Economic and Financing Aspects of Removing Asbestos in Residences

Crawford School Working Paper 1804
Author name: 
Leo Dobes

Reflecting its utility and versatility, asbestos was used in the past in many different products, including eaves, fences, roofs, walls, ceilings, floor coverings and backing, brake drums, pipe lagging, ironing boards, electrical meter boxes, sealants, pipes, and so on. Most Australian jurisdictions banned ‘the mining of raw asbestos and the manufacture, import and installation of products containing crocidolite (blue) and amosite (brown or grey) asbestos’ from 1985 (Fary 2012, p. 11).

An Australia-wide ban on the manufacture and use of all types of asbestos and asbestos containing material took effect on 31 December 2003. Work Health and Safety legislation in all states and territories prohibits the supply, transport, use, or handling of asbestos unless an exception or exemption applies. Despite the bans, remnant asbestos products are still ubiquitous, particularly in older Australian homes.

Exposure to asbestos fibres may result in asbestos-related disease, which in turn may lead to interstitial lung disease or various thoracic malignancies such as universally fatal bronchogenic carcinoma or mesothelioma. Inhalation of fibres is recognised as a hazard in a range of exposure levels in different occupations (Gottschall, 2002) and residential activities (Gordon & Leigh 2011), with different types of asbestos varying in their potency levels (Berman & Crump, 2008).

Three “waves” of asbestos-related disease have been posited in Australia. The first is associated with the mining of raw asbestos and the manufacture of asbestos-containing products. A second wave was generated by the use of asbestos products in industry. Of greatest current concern is a growing third wave of non-industrial exposure, especially affecting those undertaking residential renovations and maintenance (Olsen et al., 2011; Musk et al. 2016; ASEA 2016).

The two main themes examined in this paper are: 1. socio-economic rationale. A necessary condition for enhancing the well-being of society is that the social benefits of a proposed government action exceed its social costs. But it is also necessary to establish that any action is best undertaken by government, rather than by private firms or individuals. Situations of market failure can generally provide a prima facie case for government intervention, but the relative transaction costs and the risk of government failure also need to be considered in taking a decision. 2. cost-minimisation. Once a government has decided to take action, budgetary considerations and competing expenditure priorities will dictate that associated financial outlays be minimised as far as possible. A range of possible approaches to implementing asbestos removal are outlined, with a succinct presentation of their key advantages and disadvantages.

A number of implicit and explicit assumptions are made throughout the paper. For example, the constitutional level of government involvement is left unstipulated. While state governments have primary responsibility in Australia’s federal system for public health issues, the Australian Government established an Asbestos Safety and Eradication Agency (ASEA) in 2013 to provide a national focus on asbestos issues which goes beyond workplace safety to encompass environmental and public health concerns. The agency aims to ensure that asbestos issues receive the attention and focus needed to drive change across all levels of government. References below to ‘government’ therefore refer to any combination of local, state and federal governments, but not to any specific one. Further, no distinction is made between the many types of asbestos or their effects.

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