BioCycle July 2009, Vol. 50, No. 7, p. 21
Since opening in 1991, the Town of Amherst’s composting facility has provided cumulative net public benefits equivalent to $22.8 million, more than double the financial resources invested.
Ian Miller and Jeffrey Angiel
THE Town of Amherst, New York operates a highly successful composting facility serving a community of 117,000 residents. The facility is located on a 10-acre asphalt pad where grinding, turning, screening and curing operations take place. Over the last few years, the facility has processed approximately 25,000 tons annually (on average) of combined brush, yard trimmings and leaf feedstocks into a highly valuable soil amendment that is prized by residents, landscapers and customers in the region. The facility also accounts for the lion’s share of the town’s high waste diversion rate – 49.6 percent in 2008 (Figure 1) – as the feedstocks comprise approximately three-quarters of the diversion rate tonnages by weight.
The decision to build and operate the publicly owned 85,000 cubic yard facility was based in part on a desire to avoid high landfill disposal costs and to establish the resource recovery facility as the foundation of an environmentally progressive integrated solid waste management program. The Town’s award winning integrated solid waste management program was featured in BioCycle five years ago (“Saving Millions in Landfilling Costs,” July 2004). Over the years, the facility has provided significant economic and environmental benefits to the taxpayers. This article describes and quantifies the full net benefits since inception using established techniques applied in environmental economics. A retrospective cost benefit analysis is useful in illustrating the cumulative value of composting as a case study to inform other communities considering investments in resource recovery facilities.
TRADITIONAL COSTS, REVENUES
Actual historic town expenditures consisting of annual labor and operational and maintenance (O&M) expenses, and financial revenues from finished material sales and dumping (tip) fees were compiled from 1991 to 2008. These annual costs and revenues were converted to 2009 U.S. dollars using an escalation index compiled from the U.S. Consumer Price Index-All Urban Consumers. The financial revenues and costs were compared in a public benefit cost analysis framework that also considered the broader resource savings and environmental benefits generated by the existence of the facility. The broader benefits measured consisted of avoided landfill tipping fees (including both transport and disposal costs) and the environmental benefits from avoided greenhouse gas (GHG) emissions.
The historic financial costs of building and operating the facility included annual labor expenses associated with 6.25 full time equivalent jobs: a manager, a foreman, two equipment operators, two laborers, and two seasonal (part-time) employees. Annual O&M expenses consisted of annually recurring requirements for utilities, maintenance, equipment, fuel, insurance and debt service on all major equipment purchases as well as the original bonding of the facility. Since its inception, the facility has received 50 percent matching funds from the New York State Municipal Waste Reduction & Recycling grant program for the purchase of all major equipment directly relating to processing of materials. The facility currently operates with a Scarab windrow turner, a Diamond Z tub grinder, a McCloskey trommel screen (purchased in May), and two Volvo loaders with high-tip buckets.
Annual revenues consisted of material sales of the finished compost and wood mulch products and dump or tipping fees at the facility. In 2008, the average price for finished compost was $14/ cubic yard (cy), while the tip fee averaged $0.77/cy tipped. The Town recently added the new trommel screen to enhance the value of its finished product, and is currently evaluating the finished material pricing structure based on the high market demand. Avoided landfill costs were based on the avoided landfill and disposal cost per ton (Figure 2) multiplied by the tons of feedstock materials received. The closest municipal landfill is located in the Town of Chaffee, approximately 40 miles away. The compost facility is centrally located within the Town’s borders.
CALCULATING ENVIRONMENTAL BENEFITS
The avoided tons of CO2-e (carbon dioxide equivalent) were based on the composting process’s ability to contribute to net carbon storage (associated with the application of the compost to soils) after netting out the emissions associated with transportation and the mechanical turning of the windrows. Composting can renew and restore soils that have been depleted of organic content thereby restoring soil organic carbon content to higher levels. The composting process leads to the increased formation of stable carbon compounds (e.g. humic substances, aggregates) that can be stored in the soil for long periods (>50 years).
A 2002 EPA report, “Greenhouse Gas Emissions from Management of Selected Materials in Municipal Solid Waste,” includes a factor (expressed in metric tons of CO2-e per short ton of yard waste composted) associated with the renewal and carbon retention and capture properties of compost. That factor was applied to the facility’s annual tonnages in this analysis. The avoided GHG emissions were based on the avoided tons of CO2-e that were monetized based on applying a market value per ton to the CO2 emission reductions avoided by the facility. While carbon credits trade at relatively low market values in the U.S., in countries that must comply with the Kyoto Protocol to reduce GHG emissions, carbon values are much higher. U.S. climate legislation is pending, but most of the bills project carbon allowances to be at a much higher level than current market prices on the Chicago Climate Exchange. The carbon unit value applied has been used in other full cost and environmental externality studies related to composting (See “Best Bang For MSW Management Buck,” October 2008).
The environmental benefits estimated also included the benefits obtained from the application of finished compost. Compost produced from yard waste (i.e., brush, leaves and grass) can reduce the use of pesticides and fertilizers on lawns, gardens, green (open) spaces and golf courses. Jeffrey Morris and Jennifer Bagby, in research conducted for Seattle Public Utilities (see “Measuring Environmental Value for Natural Lawn and Garden Care Practices,” International Journal of Life Cycle Assessment, 2008), found that the use of compost on lawn and gardens can reduce the application of fertilizers and pesticides by 50 percent. Reducing fertilizer and pesticide usage can also have human health and environmental benefits linked to avoided stressors placed on ecosystems and watersheds. To measure the benefits of finished compost in this analysis, only the GHG emission reductions associated with the avoided upstream pesticide and fertilizer production were valued. The lifecycle or upstream CO2-e emissions were quantified for these benefits based on using emission factors (in pounds of emissions reductions per ton composted) to quantify CO2 reduced associated with avoided pesticide and fertilizer production.
RESULTS AND DISCUSSION
Table 1 summarizes the cumulative benefits and costs associated with building and operating the facility from 1991 to 2008. The facility has provided cumulative net public benefits equivalent to $22.8 million since its inception. These benefits are more than double the cumulative financial resources put into the facility by the Town.
The majority of the measured benefits, totaling $33.2 million, were derived from the avoided landfilling costs ($24.9 million) that would have been incurred by routing the annual tonnages to an alternative final disposal facility. Over the facility’s entire operating history, these avoided costs have averaged $61/ton. Total gross benefits averaged $81.1/ton, and the financial revenues derived from material sales and dump fees averaged $9.2 /ton, and totaled $3.75 million over the entire period.
The composting facility contributed to reducing the Town’s carbon footprint and made significant contributions to combating global climate change. The cumulative tons of carbon dioxide (CO2) emissions avoided by the operation of the compost facility since inception totaled 125,920 tons, or 7,407 tons/year, on average. These contributions were worth a cumulative grand total of $4.5 million over the period, equivalent to an average environmental benefit of $11/ton. Stated another way, the composting facility’s employees (green job workers) provided a GHG reduction benefit to the region approximately equal to their salaries and fringe benefits (not including the other benefits they generated for the Town by operating the facility).
Benefits from the Town’s composting facility that were not measured include extending the useful life of the regional landfill. Without the composting facility, it is possible that the landfill’s annual tonnages could have been between 6 to 8 percent higher, thereby depleting available capacity at a faster rate. The avoided landfill costs also do not include the avoided costs (benefits) from vehicle and truck emissions that would be generated by the vehicle miles traveled (VMT) to tip at the Town of Chaffee landfill, or the resource recovery (WTE) plant located in Niagara Falls, New York. Expenditures on gasoline, vehicle maintenance and wear and tear, and truck trip air pollutant emissions are avoided by the existence of the Town’s composting facility.
Table 2 shows the annual cost and benefit streams since facility startup. The table is provided to show interested readers the facility’s ramping up pattern, cost structure, and tipping and material sales profiles associated with an 85,000 cy capacity operation. The Town of Amherst Compost Facility has provided a substantial benefit to taxpayers and the region that is evident when the full costs and benefits are considered. The analysis provided here makes these net benefits more transparent and can be used by other communities considering investments in similar facilities as well as for comparable facility benchmarking purposes.
Ian Miller, Senior Economist at Ecology & Environment Inc,. is a member of the Town of Amherst Solid Waste Committee. Jeffrey Angiel is an Assistant Municipal Engineer with the Town of Amherst and Town Liaison to the committee.