M-RCBG Associate Working Paper No. 93
Mitigating the Municipal Waste Management Crisis in Emerging Markets: A Cost-benefit Analysis of Enhancing Waste Management Interventions
For world leaders from developed countries, the management of municipal solid waste (MSW) tends to be a low priority because most developed countries manage waste under very strict environmental and sanitary standards.
The case in developing and emerging markets, however, is often very different. In these countries, more than 80% of collected waste is currently disposed of in open dumpsites or substandard landfills, with little or no environmental controls.
These practices entail significant social, environmental and economic impacts, including serious health effects such as higher mortality rates, and large contributions to global climate change. In 2012, municipal solid waste contributed about 5% of global greenhouse gas (GHG) emissions and 12% of global methane emissions. By 2025, however, it is expected that 8-10% of global GHG emissions will be due to dumpsites alone.
The challenge with MSW management is particularly acute in fast growing urban areas of developing countries. As a result of population growth, urbanization and economic development, the world’s waste production is expected to nearly double by 2025, and over 70% of this will be generated in developing countries and emerging markets.
Despite these trends, investments in waste treatment infrastructure lag far behind in emerging markets, contributing significantly to a growing waste crisis in these countries.
SUEZ has developed a waste management solution that has significant potential to help address the waste challenges in emerging markets, but to achieve this, SUEZ also needs the support of the municipalities where these sub-standard landfill sites exist. Shifting to enhanced waste management practices can require significant upfront investment, however, and in low-income countries and many middle-income countries, this can be a difficult commitment to make when there are many other competing priorities.
According to the World Bank, the enormous impacts of poorly managed waste usually result in downstream costs higher than what it would have cost to manage the waste properly in the first place. To date, however, few studies have tried to fully quantify this hypothesis.
The objective of this paper is to build a cost-benefit-analysis that will allow SUEZ to more broadly quantify the benefits of converting substandard landfills in emerging markets to sanitary landfills, and build a more compelling business case for municipalities and other key stakeholders. Three key questions helped to guide the research and development of the model:
• What are the environmental, social and economic benefits of shifting to enhanced waste management practices in emerging markets?
• How can these benefits be quantified?
• Once quantified, how do these benefits compare to overall project costs?