[greenyes] Carbon Trading Holds Potential to Give Expanded Composting Fairer Shake

["Peter Anderson" <anderson@no.address>]

    Recent news reports indicate that the market price for CO2 trading under 
the Kyoto treaty is $19.74 per ton.

    This is very important because, for the first time, it provides an 
opportunity to better compare the cost of diversion (here through expanded 
composting) to landfilling by attributing to composting the monetized 
advantage of avoiding major releases of methane, a terrible greenhouse gas 
with at least 21 times the warming potential of CO2.

    This is because methane does not exist in garbage, but rather is 
generated deep in the oxygen starved conditions of landfills from the 
decomposition of organic material (mostly unrecycled paper, food scraps, and 
some yard trimmings, in that order).  If we divert the organics for 
composting through source separation, just like we successfully do today of 
bottles, cans and newspapers for recycling, then the source of the methane 
generation is removed and landfills will stop being a source of something 
like 12% or more of manmade climate changing gases (not the 3.1% incorrectly 
estimated by EPA based upon mathematically impossible and arbitary 
assumptions).

    Carbon trading that is a part of Kyoto (not yet ratified in the U.S.) 
means that the market finds the value that industry is willing to pay others 
to reduce greenhouse gases in oder to meet their Kyoto obligations.  With 
this latest report on carbon trading's market price, we can see that the 
market value of an action which eliminates the methane generated from a ton 
of MSW in a landfill, should have a gross value of $47.67 per ton of waste.

    My assumptions for this calculation are:
   Value
     Units
     Source

      2.72
     Cubic feet of methane per pound of MSW over lifetime
     Turning a Liability Into an Asset (1994), p. 2-5

      42.28
     Pounds of methane in 1000 cubic feet of methane
     Emissions of GHG in the U.S. (1997), App. F

      21
     CH4's GWP of CO2
     Solid Waste Management & GHG (2002), at p. 4

      $19.74
     CO2 Trading Value per Ton
     Terra Daily May 11, 2005


    Note a key part of this analysis. I have used the so-called "L sub o" 
value, which is the first row of my assumptions for how much gas is 
generated from a ton of waste, which is meant to reflect the total methane 
potential contained in a ton of fresh MSW that is generated over decades or 
longer (depending upon how long the final cover is maintained, 
precipitation, etc.). Like present value calculations in finance, I believe 
that whoever prevents entombing a unit of organic material in a landfill 
today should be given his or her reward for a lifetime of avoided methane 
emission, because, once that unit of organics is removed, that much less 
methane will be generated forever. Were one to use the estimated annual 
value, the numbers that follow would be reduced by a factor of about 20.

   Thus, the calculation, assuming all of the landfill gases are currently 
uncontrolled, is:

   [2.72 * 2000 * (42.28/1000)]/2000 * 2000 * 21 * $19.74 = $47.67

    EPA is now using a new, lower, L sub o value of 1.60 cf/lb instead of 
the 2.72 cf/lb of methane per pound of MSW that it used to put forward. But, 
that is built upon derivations that assume 75% collection efficiency while 
operating. Were one to correct that adjustment to 50%, as many consider a 
far more probable average capture rate on an instanteous basis (as opposed 
to the optimum one it's using), the resulting value reverts back to 2.72. 
But, putting all that aside, even if one uses 1.60 cf/lb., the monetized 
diversion value would still be $28.04 were all gases presently uncontrolled.

    Of course, since 1996, large landfills have had to install gas 
collection systems, which would probably be considered the baseline 
condition against which further reductions earning trading points would be 
measured. EPA assumes that their instanteous efficiency is 75% (but then 
goes on to combine that instanteneous value with a 21 times GWP conversion 
that is calculated over a 100 year interval, which logic would suggest is a 
no-no).  Our estimates presently are a lifetime (100 year) rate of 19%. The 
following chart is a scenario run that shows the monetized trading value per 
ton of waste whose organic fraction has been diverted (since it is the 
organics that are the source of the methane generated in MSW), for either L 
sub o value and any of the suggested capture rates.

  GHG TRADING VALUE PER TON OF MSW

      Capture Rate
     If Lo=2.72
     If Lo=1.60


     47.67
     28.04

      20%
     $38.14
     $22.43

      25%
     $35.75
     $21.03

      50%
     $23.84
     $14.02

      75%
     $11.92
     $7.01



    And that is just the additional GHG trading value of diversion, which a 
composting company would, when pricing his or her service, be able to add to 
the avoided collection and disposal costs of removing organics from what we 
landfill. Moreover, the amount of material that would have to be handled by 
those diverting organics would be one-third less than the ton of MSW 
currently handled by disposal companies, because, according to Franklin's 
numbers, on average organics are 66% of MSW.  On an apples to apples 
comparison of diversion to disposal, then, the diversion company's costs 
would be reduced by 33% as compared a disposal company.

    On top of that, of course, as I've discussed before, once the amounts 
diverted through recycling and yard trimming bans are added to such an 
expanded effort to remove organics, more than three-quarters of waste 
generation would be removed from the disposal system, and all of its 
putrescible attributes.  That suggests we might shift waste collection to 
monthly, and only collect recyclables and organics weekly, avoiding 71% of 
the waste collection costs, and internally incentivizing residents to 
properly sort out organics from inerts.

    Before anyone jumps into this pond with both feet, be cognizant of the 
fact that the trading value for CO2 only reaches Europe's level when it is 
mandated. In the U.S. today, there are no mandates, and the market price is 
only around a dollar.  Moreover, there are a number of hurdles to clear with 
regard to figuring out protocols for insuring that organics diversion 
actually achieves its claimed effects.

    But, nonetheless, the potential to energize a whole new commercial wave 
of expanded organics diversion, like cities such as San Francisco, Seattle 
and Nova Scotia are already deeply exploring, should be understood, and, 
those who want to move us to zero waste, and at the same time, dramatically 
reduced the negative environmental impacts we know will come from so called 
modern landfills, should begin to push the envelop to realize these 
possibiities.

                                                                             
Peter





_________________________
Peter Anderson, President
RECYCLEWORLDS CONSULTING
4513 Vernon Blvd. Suite 15
Madison, WI 53705-4964
Ph: (608) 231-1100
Fax: (608) 233-0011
Cell: (608) 698-1314
eMail: anderson@no.address
web: www.recycleworlds.net