For many products it is completely normal that they are imported for all around the world. For landfilling and incineration of waste this is in the minds of many people less logical. You should clean up your own waste, is a reaction you get often.
Also in political debates in the Netherlands and Sweden the discussion is going on about allowing the import of waste. Therefore we set up a study to analyse this from an economic point of view.
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 transport 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.
Eriksson, J.M., T. Broberg and Dijkgraaf (forthcoming), Burn it or let them bury it?, Energy Economics.
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