The social efficiency of alternative financial incentive schemes for municipal solid waste reduction

Abstract

Efficient management of waste, especially at the urban level, is becoming more and more important in order to reduce negative externalities and achieve a sustainable society. Due to an increasing amount of waste, this goal is becoming more and more difficult; many solutions have been implemented, at different levels of the value chain. This research deals with different solutions for incentivising the reduction of municipal solid waste (MSW) through separation and recycling, applied by different municipalities in Switzerland. A cost-benefit analysis (CBA) is used to assess the social efficiency of different financial incentive schemes. Social efficiency is analysed as the difference between social costs and social benefits. Therefore not only economic but also environmental and social costs are taken into account. The results show how a pay-as-you-throw (PAYT) scheme can lead to a reduction of not only economic, but also environmental and social costs. It can therefore provide an important advantage to the social efficiency of a municipality.