Economic assessment of waste-to-energy technologies for carbon emissions reduction in developing countries: An innovative methodological approach

Meeting global climate targets requires cost-effective strategies for reducing carbon emissions, especially in the waste management sector. Waste-to-energy (WtE) technologies are widely recognized for their greenhouse gas mitigation potential by diverting waste from disposal sites and displacing fossil fuels with energy recovered from waste. However, their cost-effectiveness for carbon abatement remains underexplored. This study introduces the Levelized Cost of Carbon Mitigation (LCOCM) as a novel metric to assess the economic feasibility of WtE technologies in Iran. The LCOCM is particularly valuable in countries where carbon pricing mechanisms such as emission trading schemes (ETS) are not yet in place, thereby serving as an alternative decision-support tool for policymakers. The results show LCOCM values of $32/ton CO₂-eq for incineration, $14/ton CO₂-eq for anaerobic digestion (AD), and $7/ton CO₂-eq for landfill gas (LFG) recovery. Financial indicators confirm that LFG and AD are economically viable options for carbon-emission reduction, with NPVs of $1.9 billion and $1.1 billion, IRRs of 28 % and 13 %, and payback periods of 3 and 7 years, respectively, whereas incineration is not viable under current conditions. Sensitivity analyses further underscore the critical role of operational optimization—such as extended lifespans, improved energy yields, and minimized downtimes—in reducing the LCOCM. This study demonstrates the cost-effectiveness of WtE technologies for carbon mitigation and provides a replicable framework for sustainable energy and climate policy in emerging economies. • Introduces LCOCM as a novel metric for assessing WtE carbon mitigation costs. • AD and LFG show strong economic feasibility with positive NPV and high IRR. • Incineration offers highest mitigation but remains financially unviable. • WtE systems could achieve up to 54 % of Iran’s 2030 emission reduction target. • Sensitivity analysis identifies CAPEX, OPEX, and efficiency as key cost drivers.