Waste Management Incentive Programs and Municipal Finance Michal - - PowerPoint PPT Presentation

Waste Management Incentive Programs and Municipal Finance

Michal Struk Faculty of Economics and Administration Masaryk University

WM incentives programs in CZE

̶̶Standard of flat fee per person, includes scheduled pickups, drop-off sites, CA sites, etc.

̶̶Little motivation for waste separation, even with no extra costs

̶̶Occasional efforts to employ incentives with aim to increase waste separation in municipalities

̶̶Typical forms include some PAYT variants, rewards for separation,

• r some other alternatives

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Economic aspects of incentives

̶̶Evidence shows that WM incentives significantly increase waste separation rates

̶̶Clear environmental benefits, less residual waste, more just, etc.

̶̶But what is the effect on municipal finance?

̶̶Less residual waste = less expenses on residual waste, right?

• But incentive programs are not free
• Separated waste collection is not free either, more separation = more expenses
• Also people tend to pay less with incentive programs, thus less revenues

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Goal of the study

̶̶Examine effects of waste management incentive programs on municipal WM finance ̶̶What are the differences between municipalities with and without WM incentive programs in terms

• f WM revenues and expenditures?

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Data

̶̶Municipal finance data related to WM, 2010- 2018

̶̶Per capita values for more appropriate comparison ̶̶Revenues and current expenditures examined ̶̶South Moravia Region in CZE, all municipalities (672)

̶̶Reversed PAYT incentive program

̶̶Unlike regular PAYT, people get discounts based on W separation ̶̶14 municipalities identified

• 1 (2011), 7 (2012), 10 (2013), 12 (2014), 13 (2015), 14 since 2016

̶̶Several other municipalities with WM incentives, but inconsistent

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Sample statistics

2010 2012 2014 2016 2018 Popul ation 1st quartile 269 269 271 275 279 Median 556 570 581 584 593 3rd quartile 1 072 1 093 1 103 1 116 1 134 MWE x p.c. (CZK/ year) 1st quartile 507 545 559 589 632 Median 610 632 654 710 763 3rd quartile 720 750 794 844 940 MWR e p.c. (CZK/ year) 1st quartile 444 470 505 526 539 Median 493 523 564 586 613 3rd quartile 550 576 631 657 685

̶̶Initially 672 municipalities from South Moravia Region in CZE

̶̶8 removed due to the extreme values reported (no Exp/Rev, landfill revenues) – 664 in analysis ̶̶14 municipalities with reversed PAYT incentive program

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Current MW expenditures

̶̶Comparable levels

̶̶Until 2013 higher, then decrease until 2016, higher in last 2 years

̶̶Overall, MW in municipalities is not necessarily cheaper, actual levels differ notably between municipalities due to individual characteristics

2010 2011 2012 2013 2014 2015 2016 2017 2018 100 200 300 400 500 600 700 800 900 1000 No incentives Reversed PA YT CZK per capita

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Municipal waste revenues

̶̶Comparable levels in 2010-2016

̶̶Decrease in last years (reasons to be further examined…)

̶̶Overall, revenues in municipalities with MW incentives tend to be somewhat lower, but in most years not by much

2010 2011 2012 2013 2014 2015 2016 2017 2018 100 200 300 400 500 600 700 No incentives Reversed PA YT CZK per capita

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

MW revenues from fees/charges

̶̶Municipalities with reversed PAYT tend to collect continuously less from people through fees/charges – but is this good or bad?

̶̶Over 30% less in recent years – WM incentives make it cheaper for people ̶̶People are rewarded with fee discounts based on their waste separation behavior

2010 2011 2012 2013 2014 2015 2016 2017 2018 100 200 300 400 500 600 No incentives Reversed PA YT CZK per capita

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

MW revenues from W separation

̶̶Growing trend for revenues based on W separation, not on fees

̶̶Municipalities with reversed PAYT show significantly higher levels of revenues, some years even double per capita levels ̶̶In recent years 30% higher per capita revenues from this source

2010 2011 2012 2013 2014 2015 2016 2017 2018 50 100 150 200 250 No incentives Reversed PA YT CZK per capita

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Revenues distribution

̶̶Revenues from fees/charges still dominant

̶̶Ratio with reversed PAYT is 1:2, without incentives is 1:3 ̶̶Revenues from W separation gained significantly in importance ̶̶Higher diversification of revenues for the municipality ̶̶More room for maneuvering with fee/charges levels for municipal authorities

2010 2011 2012 2013 2014 2015 2016 2017 2018 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

86% 2011; 85% 2012; 86% 2013; 85% 2014; 83% 2015; 81% 2016; 80% 2017; 78% 76% 14% 2011; 15% 2012; 14% 2013; 15% 2014; 17% 2015; 19% 2016; 20% 2017; 22% 24%

No incentives

Revenues from waste charges/fees Revenues from rewards, selling waste, etc. 2010 2011 2012 2013 2014 2015 2016 2017 2018 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

86% 2011; 92% 2012; 76% 2013; 77% 2014; 66% 2015; 67% 2016; 62% 2017; 66% 66% 14% 2011; 8% 2012; 24% 2013; 23% 2014; 34% 2015; 33% 2016; 38% 2017; 34% 34%

Reversed PAYT

Revenues from waste charges/fees Revenues from rewards, selling waste, etc.

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Overall findings

̶̶MW expenditures are comparable whether incentives are employed

• r not, so it is generally not cheaper for the municipality

̶̶MW revenues tend to be slightly lower in municipalities with reversed PAYT, so it is not more profitable for the municipality ̶̶Municipalities with reversed PAYT collect 1/3 less from fess, but cover most of this gap with higher revenues from waste separation

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

Conclusions

̶̶While MW incentive programs have clear environmental benefits in terms of higher waste separation, financially the evidence in not so straightforward

̶̶Also additional effort from municipal administration and related costs are necessary, in order to persuade and teach people how the new incentive system works (not to be underestimated)

̶̶Main difference between municipalities is in the revenue sources distribution

̶̶Municipalities with incentive program tend to earn significantly more from waste separation ̶̶Increase room for charging people less for WM – politically very appreciated

̶̶If considering adopting incentive programs, reasons should not be primarily financial, but rather environmental

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

*Development in 2010-2016*

7th International Conference on Sustainable Solid Waste Management, Heraklion, 26-28. 6. 2019

2010 2011 2012 2013 2014 2015 2016 100 200 300 400 500 600 700 800 900

Current MW expenditures

No incentives reversed PAYT CZK per capita 2010 2011 2012 2013 2014 2015 2016 100 200 300 400 500 600 700

MW revenues

No incentives Reversed PAYT CZK per capita 2010 2011 2012 2013 2014 2015 2016 100 200 300 400 500 600

MW revenues from fees/charges

No incentives Reversed PAYT CZK per capita 2010 2011 2012 2013 2014 2015 2016 50 100 150 200 250

MW revenues from waste separation

No incentives Reversed PAYT CZK per capita

Thank you for your attention Michal Struk struk@mail.muni.cz