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Types of Costs
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
Up-front | Operating | Back-end | Remediation | Contingent | Environmental | Social
Up-front
costs comprise the initial investments and
expenses necessary to implement MSW services. These
include public education and outreach, land acquisition,
permitting, and building construction or modification.
Operating costs are the expenses of managing MSW on a daily basis, including operations and maintenance, capital costs, debt service, and any unexpected costs.
Back-end costs include expenditures to properly wrap up operations and take proper care of landfills and other MSW facilities at the end of their useful lives. Costs include site closure, building/equipment decommissioning, postclosure care, and retirement/health benefits for current employees.
Remediation costs at inactive sites include investigation, containment, and cleanup of known releases and closure and postclosure care at inactive sites. Many local governments have inactive MSW landfills that require "corrective action" for known contamination of ground water, soil, or surface water. These remediation costs can be relatively well estimated, though with somewhat more uncertainty than other types of engineering projects such as road building.
Including these costs in FCA is a matter of choice. The decision to include remediation costs depends on the intended use of the FCA information. For example, if you are using FCA to document the revenue needs of an MSW program, you might want to include costs entailed by inactive sites. However, if you intend to use FCA to reveal the current economics (e.g., cost per ton) of current MSW management or compare your performance to other communities or state benchmarks, you might want to exclude inactive sites from such calculations.
Contingent costs are costs that might or might not be incurred at some point in the future. Examples include the costs of remediating unknown or future releases of pollutants, such as leaks from currently operating municipal landfills. Contingent costs also include the liability costs of compensating for undiscovered or future damage to property or persons adversely affected by MSW services. Both of these types of contingent costs can be projected, but not very precisely. (In contrast, where there is a known need to remediate, costs can be projected much more precisely.)
Environmental costs are the costs of environmental degradation that cannot be easily measured or remedied, are difficult to value, and are not subject to legal liability. To truly capture all of the important life-cycle cost elements, some people advocate assessing the upstream and downstream environmental costs of resource use, pollution, and waste generated by providing goods and services.
Social costs are adverse impacts on human beings, their property and welfare that cannot be compensated through the legal system. Social costs (also termed "social externalities") might include the impacts of MSW transport on neighborhoods along the routes taken, as well as the impacts of MSW facilities themselves. Adverse effects on property values, community image, and aesthetics, as well as the increase of noise, odor, and traffic all contribute to social costs.
