Variable Pricing May Lower Disposal Costs

Margarita Suarez

In response to mounting concern over the environmental impact of solid waste disposal, Maine has shut down many public landfills and banned the siting of new, private ones.

With a diminished capacity and rising disposal costs, many municipalities have sought alternatives to traditional solid waste management strategies.

One such alternative is pay-by-the-bag (PB) programs. Under these programs, residents are charged on a per-unit basis for each bag of disposable solid waste.

These variable cost pricing schemes have helped lower disposal costs and reduce volumes of residential solid waste (RSW) for Maine municipalities, according to a study released by the Margaret Chase Smith Center for Public Policy (MCSC), Orono, Maine.

Since fees are variable and visible, PB programs are presumed to provide households with a greater incentive to reduce disposable waste amounts.

This method differs from conventional pricing mechanisms where a flat disposal rate is included in local property tax assessments and, therefore, is a "hidden" cost to the waste generator.

To comply with PB programs, Maine residents typically must purchase tags, bags or stickers for approximately $1 per 30- to 33-gallon bag. Haulers do not collect bags without a program emblem.

Some Maine municipalities only charge for those bags that exceed a pre-set limit. In other cases, programs are weight-based, with a fee ranging from 2 cents to 6 cents per pound. Trucks use scales to weigh RSW at the curb; anything exceeding the maximum is left uncollected.

The study contrasted the effect of solid waste pricing systems on disposal volumes and management costs by comparing 29 municipalities that used PB programs for at least one year with 31 municipalities that operated under a conventional pricing system. Tonnage and cost figures were from 1993 to 1994 (see chart).

Located at least 30 miles apart to prevent waste diversion from PB municipalities, both groups had similar demographic characteristics. No commercial tonnages were used in the comparison.

The study found that PB systems are associated with a reduction of annual per capita RSW tonnages by 0.226 tons, compared with current pricing systems.

Similarly, mandatory recycling programs correlate with reduced per capita tonnages to the same level as PB municipalities. This suggests that variable pricing and mandatory recycling ordinances may affect RSW equally.

In addition, the study revealed that PB programs had lower net municipal and total per capita management costs.

The total costs, which included the purchase of program items, were $12.67, while municipal per capita costs were estimated at $19.96.

Despite advantages, the programs may have some drawbacks, such as increased illegal and roadside dumping and backyard burning.

Random interviews with road crews, public officials and business establishments in both PB and neighboring towns, however, showed little evidence of such behavior.

In municipalities reporting increased illegal dumping, the occurrences tended to taper off within several months of the program's adoption.

Furthermore, of the 13 neighboring towns examined, only four showed an increase in RSW volumes after a neighboring town adopted a PB program.

Although Maine municipalities may consider other options in the future, the study's authors suggested that more research and improved data collection will be necessary.

For more information or to order Estimated Impact of Charging Maine Households by the Bag for Waste Disposal, contact the Margaret Chase Smith Center for Public Policy, 5715 Coburn Hall, University of Maine, Orono, Maine 04469. (207) 581-1646. Fax: (207) 581-1266.