C. The Economics

There is a reason for the new, more restrictive, federal Subtitle D requirements placed on landfills. They are aimed at assuring that landfills become closed systems with virtually no impact on the surrounding environment. Such landfills are more costly than the old "dumps" we may remember. But the cost of building and operating such landfills serves as a measure of the environmental costs old landfills may have imposed on the community, but which new landfills eliminate. A cleaner environment has its costs – costs which a properly educated community might be far more willing to accept if they understand what these higher costs are buying for them.

One argument against the use of landfills is that since only modern Subtitle D landfills can be cited, and since these landfills would cost more than continued use of old, below-standard landfills, no community could afford to purchase the cleaner environment it seeks by using this method of waste disposal. Therefore, the anti-landfill argument might go, the best option would be to escape these higher tipping fees through aggressive recycling programs.

Modern environmentally secure landfills are expensive. But so also are all the steps which must be taken to affect recycling. Incineration, especially the large incinerators one finds in places such as Detroit, are expensive. (On this issue, more below.) Mandates which seek to restrict the use of certain types of materials in the manufacture of products are expensive. Indeed, given the significant impact which source-reduction mandates could have for certain classes of product, the cost of mandated source reduction could be far more costly in terms of jobs and industrial displacement than any of the other elements of the waste management hierarchy.

The real issue is not how much a modern landfill costs, but what its costs are per-ton tipped, and what these costs are compared to costs per-ton for other elements of the waste disposal hierarchy.

In a careful study published in Waste Alternatives, December, 1988, Robert T. Glebs, P.E., examined the cost of building and operating a modern 75 acre Subtitle D landfill in the upper-Midwest:

A Subtitle D state of the art landfill will likely have: one or two liners; leachate collection systems; final cover systems; more inspections and record keeping; more control of vectors; methane gas control; more detailed surface water run-on and run-off controls; more restrictions on wastes that can be received; a detailed closure plan and funding to cover closure; financial assurance required up front or as part of operations, thus increasing gate fees; and groundwater monitoring and corrective actions which may include monitoring systems, sampling and analysis programs, contingency plans with trigger levels, and contingency action plans. [113]

Glebs noted that before enactment of Subtitle D regulations, predevelopment costs (land, construction, legal fees, etc.) and operating costs (labor, machines, facilities, maintenance, etc.) accounted for as much as 93% of total cost. With the addition of strict leachate and methane gas collection requirements, along with both surface and groundwater control systems, these costs have risen in absolute terms, but have fallen as a proportion of total costs. Careful attention is now given to closure and post-closure with the result that these costs now account for 29% of the total, rather than the old 6.1%. [114]

With strict attention to environmental concerns both when a landfill is built and operated, and when it is closed, how much would a 75 acre Midwestern Subtitle D landfill cost?

Based on examination of what it cost to build state of the art landfills in the upper-Midwest in 1988, Glebs' analysis concludes that such a landfill would cost $55,038,000 to build, operate and safely close. Moreover, his cost estimate included such "unanticipated" costs as assessments for funding local recycling programs and protection for local property values – all based on the first phase of a four-phase operation. [115]

Glebs concluded that adding a 25% profit margin if the landfill is privately owned and operated, or setting aside the same margin to cover landfill replacement if the site is government owned and operated, the per-ton tipping cost would be $25.62 (Emphasis intended). [116]

With sound environmental standards, tipping fees are what matters. Indeed, the tipping is all that matters for comparing the cost of a landfill to other waste management options.

Glebs found that as much as 31.7% of this cost is first-phase predevelopment and construction cost. Therefore, as new cells are opened, per-cell costs fall. His estimate is that costs would fall by as much as 26% for the last three phases of a project which proceeded in equal 18.5 acre phases. [117] For a private firm this would mean a rising return on investment over time and, thereby, a greater margin of safety when and if competitive forces signaled the need to reduce tipping fees. [118] For a government operation, this long-term reduction in costs can translate into an increase in the net revenue which can be set aside for closure and/or expansion.

Glebs' conclusion? An environmentally safe landfill can be profitably built and operated at a tipping fee below $26 per ton.

How has experience squared with Glebs' analysis? Marquette County, Michigan recently opened a 53 acre state-of-the-art bale-fill landfill designed to accept 200 to 300 tons of waste a day over a 60 year period. With double liners, leachate collection systems, ground water monitoring, and methane gas removal, all construction and operating costs, including contingency funds for expansion and debt retirement, will be covered with a tipping fee of $25 per ton.

Marquette County's costs are an almost perfect match with the costs developed by Gleb's analysis.

In a report prepared for the Michigan House Conservation Committee, Special House Democratic Task force on Solid Waste, December, 1989, SCS Engineers reported the costs of building and operating a modern Subtitle D landfill in Michigan and compared those costs, on a per-ton basis, with costs estimated for the same Task Force by the Michigan Legislative Service Bureau and the engineering firm of Dell Associates. Dell Associates concluded that costs per-yard tipped would be $12.51. SCS Engineers estimated $14.02 per-yard. The difference was that the SCS estimate was based on a "worst-case scenario" involving longer siting time and higher siting costs. Without this difference, both firms' cost estimates were similar. [119]

Clearly, while the cost of disposing of MSW in a Michigan landfill need not be as high as what one finds in some Northeastern states, whether or not landfills are to be considered part of the Michigan waste management system, depends on what it would cost to landfill compared to other alternatives such as recycling and incineration.