Waste 2.0: An opportunity not to be wasted

Waste 2.0: An opportunity not to be wasted

trash, waste management, utility business model disruption
ShutterstockMatee Nuserm
The trash business is by no means immune to the disruptions hitting utilities.

A commonly accepted principle for managing change in the public arena is to minimize disruption for the end-user. While this makes sense from an operational perspective, it doesn’t always optimize for the end goal.

For example, U.S. recycling programs typically require end-users to collect all of their recyclable material in one easily identifiable container, such as the ubiquitous blue bin in many cities. While an easier sell to the public, the unsorted nature of “single stream” recycling presents many challenges.

A better long-term strategy is to help communities understand the benefits of sorting their recyclables upstream (separating out organics and inorganics and then further dividing them into paper, plastics, metals, etc.), which leads to more efficient recovery processes and higher-quality products, making the resource-recovery business more robust and sustainable.

Another barrier that public administrators face at the community level is the opposition to programs that collect organic matter, which tends to decompose and bring unwanted externalities such as odors and pests.

With the growing movement toward urban farming and the reduced use of chemical fertilizers, emerging community-level solutions have changed the equation by creating local demand and reducing the time lag between production and collection of organic waste.

The monetization of the organic waste stream, which is less threatened by external economic shocks (because locally produced food is relatively immune to international commodity prices), is likely to make recycling businesses more resilient. Industry observers attribute much of the success of recycling programs in San Francisco, Seattle and Portland to city-wide mandates to convert organics to compost.

2. Creative partnerships

The fact that ISWM involves so many stakeholders is generally considered a barrier, but this also can provide great opportunity for the creative structuring of partnerships.

One example is efforts to counter the widespread discrimination against deformed and discolored produce. Until 2008, for example, the European Union’s trade regulation imposed restrictions on the import of 26 kinds of vegetables and fruits based on their appearance.

Such practices lead to tremendous waste, especially mid-stream (due to trade rules) and downstream (due to stocking practices in groceries), with much produce ultimately discarded before use.

Seeing this absurdity, some businesses have begun partnering with grocery stores or suppliers to purchase “blemished” produce and convert it into new products. The Washington, D.C.-based businesses Fruitcycle and MisfitJuicery are able to sell the healthy snacks and juices they make at a competitive price point because of the low costs for raw material acquisition.

Another partnership example is Blue Star, a Colorado Springs non-profit, which employs people with autism and other disabilities to work on e-waste streams.

3. Concerted national and sub-national efforts

Although waste management, especially of MSW, is generally a local issue, the sustainability and cost-effectiveness of a resource-recovery program can be boosted by support at the national level through certain policies and measures.

In particular, a national “polluter pays” policy, which holds the producer of a consumer good responsible for its recovery, can set the stage for making recycling programs successful. In Germany, for example, extending the producer’s responsibility to the entire life cycle of the product forced industries to be creative in designing recycling programs.

Similarly, national policies that encourage organic farming can provide great support for recycling organic waste to produce high-value compost. Uganda’s 2009 Draft Organic Agriculture Policy (PDF) was a catalyst in that country’s successful compost industry.

4. Flexibility to innovate, incentives to incubate

Waste management contracts need to be written in a way that encourages both regulators and waste management companies to aim higher over time without locking in to specific technologies or processes. Yet this approach is seldom taken.

For instance, to convince a private sector company to build disposal infrastructure at its own cost and then earn a return on investment over a 30-year period, cities typically have provided the company exclusive rights of disposal for that period, sometimes including a guaranteed supply of waste streams.

While this has been successful in creating capital-intensive infrastructure such as landfills, it has created entrenched interests and institutional rigidities that severely hamstring any desire to look at alternative approaches to waste management (such as those discussed earlier).

Holistic contracts, instead, focus on the ISWM model and compensate the waste management contractor based on the nature of the disposal method used, with higher rates for more-sustainable methods.

The revenue earned from potential sale of the recycled material could be an upside for companies. Furthermore, companies will be tasked with incubating emerging technologies and business models that are chosen through a stakeholder-driven process.

By providing a stable revenue base, allowing a possible upside from the sale of recovered material and providing space for innovation, waste management companies will be amenable to trying various approaches and scale them up once the concept has been proven.

While these varying approaches to waste management might not appear to be as inexpensive as a disposal-focused contract in the short run, the long-term objectives are much more compatible with humanity’s goals and challenges.

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