SITING NUISANCE FACILITIES : THE ECONOMIC PARAMETERS

Abstract

Nuisance facilities provide products and services which are essential for economic progress. Unfortunately, these facilities are usually perceived as potentially obnoxious neighbours since they tend to impose certain negative health and environmental impacts on the host communities. Examples of such facilities include nuclear power plants, sewage treatment works, chemical waste treatment plants, dump sites and garbage incinerators. In the United States and Japan, host community resistance is so strong that unsuccessful siting is the norm rather than the exception. This NIMBY (Not-In-My-Backyard) Syndrome is best expressed by New York Governor Hugh carey's exasperated outcry, in 1981: "··· Nobody wants it in their backyard and it winds up in nobody's backyard." Sadly, failure to site such unwelcomed but necessary installations will 100st definitely place significant constraints on sustaining economic growth. On the other hand, in poorer countries, there is a great possibility that victims of such negative facility impacts go largely uncompensated. This could be due partly to public ignorance of and hence apathy towards environmental issues. As a result, the negative externalities from proposed nuisance facilities are not internalised into developers' benefit-cost calculations. Economists thus fear that too many nuisance facilities, with little or no pollution control devices, nay then be built. Further, these less developed countries are generally ill-equipped to handle the excessive pollution, increasing health care demands and industrial accidents which nay result. Hence, evidently, if economically efficient and socially optimal outcomes are desired, there is a need for comprehensive guidelines for successful siting strategies. This Academic Exercise has attempted to do this by systematically determining " whether, where and how " to locate nuisance facilities.