| Abstract: |
Paper [I] In this study, a net social cost 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 is beneficial from a societal perspective compared
to using biofuel, 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 transports 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 warmer
climates where district heating networks already exist. <p> Paper [II] In this
paper, I study municipal price sensitivity of demand for disposal of residual
waste (unsorted waste from households) and mechanisms underlying the
relationship. First, I estimate the effect on households’ generation of
residual waste with respect to municipal waste collection policies. Second, I
estimate to what extent municipalities change waste policies in response to
higher costs for disposal of residual waste. The empirical analysis is based
on data regarding Swedish municipalities’ waste management systems and
disposal costs in the period 2010–2019. Results suggests that the price
elasticity of demand is in the range 0.20–0.24. The effect is almost entirely
driven by municipalities’ implementation of weight-based collection tariffs
for residual waste in response to costlier disposal. Besides weight-based
tariffs, separate collection of food waste and joint collection of residual
waste and recyclables are also found to have substantial negative effects on
residual waste quantities. Nevertheless, such waste policies are not more
likely to be implemented in response to higher disposal costs for the
municipality. <p> Paper [III] A theoretical model of spatial price
discrimination predicts that buyers should lower input prices in line with the
additional transport cost a seller would incur by selling to a competitor
rather than to them. We test this prediction using Swedish contract-level data
on prices of waste burned a energy plants. The results confirm that higher
additional transport cost associated with selling to competitors lead to lower
prices and show no evidence of additional effects of transport cost to the
contracted buyer. In addition, we find that the degree of price discrimination
can be underestimated if—in contrast to the established theory—one includes
only transport cost for selling to the contracted buyer and not the additional
transport cost sellers would incur by selling to a rival buyer. <p> Paper [IV]
General features of waste treatment markets include comprehensive regulations
and high fixed capital costs. Hence, firms operating in them have substantial
local market power, which they exploit through spatial price discrimination
(Granlund and Meens-Eriksson, 2023). This paper examines effects of waste
treatment firms’ spatial price discrimination on Swedish municipalities’
welfare and costs of waste disposal, as well as the associated distributional
implications. Results show that the Equivalent Variation is 3.3% of a
municipality’s cost for residual waste disposal, on average. Further, the
welfare loss disproportionately affects a small number of municipalities, with
10% accounting for 62% of consumer welfare loss. Nearly the entire loss in
consumer welfare is redistributed to firms. Considering political ambitions to
transform the waste management sector, an alternative scenario is simulated,
involving closure of the smallest 20% of waste incineration plants. This would
increase the disposal cost for about a quarter of municipalities, and the
negative welfare effect within this group would be 12% of their cost of waste
disposal. |