Social Cost Of The Waste-to-energy Plant In China

With China's urbanization process accelerated,about 300 million people have migrated from the countryside into the cities after 2000.The development of economy significantly drives the growth of income per capita,and thrives the urban real estate market.However,the amount of municipal solid waste is increasing year by year,more cities encounter the garbage siege problem.In this context,the Chinese government gradually raises the incineration's proportion in harmless treatment of MSW(Municipal Solid Waste).The WTE(Waste-to-Energy)technique,which is first popularized in developed countries with the advantage of energy recovery and emission reduction,is expected to be widespread in China.Due to the technology gap,objective probability of explosion and excessive emissions in domestic waste-to-energy facility truly exists.However,the drawbacks in government's public management,such as the lack of risk communication,exacerbate the NIMBY(Not in my backyard)sentiments.While facing uncertainty,public tend to exaggerate their risk perception of waste-to-energy technique.Protests for siting are common,which means the excessive public awareness will lead to social costs.One is the reduction of waste-to-energy facilities'net benefits facilities net benefits reduced because of public anger and facility's lockout,the other is the negative externalities of the housing market.Considering the social cost,government should make efforts to mitigate the exaggerated risk perception so as to increase social welfare.Considering the importance of the public risk perception in the government's energy choices,this paper establishes a model about social costs to calculate determinants of risk perception,the impacts on facility's expansion,willingness to pay and the non-market value of marginal efforts made by government,based on the data from CV(Contingent valuation)questionnaire in Shenzhen city.Results show that residency status,household income and distance significantly affect the residents'risk perception.While fitting of risk perception significantly reduce the probability of facility expansion,with a marginal effect about 8.8%.Hedonic results indicate that exaggerated perception of risk distort the adjacent real estate market.Eventually,the net benefit model of facility expansion is constructed to quantify marginal cost of government's effort of maximizing individual welfare.Marginal cost is between 4396 and 6291 RMB.The result demonstrates the significance of taking the residents' risk perception into account.From the aspect of individual choice,the paper uses sample selection model to quantify non-market value of NIMBY sentiments.The comparison with the government's decision highlights the lower cost of marketing choice,while a welfare loss accompanied.