Managing Municipal Solid Waste Chapter 18 © 2004 Thomson Learning/South-Western

2 Managing Municipal Solid Waste Municipal solid waste (MSW) – nonhazardous wastes disposed of by local communities

3 Characterizing Municipal Solid Waste Observing a Trend  Despite the apparent growth in MSW generation, the development of better waste management practices has lagged behind

4 Characterizing Municipal Solid Waste Composition of MSW in the United States  Product groups – categories in the MSW stream identified as durable goods, nondurable goods, containers and packaging, and other wastes  Materials groups – categories in the MSW stream identified as paper and paperboard, yard trimmings, glass, metals, plastics, textiles, rubber and leather, wood, and other miscellaneous wastes

5 Characterizing Municipal Solid Waste International Comparisons  Generation Major industrialized nations are at the upper end of MSW generation rates  Recycling Rates There is considerable variability in recycling rates across nations

6 Characterizing Municipal Solid Waste Figure 18.2 Recovery Rates (%) for Major Components of U.S. Municipal Solid Waste in 1999

7 The Policy Response: An Overview States’ Responsibilities  According to the RCRA, states are to develop their own waste management plans, but these must meet certain federal requirements

8 The Policy Response: An Overview Federal Responsibilities  Based on the RCRA’s provisions for nonhazardous waste, the federal government must provide financial and technical assistance to states in designing and implementing their waste management plans

9 The Policy Response: An Overview The Current Policy Direction  Integrated waste management system – an EPA initiative to guide state MSW plans that promotes using source reduction, recycling, combustion, and land disposal

10 Modeling the Market for MSW Management Services Supply of MSW Services  Supply side of MSW services market represents the production decisions of firms under contract with cities and towns  Tipping fees – prices charged for disposing of wastes in a facility such as a landfill

11 Modeling the Market for MSW Management Services Figure 18.3 Market for Municipal Solid Waste Services

12 Modeling the Market for MSW Management Services Demand for MSW Services  Demand side represents the purchasing decisions of MSW generators

13 Modeling the Market for MSW Management Services Resource Misallocation in the Market for MSW Services  Flat Fee Pricing of MSW Services Fixed fee or flat fee pricing system – pricing MSW services independent of the quantity of waste generated  Negative Externalities

14 Modeling the Market for MSW Management Services Figure 18.4 Modeling a Flat Fee Pricing System for MSW Services

15 Modeling the Market for MSW Management Services Figure 18.5 Allocative Inefficiency in Private Markets for MSW Services: Presence of a Negative Externality

16 Market Approaches to MSW Policy Back-End or Waste-End Charges – a fee implemented at the time of disposal based on the quantity of waste generated  Unit pricing scheme – a common designation for the use of a waste end charge  Flat rate pricing – a unit pricing scheme that charges the same price for each additional unit of waste  Variable rate pricing – a unit pricing scheme that charges a different price for each additional unit of waste  Bag-and-tag approach – a unit pricing scheme implemented by selling tags to be applied to waste receptacles of various sizes

17 Market Approaches to MSW Policy Figure 18.6 Modeling a Waste-End Charge to Restore Efficiency in the Market for MSW Services

18 Market Approaches to MSW Policy Front-End or Retail Disposal Charges – a fee levied on a product as the point of sale designed to encourage source reduction

19 Market Approaches to MSW Policy Figure 18.7 Modeling a Retail Disposal Charge to Correct a Consumption Externality: Market for Household Batteries

20 Market Approaches to MSW Policy Deposit/Refund Systems – a market instrument that imposes an upfront charge to pay for potential damages and refunds it for returning a product for proper disposal or recycling