Explorations

RELATED NEWS ARTICLES

• Trash talking and garbage ideals
• The cost of recycling
• Prime real estate worth nothing to destitute owner

Problem 1. Garbage Policy Choices

A certain town is trying to decide whether to adopt a 'Pay As You Throw' (PAYT) scheme. This is a scheme whereby residents pay for garbage collection through charges levied per bag of garbage.
      A major concern is the fairness of the burden born by wealthy and poor citizens. A secondary concern in the eyes of town council is with the weighing of social costs and benefits.
      Households can reduce their garbage disposal in a number of ways (composting, reuse of some materials, etc.) but this takes some effort. This means that the amount of garbage produced by households depends on the price they pay (if any) to dispose of garbage. Garbage production also depends on household incomes. A graduate student has determined that the garbage produced (in tonnes) by all poor households (Q^P) and all wealthy households (Q^W) are determined by the following equations:

Q^P = .005 Y^P - 2 P^T
Q^W = .004 Y^W - P^T

Where P^T is the price paid by the household for garbage disposal. Y^P and Y^W are, respectively, the incomes of all poor and wealthy households in the town. The income of all wealthy households in the town is $12.5 million, and the income of all poor households is $10 million.
      Collection and disposal of garbage costs the town $20 a tonne, and environmental damage associated with the dumping of garbage is estimated to be $12 per tonne of garbage. The costs of collection and dumping are initially financed through property taxes. The poor pay 40% of all property taxes, with the wealthy paying the remaining 60%.

Questions

1. In the initial case where households can dispose of their garbage at curbside for free:
   1. How much garbage is generated?
   2. What are the social costs of garbage disposal?
   3. How much property tax do the Poor and wealthy bear?
2. Suppose that the town adopted a PAYT charge equal to the per-unit cost of collection and disposal.
   1. How much garbage is generated?
   2. What are the social costs of garbage disposal?
   3. How much do the poor and wealthy households pay in PAYT fees?
3. Briefly comment on the choice between these two schemes.

·SUGGESTED ANSWER

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Problem 2. A "Taking"

A "taking" is said to occur when a regulation or law reduces the value of some property in private use. One of the news articles above clearly relates to a "taking." Identify which article it is and discuss whether you the taking was justified and whether the taking should have been compensated.
Note: There is no 'right' answer to the discussion part.

·SUGGESTED ANSWER

• Overall description of Edmonton's approach
• Guelph's scheme is fairly well documented:
  • Home page for Wet-Dry recycling in Guelph
  • Short article describing the scheme and costs
  • an evaluation of Guelph's Wet-Dry Recycling system
• Description of Halifax's program