Moving toward a circular economy requires a fundamental rethinking of waste management practices and how they can affect health and well-being.
This report analyzes assessment of economic benefits of the health outcomes from better waste management,and discusses approaches for assessing health impacts and their economic consequences in decision-making for a zero-pollution future based on the principles of a circular economy and sustainable waste management.
Transformation to more sustainable waste management with low health risks entails substantial economic costs: in remediation of historic waste deposit sites, investment in purchasing and maintaining modern technologies for waste burning, and promoting job switching to avoid lost livelihoods.
Economic assessment methods have evolved and include selected topics in the social dimension of sustainability, such as equity.
This trend in economic assessment has substantially facilitated the evaluation of health and well-being in the context of the circular economy and waste management in both the short and long term"
- Economics of the health implications of waste management in the context of a circular economy. Copenhagen: WHO Regional Office for Europe; 2023. Licence: CC BY-NC-SA 3.0 IGO. https://apps.who.int/iris/rest/bitstreams/1487596/retrieve
From Glossary
CE[Circular Economy]
HiAP[health in all policies]
Executive summary
"The current broad area of sustainability links the topic of health to a number of areas in which significant changes can be expected after transition to a circular economy (CE) under conditions of climate sustainability. In such a context, there is pressure to transform the waste sector as well as the material flows of resource use throughout supply chains. In evaluating such actions, emphasis is naturally placed on techno-economic parameters that take into account environmental impacts. The
topic of health and waste is thus dispersed in the CE into a number of sub-agendas, such as environmental health, water reuse, food safety and sustainable transport.
Each of these areas impacts several determinants of health and well-being simultaneously. In a number of cases, the impacts of individual determinants oppose
each other; e.g., inadequately regulated water reuse for irrigation in agriculture leads to more hazardous substances in food. If a CE solution is to be sustainable, however, the negative impacts must not outweigh the positive ones, from not only a techno-economic but also an environmental and social perspective.
Measurement of social well-being falls within the area of health metrics. The most widely used metrics for decision support in health and health care include quality-adjusted life year (QALY) and disability-adjusted life year (DALY), which cover a certain proportion of social well-being, partly depending on the method of expressing their monetary value. The dominant approach in recent decades has been based on non-market-based valuation methods in stated preference studies, resulting in a willingness to pay (WTP) for a change in the risk of health damage. The value thus obtained is subject to a number of biases that economists are still addressing systematically, and the method overall requires a careful approach and a high level of expertise. Nevertheless, its use is widespread because it can theoretically provide a robust estimate of financially unreported values related to societal views of health and well-being. The values are used to prepare the results for further communication of the outputs of health assessment methods with stakeholders or are further elaborated in the form of cost–benefit analysis (CBA) or cost–effectiveness analysis (CEA) to support sound decision-making. For the global health and development agenda, these analyses are extended to include the distribution of impacts, such as equity issues, and to deal with uncertainties due to unquantifiable impacts as part of recommended practices.
There is methodological overlap between the magnitude of uncertainty of economically unquantifiable effects and estimates of the magnitude of health impact or risk, as in both cases the aim is to provide a sound basis for decisions and subsequent communication with stakeholders.
The framework for economic evaluation of the health implications of waste in the CE is based on an analysis of relevant methods and definition of three levels of evaluation management in relation to the time horizon of a plan, programme, policy or project. A portfolio of methods from the static perspective, which balances the effects of health determinants in all three pillars of sustainability, the “triple
bottom line”, provides the most accurate, detailed basis for decision-making. The
disadvantage is relatively rapid outdating of such assessments. For the single-cycle
perspective, the methods have a degree of uncertainty. The economic viewpoint is used to evaluate system capacity in terms of resource efficiency or society-wide preferences derived from WTP. Linked to this are thresholds for the level of acceptability of proposed medium-term activities. The last circular perspective has a
long-term sustainability strategy, in the sense of investment in health and systematic balancing and enhancing of the positive effects of health determinants on overall health and well-being.
This occurs not only during one material, product or resource recovery facility cycle but also takes into account and monitors impacts in subsequent cycles. This perspective has a high level of uncertainty, which is reflected in the portfolio of proposed methods.
From an economic viewpoint, the circular perspective incorporates the principles of
investment appraisal with an impact on the social rate of return on investment.
Waste prevention combined with successful transformation of the waste sector into a sustainable resource recovery sector under climate-neutral conditions has a realistic prospect of achieving a very high social return on investment. In order to prove this assumption, the right direction of health impacts for all sub-topics in the public and private sectors must be carefully managed when deciding on plans, programmes, policies or projects in the waste sector in a CE. From a strategic circular perspective, a coordinated HiAP approach meets those assumptions."
Key messages
Source: xvi | Economics of the health implications of waste management in the context of a circular economy
"The economics of the health implications of waste in the context of a transition to a circular economy (CE) are not sufficiently covered in the literature. The main topic in assessing system performance in a CE is the material cycle and the resulting focus on techno-economic and environmental solutions. The social issues of the topic, like health and waste prevention, are under-represented in the literature.
Economic tools for evaluating health and well-being can be used in the context of the CE, as these now include selected topics in the social dimension of sustainability, including equity.
Despite a number of shortcomings, non-market valuation methods with a willingness-to-pay (WTP) approach dominate economic valuation of health implications because they include the social component of health and well-being.
The theme of health is reflected in its determinants in all pillars of sustainability when assessing system sustainability. The portfolio of methods and approaches analysed in the static perspective of the proposed framework for economic evaluation of the health implications of waste in the context of a CE provide the most accurate evidence for decision-making. The disadvantage is rapid outdating of the evidence base.
The proposed circular perspective covers the longest time horizon for long-term sustainability strategies and provides a platform forcoordinating health issues in the public sector and the private sphere through investments for health in the framework of the health-in-all-policies (HiAP) approach."
CHAPTER 8 Health & waste - beyond economics
source 54 | Economics of the health implications of waste management in the context of a circular economy
"This section raises issues that should not be overlooked, because, in a CE, all good and all bad things return to the cycle.
8.1 Susceptibility
The economic consequences of the health effects
related to waste are distributed unevenly by
population, mainly according to the initial health
state. Vulnerable groups include infants, the
elderly and other sensitive groups with limited
and impaired health. The economic impact is
generally higher on these groups than on the
general population, including direct health-
care-related cost per patient with a co-morbid
condition. The formal human capital costs of this
group are, however, low, as the most susceptible
segments of a population contribute marginally
to the formal economy (142). Chronic exposure
to pollutants, including from the waste sector,
mainly affects sensitive populations who are
already economically vulnerable due to their
suboptimal general health.
8.2 Ethical concerns: exportation
of health-related externalities
Transformation to a CE raises concern because
of the well-known past reaction of the mining,
production and manufacturing sector, which
is to export pollution and other environmental
burdens. The stricter the regulations on the
resource recovery industry, the more likely
it is to try to situate itself out of regulatory
reach. The speed with which they can leave EU
territory depends on many factors, including
the cost of relocation, the capital intensity of the
technology and the level of expertise required
for effective, safe operation. Achievement
of a well-balanced environment of control
and motivation is a challenge for successful
transition to a CE.
An emphasis on refurbishment and longer
operational life of goods will have to overcome
barriers set by the current market inertia in
relation to the diminished perception of the
quality and reliability of goods. When a CE exists
already, instruments such as “performance-
based business models” are emerging,
whereby the customer pays for the “utility” of
the product and not for its quality or volume.
Such sustainable business models have limits,
however, and not all businesses can follow the
path to a CE immediately.
Resale of used and refurbished goods also has
positive and negative sides. Less efficient or
environmentally less sound technologies and
goods have been sold to less developed countries
for a long time, even within the EU (143–145).
In the short term, this can be interpreted as a
mutually beneficial strategy, especially in view
of growing consumption, but as less favourable
in the long term with regard to the environment
and ethics because of life-cycle costs, the impact
of distribution on life-cycles and possibilities for
end-of-life management.
These approaches and models of a CE must
therefore be responsibly assessed according
to the CE perspective. Otherwise, the health-
related risks of waste management are just
exported from a territory with a CE and strong
pollution control to less-developed settings
without the appropriate infrastructure, business
model or regulatory framework for efficient
management (146). The CE values high ethical
principles, which must be applied beyond
national and regional borders.
8.3 Quality and safety concerns
Extension of the waste sector back into the
supply chain raises concern about general
quality and safety (40). Control of the quality of
reintroduced or reused materials would shift
the costs in the chain; however, sectors such
as health care would face strong resistance
because of the high priority of health. The new
risks and benefits must be carefully assessed,
and extension of circularity measures to
highly vulnerable and health-risk sensitive
environments like health care must be
selective. Further research on harmonization
of safety-sensitive sectors and CE practices is
complex (147), as partly recognized by several
institutions and initiatives, such as Health Care
Without Harm and the Cochrane Collaboration,
and more support is necessary to overcome
current resistance in the sector.
Thus, application of sustainability to waste
management is only the beginning of the
challenges of environmental pollution
management and control, which go beyond
national strategic cooperation. Transition
to a CE is a long-term task involving all the
stakeholders in the production process stream
of the current linear economy and systematic
resolution of all the partial inefficiencies that
lead to negative impacts on the environment
and public health.
8.4 Waste crime
The external costs of pollution are exported
both formally and informally, depending on
market regulation, taxation and other costs
associated with waste management. This
applies to both the production sector and the
waste sector. The impact of waste electrical
and electronic equipment is clearly described
in a report on countering illegal trade in these
wastes, with a market assessment, legal
analysis and recommendations (143).
The more comprehensive and strict the policies
on waste management are, the higher the costs
for their execution. If the requirement for such
controls is underestimated, however, informal
waste management is introduced, and the
consequent health risks cannot be managed
efficiently. Such findings are reported by
EnviCrimeNet (146), an organization supported
by Europol. Waste crime is persistent, and
hazardous waste from the health-care sector
represents a particularly serious threat to public
health (148).
8.5 Waste management and challenges to social and environmental responsibility
Waste management must include residual
inefficiency in the product or service chain
that has accumulated in previous stages of the
linear economy. Such inefficiency has several
sources, the most common being technological
limitations, limited knowledge of the real
impacts, limited resources, time constraints
and combinations of these. This results not
only in a mixture of hazardous materials in
waste but also a mixture of difficult impacts on the environment and health. In business and financial terms, management strategies are
optimized to ensure that the processes and
services with the highest impacts on the overall
economic performance of the organization
are used under all the above-mentioned limits
and constraints. This also applies to the waste
management sector. Making the highest profit
under given conditions and regulations remains
the strongest driver of the economy, although
social responsibility and environmental
sustainability have been adopted to a certain
extent by the business culture, depending on
the development of countries.
Summary
Further challenges are related mainly to
transformation of the waste sector and the
infrastructure of supportive, sustainable resource
recovery from waste facilities in a climate-neutral
economic policy. The possibilities for effective
transformation of the waste sector differ among
countries in the European Region, as strong
regulation and little control (enforcement) can
push waste management outside the formal
economy and thus increase the negative
impacts on public health and the environment.
In view of the differences within the Region in
transformation of the national waste sector in
the context of the CE, one solution would be to
ensure that plans correspond to the capacity and
requirements of each country.
Economists are aware of the limitations of the
current approach to prosperity through GDP
growth and the limits of current economic
methods for tracking sustainability, even in
the area of environmental health and social
well-being. Until the necessary transformation
also takes place in the field of economic
reporting and evaluation, communication with
stakeholders must be maintained to promote
concepts such as HiAP. Transformation of a
traditional linear economy into an equitable,
well-being-enhancing CE cannot take place
in isolation in one country or region, such as
Europe: this is an international challenge. Each
individual country has different conditions
and capacities for successful transformation of
the waste sector and different possibilities for
changing consumption patterns and attitudes
towards a healthy lifestyle.
Specific requirements in terms of public health
impacts will be better perceived on closer
assessment of national baseline situations for,
e.g., strategic planning of resource recovery
capacity in view of a gradual decrease in non-
recyclable waste, the degree of control of the
chemical load of recovered materials and
resources or introduction and enforcement
of end-of life criteria for new products.
Subsequent economic evaluation of health
impacts will guide efficient allocation of funds in
accordance with the significance and influence
of health determinants. The dispersion of the
health theme throughout different economic
sectors and policy areas has led to HiAP. The
HiAP framework for national implementation
is particularly relevant in the context of a
transition to a climate-neutral CE, as it offers a
coordinated approach to continuous promotion
of health and well-being in the public space.
The necessary condition for successful progress
towards a CE is the availability of a balanced
assessment of the health implications of
enabling actions. The CE perspective of
assessment ensures evidence for responsible
decisions that are not based on short-term,
purely economic interests but will achieve
generally optimal, efficient, sustainable long-
term solution."
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