Economics of Municipal Solid Waste Management: A State level study

Project Team: Dr. Paul P. Appasamy.

Time Period: Started in 2006

Sponsored by: Central Pollution Control Board.

Objectives:

Solid Waste Management has characteristics of both a “private good” and a “public good”. Individual households would like their wastes to be collected and taken away to a disposal site. Most households would be willing to pay for this service either through a conservancy tax or as a user charge. In some cases, households may already be making a payment for this service. However, they may have no idea what happens to the waste after it leaves their premises or the street bin. They would not like the waste to accumulate either inside or outside the house, since it would be a health hazard. The person generating the waste pays for the waste removal service, which is essentially like a private good/service. A recent World Bank (2006) study estimated that the total cost per ton of solid waste management in India works out to Rs.1000-1200 ($25-30 at current exchange rates) excluding the cost of land. Thus, a city of 1 million generating around 500 tons/day, would incur a cost of Rs.5,00,000 to Rs.6,00,000 per day to manage its waste. With economic and urban population growth, the quantity of waste to be managed will increase, and the cost of solid waste management will increase even more rapidly. It then becomes necessary to consider various options to finance these escalating costs. The purpose of this study is to examine these options in the context of the State of Tamil Nadu.