The cost-effectiveness of two different plastic waste treatment options is compared. This paper evaluates the recycling of plastic waste with the more conventional incineration of plastic waste, using data for the Netherlands. Both options have specific revenues and costs. The main benefit from plastic recycling is the avoidance of CO2 emissions that otherwise would occur during incineration and from the production of virgin (new) plastic material. At the same time, there are significant costs involved, such as collection, separation, sorting, and recycling. The benefit from plastic waste incineration is the energy that can be recovered, which reduces emissions in the regular energy production sector by displacing production. The main cost associated with incineration is that this requires a waste-to-energy plant with the associated capital investments. Summing the costs and revenues from both plastic waste treatment options and comparing the results, leads to an implicit CO2 abatement price of 178 €/t of CO2 in case of plastic recycling. In general, this implicit price is much higher than current (or historic) ETS prices, the estimated external costs of CO2 emissions, or alternatives to reduce CO2 emissions (e.g. renewable energy). A sensitivity analysis shows that this conclusion is robust.
Gradus, R. H. J. M., Nillesen, P., Dijkgraaf, E., & Koppen, R. V. (2017). A Cost-Effectiveness Analysis for Incineration or Recycling of Dutch Household Plastics. Ecological Economics, 135, 22-28. https://doi.org/10.1016/j.ecolecon.2016.12.021