The city and the agricultural sector interrelationship: Environmental costs and benefits

Both the urban and the agricultural sectors use natural resources and produce wastes using environmental resources. From an economic perspective, each and every stage of production, use and disposal of goods (or services) should also incorporate (internalize) the associated environmental costs, quantified whenever possible. It has by now been universally accepted that in searching for optimal means for the solution of solid waste, comparing and selecting disposal alternatives, an explicit cognizance must be taken of environmental costs. This will render the different alternatives comparably and thus enable a more comprehensive search for an optimal solution. The co-existence of the urban and agricultural sectors is essential. For generations, the agricultural sector supplied goods to the city and obtained industrial products, central services etc. Presently, food can be imported and supplied from far away. However, the new role of the agricultural sector is to provide environmental services to the growing cities. One aspect of this will be demonstrated and analyzed here: the agricultural sector as an acceptor of wastes from the cities: municipal waste, wastewater and sludge from wastewater treatment plants. The paper will discuss the two sides of the equation describing the inter-relation between the city and the agriculture section, for the case of municipal solid wastes. Quantification of the external costs (or benefits) and adopting a wide range of administrative, legal, and, in particular, decentralized economic instruments in policy making could create a new market equilibrium that will reflect the desired adjustments in terms of volumes of waste, toxicity and other externalities generated by the community. This methodology could also determine the cost sharing between the city and the agricultural sector.