Invited Session: Climate Change

Accounting for Landfill Liabilities in the Context of Climate Change

Wednesday, September 27, 2017
9:35 – 10:05
Convention Center

Economic analysis of solid waste disposal facilities typically focuses on revenues (i.e., amount of waste, price per ton), capital expenditures during construction, operation and closure of the facility, and recurring operating expenditures. Less emphasis is generally placed on longer-term costs that are harder to quantify, such as very long term costs of post-closure care (PCC), which is presumed to be required for 30 years. PCC costs are hard to quantify primarily due to technical and environmental uncertainties and the widespread practice of discounting, which renders the present value of distant future expenses and liabilities virtually nil, particularly when high discount rates are used. Although a long-ignored issue, this practice is of growing concern as the first generation of modern solid waste facilities near the end of their presumptive 30-year PCC period. Increasingly, facility owners and regulators are realizing that ending PCC, which is linked to demonstrating no unacceptable threat in the absence of care, is not straightforward. However, simply extending PCC imposes an unsustainable financial burden on these non-revenue-generating facilities. To compound the issue, the long-term vulnerability of these facilities to climate change needs to be considered and sustainable measures adopted to improve their resilience.

This presentation discusses inherent issues with the current practice of valuing project opportunities and accounting for PCC liabilities using popular risk-adjusted discounting techniques based on net present value (NPV). Properly accounting for future routine and contingent liabilities starts with understanding the associated risks through the life of a facility, ensuring that sufficient funds are available to address these liabilities, and investing these funds appropriately. Decoupled net present value (DNPV) analysis, which separates risk from the time value of money and treats risks as a cost to the project, is presented as an alternative to current practices.


David Espinoza, P.E., Senior Principal, Geosyntec Consultants, Maryland

David Espinoza

Building on an accomplished career as a geotechnical engineer spanning more than 25 years, Dr. David Espinoza focuses on financial risk analysis for infrastructure and geoenvironmental projects. These projects have included facilities for disposal of municipal solid waste, construction and demolition debris, low-level radioactive waste, hazardous waste, industrial wastes, and mine spoils and tailings in addition to water/wastewater treatment and distribution systems, reservoirs, earthen dams and reinforced berms, and renewable energy projects. His advisory experience in the risk area has included economic feasibility evaluations of major capital projects, including projects to reduce carbon emissions in North and South America. He has developed quantitative methods for the evaluation of investment risk in environmental and infrastructure projects using state-of-the-art financial theory. Dr. Espinoza has provided financial risk consulting services to PIMCO (the world’s largest bond fund), Climate Change Capital (the world’s largest carbon credit fund), as well as several commercial and private equity investors.

Jeremy Morris, Senior Engineer, Geosyntec Consultants, Inc., Maryland

Jeremy Morris

Dr. Jeremy Morris has more than 18 years of professional and academic experience in the field of solid waste management, with particular expertise in issues relating to waste disposal by landfill. Since joining Geosyntec in 2001, he has provided lifecycle technical design and project management services during permitting and construction of new landfills and lateral or vertical landfill expansions at numerous sites around the country and internationally. His technical specialties include landfill closure and post-closure care, waste characterization, and leachate characterization and treatment. He also has experience with landfill gas management and utilization, feasibility analyses for landfill-based renewable energy technologies, and sustainable approaches to landfill development and long-term management and remediation of closed sites.