Question

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Properly manage waste can be a source of wealth. Explain.
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Answer 1

Our modern world, with its convenience and consumption, creates a whole lot of trash, which in turn suffocates cities and undermines economies. Managing trash is a municipal nightmare. But it should be a banker’s dream, right? Demand will only grow, and the problem needs a solution—without it the entire economy suffers.

But if there’s a simple solution, it has eluded us all. The management of solid waste would seem to benefit from the structuring, efficiencies, financing, and latest technology that can come with public-private partnerships (PPPs). Let’s examine the options at our disposal.
Out of Sight, Out of Mind?

Poorly managed waste spreads disease, contaminates water resources, increases the cost of potable water, increases flooding, pollutes the air, and repulses tourists. But municipalities have neither the money nor the skills to manage solid waste well. In Sub-Saharan Africa, for example, municipal waste management can amount to 30 to 50 percent of a municipality’s total annual budget.

The developing world tends to rely on informal waste pickers, who comprise five percent of urban jobs in developing economies. But these small scale solutions are inefficient and difficult to regulate. Global experience points to the benefits of integrated management and PPPs.
At Your Disposal

But the solid waste sector isn’t a natural fit for PPPs, as some other sectors are. From a commercial or financial perspective, cost recovery from households in the form of fees paid for trash collection is generally very poor. Industrial waste collection can be more lucrative, but rarely covers costs. Sanitary landfills are expensive. But there is hope where the disposal of solid waste is carefully planned to generate revenues and manage waste effectively. Here are some options:

Recycling: Recycling of scrap metal, paper, glass, plastics and cardboard, is a large industry in many developed countries, but use of recycled materials is often not well developed. In Tanzania, as in many countries, ships carry containers full of used plastics back to China for recycling since the local market is not sufficiently organized.Composting: Organic waste can be used to create compost to defray methane gas production and be used as inputs for fertilizer, construction materials, and even animal feed.Energy: Properly dried and sorted waste can provide a potent (and green) source of fuel for some industrial processes, in particular power generation and cement kilns, allowing their parent companies to fulfill their international obligation to reduce their carbon footprint. These energy sources may also qualify as renewable energy, and therefore may provide access to carbon credits, preferential tariffs for electricity generated, or other subsidies designed to encourage green activities.Sanitary landfill: Where the above do not achieve full disposal of waste, the balance needs to be delivered to a sanitary landfill, to limit its impact on people and the environment.



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Author: Jeff Delmon is a Senior PPP Specialist with the World Bank since 2005, advising globally on infrastructure finance and PP

Answer 2

Recycling: Recycling of scrap metal, paper, glass, plastics and cardboard, is a large industry in many developed countries, but use of recycled materials is often not well developed. In Tanzania, as in many countries, ships carry containers full of used plastics back to China for recycling since the local market is not sufficiently organized.

Composting: Organic waste can be used to create compost to defray methane gas production and be used as inputs for fertilizer, construction materials, and even animal feed.

Energy: Properly dried and sorted waste can provide a potent (and green) source of fuel for some industrial processes, in particular power generation and cement kilns, allowing their parent companies to fulfill their international obligation to reduce their carbon footprint. These energy sources may also qualify as renewable energy, and therefore may provide access to carbon credits, preferential tariffs for electricity generated, or other subsidies designed to encourage green activities.

Sanitary landfill: Where the above do not achieve full disposal of waste, the balance needs to be delivered to a sanitary landfill, to limit its impact on people and the environment.

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