The economic evaluation of engineering projects typically involves estimation of equipment, installation, raw material, energy, and maintenance cost. Disposal and pollution control costs are often factored into these calculations in determining economic rates of return, but other regulatory and social costs are not. In this chapter, total cost assessment of waste management alternatives is described, and the hidden costs, future liabilities, and less tangible costs associated with waste generation are discussed.
Total Cost Assessment of Pollution Control and Prevention Strategies
Traditional economic measure of engineering projects evaluate equipment, raw‐material, energy, operating, and maintenance costs. These evaluations generally overlook some of the costs of waste generation. A more complete accounting of environmental costs is referred to as total cost assessment. Four types of costs are identified, which are labeled as tier 0, tier 1, tier 2, and tier 3. Tier 0 costs are the “usual” costs that are included in a conventional analysis of a project. Tier 1 costs are included in a conventional analysis of a project. Tier 1 costs include permitting, reporting, monitoring, manifesting, and insurance costs and are often referred to as “hidden” costs because they are usually treated as overhead costs and are not directly charged to a project. Waste disposal costs are sometimes treated as overhead costs as well. Tier 2 costs include future liabilities, which are extremely difficult to accurately evaluate. Even more difficult to evaluate are tier 3 costs, which include consumer responses, employee relations, and public image. All four tiers of costs provide information for financial analysis methods, where measures such as ROR and payback periods (PPs) are evaluated.
Economics of Pollution Control Technology
In the present economic system, the goal of a sustainable development process is to maintain intergenerational equity by ensuring quality of life for future generations, which essentially requires the stopping of further damage to the environment. From this point of view the necessity of an integrated system consisting of modern manufacturing production and controlling technologies is being gradually recognized. To this end, various regulatory measures are being implemented, mainly in the industrial sector, which is the major contributor of pollution, for adopting such technologies.
Leave a Reply