Implementation Lessons

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Several implementation lessons follow from the above analysis. Since the political economy perspective forces analysts to tailor their messages to a specific group of decision makers, the focus here is on guidance just for local officials.

First, the analysis suggests that, as local government officials lose coercive fiscal authority owing to the demise of policies like flow control, they need to become better risk managers. The task has several aspects: learning to recognize asset specificity and similar vulnerabilities, shedding risks by contracting for waste management services, designing flexibility into contracting arrangements and ensuring public buy-in on decisions made on the public's behalf. In many circumstances the industry should raise capital and organize its industry structure with less governmental involvement.

Second, NIMBY (not in my back yard) pressures may help to prevent wastefully dupli-cative investments in disposal capacity, provided that the legal tools wielded by community opposition groups are not undercut (Luton 1996). Environmental justice is gaining an increased focus even as the sector shifts to greater reliance on economic rather than political decision making. Yet if environmental performance of the sector improves, persistent interjurisdictional MSW trade imbalances should not be troubling, any more than they are for food or motor cars.

Third, the policy goal of loop closing can be disentangled from the job of regulating an increasingly efficient waste collection and disposal industry. There should be no need for the elaborate cross-subsidy schemes often seen in vertically integrated systems that use landfill profits to pay for recycling. Unbundled costs and full accounting transparency can become the basis for a more legitimate contracting strategy. Governments can contract explicitly for curbside recycling as part of a MSW collection package, and encourage additional loop closing through greener procurement policies. While recycled content procurement directives may seem like blunt instruments compared to full life cycle assessment guidance (currently unavailable), they are much more efficient than current strategies that only look downstream and rely on a coercive local recycling process.

The life cycle analogy that connects the production, consumption and disposal of goods and services suggests that municipalities should send specific signals upstream to waste generators, and downstream to waste managers. For example, municipalities could implement 'Pay-As-You-Throw' (PAYT) to send signals upstream to households (Miranda et al. 1994). The property tax levy has been the predominant method of financing municipal solid waste services in the USA, and other nations also rely on fixed charges of various types (Gandy 1994). Thus the amounts paid by residential waste generators do not relate to the amount of waste they generate. As a result, there is little economic incentive for waste reduction or for increased recycling participation rates. By pegging user fees' rates to the amount of waste generated, appropriate signals can be sent to affect consumer behavior, and work their way further upstream to affect production and marketing choices (Jenkins 1993). Unit pricing or PAYT programs are not exotic: they have become an integral and successful part of municipal solid waste management systems in more than 4000 US communities (Hui 1999).

Actors can likewise use contracting to send signals downstream to waste managers. Municipalities and their residents contract for waste management with firms or other governmental units. In the US post-flow control era, contracting has to be open and non-discriminatory on the one hand, while achieving a variety of economic, environmental and institutional goals on the other hand. To ensure political legitimacy, municipal officials can develop contracts that reflect community values. Such contracts could include recycling and education programs as well as waste disposal.

Since ancient times, households and businesses have engaged in economically motivated recycling, remanufacturing, repairs and re-use. Governmental actors should make their waste management activities more complementary to these private actions, and be wary of replacing them unnecessarily.

Policy recommendations for other levels of government would be quite different. Speaking broadly, state and local governments should seek more of an oversight role and less of a provider's role in the MSW industry. If government can adequately police illegal dumpers and remove barriers to regional disposal markets that exploit scale economies, waste management can take on more of the characteristics of private rather than public goods. Then regulated private firms will more often become the logical providers. Economic regulation of the solid waste industry can move to the national level, where anti-trust lawyers prosecute individual cases of excessive market power. Meanwhile, the environmental regulation of this industry would have to remain stringent. State and local governments would need to continue enforcing strict performance standards for waste collection and processing, and actively prevent illegal dumping. The federal government would have to preserve, and state governments would have to enforce, current stringent standards on landfill and incinerator design.

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