Municipal Solid Waste Cost Calculation Technical Guidelines for Low and Middle-Income Countries

PublicDisclosureAuthorized PublicDisclosureAuthorized PublicDisclosureAuthorized PublicDisclosureAuthorized MUNICIPALSOLIDWASTECOSTCALCULATIONTECHNICALGUIDELINES Forlow-andmiddle-incomecountries ©2024InternationalBankforReconstructionandDevelopment/TheWorldBank1818HStreetNW WashingtonDC20433 Telephone:202-473-1000Internet:www.worldbank.org ThisworkisaproductofthestaffofTheWorldBankwithexternalcontributions.Thefindings,interpretations,andconclusionsexpressedinthisworkdonotnecessarilyreflecttheviewsofTheWorldBank,itsBoardofExecutiveDirectors,orthegovernmentstheyrepresent. TheWorldBankdoesnotguaranteetheaccuracy,completeness,orcurrencyofthedataincludedinthisworkanddoesnotassumeresponsibilityforanyerrors,omissions,ordiscrepanciesintheinformation,orliabilitywithrespecttotheuseoforfailuretousetheinformation,methods,processes,orconclusionssetforth.Theboundaries,colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudgmentonthepartofTheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries. NothinghereinshallconstituteorbeconstruedorconsideredtobealimitationuponorwaiveroftheprivilegesandimmunitiesofTheWorldBank,allofwhicharespecificallyreserved. RightsandPermissions Thematerialinthisworkissubjecttocopyright.BecauseTheWorldBankencouragesdisseminationofitsknowledge,thisworkmaybereproduced,inwholeorinpart,fornoncommercialpurposesaslongasfullattributiontothisworkisgiven. Anyqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressedtoWorldBankPublications,TheWorldBankGroup,1818HStreetNW,Washington,DC20433,USA;fax:202-522-2625;e-mail:pubrights@worldbank.org. Coverphoto:©JuanFernandoVelezMelguizo|iStock.com.Furtherpermissionrequiredforreuse.Graphicdesign:MikiFernández/ULTRAdesigns,Inc. MUNICIPALSOLIDWASTECOSTCALCULATIONTECHNICALGUIDELINES Forlow-andmiddle-incomecountries Purposeandaudience MunicipalSolidWasteCostCalculationTechnicalGuidelinesdiscussesgoodpracticesforcalculatinginvestmentandoperatingcostsinthesolidwastemanagementsec-torillustratedthroughnotionalcostcalculationsforwastemanagementfunctionsandacombinedwastemanagementsystem. Thereportemphasizestheneedtoaccuratelydeterminethefullcostsofmunici-palwasteservicestoestablishrecurrentfinancingneedsandplannewinvestments.Thepublicationaimstoimpressthatfundingannualoperatingexpenses—typicallyhigherthantheannualizedcapitalcostsofinvestmentsandthesinglemostimport-antfactorforsustainingwasteoperations—needstobeakeyareaofattentionforlocalauthorities.Itemphasizesthatthewastemanagementsectorisprincipallyanetcostactivitythatrequiresfinancing;whileinvestmentsinadvancedtreatmentfacilitiesandprocessesbringhigherenvironmentalandeconomicbenefits,theyalsoincurhigherfinancialcostsandhencerevenuerequirements. Thepublicationaimstosupporttheworkoftechnicaldepartmentswithinmunic-ipalitiesthatinform,advise,andguidetheirmunicipalcouncilsandpolicymakers.Theguidelinesweredevelopedwithconsiderationofthestateofthesectoranditsdevelopmenttrajectoryinlow-andmiddle-incomecountries. MunicipalSolidWasteCostCalculationTechnicalGuidelineswaspreparedbyNikolaDoychinovandPeterFaircloth.TheworkwasledbyKremenaIonkova. TheteamthanksFrankvanWoerden,BrianE.C.McCarthy,AliAbedini,andJamesMichelsenfortheirvaluableguidance. FundingwasprovidedbyPROBLUE,anumbrellamulti-donortrustfund,housedattheWorldBank,thatsupportsthesustainableandintegrateddevelopmentofmarineandcoastalresourcesinhealthyoceans. ThispublicationwasdevelopedunderthegeneralguidanceofBerniceK.VanBronkhorst,GlobalDirectoroftheUrban,LandandResilienceGlobalPractice. Acknowledgments TableofContents Purposeandaudienceiv Acknowledgmentsv Abbreviationsxi Executivesummaryxiii 1Introductionandoverview1 1.1Introductorycomments1 1.2Currentandfutureservicecosts2 1.3Chapteroutlines4 2Definingthewastemanagementsystem7 2.1Projectparameters8 2.2Thewastemanagementsystemanditstechnicalcomponents8 2.3Projectparametersandscenariosusedforsamplecalculationsinsubsequentchapters13 3Costfactorsforthemainelements ofthewastemanagementsystem14 3.1Collectionofmixed/residualwaste14 3.2Municipalwastetransfer27 3.3Landfillingofwaste32 3.4Separatecollectionofrecyclables40 3.5Compostingofwaste51 3.6Anaerobicdigestion61 3.7Sortingandmaterialbiologicaltreatmentofresidualwaste65 4Costsoftheentirewastemanagementsystem75 4.1Individualversusregionalprovisionofservicesandtheeffect ofeconomiesofscale75 4.2Theeffectoncostsofchangingwastemanagementobjectives76 5AICanalysisformunicipalwastemanagement82 5.1Introductorycomments82 5.2Averageincrementalcostapproachtocalculatingannualrevenuerequirementsandtariffs83 6Approachestoestimatingresidentialwastemanagement tariffs93 6.1Calculatingindicativetariffspercapitaasanextension oftheaverageincrementalcostpertonneapproach93 6.2Calculatingindicativetariffspercapitausinganaverageincremental costpercapitaapproach95 6.3Traditionalaccountingapproachtotariffsetting97 6.4Comparisonofaverageincrementalcostandtraditionalaccountingapproaches100 6.5Valueofaverageincrementalcost