Question

Describe how trade in Locally Unwanted Land Uses (LULUs) could work, and some of the practical problems with trade in toxic waste.

Answer 1

In land-use planning, a locally unwanted land use (LULU) is a land use that creates externality costs on those living within close proximity. These costs include potential health hazards, poor aesthetics, or reduction in home values. Such facilities with such hazards need to be created for the greater benefits that they offer society.

LULUs can include power plants, dumps (landfills), prisons, roads, factories, hospitals and many other developments. Planning seeks to distribute and reduce the harm of LULUs by zoning, environmental laws, community participation, buffer areas, clustering, dispersing and other such devices. Thus planning tries to protect property and environmental values by finding sites and operating procedures that minimize the LULU's effects.

It has been suggested that a correlation exists between the location of sites considered as locally unwanted land uses and the proximity to minority populations as a result of market dynamics. That is, externalities associated with LULUs (such as poor aesthetics, lack of desirable amenities, etc.) tend to discourage high-earning buyers from moving to the area, and thus perpetuate the cycle in which low income individuals have few choices except those which happen to be in areas with LULUs such as landfills and highways. This tends to lower home values. Further, the same market forces, especially those that may discriminate against minorities, could make it so that these areas happen to be populated predominantly by minorities.

Throughout the United States, "three out of five African Americans and Latino Americans live in communities with abandoned toxic waste sites." This pattern is typically seen because of discrimination and racism throughout the infrastructure development process. It is becoming more and more common. What makes a LULU such as this unique is that they cause displacement, whereas a landfill, dump, roads, or prisons simply discourage home-buyers from entering the area and keep home prices low. High-end health food stores such as Whole Foods causes displacement by attracting high-earning home buyers into the area, causing rents and home prices to rise. This has been dubbed the "Whole Foods effect

The environmental justice movement began after the discovery of illegal dumping throughout 14 North Carolina counties. 31,000 gallons of Polychlorinated biphenyl (PCB) was dumped by the Ward Transformers Company throughout these counties. The state government in North Carolina devised a landfill diversion plan for this waste after discovering the dumping, but the landfill was sited in Warren County, which had the greatest concentration of African American residents of all North Carolina's 100 counties, and was also the most poor, ranking 97th in GDP of the counties in North Carolina. The mainstream environmental movement was made popular by the emphasis on wildlife protection and wilderness preservation during the 20th century, but this presented cost barriers to poorer individuals whose concerns were not with wildlife and wilderness preservation.

. Low population density implies that the number of people affected by environmental risks is small. Low incomes result in a low willingness to pay for environmental quality or - to put it the other way around - high degree of tolerance to environmental hazard. Moreover, low wages are said to indicate a low economic value of human life and health and, therefore, relatively small costs of health-impairing pollution. The intention of this memo was to make the implicit value judgements contained in the neoclassical view on comparative advantage more explicit. According to the law of comparative advantage, toxic waste should be stored or treated where the environmental costs are low, i.e. ceteris paribus in low-income under-populated countries. Free trade is said to be beneficial for all parties involved. First, it is based on voluntary exchange. Thus, if a country did not benefit from trade, it would not trade. Second, the international division of labour improves the efficiency of allocation since it makes factors of production move into their most productive utilisations. Applying these arguments to hazardous waste, one would come to the conclusion that international trade in this commodity is a good thing.

In reality, however, trade in hazardous waste is neither completely liberalised nor completely prohibited. Transboundary movements of hazardous substances are possible but they are highly regulated and restricted. The most important international agreement in this respect is the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and Its Disposal (hereafter: Basel Convention). It prohibits purely private transactions in hazardous waste and exports to non-parties and it requires re-imports of exported toxic substance in special cases.