Environmental-Economic Modelling Municipal Solid Waste Management System of the Czech Republic

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1 Envronmental-Economc Modellng Muncpal Sold Waste Management System of the Czech Republc Jana Soukopová a, Jří Hřebíček b a Masaryk Unversty, Faculty of Busness and Admnstraton Lpová 4, Brno, Czech Republc soukopova@econ.mun.cz b Masaryk Unversty, Insttute of Bostatstcs and Analyses, Kamence 126/3, Brno, Czech Republc hrebcek@ba.mun.cz Abstract Strategc decson-makng for dealng wth muncpal sold waste s a problem currently exercsng the mnds of many Member States throughout the European Unon. Ths paper s devoted to envronmental economc modellng of the strategc developments n Muncpal Sold Waste Management Systems at the Czech Republc. It was created by the authors for the Mnstry of Envronment of the Czech Republc. The model was developed based on gven nput macroeconomc varables and t enables to smulate the development of varant waste landfll fees and the ncluson or excluson of certan facltes n preparaton for energy recovery (ER) or mechancal-bologcal treatment (MBT) of waste n selected locatons and the prescrbed annual capacty. It uses data from annual reports of muncpaltes (f avalable) on the producton of muncpal sold waste and estmates ts quantty (f unavalable) by usng a sophstcated model, ncludng demographc and soco-economc mpacts. The economc part of the model s based on an analyss of factors determnng the costs for landflls, ER and MBT facltes and calculates the prce for waste management for each muncpalty n CR, ncludng ts foreseeable development by The paper gves a short descrpton of the model and ts outputs n relaton to change economy of Muncpal Sold Waste Management Systems at the Czech Republc n accordance wth the mplementaton of the European Waste Framework Drectve nto Czech legslaton. 1. Introducton Waste s an unavodable by-product of human actvtes. Economc development, urbansaton and mproved lvng standards n ctes and vllages ncrease the quantty and complexty of generated muncpal sold waste (MSW). The decsons n the area of MSW management are not only very captal-ntensve, but also dffcult from envronmental and socal ponts of vew. There s the need to develop, master and mplement smple but relable nformaton and communcaton technology (ICT) tools that wll help decson-makers to analyse waste management processes. The MSW s all waste generated wthn the communty (ctes and vllages) by the actvtes of ts nhabtants (households) and busnesses (e.g. trade waste), whch s separated nto ts components and transported to waste treatment facltes, where s recovered or dsposed. The MSW normally contans the remans of food and vegetables, paper, plastc, glass and metal contaners, prnted matter (newspapers, magaznes, and books), destroyed products, ashes and rubbsh, used or unwanted consumer goods, ncludng shoes and clothng. The MSW (or ts separated components) can be composted, used as raw materal

2 2 Jana Soukopová, Jří Hřebíček (paper, plastc, glass, and metals), used n bo-gas, energy recovery (ncneraton) plants or land-flled. The separaton of ts components may take place at the source (separate collecton n the muncpaltes) or n the facltes. We analyses the post-consumpton stages of the waste lfe cycle, namely collecton, sortng, treatment and fnal dsposal. Fgure 1: The MSW management system: materal flows The MSW management system s llustrated by Fg. 1 of Shmelev and Powell (2006), whch shows the man materal flows wthn the system. The fgure reveals that the whole lfe cycle of materals enterng and leavng the waste management system conssts of several stages (raw materals extracton, processng, sale, consumpton, fnally becomng waste when they are dscarded by consumers. These materals n the waste stream then undergo collecton, sortng (removal of recyclable materals) and treatment (whch can be thermal or bologcal), wth the fnal stage beng dsposal n the landfll. So we can defne the ndvdual waste streams, whch are mass balancng. The shaded areas n the Fg. 1 are the stages of the lfe cycle

3 Envronmental-Economc Modellng Muncpal Sold Waste Management 3 of MSW taken nto account n ths paper and we smplfed these to waste streams between producers and treatment facltes ncludng transport. Earler ths decade, the development of models of waste management system began movng towards the Integrated Model Waste Management (IMWM), whch s desgned to mnmse the economc costs and / or envronmental mpacts, see (Berger et al. 1999), (Wang 2001), (Hagh 2006), (Shmelev nad Powell 2006), (Yeomans (2006). Consder the envronmental-economc model of muncpal sold waste management system dscussed by Hřebíček et al. (2009), (2010) whch belongs to the group of IMWM. It conssts of the set of MSW sources (muncpaltes) of the Czech Republc connected by the road network wth the set of waste treatment facltes (compostng, bo-gas, mechancal-bologcal treatment (MBT) and pre-treatment of recyclable waste plants, ncneratng plants wth energy recovery (ER) and landflls), where MSW (or ts components separated at source) s from MSW source transported to chosen facltes for recovery or fnal dsposal. Ths paper ntroduces the new envronmental-economc model of muncpal sold waste management system to assst n dentfyng alternatve MSW management strateges and plans that meet some Sxth Envronment Acton Programme (6th EAP) and envronmental legslatve objectves of European Unon (EU). Ths paper consders also whether envronmental economc modellng approach has anythng new to offer the polcymaker of the Mnstry of Envronment of the Czech Republc (MoE). 2. Envronmental-Economc Model of Muncpal Sold Waste Management System The muncpal waste management problem has a complex nature wth a range of mportant dmensons such as multplcty of the types of waste generated n the communtes, complex spatal pattern of waste arsngs, the necessty to transport waste long dstances for processng, a varety of emssons from waste collecton, transportng and treatment to the envronment, and the almost unpredctable and localsed character of mpacts of these emssons on humans and ecosystems. And although there have been attempts to analyse waste management systems of the Czech Republc takng nto account envronmental mpacts of processes under study, most of them have not formed a holstc method for analysng all spatal, temporal as well as qualtatve aspects of the problem. Therefore, the am of the paper s to ntroduce a new methodologcal background developng muncpal sold waste management modellng of the Czech Republc, takng nto account spato-temporal patterns of waste generaton and processng, envronmental as well as economc mpacts of the system development wth a partcular emphass on publc health and bodversty. Consder muncpal sold waste (MSW) flows at the Czech Republc among all sources (muncpaltes) S, (=1 N), N = and all waste treatment facltes F j, (j=1 M), M = 307, where ML = 237 s the number of landflls, Hřebíček et al. (2010). Consder these MSW flows n a contnuous manner lke n Fg. 1 and mass balance between sources and facltes carry out over a longer perod of tme (annual reportng). The producton of MSW at the Czech Republc s approxmately 3,2 Mllon tons of MSW annually (n 2008), and most (85%) of t s landflled. The Waste Management Plan of the Czech Republc (WMP) together wth the Drectve 1999/31/EC of 26 Aprl 1999 on the landfll of waste (Landfll Drectve) request to declne 1,5 Mllon tons of MSW from landflls to waste recovery facltes up to 2020 year. The developed Envronmental-Economc Model of Muncpal Sold Waste Management System (EEMMSW) for the Czech Republc conssts of four connected sub-models, where was used followng tools: 1) The geographc nformaton system (GIS) ArcMap, whch computed a transport matrx lnkng the sources MSW and waste treatment facltes and the smple model, whch generated emssons from the transport of MSW and enable to fnd the closest faclty.

4 4 Jana Soukopová, Jří Hřebíček 2) The sophstcated sub-model of Hejč et al. (2008) for the determnaton of the quantty and composton of MSW at every source (muncpalty) or data from annual waste reports of muncpaltes regardng the quantty and separated components of MSW. 3) The cost economc sub-models of every type of waste treatment faclty ncludng the generaton of the emssons of MSW treatment (Hrebcek et al. 2010). 4) The carbon emssons optmsaton sub-model of allocated waste treatment facltes wth the choce of ether the economc or the envronmental pont of vew. The above EEMMSW requres crtera (prortsaton) from decson-makers (regulators of MoE), whch may nvolve an acceptable level of pollutant emssons and costs, as well as a reducton of landscape and bodversty or prevent a polluton of groundwater and surface water. Practcally, such optmsaton comes nto consderaton for regulators (government offcals) when decdng on localsaton of a new faclty (technology and capacty) and / or closure of exstng facltes, the regulaton of ther capactes and the lke. Some chosen feasble mnmum s usually acceptable for regulator wthout optmsaton. It should be used only for the envronmental mpact assessment (EIA) of a new faclty (assessng alternatves) but also n the strategc mpact assessment (SEA) of strategc documents such as plans for regonal development or waste management plans at the county level. 3. Transport Network Model We bult the transport matrx D = {d j }, (NxM), of real transport dstances d j (e.g. road maps) among all sources S and all facltes F j and the vector of the dstance dc = {dc } (Nx1) of the source S from ts closest landfll F c, c {1,, M}. Fgure 1. Map of 237 landflls of the Czech Republc. We have used the GIS program ArcMap 9.2 wth ts extenson Network Analyst 9.2 from ESRI for the analyss of the closest faclty (e.g. landflls) to the ndvdual sources (muncpaltes). The Network Analyst program enables us to mplement networkng analyss - fndng the shortest path between two ponts, fndng tme to travel between two ponts, etc. Users can create and mantan network data sets n shape

5 Envronmental-Economc Modellng Muncpal Sold Waste Management 5 fle, personal geo-database, and enterprse geo-database formats. By usng ArcGIS Network Analyst, we created smple applcatons that provde us transport dstances among all M sources and N facltes, fnd closest facltes, and create the dstance matrx D and the vector dc. We used muncpaltes and roads layers of the Czech Republc for ArcGIS Network Analyst from the open-source project FreeGeodataCZ data package. It ncorporates an advanced connectvty transport model that can represent complex scenaros, such as mult-modal transportaton networks. 4. Calculaton of Quantty and Composton of MSW The sub-model of calculaton of quantty and composton of MSW s based on the producton of MSW n each muncpalty S of the Czech Republc derved by Hejč and Hřebíček (2008), (Hejč et al. 2008). They descrbed formally the smple model of MSW producton as the functon of approprate varables takng nto account specfc waste producton, and local demographc, soco-economc nfluences: P = nh. spec. std. sz. unemp. hsg. heat, (1) where: P s the amount of the MSW producton of muncpalty per year n tons [t]; nh s the number of nhabtants of muncpalty; spec s the specfc waste producton coeffcent (reference values of other coeffcents), measured n uyhg tons [t]; std s the standard of lvng coeffcent; sz s the sze of the communty coeffcent; unemp s the unemployment rate coeffcent; hsg s the type of housng (recreaton, blocks of flats, empty houses, etc. coeffcent and heat s the type of heatng coeffcent. The sub-model (1) came wth a fner dvson of demographc, soco-economc mpacts on producton and treatment of MSW at the level of ndvdual muncpaltes. It enables us to meet the condtons requred by the MoE to ht the regonal dmensons (at least at dstrct level) and, therefore, to meet dfferent mpacts on relatve prces of waste management n dfferent regons of the Czech Republc, see Hřebíček et al. (2010). Ths sub-model was nvestgated, calbrated and verfed for three years n the South Moravan regon of the Czech Republc, where some of the above varables were optmsed by Hejč and Hřebíček (2008a) wth the smple expresson: x = (act / ref). cx, where x means a varable from {std, sz, unemp, hsg, heat} and ref means a reference value from three year nvestgatons; act an actual value from gven year and cx s the compensator (gven by optmsaton process) of the consdered varable x. The above sub-model (1) calculates the producton P of MSW n each muncpalty S based on the adjusted number of nhabtants nh, the specfc waste producton coeffcent spec and specfc demographc data reflectng the populaton behavour wth respect to MSW management system (.e. the type of housng hsg and other varables std, sz, unemp, heat of muncpalty S ), (=1 N). These data are downloaded from publcly accessble Regonal Informaton Servce - RIS of the Centre for Regonal Development of the Mnstry for Regonal Development of the Czech Republc and the Czech Statstcal Offce. They are updated annually from all muncpaltes of the Czech Republc; therefore, the sub-model enables us to calculate the producton of MSW for the gven year wth actual varables n (1) and predct

6 6 Jana Soukopová, Jří Hřebíček waste producton wth usng the lnear model of the WMP. We were able to calculate waste producton MSW for the year 2008 and predct the ncrease of the producton of MSW n 2016 and 2020 years. The valdaton and optmsaton of the sub-model (1) outputs - the producton P of MSW - was done by Hejč and Hřebíček (2008a) wth the avalable data from the annual reports of muncpaltes S of the South Morava regon; however, annual reports of MSW of S bear some error, whch arose from dfferent data qualtes. The process of the mprovement of the data qualty of muncpaltes S of the South Moravan regon lasted several months. The data from the annual reports of all muncpaltes about ther waste producton are collected by the Informaton System of Waste Management (ISWM) of the Czech Republc. We used these, but we had to solve the problem wthout complete data, because more than 500 muncpaltes of the Czech Republc dd not report ther annual MSW producton to ISWM. So we had to use the sub-model (1) for the calculaton of ther mssed MSW producton n 2008 and the predcton of ther MSW producton n 2016 and 2020 years. We had to estmate the MSW composton for the calculaton of the amount of separated components of MSW at each muncpaltes S to obtan the rest PD of MSW P after the separaton of recyclable components. We used for ths estmaton values lsted n the Table 1, whch are based on the results of research of (Benešová et al. 2009) and (Vrana et al. 2010). Table 1. MSW composton at the Czech Republc (weght %) Materal The share of materal groups n waste (% by weght), average Housng estates Housng estates Mx housng Rural area of bg ctes of small ctes estates of ctes Paper 22,7 22,2 25,6 7,6 Plastcs 13,8 16,8 18,0 9,0 Glass 8,7 6,7 7,6 8,9 Metals 3,4 3,0 3,1 4,5 Bo-waste 18,2 19,6 17,3 6,3 Textle 5,6 6,6 5,1 2,2 Energy recovery waste 12,4 6,7 7,0 6,2 Under 20 mm 9,7 8,1 8,2 45,8 Other 5,5 10,3 5,1 9,5 Totally 100,0 100,0 100,0 100,0 We consdered values from Table 1 to estmate real quantty of a dsposable producton PD of MSW from the muncpalty S to waste treatment facltes (new ones or avalable ones) after separaton of recyclable components of MSW, whch was estmated by (Hejč et al. 2008), (Hřebíček et al. 2010): PD = (1 - sep. wll ) P, (2) where sep s the rato of separaton at source S, wll s wllngness to separate MSW (paper, glass, metals, textle and bo-waste) at muncpalty S (=1 N). Coeffcents sep and wll came from data of the nvestgaton of the MoE and were valdated n the South Moravan regon by (Hejč and Hřebíček 2008a). The formula (2) helped us to solve some uncertantes stemmng from the dfferent state of populaton awareness about MSW management and estmate the amount of dsposable producton PD of MSW from the muncpalty S to approprate waste treatment facltes. The MoE has used ths model snce 2009 after several months revewng process by experts usng Vrana et al. (2010) approach.

7 Envronmental-Economc Modellng Muncpal Sold Waste Management 7 5. Economc Sub-Models of Facltes Economc sub-models for all types of facltes F j (j=1 M),.e. compostng, bogas, MBT and ER plants and landflls were developed by Hřebíček et al. (2010). These models are smlar and we ntroduced followng economc sub-model for a generc faclty F. Calculate the prce p of one t of the waste treatment at a new compostng, bo-gas, MBT and ER plant F. Ths calculaton s based on the fnancal and economc analyss and fnancng methods for the measurng the effcency of nvestment, (Valach 2006). We used the Net Present Value (NPV) as the basc calculaton method for the prce p. NPV I CF ( (3) n 1 1 r) where I means an nvestment expendtures n faclty F, CF means a cash flow generated n the perod, r means the dscount rate and n means the lfetme of faclty. To calculate the prce p s assumed that the NPV must be at the tme of return postve. Thus the basc assumpton was that we set the maxmum acceptable payback perod of nvestment I n the faclty F. Then n = lfetme = payback n formula (2). If we assume that CF T pk B C u j E T (4) t( pk B C u j E O) Consder operatng expenses (costs) and operatng ncome (excludng recepts for waste management) as a constant for each year of faclty lfe, then we can express the resultng prce p per 1 ton of waste, as follows: (5) (1 t) p n 1 I 1 (1 r) B C K n 1 ( u j E ) to n 1 1 t n (1 r) 1 where B s the total revenue generated from the faclty n the perod, C s the total operatng costs arsng from the faclty durng the perod, K means the capacty of the faclty, T means a tax on ncome arsng from the faclty durng the perod, u means the nterest due on loans for the perod, means repayment of prncpal on loans for the perod and j E means the costs of emsson allowances for the perod,. means the perod (year) from 0 to n, n means lfetme and also payback of the faclty. (6) The cost p s of landfllng for 1 ton of MSW s set by where p S C popvar pop RR, (7) S fx

8 8 Jana Soukopová, Jří Hřebíček p S s the prce of 1 ton of MSW whch s landflled, ncludng fees and reclamaton reserve, pop var s the varable porton of the fee (whch s currently n CZK 0) and away to the State Fund of Envronment (SFE) of the Czech Republc, pop fx s a fxed fee of landflled 1 ton of MSW (whch s currently CZK 500) and an ncome of muncpaltes n the cadastre where the landfll s located, RR s the reclamaton reserve (whch s currently 100 CZK for the MSW) and pad nto the reclamaton fund of the gven landfll. It s clear that dfferent facltes wll have dfferent costs, ncomes, nvestments, etc. For each-mentoned faclty F j (compostng, bo-gas, MBT and ER plants, and landflls) we developed economc sub-models for the constructon of the prce p j of the gven faclty F j (j=1 M). These models were based on the real level of nvestment, operatng expenses, operatng ncomes, nterest on loans, capacty of faclty and emssons, (Hřebíček et al. 2010). The economc model of landfll was evaluated based on the average prce of all landflls n the Czech Republc because the standard devaton of prces was less than 10 percent. 6. Carbon Emsson Sub-model Reducng greenhouse gas emssons s an mportant socal topc n the Czech Republc-- partcularly the suppresson of landfll methane emssons. Total emssons of CO 2 equvalent wll have to be sgnfcantly reduced n the waste management sector. In developng the carbon emsson sub-model, we have confned ourselves to mnmse greenhouse gas emssons n the transportaton, compostng, ncneraton and landfllng MSW. We used emsson factors (Solano et al. 2002) for facltes and transport, unt fuel consumpton for transport, energy prces for energy producton at ER/MBT n economc sub-models, waste categorsaton and other parameters, whch are fxed set accordng to the Czech Republc. Besdes the mass-flow MSW modellng, there are also above economc sub-models that can descrbe the EEMSWM system of unt costs and to examne the mpact of economc nstruments; therefore, the carbon emsson model was smply transformed nto the above sub-economc models by replacng the unt cost of emsson factors. Because the sub-models allow us to nsert ndvdual emsson factors, whch depend on the waste treatment technology and ts optmal use, t s possble by analogy to conduct economc optmsaton wth regard to the cost of waste treatment facltes; however, the data for new facltes are not avalable to the regulator (MoE) and can be obtaned only from the operators (or potental nvestors at prepared facltes) or expert estmatons. 7. Integraton of Sub-models nto Envronmental-Economc Model of Muncpal Sold Waste Management System The above chapters shortly ntroduced developed dfferent sub-models needed for the regulaton of waste management of the Czech Republc and a decson support of the allocaton of subsdes from EU for new ER / MBT facltes. We used propertes of the MS Excel spreadsheet for the ntegraton and smple nterconnecton of above sub-models nto one EEMMSW of the Czech Republc that evaluates cost and prce relatonshps for the muncpal waste management of the country. Ths mplementaton of the EEMMSW enables the smple opton of the chosen set of the nput economc parameters of the model at the sngle MS Excel control sheet, whch s nterconnected wth further MS Excel sheets, where are mplemented above sub-models:

9 Envronmental-Economc Modellng Muncpal Sold Waste Management 9 a) the sheet (table) of soco-demographc varables nh, std, sz, unemp, heat, hsg, sep, wll of all muncpaltes S of the Czech Republc needed to calculate the outputs of amount MSW P and PD, (=1 N), of the model (1), (2), b) the sheet wth the dynamcally calculated the vector dc of the dstance dc of source S from the closest landfll F c by Network Analyst program, and the cost CTF of waste treatment of PD at the landfll F c together wth the cost CTE of transport to ths faclty ncludng carbon emssons cost, (=1 N), c) the sheets of economc models (6) of (planned and current) waste treatment facltes F j wth dynamcally calculated prces p j ncludng costs of carbon emsson, (j = 1 M), d) the sheet wth dynamcally calculated a potental amount of MSW from the collectng waste area of the faclty F j (j=1 M), where the collectng waste area conssts of the muncpaltes, where are cheaper costs (CTF + CTE ) to the closest approprate faclty than ones to the closest landfll, e) the sheet of man communcaton nterface the IMWM, where the nput economc varables together wth the allocaton of new facltes are set up wth further optons requred for the model. The mplemented EEMMSW compares the costs for processng MSW for each muncpalty n the Czech Republc based on prces at the nearest treatment facltes and landflls ER / MBT, even ncludng shppng costs and carbon emsson costs. If the cost of MSW treatment n the ER / MBT faclty s less than the cost of landfllng, so t s assumed that the MSW from the muncpalty wll be treated n an approprate ER / MBT faclty. If costs are hgher so t s assumed that ether the MSW dsposed of at the nearest landfll. Decsons makers of the MoE were able to use ths EEMMSW to allocate subsdes from EU to nvestors of potental facltes to declne MSW from landflls to new facltes (ER and MBT). They could choose nputs: the lst of K planned facltes F s (s = 1 K) (they are connected wth ther economc models); ther common payback; common value-added tax; chosen percentage of subsdy; charge of landfllng and landfll reclamaton. They obtaned outputs of ths model, where were prces p s of waste treatment at planned facltes F s, and calculated prces CT = (CTF + CTE ) for all muncpaltes S, (=1 N) of the Czech Republc whch wll pay for the treatment of MSW. 8. Concluson The paper descrbes the orgnal Envronmental-Economc Modellng Muncpal Sold Waste Management System of the Czech Republc, whch allows assessment of cost and prce relatonshps n waste management n the Czech Republc n relaton to several macroeconomc varables and varant assumptons about the cost of the above types of facltes (ER, MBT and landfll), ncludng the ntegraton of these devces to system of emsson tradng EU ETS. The model allows the possblty to translate nto operatonal costs and consequently the prce of a processng faclty n the MSW. The concept of the model s very general, and other addtons and modfcatons of the model (e.g. addton of other relevant waste streams) wll be performed on the current needs of ts users. 9. Acknowledgement The paper has been developed n the project No. SP/4I1/54/08 The analyss of muncpal budgets effcency n relaton to the envronmental protecton and the project No. SP/4I2/26/07 Proposal of new ndcators for contnuous montorng effcency of envronmental management systems wth respect to branches (NACE) and system of ther envronmental reportng wth evaluaton relatonshps among envronment, economy and socety granted by the MoE.

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