Economic Incentives in Solid Urban Waste Policy. Final Report

Disposal of municipal solid waste entails severe environmental burdens especially on small, densely populated regions and countries. Israel is grappling with the task of designing an efficient (and politically acceptable!) solid-waste policy, taking into consideration externalities associated with alternative disposal options and the pervasive NIMBY (Not In My Back Yard) syndrome.This paper analyzes alternative waste management options for the country, including collection, transportation, and processing costs, landfill tipping fees as well as environmental externalities, for a representative Israeli town. Externality costs may increase disposal costs by about 10 per cent. A source separation option, namely, sorting of the waste into wet, clean compostable material and dry fractions was found to be the least costly option when landfill tipping fees are higher than 15 US$. This is due to the fact that wet organic material (mostly kitchen waste) comprises about 50 per cent of municipal solid waste in Israel. Presently, neither direct nor indirect incentives for individual households to reduce, reuse and recycle waste are built into the system; households pay a fixed, uniform fee for garbage collection with no incentives for either reducing the volume of garbage or separating it at source. In order to evaluate the feasibility of an economic incentive scheme, we carried out telephone surveys in two medium-sized communities to assess the acceptability of alternative incentive schemes, and gather data on households’ willingness to pay (WTP), using a contingent valuation approach (CV), for expanded municipal waste services which would encourage recycling activity. The results indicate that the most feasible waste management scheme in these cases (probably true for the rest of the urban areas in the country) woud entail some form of a “pay-per-bag” system, assuming “backyard” dumping can be avoided. The study suggests imposing an a uniform charge of 0.6 NIS (New Israeli Shekel, ca. 0.17 US$) per waste bag, to serve as an incentive for sorting waste at home.