Managing Municipal Solid Waste

(MSW)

 Chapter 18

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 Problem of MSW

 MSW is nonhazardous waste posing no direct

threat to humans or ecology
 Still there are risks
 Excess generation
 Improper management, which can lead to…
 bacterial contamination: unsanitary conditions
 toxic contamination: hazardous wastes mixed in
 air pollution: incineration or decomposition gases

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 MSW Trends
 MSW generation is growing, both total and per capita
 Dependence on landfills continues
 In 2010, over 54% of MSW was landfilled in the U.S.
 Composition of MSW
 largest proportion by product: containers & packaging
 largest proportion by materials: paper & paperboard
 Major industrialized nations are largest generators
 Recycling rates vary across nations
 In 2009, Germany had the highest recycling rate in the EU at
48%; Sweden and Belgium are next at 36% each
 U.S. overall recycling rate in 2009 was 33.8%

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 Trend Data
U.S. Annual MSW Generation
1980 1990 2000 2010

MSW 151.6 208.3 242.5 249.9

(millions tons)

Population 227,726 250,181 282,418 310,109

(thousands)

Per capita 3.65 4.56 4.70 4.42

MSW
(pounds/day)

Sources: U.S. EPA, Office of Resource Conservation and Recovery (November 2011),
Table 1; Council of Economic Advisers (February 2011).

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 Proportion of Products in MSW in 2010

Source: U.S. EPA, Office of Resource Conservation and Recovery (November 2011) Table 1, Table 12.

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 U.S. MSW Recovery Rates (2010)
100.0

90.0

80.0

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0
Aluminum Batteries, Consumer Glass Paper and Plastics Rubber Tires Steel Yard
Containers Lead-Acid Electronics Packaging Paperboard Packaging Packaging Trimmings
and Packaging
Packaging

Source: U.S. EPA, Office of Resource Conservation and Recovery (November 2010), Table 13, Table 21.

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 Recycling Plastics
 Plastic wastes have grown over time
 390,000 tons in 1960; 31 million tons in 2010
 Largest proportion of plastic wastes is containers
and packaging
 Recovery rate is 7.6 percent (2010), which is
low compared to other materials
 Recycling process for plastics is complex
 Must be sorted by resin content, and some plastic
wastes are not readily identified

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 International Ranking
by Per Capita Generation

Country kilograms per capita

United States 745

Netherlands 623
Germany 581
Spain 575
United Kingdom 546
Italy 545
France 543
Sweden 515
Norway 490
Source: European Commission, Eurostat (2011).
Note: Waste data are from 2008

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 Policy under RCRA (Subtitle D)
 Federal responsibilities
 To give financial and technical assistance to states,
encourage resource conservation, set minimum
criteria for land disposal, incineration facilities, etc.
 States’ responsibilities
 To develop waste management plans
 Many follow EPA’s integrated waste management system,
which promotes using a combination of programs aimed at
source reduction, recycling, combustion, and land disposal –
in that order
 To use regulatory powers to comply with RCRA
 e.g., recycling laws, grant programs
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 EPA’s Integrated Waste Management System

Source Reduction

Recycling

Combustion

Land Disposal Source: U.S. EPA, Office of

Solid Waste. “Integrated Waste
Management.” March 20, 2012.

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 MSW Services Markets

 Using Economics

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 Modeling the MSW Market

 Supply (S), or MPC, represents the

production decisions of firms providing MSW
services
 Demand (D), or MPB, represents the
purchasing decisions of MSW generators

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 Two Sources of Resource
Misallocation

 Flat fee pricing of MSW services does not

reflect rising MPC associated with
increases in production levels.
 Production of MSW services is associated
with negative externalities, which means
that private market equilibria, where MPB =
MPC do not yield an efficient solution

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 Flat Fee Pricing System
 Communities typically charge the same fixed fee
regardless of amount of MSW generated
 Fee typically hidden in property taxes

 Demanders pay a zero Marginal Price as if

MPC were 0
 Ignores positive and rising MPC of MSW services
 Result:
 No incentive to reduce wastes
 Too many resources allocated to MSW services

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 Flat Fee Pricing System
$ Result is overallocation of resources,
since Q0 > Qc where Qc would be
D

based on a positively sloped MPC

=
MP
B

S = MPC (actual rising MPC)

S = MPC (implied by flat fee)

0 QC Q0 Q of MSW Services
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 Negative Externality

 Production externality causes resource

misallocation even if the fee reflects rising MPC
 External costs (MEC) are due to air pollution from
incineration, groundwater contamination, etc.
 Result:
 Overallocation of resources to MSW services

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 Negative Externality
Price

overallocation, since Qc > QE

MSC = MPC + MEC

S =MPC
PE
PC

D = MPB = MSB
0
QE QC Q of MSW Services
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 Market-Based Solutions

 Waste-end Charges
 Retail Disposal Charges
 Deposit-Refund Systems

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 Back-end or Waste-end Charge
 Imposed on waste at time of disposal
 Efficiency is achieved if the fee, PE, equals to MSC at QE
 Known as
unit pricing, or pay-as-you-throw (PAYT), programs
 Can be implemented as flat rate or variable rate pricing
 Real-world usage
 Used in over 7,000 communities in the U.S.
 Some use bag-and-tag systems
 Empirical evidence
 $0.50 per container led to reduction of 3,650 tons/year for a
community of 100,000 people (Jenkins 1993)

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 Unit Pricing
Implemented as a Waste-end Charge
Price

MSC = MPC + MEC

S = MPC
Fee = PE

D = MPB = MSB
0
QE Q of MSW Services
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 Front-end or Retail Disposal Charge
 Imposed on the product at point of sale
 Should encourage prevention through source reduction
 Used domestically and internationally
 e.g., U.S. states use for tires, fertilizers; Belgium,
Denmark, Portugal use for batteries; Norway, Sweden use
for pesticides
 Aimed at a consumption externality
 Efficiency is achieved if front-end charge equals ‒(MEB)
at QE
 Effective price of product (PR) includes fee

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 Retail Disposal Charge
A Front-End Charge

Effective price,
MSC + charge
Price

including the charge

Charge MSC = MPC

PR

D = MPB

MSB
0
QE QC Q of batteries
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 Deposit/Refund System
(review from Chapter 5)

 Up-front fee imposed on a product at point of

sale (like retail disposal charge)
 Fee equals MEC of improper disposal, or the
negative MEB of consumption
 Fee is returned if consumer takes proper action
to avoid environmental damages
 Real world examples
 For beverage containers: Australia, Canada, Denmark,
Finland, Iceland, Italy, the Netherlands, Norway,
Sweden, Turkey, United States
 For auto bodies: Denmark, Finland, Norway, Sweden

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 Selected Deposit-Refund Programs in U.S.
STATE PRODUCT AMOUNT OF DEPOSIT
Arizona Batteries $15.00 maximum
Arkansas Batteries $10.00
California Beverage $0.05 for < 24 oz.
$0.10 for > 24 oz.
Colorado Batteries $10.00 minimum
Connecticut Batteries $5.00
Beverage $0.05
Hawaii Beverage $0.05
Idaho Batteries $10.00
Iowa Beverage $0.05
Maine Batteries $10.00
Beverage $0.05 – $0.15
Massachusetts Beverage $0.05
Michigan Beverage $0.10
Minnesota Batteries $10.00 minimum
New York Beverage $0.05
Batteries $5.00
Oregon Beverage $0.02 – $0.05
Vermont Beverage $0.05 - $0.15
Washington Batteries $5.00 minimum

Sources: Container Recycling Institute (2011, 2009); Battery Council International (August 14, 2011);
U.S. EPA, Office of Policy, Economics, and Innovation (January 2001), Table 5.1, p. 59; pp. 57-66.

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 Deposit-Refund Model
$ Deposit converts % of overall waste
disposal, measured by (QIW - Qe), from
improper to proper methods MSCIW
MPCIW + Deposit
MPCIW
a

Deposit=MEC
b at QE

MPBIW = MSBIW
QE QIW
0 Improper Waste Disposal (%)
100
Proper Waste Disposal (%)
100 0
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