Waste Management effects on Economy

Waste is part of the economy – it is a by-product of economic activity, by businesses, government and households. Waste is also an input to economic activity – whether through material or energy recovery. The management of that waste1 has economic implications – for productivity, government expenditure, and, of course, the environment. Firms’ decisions over how to manage waste impact on their profitability. Where the benefits outweigh the costs, firms can reduce their overall costs2 and improve productivity by reducing the use of expensive raw materials, whether metal in industry, or paper in commerce. Equally, costs can be reduced by optimising the management of waste which arises. The decisions of consumers in demanding goods and services which lead to waste impact not only on the environment, but also on the level of government spending required by local authorities to collect and manage household waste. As well as the economy-wide impacts of waste, there are microeconomic themes around the formation of waste policy. Economics provides a framework in which to think about when intervention by Government might be desirable, as well as what type of policy intervention is appropriate. This paper sets out the key principles for public policy interventions in waste. The aim of applying these principles are to ensure that: there is a reason for Government intervening in a particular market; interventions are cost-beneficial; and any interventions are done in the most cost effective way. For example, an important rationale for Government intervention in the waste sector is because of the associated greenhouse gas (GHG) impacts. The management and disposal of waste produces GHG emissions, the full social cost of which is not taken into account either in the production and consumption decisions which lead to the generation of the waste, or in how that waste is managed. Ensuring that the amount of waste is reduced to the economically efficient level, and is optimally managed, will ensure that waste policy is delivering net benefits for society as a whole. Finally, choosing interventions, or a mix of interventions, which deliver emission reductions cost effectively will minimise costs to businesses, the Government (central and local), and the economy more widely – something which is especially important in the current economic climate. Waste policy interventions have particular impacts on public sector spending, through spending by local authorities on waste collection and management, and pursuing cost effective interventions at a time of constrained public finances is important. As well as achieving these aims an efficient waste policy helps to mitigates risks to longer-term sustainable growth, by helping to ensure that natural resources are not unsustainably used today, and contributing to GHG emission reduction targets. Over the course of the last year Defra has conducted a Review of Waste Policies in England to ensure that the policies and interventions are fit for purpose to meet the challenges we face in seeking to create a more resource efficient economy. The economic analysis has informed the work of the Review and consideration of different policies and intervention. 

Making a decision about how we can manage the waste we create is one of the most important contributions humanity can make to reduce its impact on the natural world. For this, Global Waste Management Outlook (GWMO), an initiative of United Nations Environment Programme (UNEP), and the International Solid Waste Association (ISWA), have collectively announced some goals and released a report.

The recently launched GWMO will help the waste management industry define its future over the next decade. It also called for investments to drive global clean-up of the billions of tonnes of waste “still dumped into our environment”. The GWMO released a first of its kind report in the Belgium capital of Antwerp on September 7.

"An urgent response to the world's mounting waste problem is not only a public health and environmental necessity, but also a sound economic investment”, as 

quoted by UNEP Executive Director Achim Steiner. Why would any politician be concerned about managing waste? They must be given their profit to implement these ideas, says the GWMO report. “Inaction is costing countries five to ten times more than investments in proper waste management. The global waste management goals proposed by this report have the potential to result in dramatic reductions in greenhouse gases, the creation of millions of green jobs and economic benefits in the hundreds of billions of dollars. By achieving them, we would also be taking massive strides toward realising the Sustainable Development Goals." 

The volumes of waste are likely to even double in lower-income African and Asian cities by 2030, as a perilous result of population growth, urbanisation and rising consumptions, as alarmed by GWMO. About seven to 10 billion tonnes of urban waste is produced each year and three billion people worldwide lack access to controlled waste disposal facilities, inadequacy in waste management has showered major health, economic and environmental problems. “This situation can be changed only if countries enforce proactive policies and sound institutions that encourage waste minimisation and recycling. Collectively, we have the technological capacity to solve the global waste problem. International cooperation will be vital in preventing developing countries from becoming dumping ground for hazardous materials,” said United Nations Environment Assembly president Oyun Sanjaasuren.

Bibliography 

https://www.downtoearth.org.in/news/waste/inaction-in-waste-management-leading-to-huge-economic-loss-51063

By Sugandh Priya Ojha

https://shodhganga.inflibnet.ac.in/bitstream/10603/4180/7/07_chapter%201.pdf

By shodganga publishers

https://www.recyclingtoday.com/article/rt1014-waste-recycling-economic-factors/

By Chris Giguere