to the fact that the capital intensive equipment used at disposal facilities can handle

large tonnages with few employees. Materials collection generates more jobs than disposal but still

relatively few. Processing of organics (0.5 jobs per 1,000 tons) and recyclables (2 jobs per 1,000 tons)

are somewhat more labour intensive. Manufacturing using recycled materials as inputs creates a

27

Tellus Institute (2011).

45


relatively high number of jobs per 1,000 tons, varying by material type from about 4 jobs per 1,000 tons

for paper as well as iron and steel manufacturing, to about 10 jobs per 1,000 tons for plastics

manufacturing. Although relatively small tonnages of material are involved, municipal solid waste reuse

and remanufacturing activities are particularly job intensive owing to the labour required for

disassembly, inspection, repair/refurbishment, reassembly, and testing. It must be noted that not all

downstream jobs would be located in BC due to the impact of leakage.

For many material types, remanufacturing of the recycled materials is done outside of BC. For example,

paper has almost no recycling capacity in BC (less than 1 percent). As an example, the last recycled

newsprint mill in BC (Catalyst Paper) closed within the last two years. The magnitude of the potential

increase in downstream jobs shows the importance of government policies that encourage the creation

and retention of remanufacturing facilities within BC.

Table 32: Full Time Equivalent Job Impacts on Downstream Reuse, Recycling and Recovery Sectors

2015 2020 2025

Scenario Two 669 1,338 2,008

Scenario Three 1,604 3,208 4,813

GHG and Energy Impacts The GHG and energy savings from implementation of the zero waste strategy are summarised in Table 33. Taking a global perspective, GHG emissions reductions would be 1,047 KT/year or 2,277 KT per year by 2025 for scenarios two and three respectively, while energy savings would be 10,535 GJ/year or 26,629 GJ/year by 2025 for scenarios two and three. Table 33: GHG and Energy Impacts of Zero Waste Strategy in 2025 [GJ]

Scope Scenario Two Scenario Three

GHG Savings [Kilo tonnes]

Within BC 33.6 72.6

Energy Savings ['000 GJ]

465 1000

GHG Savings [Kilo tonnes]

Global 1,047 2,277

Energy Savings ['000 GJ] 10,535 26,629

Zero Waste Business Case Results Summary A summary of the economic, job creation and environmental benefits of implementing a zero waste

strategy is summarised in Table 34. Based on these results, the business case is favourable.

46


Table 34: Zero Waste Business Case Summary Results (Relative to BAU, 2025)

Triple Bottom Line Summary

Scenario Two (62% diversion rate)

Scenario Three (81% diversion rate)

Public Sector Benefits (Costs) [$ million]

$33 $70

Private Sector Benefits (Costs) [$ million]

$23 $56

Direct Economic Benefits (Costs) [$ million]

$56 $126

Change in GDP [$ million] $27 $89

Jobs Created (Destroyed) (FTEs)

304 (direct, induced and upstream indirect)

1,005 (direct, induced and upstream indirect)

Downstream Jobs Created (Destroyed) (FTEs)

2,008 (downstream) 4,813 (downstream)

Greenhouse Gas Emissions Reduced [KT/Year]

1,047 2,277

Human Health Impacts [KT/year e toluene]

947 1741

Ecosystem Impacts [KT/year Herbicide Equivalents]

1 3

47


Discussion

Distributional Impacts The trends regarding expenditures on 5Rs, landfilling, recycling and industry stewardship programs are

identified within the zero waste scenarios. Table 35 below provides a qualitative analysis of trends in

the shifting of costs among consumers, producers and government. A challenge in developing a

quantitative assessment of the impacts is the lack of information on the distribution of costs among

industry segments. A second issue is the dynamic nature of landfill fees wherein a reduction in waste

sent to landfills might in some cases result in an increase in tippage fees due to the fixed costs

associated with landfill operations. The impact of this issue will depend on landfill size and annual

throughput.

Table 35: Trends in Cost Shifting from Implementation of Zero Waste Strategies Compared to Landfilling

5R Strategy Distributional Impact

Reduce Economic activity in waste management sector is reduced. A reduction in waste will prolong the life of the landfill, but may result in

an increase in the disposal cost per tonne of waste.

Reuse Local government costs are reduced; this could result in savings or other benefits for taxpayers.

Potential for diversification of local private enterprise. A reduction in waste will prolong the life of the landfill, but may result in


Recycle (industry stewardship)

In areas where households pay a per capita landfill fee, costs shift from local government and taxpayers to producers and consumers.

Industry stewardship may promote product design changes that lead to a reduction or change in materials which positively impact the amount and type of waste generated.

A reduction in waste will prolong the life of the landfill, but may result in an increase in the disposal cost per tonne of waste.

Recycle (Municipal) Costs are shifted within local government from landfilling to recycling. Depending on commodity prices, local governments may receive revenue

from the sale of valuable materials. A reduction in waste will prolong the life of the landfill, but may result in


Recovery Costs of waste to energy are generally lower than for landfilling, resulting in reduced costs for local government and taxpayers.

Residuals Where a significant portion of landfill costs are fixed, lower tonnages being landfilled may not benefit net costs as much because the fixed costs will have to be distributed over a lower volume of material being landfilled; this may increase the fee per tonne of landfilling, particularly at small landfills

Lower residual waste disposal rates may increase the cost per tonne of waste to operate a landfill; however, the life of the landfill will be prolonged, reducing costs associated with siting and establishing new landfills

48


Impact of Increased Diversion on Landfill Costs

In estimating the costs and benefits of increased diversion, we have assumed the avoided landfill fee is

constant and equal to the current average landfill cost of $107/tonne. Sensitivity analysis included the

impact of increasing landfill costs to $184/tonne which is seen to be significant and based on projected

costs of landfilling in Metro Vancouver in 2015 based on achieving a 70% diversion rate28. It is beyond

the scope of this work to examine the market dynamics of avoided landfilling and the impacts on landfill

costs since this is a long term marginal cost issue related to the cost of the next increment of landfill

capacity compared with other alternatives such as waste to energy. The impact of increased landfill

diversion is likely to increase landfill costs meaning that our assumption is a conservative one.

Leakage

Leakage is defined for the purpose of this study as waste material that is produced in BC and is disposed

of or diverted without creating economic returns within the province. According to this definition,

leakage includes:

Illegal dumping since it generates no economic activity.

Material that is exported from BC to landfills outside BC, since the value of the material is lost to

BC and the tippage fee is also paid to an entity outside BC.

There is also reverse leakage – or inflow – occurring. For instance, plastic bottles purchased in

the United States and carried back into BC are not eligible for deposit returns, but may be

processed through a municipal blue box or ICI recycling program

Exporting of material by BC processors for re-use in international markets is not leakage, since

there is economic activity from sorting and collection and the processors receive revenue from

selling the product.

By its nature, estimating the quantities of leakage is difficult. No data was identified to estimate the

amount of illegal dumping, but it is not expected to be significant. Similarly waste exports were

identified for the ICI sector in Abbotsford, but no data on the quantities was obtained. It was not

possible to identify other regions in the province where exporting waste is occurring, but a reasonable

estimate is 50,000 to 100,000 tonnes/year.

28

Ref http://www.richmondreview.com/news/176033441.html

http://www.richmondreview.com/news/176033441.html

49


Conclusions Overall, higher waste diversion through implementation of a zero waste strategy will produce

substantial societal benefits. Scenario Two will have an annual net benefit of $55.6 million by 2025.

Implementation of Scenario Three will have an annual net benefit of $126 million by 2025. These

benefits accrue almost equally between the private sector and the public sector. In addition to the

positive economic impacts, implementation of the zero waste strategy will also have positive job

creation, GDP and GHG impacts. By 2025 Scenario Two stimulates $12 million in additional wages

annually, $27 million in additional GDP annually and just over 300 full time jobs.

Scenario Three produces approximately three times that impact, with $40 million in additional wages

annually, $89 million in incremental GDP annually and over 1,000 additional jobs. In all cases, direct

impacts are roughly two thirds of the total, while indirect impacts are roughly 25 percent, and induced

impacts make up the remaining 10 percent.

The potential for creating direct downstream jobs in the reuse, remanufacturing, and recycling-reliant

industries is even greater. By 2025, Scenario Two leads to more than 2,000 additional jobs in

downstream sectors. This is almost seven times greater than the corresponding impact of the diversion

strategies on direct jobs in the collection and processing sectors. Scenario Three leads to more than

4,800 jobs, almost five times the corresponding direct jobs impact in collection and processing. For

many material types, remanufacturing of the recycled materials is done outside of BC. The magnitude of

the potential increase in downstream jobs shows the importance of government policies that encourage

the creation and retention of remanufacturing and recycling-reliant facilities within BC.

It should be noted that this number of jobs is small in relation to the full BC economy (which has an

employment base of 2.5 million), and the benefits are minimal unless the downstream jobs can be

located in BC. Development of a remanufacturing industry in BC utilising the most significant materials

(paper, plastics, ferrous and non ferrous metals) is critical to increasing the economic benefits of a zero

waste business case.

Recommendations Based on the analysis completed, the following recommendations are submitted for consideration:

1. The business structure of a particular EPR program has a significant impact on the cost of

program delivery. Ensuring that costs are minimised to industry and consumers will reduce

backlash from program implementation. Further analysis on this issue is recommended.

Sensitivity analysis revealed that a different mix of zero waste strategies could positively impact

the business case for zero waste. Further analysis to optimise the zero waste business case is

recommended.

2. Materials quantification forecasts highlight inconsistencies in data collection procedures and

material forecasts developed at the provincial level versus at the regional districts.

Implementation of a consistent material quantification methodology is recommended to

support improved decision making and policy analysis.

50


3. Costing of 5Rs activities highlights that accessing municipal data is frequently a challenge due to

confidentiality requirements. Development of data sharing policies is recommended to improve

the transparency of subsequent analysis and to assist municipalities to ensure that pricing across

jurisdictions is fair and competitive and that provincially, investment in waste management

activities is based on defensible cost data.

51


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http://www.ilsr.org/recycling-means-business

53


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October 29, 2012.

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eng.pdf, 2010.

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http://www.epa.gov/smm/wastewise/pubs/conversions.pdf

54


Appendix: Local Government Survey on Waste Management Costs and

Practices Municipal and/or Regional Collection Description

Single family (curbside) Garbage collection

Contract or municipal crew?

2011 $/tonne? if not available then: o 2011 collection costs (contract or operations) o 2011 tonnages

Single family (curbside) Recycling collection

Contract or municipal crew? 2011 $/tonne? if not available then: o 2011 (net) collection and processing costs (contract or operations) o 2011 tonnages

Single family (curbside) Green Bin collection

Contract or municipal crew?


Multi-Residential Recycling collection

Contract or municipal crew


Landfill Disposal

2011 $/tonne? Organics Disposal

2011 $/tonne? Recyclables Processing

MRF – contract or municipal crew?

2011 tonnes processed?

2011 tonnes marketed?


Historical market prices (up to past 5 years)? Any information on

Private sector ICI garbage and/or recycling collection costs (by tonne or by lift - typical lift size)?

Private sector DLC collection costs (by tonne or by lift – typical lift size)?

Private Sector Multi-Res garbage and/or recycling collection costs (by lift - ask typical size or by tonne)?

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