Burn It or Let Them Bury It? The Net Social Cost of Producing District Heating from Imported Waste

40 Pages Posted: 18 Oct 2021

See all articles by Thomas Broberg

Thomas Broberg

University of Umea - Centre for Environmental and Resource Economics

Elbert Dijkgraaf

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus University Rotterdam, SEOR-ECRi

Sef Meens-Eriksson

University of Umea - Centre for Environmental and Resource Economics

Date Written: October 14, 2021

Abstract

In this study, a cost-benefit analysis (CBA) framework is applied to provide insights on policy issues relating to the cross-border trade in waste fuel. We estimate the net social cost of using imported waste fuel in a highly efficient combined heat and power plant (CHP) in a cold climate by considering both private costs and benefits as well as external costs related to energy production, alternative waste management and fuel transport. We conclude that using imported waste fuel under such circumstances is beneficial from a societal perspective given the wide range of assumptions regarding technical, economic and environmental characteristics. The net social cost is mainly determined by fuel cost advantages and the external cost of greenhouse gas emissions. External costs associated with transports only marginally impact the net social cost of waste imports for incineration. The results are robust to variation in the excess heat utilisation rate, which implies that importing waste for incineration would also be beneficial in countries with milder climates where district heating networks already exist.

Keywords: Cost-benefit analysis, district heating, externalities, incineration, trade, waste

JEL Classification: Q48, Q53, Q56, Q58

Suggested Citation

Broberg, Thomas and Dijkgraaf, Elbert and Meens-Eriksson, Sef, Burn It or Let Them Bury It? The Net Social Cost of Producing District Heating from Imported Waste (October 14, 2021). Available at SSRN: https://ssrn.com/abstract=3942535 or http://dx.doi.org/10.2139/ssrn.3942535

Thomas Broberg

University of Umea - Centre for Environmental and Resource Economics ( email )

Umeå, S-901 87
Sweden

Elbert Dijkgraaf

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus University Rotterdam, SEOR-ECRi ( email )

P.O. Box 1738
H 7-34
Rotterdam, 3000 DR
Netherlands
+31 10 4082590 (Phone)
+31 10 4089650 (Fax)

HOME PAGE: http://www.ecri.nl

Sef Meens-Eriksson (Contact Author)

University of Umea - Centre for Environmental and Resource Economics ( email )

Umeå, S-901 87
Sweden

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