**4. Policy issues in the solid waste management**

Callan and Thomas [23] in their study on "Adopting a Unit Pricing System for Municipal Solid Waste: Policy and Socio-Economic Determinants" had carried out a detailed analysis by adopting a unit pricing system for municipal solid waste in USA. 351 Towns are included in the estimation, with 79 of these communities employing the MSW unit pricing approach and they had used the logistic regression equation for their estimation. The estimated parameters and their asymptotic standard error and each parameter gave the estimated change in the log of the odds of adopting unit pricing associated with a unit change in the corresponding independent variable. This study had empirically estimated the influence of the various theorised determinants of unit pricing adoption. From a broad perspective, this study had found that certain socio-economic and demographic characteristics appeared to have influenced the adoption decision. Although such factors were

#### *Economics of Solid Waste Management: A Review DOI: http://dx.doi.org/10.5772/intechopen.95343*

not controllable by the policy makers, an awareness of these determinants could correct false expectations and hence diminish the risk of costly failure. This Study had suggested that a community's decision to adopt unit pricing was explainable and therefore predictable to some extent. In certain instances, the decision may be directly or indirectly controllable through policy initiatives. The relevance of these findings to MSW policy initiatives development should motivate further empirical investigations of unit pricing adaptation and the associated implications for policy makers and for the society at large.

Kinnaman [24] had used a skeletal model to develop and to frame a discussion of optimal policy design. This Model employed the virgin and the recycled materials so that the ratio of input prices was equal to that the ratio of marginal products. The Households might choose between the garbage and the recycling in a similar manner. Since agents in this simple model internalized all of the costs and benefits of their choices, resources were allocated efficiently and the optimal quantities of garbage and recycling were produced. The household utility would have an impact due to by these effects. So assume now that u = u (c,g), where ug < 0. Under this assumption, households failed to internalise the fuel social costs of their disposal decisions. Too much garbage and too little recycling could be adopted by a decentralized economy. The majority of the households are paid traditional ways such as garbage removal fee or local property tax to the municipalities. Miranda [25] in the study on "Unit based Pricing in The United States: A Tally of Communities" had highlighted 21 communities with unit-pricing programmes and had compared the quantity of garbage and that of recycling over the year preceding the implementation of the unit-pricing system with the year following it. Results had indicated that these towns had reduced garbage by 17 per cent and had increased recycling by 128 per cent. These large estimates could not be attributed directly to pricing garbage, since in every programme curbside recycling programsme were implemented during the same year as that of the adoption of the unit-pricing programme. Callan and Thomas [26] had predicted that the implementation of a user fee had increased the portion of the wastes recycled by 6.6 percentage points. This impact increased to the level of percentage 12.1 points when the user fee was accompanied by a curbside recycling program.

Kinnaman and Fullerton [27] had demonstrated that the disposals of household wastes were constrained by two disposals an option that is garbage disposal at landfill and recycling, and then marginal cost pricing which would tend to substitute recycling for garbage disposal. But if illegal disposal or burning features was a third alternative in the household disposal choice set, then unit pricing would encourage illicit dumping. If marginal cost pricing resulted in an increase in illegal dumping, and if the externality costs are high, the efficiency losses from under- pricing services might be smaller to bear with. In fact, the initial introduction of the unit pricing system resulted only in a modest reduction in waste disposal through dumping [28]. Fullerton and Kinnaman [29] had estimated that 28 per cent of the reduction in garbage resulting from pricing garbage disposal at the curb might be due to of illegal dumping. Jenkins [30], Blume [31] and Miranda and Aldy [32] had also come out with similar findings. The unit pricing model was used in a household production framework Morris and Holthausen [33] had shown that a price increase on the conventional disposal method did not affect recycling. In the system of unit pricing, the households found it more convenient to increase the total waste reduction efforts. The resources like Time and the prices of the purchased inputs devoted to the recycling process were high but they became less effective because of the reduction of wastes. Maraco Runkel [34] had attempted to develop a partial equilibrium vintage model of a durable good in which the producers determined the output and the product durability either under perfect or under imperfect competition.

The Model differed from the previous durable goods Models in explicitly accounting for the consumption waste and for the disposal costs. This Paper had investigated as to how the Extended Producer Responsibility (EPR) in waste management had influenced the product durability and welfare. At the end of the products' life the households had to pay a unit-based waste tax that coved the marginal disposal costs also. When purchasing consumption goods, rational households anticipate the tax, adjust their demand such that less waste was generated and rendered the resource allocation very efficient. The analysis derived the first-best and the second-best regulatory schemes and, on the basis of these schemes and had, investigated as to how EPR had influenced durability and welfare. All considered EPR instruments had exerted a positive effect on durability. Under perfect competition, the firstbest outcome was attained provided the EPR had assigned a few marginal disposal costs to producers at the end of the products' life; for example, through a take-back requirement combined with a regulated private disposal by the firms.

Marcello Basili et al. [35] had analysed and evaluated the costs and benefits of the New Garbage Plan (NGP), and had used hypothesis that Willingness To Pay (WTP) should reflect the value of the community of having a better environmental quality according to the contingent valuation literature. The study sample was divided into two subsets: firms and households, through the information gathered with the help of a detailed questionnaire and the, parametric and the non-parametric estimates were elaborated to analyse the willingness to pay of the population for the benefits flowing from increased SWC, increased incineration and through the cutting down of the landfills. The non-parametric from (using the double-bounded format) had produced an estimation of the minimum willingness to pay for the households and the firms, without the need to make any assumption about the true probability distribution of the values in the population. The mean willingness to pay for an increasing SWC was € 15.89 for households and € 20.89 for firms. The mean willingness to pay was easy to calculate but did not convey enough information for the policy makers. This was because of the fact that it was not possible to know the possibility of the willingness to pay to the socio-economic characteristics which could be obtained through parametric estimation producers. The Non – parametric estimates were robust, whereas the parametric estimates gave more information, and the authors had combined the non-parametric with the parametric estimates.

There are some recent literature have focused on economics of solid waste management at the national level. For example, cost and revenue aspects of municipal solid waste management, Al-Salem et al. (2014) had estimated the cost and revenue aspects of municipal solid waste management in the Great London. This study had found material resource recovery is more favorable in the context of economic in the city. Another study, Nahman [4] estimated the external cost of solid waste landfill in Cape Town, South Africa. The external costs are includes environmental as well as social cost in the estimation methodology. This study had estimated at the US\$ 16 per tons of waste which has energy generation process from the municipal solid waste in the Cape Town. Aleluia and Ferrão [1] calculated the costs of solid waste management in the Asian Countries. The cost have included such as capital and operational expenditure for the municipal solid waste management. This study had estimated the average capital expenditure cost per ton US\$ 21,493 for the Asian cities. Casado et al. [6] had calculated that the cost of municipal waste incineration through the Hedonic Pricing Method in England. This study had found that the impact of effective incineration the house prices range between 0.4 % to 1.3% in the study area. Sun et al. [7] had estimated the value of real estate price due to municipal solid waste landfill in Shenzhen, China through the hedonic price method. This study has found that the property value has been increased by 1.30% if the landfill away from houses.
