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Recovery of C&D waste Changing under different economic constraints EU: differences in GDP / cap ~€ • 7.500-10.000 – Bulgaria, Poland, Hungary • 10.000-17.000 – Lithuania, Czech Rep., Latvia, Portugal, Greece, Cyprus, Slovenia • 17.000-21.000 – Spain, Italy, Germany, Estonia • 22.000-30.000 – Belgium, France, Austria, UK, Netherlands, Sweden, Denmark, Ireland, + Luxemburg Turnover P/c Eco-industry SWM& Rec ~ € 20,-/cap SW & Rec ~ € 50,-/cap SWM & Rec ~€ 250,-/cap Ratio SWM cost/GDP • GDP<20.000: 0,1 - 0,2 % • GDP>20.000: 0,5 - 1,0 % • Low: Estonia, Spain, Belgium • High: Slovenia, Denmark, Austria A guess • Prices for C&D waste recycling are about 1/3 of cost of waste management per capita, e.g.: – € 7,- at a level of € 20,– € 17,- at a level of € 50 – € 70,- at a level of € 200 A general model for cost accounting • Full costs: – Internal: • Process cost • Product costs and revenues – External “community” cost: • Generation of pollution & deterioration of renewables exceeding natural absorption level & Depletion of natural resources: – – – – Difficult to count, change with wealth Difficult to address: local, regional or global For someone else or the next generation Diluted Conservation of misery • • • • Law on conservation of matter: the GOOD, the BAD and the UGLY A dynamic arena of interacting parties • Consequences of goods with negative value • Recycling breakeven • Profitability regarding different public policy instruments • Choice of market match • Economy of scale • Economic depreciation of investments Consequences of goods with negative value • • • • Cash flow Stock value Risk management Loss reward + +/+ Recycling Breakeven – Competition with other treatment chains (e.g. land filling or incineration): dominant competition – Built-in percentage of other treatment: BAD can become worse for residues Competing chains C -70 Transport -20 1 Transport -40 Tipping fee -30 Landfill 50% GOOD 2 R -20 40% BAD -40 10% UGLY ( = Community) A guess • Prices for C&D waste recycling are about 1/3 of cost of waste management per capita, e.g.: – € 7,- at a level of € 20,– € 17,- at a level of € 50 – € 70,- at a level of € 200 Competing chains C -10 1 Transport -5 Tipping fee -5 Landfill 2 Transport -5 PRICE ?? 80% GOOD +3 R -20 20% BAD -5 10% UGLY (-100 = Community) MAX PROFIT ?? Low cost competition C -10 Plastics 1 Transport -5 Tipping fee -5 Landfill Wood, Metals, 2 Transport -5 PRICE 4,90 80% aggregate +3 R -5 20% BAD -5 10% UGLY (-100 = Community) MAX PROFIT 1,30 After technical regulation C -25 1 Transport -5 Tipping fee -20 Landfill 2 Transport -5 PRICE 19,90 70% GOOD +12 R -20 30% BAD -20 10% UGLY -100 community MAX PROFIT 2,50 After technical regulation and taxing C -75 1 Transport -5 Tipping fee -70 Landfill, incinerator debris, wood, metal 2 Transport -5 PRICE 69,90 R -35 40% BAD -70 60% GOOD +2 5% 5% UGLY -100 tax MAX PROFIT 3,10 Selective Landfill ban for unsorted waste: BINGO C -104 1 2 X Transport -5 PRICE 99 R -35 40% BAD -80 Landfill 60% GOOD +2 5% 5% UGLY -100 = Tax MAX PROFIT 28,20 Finding a match of markets • A. waste product markets • B. Resources markets (Energy and raw materials) B Sophiticated specific A Economy of scale collect Sort 1 Sort 2 Sort 3 end Innovation and governmental reliability • When investing, parties want a “innovative” public policy guaranteeing change, to be able to invest; • After investment parties want a “reliable” public policy to have a optimal depreciation of their assets; • It would be a coincidence if all the parties would be in the same stage at the same moment: countervailing lobbying causes delays Instruments of public authorities creating a artificial market – Technical regulations (IPPC, BAT) – Treatment regulations (BREF’s) – Economic measurements: grants and taxes – Economic actor: client, supplier, manager Effective regulation Thesis: • A combination of technical regulation and taxing the remaining external cost is sufficient for the creation of an effective diversified market • More is politics and can be used as temporarily accelerator Concluding remark: Design your system(-role) back to forth • Start in the future, count ten years back; • Question what scarce resources are and what can be paid; • Count internal and external cost; • Design the whole system of end-treatment, recycling and collection (In that order); • Find efficient rules for the play and roles for the players.