Managing Hazardous Solid Waste and Waste Sites

Chapter 18

© 2007 Thomson Learning/South-Western Thomas and Callan, Environmental Economics

2

How Serious is the Problem?

It is worldwide in scope, affecting both developed and developing nations

In the US, annual hazardous waste generation is about 36.3 million tons per year or 0.13 tons per person

Risks are nontrivial e.g., Love Canal

3

Overview of Recent Policy

Resource Conservation and Recovery Act (RCRA) of 1976 (Subtitle C)

Established ‘cradle-to-grave’ management; delegated nonhazardous waste control to states

Hazardous and Solid Waste Amendments of 1984 (reauthorized RCRA) Some shift toward waste reduction and improved

treatment Strengthened standards

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Overall Policy Approach (RCRA)

Command-and-control Primary responsibility is at federal level (EPA) Emphasizes waste management more than

source reduction (pollution prevention)

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Components of Cradle-to-Grave Management System

Identification of hazardous waste A waste is hazardous if it falls into one of two categories

characteristic wastes: have attributes posing substantial risk In the US, characteristics are: ignitability, corrosivity, reactivity,

toxicity listed wastes: pre-identified by EPA as having met certain

criteria, such as the presence of toxic or carcinogenic constituents.

National manifest system for tracking Once wastes are ready for transport, generator must prepare a

document, called a manifest, that identifies the hazardous material and all parties responsible for its movement

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Components of Cradle-to-Grave Management System (continued)

Permit system This controls waste management for transport,

storage, and disposal facilities (TSDFs)

Standards for TSDFs General regulatory standards: apply to all types of TSDFs

and control functions like inspections, emergency plans, and participation in the manifest program

Technical regulatory standards: outline procedures and equipment requirements for specific types of facilities

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Evolving To Pollution Prevention

1984 amendments suggest some movement toward prevention and away from land disposal

Land disposal of untreated hazardous waste is essentially prohibited

Economic Analysis of Policy

9

4 Elements of the Analysis

Risk-based uniform rules of identification Benefit-based uniform standards Failures of the manifest system Market implications of the 1984 land

restrictions

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Risk-Based Uniform Identification

Absence of risk-benefit analysis Risk-based -- no consideration for balancing risk with

benefits of the material before it becomes waste Result: allocative inefficiency

All waste materials are controlled with same stringency regardless of their value to society

Identification criteria are applied uniformly No adjustments allowed for degree of toxicity or for the

amount of waste that poses a hazard Result: allocative inefficiency

Potential for underregulation of more toxic wastes and overregulation of less toxic wastes

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Benefit-Based Uniform Standards

Standards are benefit-based No cost considerations

particularly problematic for long-term rulings such as post-closure procedures

Result: allocative inefficiency Standards applied uniformly

No consideration for site-specific differences Result: cost ineffectiveness

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Failures of Manifest System

Strict CAC no incentives Solely benefit-based

No consideration for costs of administration, compliance, etc.

Result: allocative inefficiency Limited scope

only 4 - 5% of U.S. hazardous waste are moved off site and therefore subject to manifest system

High compliance costs Potential incentive to illegally dispose

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Market Implications of 1984 Land Restrictions

Landfilling had become predominant form of disposal because it was believed to be a lower cost alternative, due in part to scale economies Error was that external costs were ignored Policy response was 1984 land restrictions

Land use restrictions raise MPC, reducing landfilling activity, which lowers external costs in that market

Issue: How is landfilling reduction achieved? If through source reduction, society gains If through alternative practice, such as incineration, the net

effect is unclear because that practice adds external costs

Effect of Land RestrictionsSource Reduction or Alternative Practice?

$ $

D=MSB=MPB D=MSB=MPB

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Land Disposal Incineration

Unless the decline in external costs in the landfilling market is larger than the increase in external costs in the incineration market, the land restrictions achieve no net decline in external costs to society

Market-Based Policy

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Waste-end Charge

A fee in place at time of disposal based on the quantity of waste generated To achieve efficiency, the charge must be set equal to the

MSC of hazardous waste services at the efficient output level to cover MPC of the waste facility plus MEC from associated pollution

Real-world examples Australia, Austria, Belgium, and Finland charge a fee on

hazardous waste 35 U.S. states charge a tax on hazardous waste

Uncontrolled Hazardous Waste Sites

Superfund

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Overview of Policy

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) 1980 (Superfund) Established CERCLIS, a national inventory of hazardous waste sites

CERCLIS is used to identify the worst sites and place them on National Priorities List (NPL)

Established a $1.6 billion fund to clean up and recover damage Superfund Amendments and Reauthorization Act (SARA) 1986

Reauthorized CERCLA Increased fund to $8.5 billion Mandated federal action on 375 sites within a 5-year period;

promotes permanent clean-up

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Overview of Policy (continued)

Small Business Liability Relief and Brownfields Revitalization Act of 2001(known as Brownfields Act) Amends CERCLA Outlines exemptions from Superfund liability Authorizes grant funding of up to $200 million annually for

assessment and abatement of brownfield sites Abandoned or underutilized properties that are less

contaminated than Superfund sites, but redevelopment is complicated by (potential) presence of contamination

CERCLIS and NPL SitesYear CERCLIS

(cumulative) NPL

(cumulative) 1980-90 33,371 1,236

1992 36,869 1,275

1994 39,099 1,360

1996 12,781* 1,210

1998 9,404 1,192

2000 9,297 1,226

*In 1995, over 24,000 sites were removed from the CERCLIS inventory as part of EPA’s Brownfields Economic Redevelopment Initiative (aimed at promoting redevelopment of these sites.)

Sources: U.S. EPA, Office of Emergency and Remedial Response (April 2000), as cited by Council on Environmental Quality (1998), p. 312, table 8.9 and updated online; U.S. EPA, Office of Solid Waste and Emergency Response (April 1997).

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Superfund ProceduresResponse/Cleanup: National Contingency Plan (NCP)

The substance release is identified and the National Response Center is notified

Site is listed in CERCLIS EPA responds

Removal Action: to restore immediate control Remedial Action: to achieve permanent solution

Hazard Ranking System (HRS) If site gets a risk ranking > 28.50 out of 100 in the HRS,

it is placed on the NPL

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Superfund Procedures (continued)Response/Cleanup: National Contingency Plan (NCP)

Site is listed on the Construction Completion List (CCL) when: all immediate threats are addressed all long-term threats are under control

Site is deleted from the NPL when the EPA and the state jointly determine that no further remedial actions are needed

Steps in a Superfund Cleanup

Source: U.S. EPA, Office of Solid Waste and Emergency Response (December 11, 2000).

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Compensation and Liability

EPA has authority to force those responsible to correct the problem and pay for damage

The law identifies potentially responsible parties (PRPs) as: Current or former owners or operators of a site

and all parties involved in disposal, treatment, or transport of hazardous substances to site

Economically, the intent is to internalize the externality

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Emergency PlanningTitle III of SARA

Public must be informed of production and release of hazardous substances according to Title III of SARA Each state sets up an emergency plan in the

event of a hazardous release Various reports about hazardous substances

are required by law Resulting data forms the

Toxics Release Inventory (TRI) published annually by EPA

Analysis of Policy

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Assessing Superfund’s Performance

CERCLA of 1980 was a national failure $1.6 billion cleaned up only 8 sites

Slow progress removing NPL sites As of 2005, only 293 have officially been removed

from the NPL Average cost of remedial action is $25 million per site

Problem of “how clean is clean” Sites are brought to a uniform level of cleanliness Debate is whether this decision should be risk-based

or benefit-cost based

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Two Major Flaws in Superfund

1. Poor information and reporting practices An initial lack of awareness about the extent of the

problem Inadequate knowledge of abatement technology

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Two Major Flaws in Superfund

2. Absence of market incentives Feedstock taxes that financed Superfund were

targeted to be revenue producing, not as an incentive to reduce use of hazardous materials

Definition of PRPs’ liability is disincentive for individuals to come forward

Strict liability: a party is responsible even if negligence is not proven

Joint and several liability: single party is responsible for all damages even if contribution is minimal

Outcome is resource misallocation from cleanup to litigation procedures