Waste Management Financing

by Suhaib Arogundade

While waste management is a salient service every society and city requires, its financing can be pretty overwhelming for the city government especially if the government see it as a critical part of the service they should render to the citizen and if the citizen also hold it as a basis for measuring the performance of the government and using it as one of the conditions for re-election.

Waste management entails different aspect. Generally speaking, we have; pre-collection, collection, transportation, storage, treatment, and disposal. Technically, the aspect is captured by what is called hierarchy of waste management and it includes; prevention, minimization, reuse, recycling, energy recovery, and disposal. For the purpose of this article, we will focus on the general aspect classification as it lays bare the activities which need financing.

Waste Management Hierarchy (Adapted from USEPA website)

 

All these aspects require proper funding in rendering a good waste management service to the society. As citizens, hardly are any deep thought given to the different aspect and what it takes to ensure it is carried out efficiently and effectively. Let’s briefly describe the aspects to provide background knowledge before diving into the financing options that can be adopted.

  • Pre-collection: This is when the waste has just been generated in households, offices, industries, etc and waiting for collection by the waste management service provider. This waste needs to be kept in good condition for easy pick-up by the service provider, hence, it needs to be stored in a container or sack or any material that can ensure it does not cause a nuisance. This container, sack, etc. has a cost and it is factored into the financing of waste management.

 

  • Collection: This is the carting away of waste from the generated site which can be done using different means depending on the locality, terrain, sophistication, customer to be served, etcetera. Generally, the collection of waste is by the use of mini-trucks or compactor trucks.

 

  • Transportation: It comes naturally with the collection of waste. It is the movement of the waste from the point of generation to the storage or final disposal site. Transportation and collection are part of the aspects which requires tons of money to run.

 

  • Storage: This is where the waste is kept within a city before being transferred to the final disposal site. It also serves as a treatment center for the waste.

 

  • Treatment: It involves the sorting of waste for recyclables, extraction of biodegradables for fertilizer production, and treatment of toxic waste before disposing-off at the landfill. The treatment center is sometimes called a Material Recovery Facility (MRF) which can be a Clean MRF (for recyclables only) or Dirty MRF (for all types of waste sometimes co-mingled or otherwise). The treatment of waste could also be incineration.

 

  • Disposal: This is the final resting place for all waste and it usually occupies a large expanse of land and away from the city center due to numerous reasons. If designed and constructed properly, it is called an Engineered Landfill. Although, in most part of Africa, what we have are dumpsites termed as “landfills”. A well designed and constructed landfill requires huge financing for the construction, operation, and maintenance.

 

Financing Options for Waste Management

Having highlighted the purpose and functions of the different aspect of waste management, let’s now look at how this service can be properly funded to achieve an utmost result.

There are four different finance options that can be adopted for waste management and the option chosen will be dependent on various factors. The chief of the factors will be “what is the end goal of providing waste management service to citizen” and this is to be determined by the city government. Therefore, we say finance option is directly related to waste management goal of a city or State.

Option 1 – Public Financing: This primarily is the funding of waste management service entirely by the government through budgetary allocation. The government determines how it will generate the cash for service and this can be through taxation or redistribution of funds generated from other sources like sales of city natural resources or combination of various sources of funds.  This is generally inefficient due to the iniquities of government and lack of proper management capabilities in most instances. The government might decide to charge a service fee or not.

Option 2 – Private Financing: This involves infusing funds from the private sector into waste management service and also seeing to the day to day running of the service. However, the private sector will charge a service fee which will be determined by calculating the amount of invested funds, operating cost, and profit envisaged. This will be spread over a period of time. This financing option can deliver optimal result in providing waste management service but the private sector needs to be checked in order not to set a high fee that will end up scaring citizen which might lead to citizen abhorring the service.

Option 3 – Public Private Partnership (PPP): This is a special type of arrangement which brings together the government and private sector in providing funds and management capabilities for the delivery of waste management service. All things being equal, this arrangement is best because the government will be able to regulate and have a say in how the service should be delivered especially as it relates to the setting of service fees which might be difficult in the solely private financing option. The PPP can equally be extended to be a Joint Venture (usually termed as Institutional PPP).

Option 4 – Donors and Grants: This funding mechanism is dependent on the interest of the donor organization. While it is a good way to develop a city’s waste management infrastructure, attracting and utilizing grants is solely reliant on what the donor considers as important. Hence, it might be difficult for a city government to dictate how the funds should be distributed among the various aspect of waste management. However, this type of financing can be combined with a PPP arrangement to cater for a specific waste management aspect that is in tandem with the interest of the donor and can be part of the city government contribution to the PPP.

In conclusion, waste management financing is quite dynamic just like many other services and infrastructure provided by a city government and the best option for financing the provision of waste management service can only be made after appropriate due diligence and consultation with relevant stakeholders has been made and observed.

Reference

  1. United States Environmental Protection Agency. Available online: https://www.epa.gov/smm/sustainable-materials-management-non-hazardous-materials-and-waste-management-hierarchy. (accessed on 4 April 2018).

Author: Suhaib Arogundade

Suhaib Arogundade is an enthusiastic young professional who has interest in commodity trading, mindset redesigning, and waste management research.

Suhaib is the Chief Waste Eliminator at WasteWatch Africa.

7 thoughts on “Waste Management Financing

  1. Waste management is an exceptional sector with few being interested forgetting the waste is generated collectively. Thanks for influencing the minds of youths towards waste management. We the specialists also appreciate your zeal.

    • Dear Sir – Yes, it is truly an exceptional and dynamic sector which requires a coordinated effort and involvement of specialist every step of the way. We will continue to advance the knowledge, create more awareness, engage the government, and build strong partnerships in seeing to the elimination of waste from the street of Africa.

      With encouraging words like this, we are deeply inspired to do more.

      Best regards,

Leave a Reply

Your email address will not be published. Required fields are marked *