Biomass Energy Outlook: Waste By Any Other Name May Still Be Waste

Mark Jenner

Mark Jenner
BioCycle February 2012, Vol. 53, No. 2, p. 53

I have spent most of my professional life as a manure economist adding value to undervalued organics. For years I have preached and goaded folks not to use the word ‘waste.’ Six months ago I started moving away from that position, because moving waste materials back into the economy is progressing so slowly. Failure to effectively move wastes to resources means that we are choosing to preserve a reliance on continued poor management of these materials and keep waste as waste. During a high-level manure workshop a few weeks ago someone said, “We have to stop using the word waste.” I am now ready to say, “No, that only works if you stop generating wastes.”

Legal definitions of ‘waste’ and related materials provide an excellent illustration of this seemingly untenable challenge. Pick any strategic term, e.g., ‘biomass,’ ‘manure,’ ‘organic.’ There seems to be some kind of competition to be the most explicit in describing everything that can be in the definition, as well as everything that cannot be included. The more verbal ‘fortification’ with which we surround the definitions of waste, the less accessible to use and the more costly these materials become. For example, the state of California is working to legally capture every positive and negative facet of what may or may not be solid waste. One of my colleagues in California once quipped that recyclables have ‘rights’ in the state, implying that the statutes limit the best reuse of household leftovers.

In 2010, the Congressional Research Service put out a great analysis of all the varieties and flavors of legal definitions of ‘biomass’ that were involved in legislative initiatives in the 111th Congress. Some of these definitions filled most of a page. Writing more comprehensive, very detailed legal definitions is not an effective way to guide implementation of policy. A great function of effective policy is to help us change behavior, but it must do so without constraining healthy innovation. This is not easy. A sincere and zealous sense of responsibility is behind efforts to over-define legal definitions, but that innocent intent eventually gets in the way of entrepreneurs building a better mousetrap.

Waste As An Economic Term

Before copious legal definitions, we all understood that waste is something we do not want. Wastes are materials that we typically have processed and treated into materials without value. Simply changing the name does not change the technical composition. Marketing certainly plays a role, but eliminating waste materials is not just about spin.

For fun, I Googled ‘waste.’ Wikipedia came up with, “Waste is unwanted or useless material.” This is perfect. As an economist, this says that waste is an economic term (more than a legal term). It is material of negative value. My natural resource peers confounded this discussion years ago by sending us off on a fruitless discussion of externalities. While wastes may have been treated as external, they really are not external. The economic, and therefore legal, challenge is that we have not internalized them. Entire fields of study and our subsequent legal structure have evolved around the isolation and inadvertent preservation of system components that we do not want (i.e., waste, pollution, emissions, etc.).

Wastes are an unmanaged part of the system. It is difficult to find value in anaerobic lagoon effluent that has burned off all the nitrogen and carbon to the atmosphere and diluted the rest with water. For clarification, anaerobic lagoons in this context serve the opposite function as anaerobic digesters that capture value while stabilizing carbon. Wastes, then, are heterogeneous by-products (mixed) and in sufficient excess supply requiring additional costs to remediate the over production of poorly managed inputs. They are outputs produced in such overabundance that the economic demand requires a negative price, or cost, rather than a positive price.

In this suggested taxonomy of value, there are three levels in decreasing order of value: products, residuals and wastes. Product quantities are determined by market prices for the principal product. Residual quantities are determined by the level of production of the principal product and not by the residual by-product market. The value of the residuals is determined by technology selection and the development of markets for the residual products. Wastes then are the leftover materials that are produced in such high volume that they can only be managed as a cost.

An example would be eggs and manure that are both generated by a chicken. The demand for eggs drives the number of chickens grown, but the manure typically gets produced at the level of chickens that brings in the most profit from eggs. Manure technologies that add value allow residuals to supplement profit as fertilizer, energy and solids. Manure that is poorly managed under threat of compliance, at a cost, is really only a waste. Successful systems include revenues from all outputs including manure, but it is difficult to imagine operations that grow chickens principally for the manure revenue and then fill in with supplemental egg revenue.

Typically demand for residuals is periodic and they may enter the market as seasonal demand goes up and down such as with wheat straw or corn stalks. The other interesting thing about residuals is that once a steady profit develops, these by-products become products and commodities and not leftover residuals of limited economic value.

If we want to eliminate wastes, we have to quit producing them. And that also means reconsidering some less essential, perhaps “unwanted or useless,” legal definitions that keep poorly-managed leftovers from adding value and creating wealth in our economy.

Mark Jenner, PhD; California Biomass Collaborative, World Agricultural Economic and Environmental Services (WAEES) and Biomass Rules, LLC (www.biomassrules.com).

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