Bruciare i rifiuti così vicino alla casa non è stata una buona idea.

English Translation

Burning the trash so close to the house wasn’t a good idea.

I wonder if one could use stato here, as one could argue that it refers to the verbal phrase “bruciare i rifiuti”.

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I don’t think so.
If you translate
“It was not a good idea to burn the trash so close to the house.”
(which is not better English but closer to the Italian grammar)
it is clear that is has to be “stata”.

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To me the question boils down to: should the participle correlate to the subject (bruciare i rifiuti) or the predicative (idea)?

Cf. “le elezioni sono state (stato???) uno scandalo”.

In my understanding the structures are different.
Compare in English:

The elections are a scandal / were a good idea.

It was a good idea / It is a scandal to have elections now

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