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Lecture 2 - Economics and Financing of Waste Management

1. Economics and Financing of Waste Management

1.5. Economic Theories - Conclusion

  • In traditional Waste Management no good of value is produced but a service to remove waste from the living area to ensure the health of the citizens.
  • In classical economics the business model wins that can offer this service at the lowest price.
  • Ecological sound waste management costs more and there is little incentive for individuals to pay a higher price as the common good „environment“ could be mistreated by others despite the personal investments (Tradgedy of the commons)
  • Common goods have to be protected using regulations and monitoring which are unwelcomed in a free market economy.
  • Waste management has to be supported by the state as the economic incentive to invest is little.

BUT:

  • Curently the world economy is changing as ecological and social issues are becoming more and more important (transformation from the magial square to the magial hexagon or even pentagon).
  • Ressource depletion is increasing the interest of companies in valuable waste fraction and recycling.

    => Unattrative waste fractions still have to be covered by state funding

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