Two different economic approaches are taken to allocating responsibility and cost for waste management. One is the Producer Pays approach where waste management responsibilities and costs are place upon the manufacturers and users. The other is the Polluter Pays approach, where the actual waste generator pays according to the amount of waste requiring to be disposed of. This is called variable pricing of waste disposal. It requires waste to be measured and paid for accordingly.
Variable pricing dates back to the Polluter Pays initiatives of the 1950s. It has not been carried through to households and other final disposers of waste until very recently.
Different approaches have been adopted by waste collection authorities based on their specific needs and circumstances. Cost structures include: pay-per-bag, variable payment based on the size of bin, use of prepaid tags or weight-based systems. For example, it was not politically acceptable that escalating landfill costs for local authorities in the Hainaut province of Belgium be passed on to residents as incremental additional to their already high base charges for rubbish removal. The solution was to raise the additional charges via unit pricing per bag of waste put out for collection. This was complemented by the introduction of selective waste collection and resulted in 40% less waste going to landfill.
The town of Oostzaan, Netherlands, used a pilot scheme to assess the viability of a weight-based tariff for household waste collection. Local resident separated their recyclables and deposited them at either one of the local recycling sites or an Eco-Park. In addition, each property was provided with two 240 litre wheeled bins, one for residual waste and one for biodegradables. The bins were emptied every second week and analysed. A weight-based tariff of equal value was applied to each bin. The results were an overall reduction in waste generated of 38%, a 60% drop in residual waste collection and a halving of the amount of biodegradable waste collected.
Zurich introduced the Züri-sack system whereby households covered the full cost for waste management through the unit pricing of each waste sack used. Overall quantity of waste arising fell while the amount going to recycling increasing significantly.
In the USA, a survey of 500 communities showed that variable rate programmes increased the amount of kerb-side recycling and drop-off recycling, increasing overall recycling levels by 6-8%. It also resulted in diversion of an additional 8 to 11% of garbage sent for final disposal.
Internalizing the costs of waste management in higher consumer prices is not the most effective way to encourage the waste generator to produce less waste for final disposal.
