A theoretical framework for determining environmental costs, benefits, and the net welfare effects associated with hazardous waste management

This paper reviews and presents a theoretical model to determine the costs, benefits, and welfare effects of hazardous wastes management. According to the Iranian law, environmental costs are assigned to waste producing firms. However, in practice, due to weak enforcement programs, firms do not pay any environmental costs. Using the basic principles and logic of welfare economics, we present a micro-level model for analyzing an industry that generates waste as a by-product of its production process. Firms in the industry choose the least cost method of disposal (either legal or illegal disposal). By utilizing various figures of presented models in partial equilibrium structure we found R'۱, R'۲ and ۳ R′ which are the net welfare effect of producing firms, the net welfare effect to firms supplying legal waste disposal services and the net welfare effect of the environmental damage, respectively. By analyzing the presented figures we concluded that government regulatory policy may ideally lower environmental costs via a subsidy program.   REFERENCES Dewees, D. (۱۹۹۸) Instrument Choice in Environmental Policy. Econ. Inquiry. ۲۱, ۵۳- ۷۱. Environmental Protection Agency. (۱۹۹۸) Safer Disposal for Solid Waste: The Federal Regulation for Landfills, ۳۷p. Environmental Protection Agency. (۲۰۰۸) Experiences of Hazardous waste generators with EPA’s phase I RCRA program, Washington DC, ۱۱۸ p. Kiel, K. and Zabel, J. (۲۰۰۱) Estimating the Economic Benefits of cleaning up superfund sites: The Case of Woburn, Massachusetts. J. Real Estate Finance Econ. ۲۲, ۱۶۳-۱۸۴. Layard P.R.G. and Walters A.A. (۲۰۰۷) Micro– Economic Theory. Mc Graw Hill Book Company, New York. pp. ۱۰۲-۲۵۸. Magorian, C. and Morell, D. (۱۹۹۹) Sitting Hazardous Waste Facilities, Ballinger, Cambridge, Massachusetts. pp. ۸۷-۱۹۸. Menhaj, M.H. (۱۹۹۴) Liability Rules for Solid Waste Management: Efficiency and Equity Effects. PhD thesis, Oklahoma State University, ۱۵۳ p. Morris, JR., Phillips PS, Read AD. (۱۹۹۸) The UK Land Tax: an analysis of its contribution to sustainable waste management. Resour. Conserv. Recy. ۲۰, ۲۵۹-۲۷۰. Office of Technology Assessment (O.T.A), U.S. Congress. (۲۰۰۷) Superfund Strategy Summary, Washington DC, ۵۸ p. Ronald, F. and Hengartner, N. (۲۰۰۱) Environmental Equity and the Distribution of Toxic Release Inventory and other Environmentally Undesirable Sites in Metropolitan New York City. Environ. Ecol. Stat. ۸, ۳۲-۵۲. Saed, N. and Tila, P. (۲۰۰۹) A survey of Iranian environmental law and Regulation. Khorsandi cultural-publication Center, Tehran, Iran, ۴۶۴ p. Steven, T. and William, L. (۱۹۹۳) Microeconomics. ۲nd Edition. Wads Warth Publishing INC, USA, ۴۹۹ p. Smith, M.A., Lynn, F.M. and Andrews. R.N.L. (۱۹۸۶) Economic Impacts of Hazardous Waste Facilities. Hazard Waste Hazard, ۳, ۱۹۵-۲۰۴ Sullivan, A M. (۱۹۸۶) Liability Rules for Toxics Clean - Up. J. Urban Econ. ۲۰, ۱۹۱-۲۰۴. Sullivan, A M. (۱۹۹۷) Policy option for Toxics Disposal: Laissez- Faire, Subsidization, Enforcement. J. Environ. Econ. Manage. ۱۴, ۵۸-۷۱. Tietenberg, T. (۱۹۹۹) Environmental and Natural Resource Economics ۳rd Edition. Scotte, Foresman and company, Gleview, Illinois, USA, ۵۵۹ p.

Keywords:

Hazardous waste , Legal and illegal disposal , Environmental cost and benefits , Subsidy program