Cost Benefit Analysis of Food Waste Processing in Massachusetts

Abstract

This thesis aims to compare food waste processing technologies to understand which have higher socio-economic benefits. Each year, approximately 1.3 billion tons of food produced for human consumption is wasted globally which puts stress on the environment and undermines efforts to combat world hunger (van Otterdijk & Alexandre, 2011). As food waste diversion systems are being developed across the world, strong food waste diversion planning should be understood to reduce its negative impacts and optimize its benefits. In order to suggest sustainable ways of developing a food waste management infrastructure, this study will compare the socio-economic costs and benefits for leading commercial food waste processing technologies in Massachusetts. I collected data by surveying 10 of 30 windrow aerobic composting (AC) facilities and four of five on-farm anaerobic digestion (AD) facilities. I used the information collected through interviews, added data from comparable studies to close gaps, and calculated cost and benefit variables. By discounting both over a lifespan of 15 years, I derived the net present value (NPV) of each food waste processing methodology. The analysis yielded a NPV of $12 per short ton of food waste for windrow AC and -$8 for on-farm AD. A sensitivity analysis highlighted that the driving factors for the NPVs are transportation, diesel price, and tipping fees. AD is furthermore sensitive to electricity prices and construction and equipment costs while the price of compost is a determining factor for the feasibility of AC. Differences in tipping (or gate) fees and distance to food waste generating sources best explain the differences in the NPV between AC and AD in Massachusetts. Since both variables are not necessarily linked to either food waste treatment methodology, it cannot be inferred from the CBA results that one is in fact superior to the other.