Assessing the efficiency of municipal waste management: an empirical analysis of different tariff schemes

Environmental protection has increased in recent years due to the growing pollution and climate change issues. The Circular Economy (CE) aims to change the current consumption system based on 'take, make and dispose' and waste management is a key sector to analyze to derive possible policy strategies. Pay-as-you-throw (PAYT) is a tariff system based on the polluter pays principle, which suggests that those producing more waste will be charged higher fees. The research aims to investigate whether the municipal waste management linked with this strategy is more efficient than the standard pay-as-you-own (PAYO) system. To do this, a Data Envelopment Analysis (DEA) model is implemented using separate waste collection costs as an input and quality and quantity of collected waste as an output. The analysis focuses on the municipalities of the Veneto region of Italy. The obtained efficiency scores are discussed in light of the PAYT adoption and other municipal characteristics, such as population served, population density, average income, age and affiliation to consortia. The main result suggests that municipalities adopting PAYT are on average more efficient than the ones adopting PAYO. This result takes into account the existing trade-off between the additional costs required to switch to the new system and potential longer-term economic benefits. Moreover, municipal cooperation for waste management combined with a PAYT adoption leads to efficiency gains.