Evaluating the risks of solid waste management programs: A suggested approach

Abstract

The Resource Recovery Planning Model (RRPLAN) is used to illustrate an approach for evaluating the risks associated with alternative solid waste management programs. The paper first discusses how RRPLAN uses a detailed cost accounting framework to weigh the consequences of decisions affecting siting, routing, marketing and financing. A case study of the tri-county area surrounding Jackson, Mississippi, where two waste-to-energy facilities are compared to an all-landfill option, is then introduced. The case study shows how the results of a sensitivity analysis can be used to develop a cost estimating relationship between the discounted cost per Mg (ton) of processing at a waste-to-energy facility and three explanatory variables: (1) the capital cost of the facility; (2) the volume of waste processed; and (3) revenues from the sale of recoverable materials and any associated tipping fees. A Monte Carlo experiment is then performed to show how variations about the expected values for the three explanatory variables affect the risk of the program. The probability that the discounted cost per Mg of the waste-to-energy facility exceeds that of the all-landfill option is used as a risk assessment mechanism.