Abstract
Recently there happened so-called “Garbage and Refuse War” in Tokyo.
The fundamental issues of it are i) the external diseconomies produced by the disposal of garbage and refuse and ii) the geographical distribution of the external diseconomies. Relevant external diseconomies are air pollusion produced by the incineration, air pollusion, noise and traffic congestion produced by transporting garbage and refuse etc. The pattern of geographical distribution of the external diseconomies depends on the disposal system adopted.
It is plausible that the incineration has scale economies. However the benefit of scale economies can be realized only when transprotation activity is intensively used, that is, one incineration covers relatively broad collecting area.
“Garbage and Refuse War” has arisen from the minimization of pecuniary disposal costs incurred by the Tokyo Metropolitan Government, neglecting the jointly produced external diseconomies.
The optimal disposal system should be that of minimizing the social costs, that is, the sum of direct disposal costs and the external diseconomies, given the total amount and geographical distribution of garbage and refuse.
If an appropriate pricing is introduced, the social costs of the disposal system could be reduced.
