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3.4.5. Summary of Cost Savings from Existing Incentives to Reduce Land Pollution

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Savings from Economic Incentives


Two solid waste incentive mechanisms have the potential for producing significant cost savings under existing incentives: deposit systems for bottles and batteries and unit pricing for household wastes. While deposit systems do encourage greater recycling, evidence is inconclusive concerning any net savings Porter, 1978. Unit pricing apparently produces savings for the communities where it is used. Seattle's Solid Waste Authority estimated that unit pricing yielded a 30 percent reduction in volumes collected when coupled with recycling alternatives. According to earlier calculations, total national savings from solid waste unit pricing probably were on the order of $100 million annually in the early 1990s, about $250 million annually by the mid-1990s, and have the potential to achieve savings of at least $650 million annually.

Disposers of hazardous waste (other than small generators) must comply with Resource Conservation and Recovery Act (RCRA) requirements. These requirements impose substantial costs on generators, costs that vary directly with the volumes of hazardous wastes produced. There is very limited information concerning the response of generators to increased disposal costs, though analysts are beginning to address this issue.Sigman, 1993.

Hazardous waste pricing incentives almost certainly are having an impact on the volume of waste generated. Because generators are able to choose between paying for disposal or reducing their waste stream, pricing incentives will be more cost-effective than direct regulation and will result in cost savings for generators. To date this subject has not been studied closely, though the cost savings could be large given the approximate $40 billion in RCRA compliance outlays each year.

Reporting requirements for land disposal of hazardous wastes are having a significant effect on volumes generated. As presented earlier in this section, by the mid-1990s cost savings attributable to reporting requirements likely were on the order of $150 million annually, with projected savings by 2000 amounting to $250 million annually.

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