Other types of transfers, sometimes referred to as ‘‘pecuniary
externalities’’ may be related to energy and material recovery
within the waste system. These transfers represent financial losses
occurring when existing facilities or industries outside the system
boundary of the assessment have to operate below their design
capacity as a result of the additional supply of energy and/or material
resources offered by the waste system. Although local changes
in resource recovery from waste may generally be assumed to have
a marginal influence on global primary production (for example of
plastic), and pecuniary externalities can therefore be neglected,
effects on more localised markets (for example heat in a local district
heating network) may require attention. For example, if heat
production from waste incineration increases, other marginal heat
producers in the same network must reduce their production correspondingly
(heat production from waste incineration has priority
over other producers in Denmark). Reducing
heat production would result in lower variable costs as well as
lower revenues at the off-set facility, but all fixed costs would
remain the same. Overall, this could potentially result in higher
costs for heat consumers. These costs are considered transfers,
since they are related neither to resource re-allocation nor to welfare
changes, provided that consumers do not change their heat
demands significantly (which is likely to be the case, since heat
demand is fairly in-elastic in Northern Europe).