Is Municipal Solid Waste Recycling Economically Efficient?
- 1.2k Downloads
It has traditionally been argued that recycling municipal solid waste (MSW) is usually not economically viable and that only when externalities, long-term dynamic considerations, and/or the entire product life cycle are taken into account, recycling becomes worthwhile from a social point of view. This article explores the results of a wide study conducted in Israel in the years 2000–2004. Our results reveal that recycling is optimal more often than usually claimed, even when externality considerations are ignored.
The study is unique in the tools it uses to explore the efficiency of recycling: a computer-based simulation applied to an extensive database. We developed a simulation for assessing the costs of handling and treating MSW under different waste-management systems and used this simulation to explore possible cost reductions obtained by designating some of the waste (otherwise sent to landfill) to recycling. We ran the simulation on data from 79 municipalities in Israel that produce over 60% of MSW in Israel. For each municipality, we were able to arrive at an optimal method of waste management and compare the costs associated with 100% landfilling to the costs born by the municipality when some of the waste is recycled. Our results indicate that for 51% of the municipalities, it would be efficient to adopt recycling, even without accounting for externality costs. We found that by adopting recycling, municipalities would be able to reduce direct costs by an average of 11%.
Through interviews conducted with representatives of municipalities, we were also able to identify obstacles to the utilization of recycling, answering in part the question of why actual recycling levels in Israel are lower than our model predicts they should be.
KeywordsMunicipal solid waste (MSW) Recycling Landfill Economic analysis
The author wishes to express his gratitude to the Ministry of Environmental Protection, which financed this research, and to Prof. Uri Regev, Prof. Nir Becker, Prof. Frank Ackerman, and four anonymous referees for their helpful comments and suggestions.
- Ackerman F (1997) Why do we recycle? Markets, values and public policy. Island Press, Washington, DCGoogle Scholar
- Ackerman F, Gallagher K (2002) Mixed signals: market incentives, recycling, and the price spike of 1995. Resources, Conservation and Recycling, 35:275–295Google Scholar
- Ayalon O, Avnimelech Y, Shechter M (1999) Issues in designing an effective solid waste policy: The Israeli experience. in Sterner T (ed.), The market and the environment: The effectiveness of market based instruments for environmental reform. Edward Elgar Publishing, Cheltenham, UK, Pages 389–406Google Scholar
- Biotech Environmental Company Ltd. (1995) National waste composition survey: A report submitted to the Israeli Ministry of Environmental Protection. Biotech Environmental Co. (in Hebrew)Google Scholar
- Brisson IE (1997) Assessing the waste hierarchy: A social cost-benefit analysis of municipal solid waste management in the European Union. Samfund, Okonomi and Miljo, 19. AKF Forlaget, KopenhagenGoogle Scholar
- Dijkgraaf E, Gradus R (2003) Cost savings of contracting out refuse collection. Empirica, Journal of Applied Economics and Economic Policy 30(2):149–161Google Scholar
- Dobos I, Richter K (2003) A production/recycling model with stationary demand and return rates. Central European Journal of Operations Research 11(1):35–46Google Scholar
- Fullerton D, Kinnaman T (1996) Household responses to pricing garbage by the bag. American Economic Review 86:971–984Google Scholar
- Jenkins R (1993) The economics of solid waste reduction: The impact of user fees. Edward Elgar Publishing, Cheltenham, UKGoogle Scholar
- Lavee Economic Consulting. (2000) Economic valuation of recycling in municipalities in Israel, report submitted to the Israeli Ministry of Environment. Lavee Economic Consulting, 71 Ashkenzai St., Tel-Aviv (in Hebrew)Google Scholar
- Morris J (1993) The economics of recycling and recycled materials. Sound Resource Management Group, Clean Washington Center, Seattle, WAGoogle Scholar
- Staudt E (1993) A comparison of the cost structure and fees for domestic waste disposal and recycling (abridged version). Ruhr Universitat, Bochum, GermanyGoogle Scholar