Issue #12 84368 IFC’s quarterly journal on public-private partnerships WEIGHING THE OPTIONS: Burn or bury? In this issue WASTE AND CLIMATE: Supporting governments COMMUNITY ENGAGEMENT: Integrating India’s informal sector INTERVIEW: “Trashed” documentary Director Podcast with 2013 CNN Hero on BONUS: community cleanups WASTE ppps IN PARTNERSHIP WITH Australia • Austria • Brazil • Canada • Catalonia (Spain) • Flanders (Belgium) • France • Ireland • Italy • Japan • Kuwait • Netherlands • Norway • Sweden • Switzerland • United Kingdom • United States • Public-Private Infrastructure Advisory Facility (PPIAF) • Global Partnership for Output-Based Aid (GPOBA) • Private Infrastructure Development Group (PIDG) • African Development Bank • Asian Development Bank • Brazilian Development Bank (BNDES) • Caribbean Development Bank • Central American Bank for Economic Integration • European Investment Bank • European Bank for Reconstruction and Development • Inter-American Development Bank • Infrastructure Consortium for Africa • Islamic Development Bank Issue #12 – January 2014 IFC Advisory Services in Public-Private Partnerships 2121 Pennsylvania Avenue, NW • Washington, D.C. 20433, USA +1 (202) 458 5326/7 • ifc.org/ppp • handshake@ifc.org Editorial Tanya Scobie Oliveira • Alison Buckholtz Art & Design Victoria Adams-Kotsch Digital Strategy Jeanine Delay Disclaimer This journal was commissioned by IFC, a member of the World Bank Group, through its Advisory Services in Public-Private Partnerships department, which helps governments improve access to basic public services through public-private partnerships in infrastructure, health and education. The conclusions and judgments contained in this report should not be attributed to, and do not necessarily represent the views of, IFC or its Board of Directors or the World Bank or its Executive Directors, or the countries they represent. IFC and the World Bank do not guarantee the accuracy of the data in this publication and accept no responsibility for any consequences of their use. Cover photo © Global Environment Facility, General Santos, Philippines One of the most pervasive myths about waste is that there’s always In this issue an “out”—as in, when something is no longer useful, you can throw it out. But trash stays with us long after we think we’re rid of it. And this is not your grandfather’s trash. The alarming accumula- tion of waste today is a product of unrelenting urbanization as well as the materials that power growing economies. This waste pollutes air, land, and sea, hastening climate change, which in turn worsens the effects of natural disasters. New approaches in public-private partnerships (PPPs) in the waste sector combine public sector leadership, private sector skill and effi- ciencies, community involvement, and innovative financing methods to tailor solutions to local conditions that can beat back this grim vision. Partnership successes in Berhampur, India, for example, create a model ripe for replication, as we see in “Consensus for Cleanup.” The Clinton Climate Initiative’s support for PPPs that reduce methane (“Nurturing New Partnerships”) may ultimately blunt waste’s impact on the climate. Technology can provide solutions for many different waste manage- ment scenarios. “When does EFW work?” and “Due Diligence” both guide municipal officials toward a tailored solution that’s best for their area. In “Burn or Bury,” authors Daniel Hoornweg and Perinaz Bhada-Tata, known most recently for sounding the waste alarm in Nature, explore the choices of landfill versus incineration. It’s critical to engage communities in partnerships to reduce and manage municipal waste. The 2013 CNN Hero of the Year, Chad Pregracke, founder of the nonprofit cleanup group Living Lands and Waters, knows this first-hand. As he says in the first Handshake podcast: “These are big problems with no easy answers, but we’re creating solutions as we go.” Laurence Carter, Director Tanya Scobie Oliveira, Editor IFC Advisory Services in Public-Private Partnerships U.S.A. Photo © Michael Kappel, retired landfill in Illinois,IFC |1 Features Overview Due diligence | 10 America’s dirty love affair with trash | 20 44 PPPs Linking public & private | 22 E-waste explained | 31 Cleaning up the law | 34 Ukraine clears the air | 36 Consensus for cleanup | 40 Energy from waste When does EFW work? | 44 Burn or bury? | 52 Climate Mitigation via waste management | 56 Nurturing new partnerships | 60 Post-Kyoto | 64 22 In this issue 2 | IFC.ORG/HANDSHAKE Columns Community Engagement Integrating the informal sector | 66 PERSPECTIVE Insights & opinions Kampala’s campaign | 74 What a waste | 06 Innovation INSIDE INFRASTRUCTURE Crowdsourcing for waste management | 76 Commentary on current events The world’s waste Together in trash | 78 dilemma | 14 COMPASS Surveying the PPP landscape A decade of deals | 26 MONEY TALKS Financing & Funding PPPs PPPs turn trash to treasure | 32 LEGALEASE 66 Law & legislation, decoded A legal look at EFW | 50 Interviews Candida Brady: Giving garbage its “aha” moment | 16 Chad Pregracke: Trash talk | 72 IFC | 3 Contributors 10 56 Farouk Mollah Banna 16 Candida Brady Atilio Savino Candida Brady Delphine Arri Jeff Delmon is an Environment Specialist in IFC’s Corporate is a Senior PPP Specialist in the Finance and Private Environment, Social and Governance Department. Sector Department of the Africa Region for the World Bank, based in Tanzania. Farouk Mollah Banna is an Environmental Engineer with the Urban Devel- Amandine Dukhan opment and Resilience Unit of the World Bank work- is a Project Manager for the Local Authorities and ing on Municipal Solid Waste Management projects. Urban Development division at the Agence Française de Développement. Christel Bourbon-Séclet is an Investment Officer, Infrastructures and Mines Carlos Silva Filho division, at Proparco, the development finance is the CEO of ABRELPE, the Brazilian Association of institution partly owned by Agence Française de Waste Management Companies, and a board member Développement. of the International Solid Waste Association. Jonathan Brufal Tom Gray leads the International Projects Team at Wragge & is an Associate in the Energy and Infrastructure team Co LLP, specializing in energy and infrastructure at Wragge & Co LLP. projects in emerging markets. Sanjay K. Gupta Jeff Cooper is an Independent Advisor and Consultant working is past President of the International Solid Waste on informal sector livelihood and integrated solid Association. waste management issues. 4 | IFC.ORG/HANDSHAKE Daniel Hoornweg Christopher Olobo is Professor of Energy Systems at the University of is an Investment Officer with IFC Advisory Ontario Institute of Technology in Oshawa, Canada. Services in Public-Private Partnerships, based in Nairobi, Kenya. Edward Humes is the author of Garbology: Our Dirty Love Affair Adele Paris with Trash. is an Investment Officer with IFC Advisory Services in Public-Private Partnerships, based Silpa Kaza in New Delhi, India. is an Urban Analyst in the World Bank’s Urban Development and Resilience Unit working on solid Eva Rossi waste management and low carbon planning. is a Social Specialist in IFC’s Corporate Environment, Social and Governance Department. John Kjorstad leads infrastructure research and business support Atilio Savino for KPMG Global Services on behalf of partners and is Ambassador for Climate Change at the member firms around the world. International Solid Waste Association. Tatiana Korotka Perinaz Bhada-Tata is Director of the PPP Professional Services Group of is a Solid Waste Consultant currently based in the USAID Public-Private Partnership Development Dubai, UAE. Program in Ukraine. Nathalie Yannic Markus Luecke is an Investment Officer, Infrastructures and Mines is an Environmental Management Expert for the division, at Proparco, the development finance Gesellschaft für Internationale Zusammenarbeit institution partly owned by Agence Française de (GIZ) and heads the regional network “SWEEP-Net.” Développement. Karen M. Luken serves as the Global Waste Director for the Clinton INTERVIEWEES Foundation’s Climate Initiative. Candida Brady Muhabbat Mahmudova founded Blenheim Films in 1996 and has produced is a Research Analyst at Infrastructure Journal, and directed documentaries on a variety of subjects. the leading global infrastructure information In 2012 she completed her first solo documentary service for the global infrastructure community. feature film, “Trashed,” which follows Academy Award winner Jeremy Irons on a world tour as he Antonis Mavropoulos discovers the pressing issues surrounding waste and is the Founder and CEO of D-Waste and STC Chair sustainability. of the International Solid Waste Association. Chad Pregracke James D. Michelsen founded the nonprofit group Living Lands and is Senior Industry Specialist for Waste in IFC’s Waters, which is credited with collecting over 7 Climate Business Department. million pounds of debris from American rivers. He Mick Mullay has received the Jefferson Award for Public Service, is Chief of Party of the USAID Public-Private America’s version of the Nobel Prize, and was the Partnership Development Program in Ukraine. 2013 CNN Hero of the Year. IFC | 5 WHAT A By Daniel Hoornweg, University of Ontario Institute of Technology & Perinaz Bhada-Tata, Consultant Photo © United Nations, Connecticut, U.S.A. 6 | IFC.ORG/HANDSHAKE PERSPECTIVE Municipal solid waste (MSW) management is the most important service a city provides; in low-income countries as well as many middle- income countries, MSW is the largest single budget item for cities and one of the largest employers. Solid waste is usually the one service that falls completely within the local govern- ment’s purview. A city that cannot effectively manage its waste is rarely able to manage more complex services such as health, education, or transportation. Not surprisingly, poorly managed waste has an enormous impact on residents’ health, the local and global environment, and the economy; improperly managed waste usually results in down-stream costs higher than what it would have cost to manage the waste properly in the first place. The long-term impact is also dire, as improperly managed waste contributes to climate change in the form of greenhouse-gas emissions (the methane from the organic frac- tion of the waste stream), and has serious short- and long-term health impacts. This issue of Handshake delves into the messy area of MSW for all of these reasons and more. Authors share innovations at work in develop- ing countries, public-private partnership (PPP) models that can be replicated, and technology IFC | 7 It’s important to understand in what ways [waste] is a new problem that requires a fresh look. that is increasing efficiency in the sector. Several Solid waste is generally considered an “urban” articles also help demystify the many options issue. Waste generation rates tend to be much available to municipal officials today, such as the lower in rural areas since, on average, residents choice of landfill model versus energy from waste are usually poorer, purchase fewer store-bought (EFW) model. items (which results in less packaging), and have higher levels of reuse and recycling. By 2050, as many people will live in cities as the popula- MORE PEOPLE, MORE TRASH tion of the whole world in 2000. All these city The articles in the following pages explain the dwellers will likely generate more than 8 million scope and scale of the waste problem, but first tonnes of waste a day—twice as much as today. it’s important to understand in what ways this This will add challenges to an already tough is a new and growing problem that requires a problem. The public and private sector together fresh look. Solid waste is inextricably linked to will need to assume much more responsibility urbanization and economic development, and for waste generation and disposal, specifically globally the pace of urbanization is increasing. product design and waste separation. Formal- As countries urbanize, their economic wealth izing these responsibilities through well-struc- increases. As standards of living and disposable tured PPPs can result in significant improve- incomes increase, consumption of goods and ments in efficiency and quality to solid waste services increases, which generates more waste. management. According to the World Bank Report “What a Waste,” almost 1.3 billion tonnes of MSW are To make PPPs for MSW successful, governments generated globally every year. The actual per must consider the content and volume of the capita rates are highly variable, geographically, existing waste stream, the appropriate technolo- as there are considerable differences in waste gies, the imperative of stringent environmental generation rates across countries, among cities, standards and community engagement, who will and even within cities. pay for what, and the availability of experienced private partners. 8 | IFC.ORG/HANDSHAKE These are big, complicated issues, but the results are straightforward. As the world hurtles toward its urban future, how we handle municipal solid The public and private sector waste today will be one of the best predictors of together will need to assume future generations’ welfare. more responsibility for waste generation and disposal. This article was adapted in part from “What a Waste: A Global Review of Solid Waste Management” by Daniel Hoo- rnweg and Perinaz Bhada-Tata, Urban Development Series Knowledge Papers, World Bank, March 2012, No. 15. WASTE MARKETS PREDICT ECONOMIC TRENDS In the last 10 to 20 years an additional planning more difficult. The price is often challenge has emerged for the waste indus- predictive of economic trends, dropping try: the growing global vagaries of second- significantly during economic downturns ary materials markets. Many municipal (when a city is least able to afford price recycling programs in Europe and North drops). Although there are some hedg- America were started with the recycling ing opportunities for materials pricing, markets relatively close to source. More secondary materials marketing does not recently, marketing of secondary materials yet have the same degree of sophistication has emerged as a global business. The price as other commodities (largely due to issues paid per tonne of waste paper in New York of reliability, quality, externalities, and the City is often based on what the purchase sheer number of interested parties). price is in China. The majority of waste recycled in Buenos Aires, for example, is shipped to China. The volatility of second- —Excerpted from “What a Waste: A Global ary materials prices has increased, making Review of Solid Waste Management” IFC | 9 DUE DILIGENCE Urbanization and economic growth are leading to a rapid rise in municipal waste generation. In 2012, the World Bank projected that municipal solid waste will grow from 1.3 billion tonnes in 2010 to 2.2 billion tonnes by 2025. Many cities are struggling with municipal waste that is increasing in quantity and changing in composition while the financial resources to manage waste remain flat. But solving the solid waste problem is not always a matter of increasing investment. Cities could first focus on the fundamen- tals—understanding local context and not overly complicating the waste management system—while designing for the antici- pated change in waste quantities and composition. Waste can be a financial asset if cities collaborate to attract investors, select appropriate technologies, extract value from recoverable materials, and work with the informal sector. —Silpa Kaza & Farouk Mollah Banna, World Bank 10 | IFC.ORG/HANDSHAKE OVERVIEW THE CHALLENGE 3.5 MILLION tonnes of solid waste generated globally per day in 2013. 6 MILLION tonnes of solid waste expected to be “ generated globally per day in 2025. For every truckload of product with lasting value, 32 truckloads of waste are produced. THE SOLUTION We have a waste- Build MSW systems that reflect making system. local waste quantities and Clearly, we cannot con- composition. tinue to dig up the Earth and turn it to waste. ” —Ray Anderson, Founder of Interface & Fortune magazine’s “Greenest CEO Focus on fundamentals of waste management before racing to sophisticated solutions. in America.” Prioritize waste collection and disposal methods that are afford- able for the local customer base. WATCH THE TED TALK Select technologies that can be operated and maintained locally. Ray Anderson: The business logic of sustainability IFC | 11 AN EFFECTIVE SWM FUTURE-PROOF $ GET PRICES YOUR SYSTEM $$ RIGHT • Design the system in a way that it • Make polluters/waste can grow with the population. generators pay. • Anticipate whether economic growth • Ensure your pricing incentivizes will change local waste composition. waste prevention and diversion. • Consider the future impact of climate change on your facilities. WASTE COMPOSITION BY INCOME Organic Glass Paper Metal Plastic Other LOW-INCOME HIGH-INCOME COUNTRIES COUNTRIES 12 | IFC.ORG/HANDSHAKE EFFORT STARTS HERE $ MAKE NICE WITH EXTRACT WEALTH YOUR NEIGHBORS FROM WASTE • Regional waste facilities are cheaper • Create jobs for informal sector. to build and operate. • Pull energy from waste. • Bundling multiple waste systems • Divert waste to save money. within a region makes a deal more attractive to the private sector. • Mine the waste stream for valuable commodities. GLOBAL SOLID WASTE COMPOSITION —46% Organic­ Glass—5% —17% Paper­ Metal—4% Plastic—10% —18% Other­ Source: “What a Waste: A Global Review of Solid Waste Management” by Daniel Hoornweg and Perinaz Bhada-Tata, Urban Development Series Knowledge Papers, World Bank, March 2012, No. 15. IFC | 13 the world’s waste DILEMMA Photo © Neil Howard, Alderny, Channel Islands By John Kjorstad, KPMG Global Services Some of the subtle features I remember about don’t have to deal with it. Prior to writing about my grandmother’s farm in the rural United infrastructure, I never gave it much thought. States include a rusty milk truck from the Unlike my grandmother, I grew up in a small 1930s—permanently parked behind the town with good public services. Waste wasn’t a garage—and two old oil barrels perched below problem—more of an unwanted chore and occa- a small hill about 100 meters from her house. sionally a punishment. To “take out the garbage” This was waste management on the American required walking just 20 meters, opening a gate, frontier (or at least in western North Dakota). and tossing a bag in a massive bin we shared My grandmother incinerated household trash in with our neighbor. Job done. Out of sight and the barrels, and for larger appliances—generally out of mind. If only it were truly that easy. anything that couldn’t be burned, composted, As the global population continues to grow, parked, or sold for scrap—there was a pit hidden waste management has become more sophisti- away in a nearby coulee. cated to deal with an increasing problem—more These days, rural household waste can be humans means more waste. Additionally, as collected by professional services and sent to the world’s population begins to shift from the landfill. My relatives still burn what they can, rural to the urban, the new class of city folk— but plastics are taken into town to be recycled. if they’re lucky enough to have good public Even the old milk truck has been sold, restored services—does not have to deal with the realities to its original condition and is now pampered of the waste they generate. They will bin it, pay like it was a Porsche 911—driven only on sunny their taxes, and forget about it—leaving manage- summer days and special occasions. I guess one ment to city planners and professional service man’s trash is another man’s treasure. providers. Of course taxes are not always popular, and waste is not a particularly attractive resource. Histori- LET’S THINK ABOUT TRASH cally, cost has been the driving issue leading most It’s intriguing how quickly we can become city planners to choose the cheapest treatment disconnected from our waste, when we ourselves options available—most of which are not much 14 | IFC.ORG/HANDSHAKE INSIDE INFRASTRUCTURE more sophisticated than what my grandmother change in rural communities is not keeping up, did on her farm. The two mainstays of global but progress is being made. waste management involve either burning trash In 2010, I flew on a small private aircraft to or burying it in landfill. Both of these options Alderney, a place in the Channel Islands between carry some significant environmental baggage. the United Kingdom and France. As the plane As the world’s population grows (particularly circled around the small island of about 2,500 with a wealthier middle class), these activities people to land, the pilot pointed to a cliff hang- are viewed as unsustainable—and, increasingly, ing out over the sea and said, “That’s the local socially unacceptable. tip.” In other words, this is the point from which residents dumped trash into the waters below. A 21ST CENTURY APPROACH To be fair, Alderney has a modern waste dis- While public authorities can change to some posal and recycling program with containerized extent how people consume—by incentivizing garbage taken to appropriate facilities on nearby the use of more efficient packaging and biode- Guernsey. The island is also considering energy gradable materials—governments cannot feasibly from waste via anaerobic digesters to cut both limit consumption. This requires the waste issue waste export and energy import costs as the to be viewed and managed more holistically in community currently burns expensive oil for the 21st century. power. Therefore, more and more private companies However, tipping waste into the sea was once the and public authorities are developing strategies cheapest solution for the residents of Alderney. for not only reducing cost but also generating While it may no longer be such an issue there, revenue from waste and recycling. With such a it remains a serious problem around the world. valued asset to manage, this will have a profound Unlike other critical sectors—such as transport impact on the quality of life surrounding histori- or energy—the waste industry has no strong eco- cal waste treatment facilities. nomic driver to support innovation. The truth is, there is no shortage of innovative solutions In India, for example, the closure of the Gorai available to treat and manage waste, but rather dumping ground in Mumbai was a public- a general and widespread unwillingness to pay private partnership that transformed the quality for anything other than the cheapest option. of life in the local community. In addition to the health, safety, and counter pollution benefits This has to change. Poor waste management is achieved by sealing in the dump in 2009, the a debt for future generations to pay. As the pace new operators now have designs on generating of technology quickens, our public authori- electricity from waste methane currently flared ties need to evolve their approach to waste and from the site. explore how technology can be integrated into existing systems to enhance efficiency and sustain This is how waste management is rapidly evolv- relevance for future users. ing in urban areas. Unfortunately, the pace of IFC | 15 In the documentary “Trashed,” producer/director Candida Brady sets out to discover the extent and effects of the world’s waste problem. As she trav- els around the world with actor Jeremy Irons to destinations wrecked by pollution, she brings the problem close to home—literally. Here, she speaks to Handshake about how to effectively convey the scope of the global garbage crisis. Interview by Alison Buckholtz Giving garbage its “AHA” MOMENT 16 | IFC.ORG/HANDSHAKE INTERVIEW One of the most difficult things to convey about the waste problem is its scope—people tend to see it as it affects themselves and their immediate community or city. In “Trashed,” you tackle this problem by allowing the viewer to follow you to several places around the world that have been devastated by waste. What did you see in these travels that you hadn’t understood before about waste? I understood the scale of the problem fairly quickly from my research. I spoke to many people from communities all over the world who all had similar horror stories to tell about waste. But in the film, we saw the scale with our own eyes. If you stand on what was once a white sandy beach in a once-beautiful, historic ancient port and see not one but two trash mountains, each over 40 meters high, and think every city in the world has these in one way or the other, it really brings it home. “ We hope the film will demonstrate that by changing the way we live our lives, we can contribute to our own survival and well- being and ultimately that of the planet. ” —Jeremy Irons, from the “Trashed” website Photo © Blenheim Films IFC | 17 Waste and climate change are inextri- Individuals can exert control over cably linked. But other than the areas the trash issue, but often feel inertia of the world hardest hit by climate because they think that one person change-related disasters, this link is can’t make a difference. How do you still abstract to many. When convey- prove otherwise? ing this to others, what points do you We showed really positive change in different find most persuasive? In other words, ways, from the individual to the big city. If a city what arguments tend to cause the like San Francisco, with all its high rise build- “aha” moment of understanding in ings and busy people, can effect such a dramatic the person you’re talking to? change—80 percent diversion from landfill— isn’t that how change has always started? It’s I don’t think anyone has the same “aha” moment. one person at a time. For me, it was the fact that during my research I read a study about babies being born with over 250 different manmade and toxic chemicals in If “Trashed” has a sequel in 10 years, their blood, flame retardants and the like. These what do you think the message children were all tested from different hospitals might be? in different areas. Up until that point I had hoped I had imagined it all. I also found the One of hope—that change happened. research on the effects of pollution on the killer whales and other cetacea; one scientist I spoke to believes these will be gone in our lifetime because the chemical burden in their bodies is too great. We made sure we only used facts which were backed up by peer reviewed pub- lished papers. I have said this before but I also think everyone should stand in a landfill for a day to understand the smell and how it makes you feel. None of us could talk after filming in them and one of my crew members was violently ill after we filmed in the one in Lebanon. Candida Brady Photo © Blenheim Films 18 | IFC.ORG/HANDSHAKE WATCH THE TRAILER FROM “TRASHED” “ We buy it, we bury it, we burn it, and then we ignore it. ” “ I know film can help to change things. ” —Jeremy Irons on telling the stories behind “Trashed,” Sarajevo Film Festival, 2012 IFC | 19 America’s dirty love affair WITH TRASH By Edward Humes, author of Garbology: Our Dirty Love Affair With Trash The head of a plastic bag industry group, whose Just the opposite. After immersing in the world full-time job consists of battling local bans on of Garbology I’ve learned some shocking truths disposable grocery sacks, made a provocative about the high costs of our garbage. Here are observation to me about trash recently: Don’t some numbers to consider: be so quick to reject waste, he warned. “Zero waste would mean a zero economy.” AMERICANS MAKE TWICE AS MUCH WASTE PER PERSON AS IN 1960. Equating green with economic ruin is a familiar Most of the increase is from “instant trash”— refrain, of course, but this claim about waste packaging, wraps, containers, and bags, the is worth a hard look. Trash really is the biggest biggest component of our garbage these days. thing Americans make, and it tends to get bigger in good times while shrinking during reces- sion. Does that mean, as counter-intuitive as it GARBAGE IS OUR NUMBER ONE EXPORT. sounds, that garbage is good? Should the old saw Not computers, cars, or planes. Our biggest about waste not, want not really be waste more, export is the scrap paper and metal that China get more? Should Americans just chill out and turns into products and packaging, which they revel in the fact that we are the most wasteful sell back to us. America has turned itself into people on the planet, rolling to the curb 7.1 China’s trash compactor. pounds of trash a day for every man, woman, MANY AMERICAN COMMUNITIES PAY and child—a personal lifetime legacy of 102 MORE FOR WASTE. tons of garbage each? Doesn’t that just show that More money is spent on waste management we’re buying lots of stuff and living large—that than for parks and recreation, fire protection, we should throw ourselves into a dirty love affair or school textbooks. with trash? 20 | IFC.ORG/HANDSHAKE OVERVIEW MANY AMERICANS CREATE HIGH her family’s commitment to buying unpackaged AMOUNTS OF WASTE. bulk goods, refusing plastic and disposable prod- The average American makes 7.1 pounds of ucts, selecting used and refurbished items, and trash a day, according to the best available data buying more wisely, with a focus on durability (from a biannual survey of American landfills by and need rather than disposability and impulse Columbia University and the journal BioCycle). purchases. It’s not enough to reuse and recycle, That compares to 2.5 pounds per person in Johnson says. “You have to refuse!” Japan. The Johnsons’ household expenses have dropped by 40 percent, making college funds, a hybrid THE U.S. MAIL IS MORE THAN HALF car, and cool vacations possible. Their non- JUNK MAIL. recycled, non-compostable trash fits in a mason Eighty-five billion pieces of junk mail, weighing jar—for the year. 4 million tons, were sent last year (about one Zero waste doesn’t mean zero economy. It means out of every 100 pounds sent to the landfill). a different economy, with different winners. And We subsidize junk mail with an artificially low fewer mountains of garbage. postal rate and by excusing the creators of this unwanted waste product from cleaning up their Reprinted with permission of the author. Photo courtesy of Garbology: America’s Dirty Love Affair with Trash. For more information: own mess. http://www.edwardhumes.com. AMERICA SENDS 69 PERCENT OF ITS MUNICIPAL SOLID WASTE TO LANDFILLS. YOUR GARBAGE By comparison, the Netherlands and Austria landfill 1 percent of their trash; Sweden, 2 QUESTIONS, percent; Belgium and Denmark, 4 percent. ANSWERED Germany claims zero landfilling. Those countries recycle at two to three times the rate of the U.S., and make energy with the rest of the refuse. We, on the other hand, make geographic features out of our trash. Waste is a cost, not an economic engine. Busi- Is all the hoopla about garbage just hype? nesses understand this—Wal-Mart has reduced What belongs in a landfill? How much its landfilling in California by 80 percent and is incentive money should governments ramping up recycling and reusing to the point pay people to recycle? Garbology author that waste is now a profit center instead of a cost. Edward Humes answers all these questions and more in a Q&A with the authors of Families know it too: Artist Bea Johnson of Freakonomics. Marin County, California has presided over Photo © David Bayles IFC | 21 & linking PUBLIC PRIVATE Photo © Green Energy Futures By Amandine Dukhan, Agence Française de Développement; Christel Bourbon-Séclet & Nathalie Yannic, Proparco 22 | IFC.ORG/HANDSHAKE PPPs When it comes to managing waste in developing countries, the private sector can contribute technical skills, organizational capabilities, and flexibil- ity. Yet private sector involvement alone will not solve all the problems. The public sector, while far from abrogating its responsibilities, has to strengthen regulations and step up project management. It is also vital to improve the financing of waste management services and to ensure a better-structured regulatory framework. Solid waste management is often regarded as THE NEED FOR INTEGRATED the most local of all public utilities. Since the first steps were taken to decentralize this service MANAGEMENT in developing countries, responsibility for it is Reducing the quantity and noxiousness of waste increasingly falling to municipalities, as it has at the source, introducing separate collection been the case in Europe for decades. Frequently and sorting procedures to encourage recycling subject to financial, material, and work force and reuse, organizing waste transportation, constraints, municipalities try to manage just and investing in recycling, energy, and organic the most urgent needs, such as removing waste recovery technologies are the fundamentals of from cities to keep them clean. Many focus their sustainable waste management. All the links in efforts on developing basic cleaning services— this chain are interdependent: they follow exactly street sweeping, waste collection, gutter mainte- the same path and address the same issues, nance, and running landfills—with mixed results regardless of region. An integrated system based and high costs. In some cities in Sub-Saharan on prevention-sorting-recycling-recovery-reuse is Africa, operating costs can account for 30 to 50 therefore key to reducing waste production over percent of a municipality’s total annual budget. the long term and reducing the amount of waste Yet this approach, based on collecting and stor- deposited in landfills. ing waste in open landfills, falls short of manag- ing municipal solid waste on a long-term basis. IFC | 23 However, the public sector’s efforts to develop a build-operate-transfer contract are the most waste management toward an integrated system common; these involve a system of direct pay- are hindered by the difficulties associated with ment to the private operator by public authori- investing in and maintaining facilities, the lack ties, based on a management cost per metric of business competencies in certain links of the tonne. This rate not only covers operating costs chain, and the ongoing absence of sustainable but also, in some cases, investment in initial financing sources. infrastructure and upgrading works. As it is difficult for municipalities in developing REDEFINING THE ROLES countries to pay private operators enough to cover the cost of all waste management services, The private sector can correct the management the central government often has to provide failures encountered in a state-run system and additional funding. The private network is there- provide the technical skills often lacking in the fore split between primary collection, organized public sector. In best-case scenarios, private by a very active informal service, and the rest of operators have qualified staff and appropriate the waste management chain, where one can find production resources, while still being flexibly global corporations as well as local operators, organized. some of whom are from the informal sector. A COMPLEX CONNECTION To attract private investment, But private sector management of all or part of local authorities need to estab- the system does not solve the problems entirely, lish a strategic framework tai- and public authorities have to step up their involvement as regulators and project managers lored to local conditions and even further. Perhaps more so than for other based on consultation with all public utilities, waste management requires local stakeholders. coordination among numerous stakeholders at different stages in the process, and calls for a broad range of skills and know-how. Implement- ing a proper waste management policy implies a Since costs cannot be fully covered by the fees strong involvement from the public authorities collected from users, calling on specific service running the service. This includes controlling providers (for collecting waste, operating a waste costs, planning investment, negotiating contracts transfer plant, or technical landfill center) is with service providers, educating users, establish- more widespread than the appointment of a ing and enforcing regulations, and involving large-scale private operator covering the entire producers and consumers. sector. Public-private partnerships involving 24 | IFC.ORG/HANDSHAKE The project must take into account the town’s Due to the lack of transparent systems for pay- socio-spatial structure, the type of waste ing local taxes to municipalities on an ongoing involved, the resources available, the institu- basis, losses inevitably occur. Waste manage- tional setting, and whether those involved are ment services in the developing countries are from the formal or informal sector. For a public therefore subject to the problem of mobilizing waste management policy to be sustainable, a tax resources in towns and cities. Consequently, pragmatic, customized, and progressive approach the income generated is insufficient to cover the is essential. Such an approach is preferable to costs of setting up an integrated waste manage- applying high standards from the beginning. ment system. More generally, a clearly defined regulatory framework enabling companies to compete equitably is a prerequisite for effective private sector involvement. For a public waste manage- Significantly, solid waste management services in ment policy to be sustainable, both developed and developing countries rarely a pragmatic, customized and reach financial equilibrium. Local authorities progressive approach is in the developing countries often have to resort essential. to three different funding sources—household waste collection fees paid by the user, a house- hold waste collection tax, and general budget contributions—in an attempt to cover sector As sketched in this scenario, mobilizing the costs. Waste collection fees are paid directly by private sector, skilled as it is, does not in itself each household and usually apply to collection constitute a solution for better waste manage- only. The amount is kept low, to be manageable ment. To be effective and appropriate, a waste for households, and is typically paid to private or management system must be accompanied by informal waste collection operators. These fees better financing mechanisms, increased technical are generally not enough to cover the system’s and institutional capabilities on the part of pub- upstream costs. lic authorities, and a well-structured regulatory Local authorities therefore try to obtain addi- framework. In the absence of such an environ- tional financing via a household waste collection ment, private sector involvement—even if it can tax, which is used to finance other aspects of temporarily fill public management gaps—may the service. This tax is usually linked to a land still not be enough to achieve an integrated and tax on developed properties. In the case of local sustainable waste management system. authorities in the developing countries, the base of this tax is reduced, and payment rates are low. This article was adapted with permission from Proparco’s magazine, Private Sector & Development (Issue 15, Furthermore, the tax is collected by the state and October 2012). channelled through the treasury. IFC | 25 COMPASS A DECADE OF DEALS the rise of the PPP 26 | IFC.ORG/HANDSHAKE By Muhabbat Mahmudova, Infrastructure Journal Governments that are concerned about the state ment, recycling, and energy from waste (EFW) of landfills and the environmental impact of projects. waste typically get a crash course in the waste management sector, and especially in the impor- tance of introducing sustainable practices to the A LOOK BACK system. More and more, government officials’ Through a PPP, governments contract with education includes lessons on how to implement private companies to construct, operate, and a public-private partnership (PPP). maintain waste facilities. PPP transactions have been widely applied in the delivery of waste As PPPs become accepted practice, investments treatment and EFW facilities in the past decade. in the waste sector have grown as governments Most of the volume generated between 2005 attract private capital and technical expertise and 2013 was from public projects tendered as for the construction, operation, and manage- PPP concessions: a total of 68 deals in the waste ment of waste projects. Most commonly, these sector, worth $17.3 billion. projects include waste incineration, waste treat- Photo © cbclove, Integrated Processing & Transfer Facility IFC | 27 Over the past decade, the countries EUROPE’S INVESTMENTS IN THE WASTE SECTOR, 2005-2013 with most active PPP market have been the U.K., Spain, Singapore, Australia, Poland, Italy, and France. In 2013 $ Total value in millions $ Total debt in millions alone, the U.K. saw nine deals reach- ing financing close in the waste sector, including the construction of waste 2005 $$ 297.3/255.3 treatment plants and EFW facilities, with a total investment of $3 billion. 2006 $$$$$$ 1293.93/1218.33 On page nine we can see the volume 2007 $$$$$$$$$$$$ 3315.5/2563.86 of global investments that financed waste projects (PPP and other) from 2008 $$$$$$$$$$ 2747.34/2230.99 2005 to November 2013. In total, there 2009 $$$$$ 1353.7/1035.47 were 105 projects with a total value of around $22.5 billion. 2010 $$$$$$$$$ 3129.7/1156.21 2011 $$$$$$ $$$ 3093.45/1809.22 EBB AND FLOW 2012 $$$$$ 1589.63/634.83 The graph shows a wide fluctuation in waste market financing during the past 2013 $$$$$$ $$$ 2160.08/1703.24 decade. The onset of the global financial crisis produced a steep fall after 2007. Source: Infrastructure Journal It picked up again in 2010 when the global sentiment temporarily improved. Then it dropped again due to the pro- tracted economic slowdown. Although the volume in 2009 dipped at the peak of the financial crisis, the Because of Europe’s long-term political U.K. managed to close five waste PPP and regulatory stability, there has been projects that year, including a long- delayed $1.1 billion Greater Manchester a clear legislative strategy for waste Waste PFI project. The largest privately infrastructure. financed deals over the same period were all U.K. projects: Staffordshire 28 | IFC.ORG/HANDSHAKE Waste PFI, Western Riverside EFW, and GEOGRAPHY IS DESTINY Greater Manchester Waste PFI valued over $1 billion each. Europe has been the most prominent region for private capital investments in the waste sector. In 2013, a number of projects were able to Because of its long-term political and regulatory secure financing despite the difficult economic stability, there has been a clear legislative strategy conditions remaining in many countries. Look- for waste infrastructure, as well as mechanisms ing ahead to the next year, however, it appears in place—such as PPP structures—to support that deals that require substantial financial com- private capital investments. mitment may face delays. GLOBAL INVESTMENTS IN THE WASTE SECTOR, BY SOURCES OF FUNDING (2005-2013) $ billions Deal count 4.0 IFI/government support 20 Equity Debt 18 3.5 Deal count 16 3.0 14 2.5 12 2.0 10 8 1.5 6 1.0 4 0.5 2 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Infrastructure Journal IFC | 29 Continuing this trend, the U.K. has a consider- sector. These countries are especially important able pipeline of waste projects that it hopes to for the sector because they have fast-growing develop in order to meet environmental targets populations and labor mobility. These two fac- set by the European Union by 2020. tors prompt many to move from rural areas into Looking ahead globally, many countries in Asia, cities. This in turn creates increased demand for Latin America, and the Gulf region have been infrastructure assets—including waste treatment targeting private capital investments in the waste and management—and the cycle of growth continues. GLOBAL INVESTMENTS IN THE WASTE Spain: 8 deals—$1.6 billion SECTOR, BY COUNTRY (2005-2013) U .K.: Italy 42 :9 dea dea Fr ls— an ls— ce $12 :1 $1. 0 .4 de 4b al billi s— Ge illio rm on $1 any n .1 :4 dea bi llio ls— $1 n .1 bill ion U.S.: 4 deals— $569 million Ireland: 1 deal—$424 million $20.5 —$385 million billion Singapore: 2 deals million total investment 3 d e a ls —$254 a: n Australi millio a ls — $249 ia: 2 d e illio illion lion n Austr $ 2 36 m 223 m mil — $ : 1 deal e al— $ 5 85 d s 1 d erlan nd: ls— Neth Pola 2 dea 1 er: Oth Debt as a proportion of total investment *All numbers rounded. Source: Infrastructure Journal 30 | IFC.ORG/HANDSHAKE PPPs E-WASTE EXPLAINED WHAT’S IN A CELL PHONE? 40 million Other 4% metric tons of electronic waste 80 (lead, antimony, beryl- are produced each year globally. lium, aluminum, etc.) 70 Epoxy 9% 60 Ceramics 16% Flame Only 13% of this 50 retardants 1% electronic waste Metals 21% gets recycled. Most 40 13% (zinc, iron, copper, of it is burned and silver, nickel ) dismantled infor- 30 mally in developing 20 countries with Plastics 29% adverse effects (ABS, PC, silicon, PPS) 10 on health and the environment. 0 Sources: Nokia, Population Reference Bureau/ILO WATCH 60 MINUTES: FOLLOWING THE TRAIL OF TOXIC E-WASTE Follows America’s Toxic Electronic Waste As It Is Illegally Shipped To Become China’s Dirty Secret IFC | 31 TRASH to PPPs turn TREASURE By Jeff Delmon, World Bank Our modern world, with its convenience and regulate. Global experience points to the benefits consumption, creates a whole lot of trash that in of integrated management and PPPs. turn suffocates cities and undermines economies. Managing trash is a municipal nightmare. But it AT YOUR DISPOSAL should be a banker’s dream, right? Demand will But the solid waste sector isn’t a natural fit for only grow, and the problem needs a solution— partnerships, as some other sectors are. From a without it the entire economy suffers. commercial or financial perspective, cost recov- But if there’s a simple solution, it has eluded us ery from households in the form of fees paid for all. The management of solid waste would seem trash collection is generally very poor. Industrial to lend benefit from the structuring, efficiencies, waste collection can be more lucrative, but rarely financing, and latest technology that can come covers costs. Sanitary landfills are expensive, with public-private partnerships (PPPs). Let’s and rare. But there is hope where the disposal of examine the options at our disposal. solid waste is carefully planned. Here are some successful routes: OUT OF SIGHT, OUT OF MIND Recycling: Recycling of scrap metal, paper, glass, Poorly managed waste spreads disease, con- plastics, cardboard, and composting is a large taminates water resources, increases the cost of industry in many developed countries, but use potable water, increases flooding, pollutes the of recycled materials is often not well developed. air, and repulses tourists. But municipalities have In Tanzania, as in many countries, ships carry neither the money nor the skills to manage solid containers full of used plastics back to China for waste well. In Sub-Saharan Africa, for example, recycling since the local market is insufficient. municipal waste management can amount to Composting: Organic waste can be used to cre- 30 to 50 percent of a municipality’s total annual ate compost to defray methane gas production budget. and be used as inputs for fertilizer. The developing world tends to rely on informal Energy: Properly dried and sorted waste can waste pickers, who comprise 5 percent of urban provide a potent (and green) source of fuel for jobs in developing economies. But these small some industrial processes, in particular power scale solutions are inefficient and difficult to generation and cement kilns, allowing their 32 | IFC.ORG/HANDSHAKE MONEY TALKS parent companies to fulfill their international Carbon finance can be accessed through the obligation to reduce their carbon footprint. reduction of methane gas, generation of renew- These energy sources may also qualify as renew- able electricity, and the reduction of carbon foot- able energy, and therefore may provide access to print by offsetting other thermal heat generation. carbon credits, preferential tariffs for electricity Potential annual carbon finance in Sub-Saharan generated, or other subsidies designed to encour- Africa may amount to around $2.6 million per age green activities. million people for landfill gas recovery, $1.3 Sanitary landfill: Where the above do not million for composting, and $3.5 million for achieve full disposal of waste, the balance needs recycling. But even these amounts are less than to be delivered to a sanitary landfill, to limit its 10 percent of waste management costs. impact on people and the environment. Energy fees from power generated, or calorific Some developing economies might also be able value provided to kilns or other high energy to replicate the approach in India, which has (and high temperature) activities, create value succeeded in issuing a few “no gate fee” PPPs for while also breaking down the chemical composi- solid waste. Here, the private sector is required tion of the waste. to provide integrated solid waste management Recycling fees, including the value of recycled services with no fees for disposal, maintaining plastics and compost, for purchase by local firms a clear incentive on the private sector to avoid to transform into saleable goods, or to export the dumping and monetize waste to the extent materials where they can be used effectively. possible. Gate fees for dumping of waste are usually con- strained by municipal budgets and low user fees. TURNING TRASH INTO TREASURE High gate fees can result in diversion of waste to It’s possible to turn trash to treasure with the informal dump sites. The municipality may also revenue opportunities available in solid waste. be a poor credit risk, leading investors to ask for government guarantees or other security rights. User fees for collection of solid waste are usually kept artificially low. Collection can be facilitated It is tempting to pick up the trash one piece by combining waste management bills with at a time. But by approaching the issue in an electricity bills (as in Mombasa) or water bills (as integrated manner, revenue generation can get in Addis Ababa). Municipal taxes can provide a close to cost recovery, or even provide a profit. solid revenue stream, but are usually spread over So while the solution is seldom simple, especially a small part of the total population. when it comes to matters of finance, PPPs do provide benefits when applied to solid waste Taxes on importers and producers of waste. For management. examples, see the tax being proposed in Kenya on imported tires, or in Togo, where a tax on industries, hotels, and other large enterprises shifts the tax burden to large producers of waste. IFC | 33 Cleaning up Fifteen years of strong economic growth in Brazil has increased citizens’ consumption of goods along with their disposable income. According to recent data, Brazil is the largest world market for personal care products, and the third largest world market for electronic products, pet care, and home cleaning products. With at least 60 percent of the population now considered middle class, consumption will only increase—and along with it, waste. By Carlos Silva Filho, Brazilian Association of Waste Management Companies 34 | IFC.ORG/HANDSHAKE Photo © Wikipedia,, Chamber of Deputies of Brazil PPPs Brazil’s economic growth is a popular story, and (no. 12.305/2010) was passed to establish a for good reason: the GDP per capita variation series of new procedures for waste management. from 2003 to 2012 in the country was a remark- The law requires waste management companies able 20.8 percent. But if there’s a downside to to develop integrated waste plans; introduces the this good news, it’s that the country’s waste waste hierarchy principle; requires some sectors generation, linked to this growth, is also on the to implement a producer responsibility system; rise. The Brazilian Association of Waste Manage- and creates many other important incentives ment Companies (ABRELPE) calculates that and directives. from 2003 to 2012, Brazil generated almost 63 Once implemented, this law will: million tons of municipal solid waste (MSW)— a 21 percent growth over the previous 10-year • improve natural resource conservation; period. During the same period, the population • promote economic development within growth was 9.65 percent—waste generation the industry by stimulating new businesses increased two times more than the population. related to recycling, recovery, and treatment Waste collection procedures have not yet caught activities; up with this drastic growth. Almost 10 percent • improve environmental and public health by of the MSW generated in Brazil is not even the closure of open dumps and inadequate collected. Almost half of the MSW is going to disposal sites by August 2014; inadequate disposal sites like opens dumps and • promote social inclusion; and uncontrolled landfills, and only 3 percent is recycled effectively. • mitigate climate change effects by reducing greenhouse-gas emissions. To rectify this, ABRELPE estimates that Brazil needs a $2.75 billion investment in modern solid With this law, Brazil has an opportunity to waste management. This investment need gener- achieve new waste management standards ates significant business opportunities if federal, through systems, technologies, and practices state, and municipal governments create the tailored to local characteristics and demands. right environment to attract the private sector. This leap forward may ultimately break the existing paradigm, moving a linear waste man- agement system to a cyclical system featuring A LEGISLATIVE REMEDY recycling, reuse, and recovery. The first steps toward this solution have already been taken. In 2010, the National Waste Law IFC | 35 PPPs UKRAINE CLEARS THE AIR PPPs TAP INTO LANDFILL GAS FOR POWER GENERATION By Mick Mullay & Tatiana Korotka, USAID Photo © David Dodge/Green Energy Futures, methane collection 36 | IFC.ORG/HANDSHAKE Ukraine, like other countries of the former Soviet Union, inherited highly inefficient and polluting solid waste management systems upon independence in 1991. The country has been struggling with its garbage ever since. According to a recent World Bank study, Ukraine generates 17 million tonnes of waste per year. Its waste recovery rate is alarmingly low—about 5 percent. The rest ends up in landfills or illegal dumps near cities, posing health and environmental risks to the public and contribut- ing to harmful greenhouse-gas emissions. Regardless of future govern- ment actions and potential changes in consumer behavior, Ukraine needs to significantly expand its landfill capacity. The Ukrainian government has taken impor- VALUE IN VINNYSTIA tant steps to foster a legislative environment that will enable the processing and recycling Vinnystia, a city of 370,000 in western Ukraine, of waste. Encouragingly, municipalities have plans to decommission its existing landfill and recognized lately that tapping landfill gas for generate electricity from its landfill gas, which power generation is an effective component of a mostly consists of methane—a greenhouse-gas comprehensive solid waste management system. with over 20 times the impact of CO2. The city’s The USAID Public-Private Partnership Develop- developing PPP project will generate and sell ment Program (P3DP) is in the forefront of this electricity using biogas that is currently flared. movement, helping two Ukrainian municipali- The proceeds will be used to recultivate and ties develop biogas technology as part of their close down the landfill once its capacity expires. respective waste management systems through The municipality has completed feasibility stud- public-private partnerships (PPPs). ies and expects to be ready to issue a competitive These partnerships are a relatively new tool in tender in 2014. An independent study showed the government’s arsenal for improving infra- that the project could attract up to $3 million in structure and delivering public services. The private sector investment, generate $5 million in approach produces energy and reduces environ- tax revenues, and reduce gas emissions of nearly mental impact while potentially freeing up scarce 460,000 tonnes of CO2. budget funds that can be applied elsewhere. IFC | 37 The idea is catching on. After visiting the site in municipalities do not have the necessary Vinnytsia, the town of Ivano-Frankivsk pushed funds to address infrastructure needs. for a similar PPP in its region. A feasibility study • Greater energy independence. Ukraine is underway and is expected to be completed in imports most of its natural gas from Russia, mid-2014. making it vulnerable to geopolitical pressure. Using landfill gas will reduce the need for imports. With solid waste management • Opportunities for small business. Local a top priority for the Ukrainian Ukrainian businesses will have greater opportunities to participate in the solid government, this is a good time waste and energy sector. to demonstrate how PPPs can • Reduced greenhouse-gas emissions. Ukraine improve the collection, processing, is a leading contributor to carbon emissions and disposal of solid waste. on a per capita basis. A study by Biogas, an engineering firm, estimates Ukraine could save the equivalent of 6 million tonnes of CO2 annually by using landfill gas. THE DEMONSTRATION EFFECT With solid waste management a top priority With approximately 100 landfills in Ukraine for the Ukrainian government, this is a good suitable for extraction and utilization of landfill time to demonstrate how PPPs can improve the gas, these encouraging steps forward could be collection, processing, and disposal of solid waste replicated across the country. If this becomes throughout the country. PPPs bring private an ingrained aspect of Ukraine’s solid waste sector investment for infrastructure and public management system, landfill gas utilization services, as well as new technologies and mana- will ultimately contribute to more efficient and gerial skills that play a major role in increasing environmentally friendly use of the country’s energy efficiency and mitigating climate change. resources. Landfill gas PPPs could lead the way, forming an Other benefits include: integral component of a sustainable solid waste management program. • Lower energy costs. The high cost of energy in Ukraine is a drain on the economy and local budgets. Business is uncompetitive and 38 | IFC.ORG/HANDSHAKE AGRICULTURAL WASTE AS A BIOFUEL Cities and industry aren’t the only source of waste in Ukraine. The country’s agricultural sector, which produces over 50 million tons of grain annually, generates huge amounts of straw as a by-product. When compressed into pellets, it burns at temperatures high enough to substitute for natural gas or coal to provide heating. In Malyn, a town of 27,000 in Ukraine’s Zhytomyr Region, USAID is advising city officials Photo © Shell, harvesting sugar cane on a PPP to heat schools using straw pellets as an alternative, renewable biofuel. The PPP will reduce costs, enable the schools to operate at warmer temperatures, and provide local producers of pellets with a new market. Furthermore, heating with agricultural waste doesn’t contribute to greenhouse-gas emissions, as the carbon released by burning equals the carbon absorbed by crops during the growing season. The PPP is expected to go to tender in 2014. IFC | 39 for CLEANUP Photo © Ajay Tallam, India By Adele Paris, IFC INDIA’S NEWEST PPP FOR WASTE COLLECTION INCLUDES COMMUNITY OUTREACH In the Indian state of Odisha, a new PPP The municipal solid waste management system with a private operator improved waste in Berhampur, a city of 350,000 people in the collection and disposal, raising the Indian state of Odisha, suffers from a lack of quality of life for the residents of one investment and inadequate staffing and manage- ment. In addition, like many other smaller cities large city. A targeted, well-developed in India, its solid waste management system is outreach program was critical to the not in compliance with national regulations. project’s success and is now being used Door-to-door collection is provided only in as a model throughout the state. about half of the city, where roads are wider. 40 | IFC.ORG/HANDSHAKE PPPs Households from the economically weaker typically come from the sale of by-products section, living in other sectors where roads are (recyclables, compost, refuse-derived fuel, and narrower, deposit their waste at collection points, power, depending on the optimal treatment often on the side of the road. It is then picked solution for the city). up by municipal workers and small private But in India, the sale of by-products, mostly operators, and transported to a dumpsite on the recyclables and compost, is insufficient to outskirts of the city. What is not collected by recover the investment made in the treatment them or by street sweepers continues its journey and disposal segment, let alone the collection in the drains. Citizens are exposed to health risks part. Therefore the municipality must pay a resulting from pollution, water contamination, “tipping fee” to bridge this gap. The real struggle and untreated waste. is to set the tipping fee to a level low enough that To solve this problem, Odisha’s Department of the municipality can afford it, and high enough Housing and Urban Development and the Ber- that the investor finds the project profitable. hampur Municipal Corporation turned to IFC In this case, what the municipality could afford to help structure an affordable PPP transaction was not enough. After analysis, IFC proposed and attract a private operator. The goal was to that the state contribute to financing the initial improve the collection, transportation, treat- investment for the construction of the treatment ment, and disposal of waste and raise the quality and disposal facilities through the provision of a of life for city residents. An extensive outreach grant and a concessional loan. These instruments program, conceived and deployed to reach are provided by the Odisha Urban Infrastructure citizens from all areas of the city, helped ensure Development Fund (OUIDF), a specialized that the goals and mission of the new system fund of the Housing and Urban Development were shared widely. Department of the state of Odisha, financed by KfW, the German government-owned develop- TALKING “TIPPING FEES” ment bank. In most places in India, the municipality covers For the tender process, the tipping fee was fixed most of the costs related to management of at an affordable level for the municipality of municipal waste. There is little to no financial about $21 per tonne. The portion of conces- contribution from users. As a result, waste sional loan offered by OUIDF was fixed at 25 management is a cost center on the municipal- percent of the initial project cost. The project ity’s budget. A private operator taking over the was bid out on the basis of the amount of grant management of the waste system will look for required by the private sector to make the proj- reliable revenue sources to recover the costs of ect viable, with a cap at 25 percent of the initial building, equipping, and operating the waste project costs. collection, transport, treatment, and disposal IFC also recommended that the municipality in an adequate landfill. These revenue sources start building consensus among residents regard- IFC | 41 ing the beneficiaries’ willingness to pay for the activities proposed through its life cycle and significant improvements outlined under the the technological interventions. project. In the future, this will help the munici- • Employees of the municipality. No city pality recover some of the expenses toward the employee shall be retrenched due to private tipping fee. sector participation. The municipality will consult with the sanitation employees and SPREADING THE WORD workers to assess potential redeployment opportunities so that the workload is opti- Officials from Berhampur, along with IFC, mized and there is seamless integration of understood early on that successful implementa- operations between the municipality and tion of the project depended on the municipal- the PPP contractor. ity’s ability to raise awareness of its objectives, benefits, and risks. The detailed outreach initia- • Workers in the informal sector. Programs tive that emerged alongside the deal introduces targeted at rag pickers and other informal the project’s benefits to city residents, employees recyclers in the system will educate them of the sector, and others who are impacted. about their potential reintegration in the new system. “I am convinced that the stakeholders’ engage- ment, consultation, and communication strategy, • Government bodies. Internal coordination created and implemented with IFC’s support, among the multiple governmental agencies will effectively help Berhampur Municipal involved across the proposed transaction Corporation,” says Dr. Ajit Kumar Mishra, structure is vital. Municipal Commissioner of Berhampur. “The • Employees of existing private contractors. project has made Berhampur a statewide role While contracts with these existing private model by addressing the specific concerns of all contractors will be terminated, the private the stakeholders for a clean and better city.” concessionaire will need to continue to To recognize the needs of each group and employ them. achieve consensus among all parties, the out- • NGOs working in the social and envi- reach targets: ronmental sector. These groups also need • Beneficiaries of the project. The municipal- to be consulted with and kept abreast of ity is undertaking awareness drives on the developments. benefits of the proposed system to encourage users to adapt their current waste disposal “A CLEANER BERHAMPUR” practices to make the city clean. The winning bidder, a consortium led by UPL • Communities living close to new and old Environmental Engineers Limited, is a large sites. This involves informing communities Indian environmental engineering construc- near the proposed new site about the project tion firm with 15 years of experience in solid and hazardous waste management, wastewater 42 | IFC.ORG/HANDSHAKE treatment, recycling, and other environ- mental projects. FUNDS PUT TO GOOD USE The concession agreement was signed KfW Development Bank finances invest- on August 30, 2013 and collection is ments and advisory services in developing expected to begin in the spring of 2014. countries on behalf of the German Federal Expected results include: Ministry for Economic Cooperation and Development. It is committed to the primary • Over 350,000 residents, one-third goal of sustainably improving the economic of whom live in low-income areas of and social conditions of the people in Berhampur, will benefit from daily developing countries. door-to-door waste pickup services without increasing costs to the Odisha is among the pioneering states to municipality. introduce the Odisha Urban Infrastructure Development Fund (OUIDF), a funding • Environmental and health risks for mechanism for the creation and improve- the city’s residents will be reduced. ment of urban infrastructure. The OUIDF • The private operator will construct has been set up as a fully owned trust by the and manage a composting facility state government under the Housing and with a capacity of 150 tonnes per Urban Development Department. It includes day. a loan component of €52.5 million and state • The project will attract total private government contribution of €5.5 million. sector investments of $10.3 million. OUIDF has been set up with the goal of • There is high potential for replica- developing sustainable financial structures tion in other Indian municipalities; that will effectively link external, non-bud- bid documents developed under this getary sources of finance and capital markets project are being used for two other with the financing needs of urban local projects in Odisha. bodies and municipalities. Public and private players are able to access the fund, which “The citizens of Berhampur are eager also provides viability gap funding up to 50 to have a clean and hygienic city,” percent in case of any gap in the commercial says Berhampur’s Mayor, K. Madhabi. viability of a project. The fund will encourage “We are committed to efficient delivery private investors to avail themselves of this of basic public services in our city. This funding to set up PPP projects. PPP model is the most affordable solu- The Berhampur solid waste management tion to deliver our vision for a cleaner project is the first project to benefit from Berhampur.” the financial contribution of the OUIDF. IFC | 43 Because of its small footprint, an EFW plant can integrate into its surroundings. This EFW plant in Spittelau, Austria, was designed by architects to blend in with the rest of the town, and has itself become a tourist destination. WHEN DOES EFW WORK? By James D. Michelsen 44 | IFC.ORG/HANDSHAKE ENERGY FROM WASTE The debate over creating energy from waste (EFW) is as heated as the process of creating energy itself. Although EFW is already a proven, successful technol- ogy in some developed countries and select emerging markets (such as China), many developing markets have not yet adopted the model and are weighing carefully the pros and cons. EFW merits close examination, taking into consid- eration the geography, population, and economies of the locations that need waste sector services the most. DEFINING OUR TERMS Energy from waste (EFW): The process of applied to municipal waste treatment—including producing energy in the form of electricity or pyrolysis, gasification, and plasma gasification. heat from the thermal breakdown of waste Other Conversion Technologies: Refers to through any thermal conversion technology anaerobic digestion (AD) of organic municipal or combination of thermal technologies. waste to generate biogas after processing/ Conventional EFW: Refers to grate-fired separation from recyclables and inerts or or fluidized bed combustion of waste. landfill gas-to-energy, or other technologies Advanced Thermal Conversion Technology: applied to waste to extract energy. Refers to non-combustion technologies recently Photo © Stefan Baudy, Vienna Hundertwasser, Austria IFC | 45 For EFW to be worthy of consideration in There is evidence of end cost recovery for emerging markets, many of the following waste services. Revenues from tipping fees to conditions should exist: support electricity tariffs can more readily be Land and transport infrastructure is con- achieved when constituents pay a fee, however strained. EFW facilities can be put in city small, for waste services received. This allows centers as they require little land and lower for a level of cost recovery that can be built waste transport costs. This is helpful when upon, which would not otherwise exist. large land sites for landfills are not available There is a large urban center with a growing near urban centers, land is expensive, and population and GDP. Megacities or very large when road infrastructure is constrained for cities, particularly in middle income countries, truck traffic. often have many of the characteristics that make Electricity tariffs or energy costs are high in EFW an attractive option, especially if they can the grid or for end users. Electricity tariffs take part in an integrated solid waste manage- are high in the grid or for large end users who ment plan including recycling, reuse, and waste could contract for the electricity or steam. The reduction. site can also be located close to energy demand, The government considering EFW is a small co-located with an end user for “behind the island nation. Island nations are also a good fence” (i.e., on-site) co-generation or district fit for EFW plants because land is constrained, heating/cooling applications. economies are driven by tourism, and there are high electricity costs. When several of the conditions above are met, EFW will not be the answer EFW might be a good solution for local govern- ments, electric utilities, and constituents, as for many emerging markets. well as for waste companies. In the “win/win” scenario, utilities and governments can get base load renewable electricity sources, while entities There are attractive electricity tariffs for EFW responsible for solid waste get an environmen- and/or tipping fees exist. Many EFW projects tally sustainable disposal solution financed by in emerging markets rely predominantly on elec- the private sector. EFW services can favorably tricity revenues. Projects become more viable in impact other sectors and elements of urban markets where there is a renewable feed-in tariff infrastructure, such as tourism, property values, or renewable portfolio standard for which EFW transport, and water and air quality. EFW can is eligible and/or there is a practice of paying for also contribute to the reduction of greenhouse- waste disposal or “tipping fees.” gas (GHG) emissions (see box at right). 46 | IFC.ORG/HANDSHAKE Furthermore, adoption of the EFW concept can drive policies and regula- tory regimes that improve solid waste management and enforcement, give opportunities to improve cost recov- A PLUS FOR CLIMATE ery, and improve grid diversity in the electricity sector. The shift toward requiring constituents Adoption of the EFW concept is climate to pay for improved service can also beneficial. Although EFW facilities emit CO2 pave the way for public-private part- as part of combustion process, they achieve nerships. When constituents pay for a net reduction of GHG emissions over their services, another revenue source opens lifecycle. up that can be used to manage risk, Most of the emissions are from biogenic and this sound fiscal municipal policy (natural) sources, with remaining waste supports a private sector transaction. from anthropogenic (man-made) sources. Greater climate benefits can be achieved if A CHALLENGING linked with a recycling program. PROPOSITION EFW facilities reduce emissions several ways: But there are significant challenges that • The harmful GHG emissions (methane) may prevent EFW from achieving its that would have been generated from potential in emerging markets. the waste if it were sent to a landfill are High cost: Most notably, from a utility’s avoided; point of view, EFW may not be the least • It displaces electricity that would be cost base load option, and not the least otherwise provided by fossil fuel power cost renewable option. From the per- plants; and spective of public solid waste manage- • Ferrous and non-ferrous materials can ment authorities, EFW may not be the be recovered and recycled, requiring less least cost waste disposal option, either. energy than processing raw materials. Difficult to site: EFW is difficult to site for both utilities and public solid waste authorities because residents tend to reflexively reject the idea of waste pro- cessing and disposal taking place in their IFC | 47 vicinity. This is also known as the NIMBY effect ing EFW. However, as environmental and social (“Not In My Backyard”). Once local citizens are considerations become increasingly important educated about EFW—understanding that the for global financial institutions, countries can footprint is small and low-impact, and that the improve their access to finance by: facility can be integrated architecturally with • Satisfying stringent air and effluent the surroundings—perceptions can potentially emissions requirements; change. • Showing evidence of community engagement and acceptance; and • Incorporating environmentally The shift toward requir- sustainable practices, including ing constituents to pay for sustainable ash disposal solutions. improved service can pave PLAN FOR SUCCESS the way for public-private A solid waste management plan that integrates partnerships. the EFW facility, demonstrating that it is techni- cally and financially the best solution for the community, is one of the most effective ways for a government to evaluate whether or not an Landfill still needed: EFW does not eliminate EFW plant is the right fit for its community. entirely the need for a sanitary landfill as part When recycling, waste reduction, and re-use of the solid waste management plan. Landfills concepts also complement the model, and there are still needed to address ash disposal, non- is a plan to leverage existing formal and informal combustible waste streams, climate events (such sector participation, many of the pieces may as hurricanes), or extended facility outages. begin to come together for the winning waste Poor quantity and quality of waste: Smaller strategy that so many developing economies waste quantities (scale issues) and poor waste are searching for. quality (low calorific value and high organic and moisture content) have also traditionally created challenges for EFW in emerging markets. Tech- nological advances, driven by emerging markets’ requirements, are producing new designs and operating procedures better able to handle low calorific value waste. Limited access to finance: Access to finance can be a concern in developing economies consider- 48 | IFC.ORG/HANDSHAKE ADVANCED THERMAL CONVERSION TECHNOLOGIES (ATCTs) Many ATCTs have been in existence for a long time and suc- cessfully applied to homogeneous, high heat content waste streams. However, they have only been recently applied to municipal solid waste on a commercial scale—and with mixed results. Successful technologies have been character- ized by high capital and operating costs, requiring in turn high tipping fees and electricity rates to cover costs. Local governments in emerging markets are promised strong results from ATCTs. But to most accurately evaluate its potential, they should consider the following criteria: • The potential partner has an existing facility in operation, or uses a third party technology with a facility already in operation, including upfront waste processing and syngas treatment. • The existing facility operates at a similar scale (waste throughput and output) to the project being planned. • The potential partner can provide operational and performance data (including emissions) for their existing operations, demonstrating that the commercial facility can operate off the same feedstock continuously for an extended period. • The syngas should be used as feedstock in the energy conversion equipment (for example, reciprocating engines, turbine, or boiler) for an extended period. • There are substantial performance guarantees from the private operator. • And finally, nothing substitutes visiting the existing facility and talking to project stakeholders. Photo © BASF—The Chemical Company, syngas complex, Malaysia IFC | 49 A LEGAL LOOK AT EFW By Jonathan Brufal & Tom Gray, Wragge & Co LLP Energy from waste (EFW) facilities are becom- levying a fee by way of tax. In emerging markets, ing a popular solution in developed markets. where waste collection might not yet be an They answer the requirement for higher levels of established responsibility of the local authority, renewable energy while reducing landfill waste. certainty of waste supply is a significant risk. An established, market tested risk allocation Developers and lenders need assurance of suf- structure and payment mechanism allows for ficient waste. If the municipal authority cannot the successful construction and operation of provide such certainty, they either won’t enter EFW plants by private sector participants. into these deals, or will refuse to take on volume There is an interesting dynamic at play in risk without a minimum payment guarantee developing markets: ongoing urbanization is (reducing the value of the deal for the authority). resulting in an ever-increasing need for energy Project companies in developed countries bolster and a growing volume of waste. Is EFW the waste volumes (thereby offsetting any supply answer in these emerging economies as well? risk) by securing large commercial contracts. It’s worth considering the following points from This could be a solution for emerging markets, a legal perspective when reviewing potential but relies again on local companies producing EFW projects in such markets. sufficient waste, which may or may not be a dependable outcome. LARGE COMMERCIAL CONTRACTS EFW plants rely on a constant supply of waste, DEPENDABLE ENERGY OUTPUT either commercially generated or from the local The supply of waste should not only be constant population. When originating from residents, it and sufficient but also of a composition that is typically collected and delivered to the plant allows for viable energy production. The calorific by the relevant municipal authority. value of waste directly impacts energy output. In countries where that municipal authority While developers and lenders have generally “owns” and is responsible for the waste of its become comfortable with the project company residents and has the requisite infrastructure, taking composition risk in established markets it is possible to institute an efficient collection (owing to a level of certainty regarding calorific system necessary to supply the EFW plant. In values), the willingness to do so in developed these cases, the authority funds the collection by markets is unlikely. 50 | IFC.ORG/HANDSHAKE LEGALEASE Uncertainty surrounding composition will make in emerging markets, but its development is developers reluctant to commit to any minimum crucial to the success of EFW projects in such energy output—in direct conflict with the public jurisdictions. sector objective to assure a reliable energy source. A strong regulatory environment is often backed by governmental or intra-governmental policies GATE FEE ECONOMICS that support and incentivize EFW. This fulfills Notwithstanding the relative lack of supply risk the twin objectives of increasing renewable in developed markets, the income stream that energy production and reducing landfill. In the a EFW plant can deliver through the sale of U.K., incentives typically represent two-fifths energy alone has not generally been considered a of a EFW plant’s income. (The gate fee also bankable proposition. Instead, developers usually represents two-fifths, and the sale of energy require the municipal authority to pay a “gate” the remaining one-fifth). or “tipping” fee per tonne of waste the plant However, the likelihood of replicating this model accepts. Due to the importance of a consistent in emerging markets seems slim. In real terms, income stream, developers may require the this means that the payment structure will be authority to commit to providing a certain highly negotiated and potentially onerous for the tonnage of waste per month and make the municipal authority, with higher gate and energy gate fee payable for that tonnage regardless fees required to make up the incentive shortfall. of whether or not the authority can actually deliver it. NEW FRAMEWORK In markets where waste collection is an estab- lished (and taxable) function of municipal Applying the established contractual model in authorities, those authorities are normally developing markets is likely to prove difficult. willing to take this risk. But authorities in New technologies might broaden the composi- emerging markets may not be able to afford tion of acceptable waste and increase the effi- the fees, nor be willing or able to increase ciency with which plants can produce energy. local taxes for collection. This in turn may result in lower gate fees and a reallocation of supply risk. STRONG REGULATORY However, lenders are cautious. In emerging ENVIRONMENT markets particularly, they want to see proven technology being used. For the foreseeable Strong regulatory and policy support is a neces- future, municipal authorities in developing sary condition for successful EFW plants. A countries are likely to have to guarantee supply fast track planning system and an established levels and pay high gate fees—and take risks and efficient process of obtaining approvals give which are usually carefully negotiated between developers and lenders the reassurance that they the parties—to make EFW a viable option in can move from conception to financial close in emerging markets. good time. Such a regime is likely to be absent IFC | 51 Photo © Justin Ritchei BURN Photo © Colt Group, AZN Moerdijk Plant, Holland BURY ? COMPARING ENERGY FROM WASTE FACILITIES TO LANDFILLS By Daniel Hoornweg, University of Ontario Institute of Technology & Perinaz Bhada-Tata, Consultant There is no ideal way to dispose of waste. All options are expensive and have myriad impacts, so waste managers need to select from among several challenging choices. The most hotly debated topic in many waste management discussions is whether to burn or bury our waste. This discussion centers around the world’s two most popular waste disposal options: energy from waste (EFW), which is also known as waste to energy, and landfilling. But rarely is there an “either/or” scenario; landfill and EFW must co-exist as they each fulfill different roles in an integrated waste management program. Here we discuss the merits of each model from the perspective of technology, cost, local considerations, and global environmental impact. 52 | IFC.ORG/HANDSHAKE ENERGY FROM WASTE TECHNOLOGY BUYING BETTER EFWs EFWs are capital intensive, and much of the Yesterday’s highly polluting trash incinerators system cost is upfront. Similar to buying a car and leaking, stinking dumps burden both or computer, it is important to get the tech- landfills and EFW efforts. Today’s EFW air nology as correct and flexible for improved pollution control technology is so highly downstream operations as possible. The large advanced that dangerous pollutants, such as initial contracts associated with EFW can dioxins and heavy metals, have been virtually attract unwanted political influence. Local eliminated—in some cases by as much as 99 governments, when acquiring EFW plants percent. Germany’s Ministry of the Environment or services, should ensure that the selection reports, for example, that residential fireplaces process is as transparent as possible, with all emit 20 times more dioxins than EFW plants. costs over the life of the facility considered. Many EFW plants also enable real-time moni- toring of key operational parameters, such as carbon monoxide levels and temperature of stack emissions, providing important assurances to nearby residents and regulatory authorities. However, these costs are often difficult to Such plants benefit from regular and sustained compare directly as ancillary benefits and local technological advances. subsidies can drive overall costs. Landfilling, although not as dependent on The method of procurement is slightly different technology as EFW, also benefits from regular for EFWs and landfills. An EFW plant is similar process improvements. Procedures to recircu- to purchasing a costly building that is operated late leachate, improve leachate treatment, and over its lifespan. A landfill, on the other hand, update collection of landfill gas are constantly is similar to an ongoing civil works project. reevaluated. The finished product is a green space such as a golf course or park. Financing an EFW requires COST upfront capital, usually issued through bonds or the operator’s own financing. Overall (total) costs for EFW are about $70 to $200 per tonne, while sanitary landfilling is less Comparing costs of landfilling and EFW is chal- than half that at $40 to $100 per tonne. Learn lenging since they are considerably different. The more from “What A Waste: A Global Review of total cost is impacted by considerations that are Solid Waste Management.” often set by political dictate, like feed-in tariffs IFC | 53 for generated electricity, a price on carbon, and is certainly not free of opposition, but they tend location and cost of land. Other important cost to generate less angst. inputs include prices of recyclables, ash disposal The waste hierarchy ranks waste management costs, environmental legislation (stack emissions options in order of preference: reduce, reuse, and leachate treatment standards), and tipping recycle, recover, and finally, dispose. Using waste fees. as a fuel has benefits such as displacing fossil fuel and reducing the volume of waste by up to 90 LOCAL CONSIDERATIONS percent. Few other issues have the potential to gener- EFW complements recycling, if sized correctly. ate street protests from angry residents than Research from the European Union and com- announcing a planned landfill or other waste munities in the U.S. with EFW plants shows disposal facility. The fury is often exacerbated that jurisdictions with the highest recycling rates by the perception of local residents who see often have EFW facilities. When EFW facilities urban garbage being dumped in a rural setting. are too large—with “pay or put” contracts that Additional truck traffic and real and perceived require local governments to always provide a impacts make siting any kind of waste disposal minimum amount of waste—they can discour- facility very difficult. age long-term waste reduction and recycling efforts. EFW facilities are often located in more indus- trial settings, closer to city centers. Their siting BUILDING & SITING LANDFILLS Landfills are similar in scope and complexity to large, ongoing civil works projects. For 10 to 20 years, a landfill requires heavy machinery to compact waste, excavate, and move soil cover material. Waste managers need to ensure that there are always funds available for fuel, civil works, and liners for new cells, along with site supervision and communications with local residents. Landfills also need to be fully integrated into local land use plans. Before work starts, the final land use should be known. Will the closed site be a golf course, public green space, or used for agriculture? Local residents are more amenable to a landfill site if they know what the site’s final use will be and what the time frame is. Siting a landfill is a complicated process with many aspects to consider. Those considering this option will find more detailed, step-by-step information from Waste Treatment and Disposal. 54 | IFC.ORG/HANDSHAKE For best operational efficiency, EFW plants also needs to be integrated with a nearby energy require upfront waste processing and recycling. customer. Materials like PVC plastic and florescent light bulbs should be removed at source to reduce emissions. These efforts can be linked to city- ENVIRONMENTAL IMPACT wide recycling and hazardous waste programs. EFW is often considered a renewable energy Moreover, EFW operators are keen to have these source, or at least climate-neutral, according wastes removed to protect equipment and ensure to the Intergovernmental Panel on Climate safe operation. Change. Although EFW plants emit greenhouse- gases, the major portion (50 to 67 percent) Landfills, on the other hand, tend to be more of carbon is biogenic, so the combustion does forgiving of spurious waste products, or wastes not increase the total amount of carbon in the with high moisture content. Unlike EFW, atmosphere. This is because the carbon is part landfills are constrained by total volume. Recy- of the earth’s carbon cycle already. cling and diverting waste can extend the life of landfills (although, similar to EFW, local govern- In addition, combusting one ton of waste in ments that rely on waste tipping fees for overall an EFW plant prevents one ton of CO2 being revenue might have an incentive to accept more emitted, according to the Environmental Protec- waste). tion Agency. By comparison, landfills generate methane, which is a 21 times more potent greenhouse-gas than CO2. Landfill gases need to be collected and combusted (also often In an ideal world of less waste, generating energy). fewer EFW plants and fewer In an ideal world of less waste, fewer EFW plants landfills would be needed. But as and fewer landfills would be needed. But as waste volumes around the world waste volumes around the world are expected to are expected to double in the next double in the next 30 years, more landfills and EFWs are inevitable. 30 years, more landfills and EFWs For peak performance, both EFW plants and are inevitable. landfills require professional management and unrelenting attention to waste separation and community involvement. Better decisions are Landfills may be more appropriate in communi- made when the public is part of the decision- ties where waste tends to be high in moisture, making process and supports an ongoing waste collected erratically, and sustained regulatory management program. oversight may be missing. For best effect, EFW IFC | 55 MITIGATION VIA WASTE MANAGEMENT By Atilio Savino, International Solid Waste Association 56 | IFC.ORG/HANDSHAKE CLIMATE Photo © Jayaprakash R, Thiruvananthapuram, India While waste contributes relatively little to climate change—only 3 to 5 percent of anthropogenic greenhouse-gas (GHG) emissions—certain waste management approaches offer an immediate, cost-effective way to achieve significant cuts in global GHG emissions. Using existing technologies that can be deployed at scale in virtually all regions and markets, waste management can be transformed into a climate mitigation tool. Every city, region, and country has a unique These strategies include: foundation of waste composition, technolo- gies and infrastructure, climate conditions, and COLLECTION & TRANSPORTATION economic capability. During the past 50 years, the waste management sector has developed the • Optimize collection routes and streamline technology and expertise to tailor its approach operations to improve fuel efficiency. to these specific conditions of each area. A key • Use alternative fuels (e.g., biodiesel, advantage of waste management’s GHG mitiga- bioethanol). tion potential is that it can use these conditions • Develop alternative means of transportation as a foundation to enhance overall performance. (e.g., rail and waterway transport). There are several strategies in the waste manage- ment sector with the potential to reduce GHGs. RECYCLING AND REUSE They provide opportunities for both upstream and downstream cost savings, energy efficiency • Increase material recovery rate to save energy. improvements, and public health and lifestyle • Recover substitute fuels (e.g., waste oil, benefits. refuse-derived fuels). IFC | 57 ENERGY FROM WASTE BIOLOGICAL TREATMENT • Generate thermal energy and electricity • Increase compost production from waste combustion as a cost-competitive (a low-emitting treatment solution). substitute for conventional fossil fuels. • Recover methane from anaerobic • Recover metals and bottom ashes digestion processes. from incineration. POTENTIAL EMISSION SAVINGS FROM EU LANDFILL DIRECTIVE Million tons emissions (+) / total savings (-) 150 100 50 0 -50 Recycling Incineration Landfilling -100 Transport Total savings Net emissions -150 1990 1995 2000 2005 2010 2015 2020 58 | IFC.ORG/HANDSHAKE LANDFILL ENVIRONMENTAL BENEFITS • Install active landfill gas collection and • Reduced GHG emissions generation. treatment systems. • Reduced environmental degradation • Use landfill gas as a fuel to produce from uncontrolled waste disposal. electricity or thermal energy. • Resource and energy conservation through material recovery. THE EU AND BEYOND • Energy recovery to reduce demand on Recent experience in European Union (EU) limited natural resources. countries has shown that through the combina- tion of proven waste management technologies, ECONOMIC BENEFITS comprehensive regulatory standards, and broad, multi-stakeholder coordination and communica- • Access to international financing. tion, municipal waste management can achieve • Revenues from the sale of carbon reduction substantial, near-term reductions in GHGs. credits, recovered energy, and materials. Between 1995 and 2008, for example, municipal • Technical expertise and training to facilitate solid waste management systems in the EU have technology transfer and build capacity. reduced approximately 48 million tonnes of CO2-equivalent. Another 62 million tonnes of SOCIAL BENEFITS CO2- equivalent will be reduced by 2020 as the EU Landfill Directive is fully implemented in • Improved sanitary and health conditions. the coming decade. This will make the municipal • New jobs from construction of new waste sector a net GHG reducer between 2012 facilities and projects. and 2020. • Training and capacity building in support In developing countries, however, rapid increases of waste management modernization. in population and urbanization are resulting in increased waste generation. GHG emissions Moving from waste management to resource will also increase unless a new approach takes management is a transition critical to the success hold. Implementing effective waste management of all economies. In this transition, waste preven- systems in these developing regions can bring tion, resource recovery, reuse, and recycling are a wide range of environmental, economic, and essential and enabling components of strategies social benefits. that can help slow the negative effects of climate change for generations to come. IFC | 59 CLIMATE Photo © Bill Stamps/KUHF News, Clinton Climate Initiative Globe nurturing new partnerships By Karen M. Luken, Clinton Climate Initiative CLINTON CLIMATE INITIATIVE CURBS METHANE EMISSIONS Developing public-private partnerships for integrated waste systems can be challenging, especially in developing cities and countries. The Clinton Climate Initiative can help guide municipal and national governments in changing waste systems to reduce methane emissions. 60 | IFC.ORG/HANDSHAKE While the term “carbon footprint” is so widely sporta used that it is now included in the Webster- an tio tr Merriam dictionary, the impacts and origins n of methane are just beginning to be recog- nized. Methane is the second most prevalent greenhouse-gas emitted from human activities. facturi u se nu ng ma Methane’s lifetime in the atmosphere is much shorter than carbon dioxide, but methane is THE LIFE OF more efficient at trapping radiation than carbon A PRODUCT dioxide—and also more damaging. Pound for pound, the comparative impact of methane on climate change is over 20 times greater than tractio ife m a na ex n carbon dioxide over a 100-year period. end of l ge nt me METHANE 101 Methane from human activities can be emitted from natural gas and petroleum systems, raising livestock, and discarding organic wastes in land- The other reason for the CCI’s focus on methane fills and wastewater treatment facilities. When is that the annual quantity of waste generated, organic wastes, such as food, garden trimmings, especially in emerging markets, is growing at an wood, paper, and sludge decompose, methane is alarming rate and is expected to triple by 2025. released into the atmosphere. For most of these cities and countries, waste management systems are still in their infancy. For many communities, landfills and waste water Without guidance, there is high potential for treatment systems can be the largest single source waste to be improperly managed. This can create of methane emissions. But these emissions can serious health and environmental consequences. be significantly reduced by initiatives that divert waste from disposal, such as composting, or Globally, waste accounts for approximately capturing the methane to use as a biogas for 3 to 5 percent of greenhouse-gas emissions generating energy. This is one of the reasons from human activities. However, waste has the why the William J. Clinton Foundation’s potential to become a significant contributor to Clinton Climate Initiative (CCI) is guiding the reduction of greenhouse-gas emissions. This municipal and national governments in chang- is because recovering waste to manufacture new ing their waste systems in a manner that reduces products or create energy avoids emissions dur- the emission of methane. ing the product life cycle. IFC | 61 DEVELOPING SUCCESSFUL PPPs implementation. Unless roles and responsibilities are clearly understood, the success of the PPP Because of the limited financial resources, insti- can be compromised. tutional capacity, or technical knowledge, many developing cities and countries are considering For example, it is not uncommon for the market the use of PPPs to implement their integrated conditions for the products and energy to be waste systems. However, for PPPs to succeed assessed only after a private project developer and flourish in the waste sector, the risks to the and waste technology has been selected. The private project developer, public officials, and private developer will assume that the public financial investor must be diligently assessed officials are securing off-take agreements for and mitigated. the products and energy that the waste system will create unless the tender documents clearly indicate that responsibility. Conversely, public officials often think that identifying a market’s A waste PPP is a 10- to 20-year product and energy is the responsibility of the private developer. relationship—so it is paramount that all partners are committed Inability to regulate to collaborating, especially in Regulations to govern waste systems and the more complex environment advanced waste technologies are either non- of an emerging market. existent or severely insufficient. Consequently, ascertaining public and political support can be an insurmountable barrier for developing waste systems. This is due largely to safety, health, and Public-private partnership (PPP) projects in environmental concerns. These concerns are waste carry unique risks. Overall, the most justified as cities without regulations are often common challenges for developing cities and targeted by developers and technologies that countries include an unclear delineation of roles would never be considered in North America and responsibilities, inability to regulate, and or Europe. Thus, it is essential for regulations unrealistic financial expectations. to be in place before the procurement process commences, along with training for public Unclear delineation of roles and officials to monitor and inspect waste systems. responsibilities Even if the PPP mandates a private company to Unrealistic financial expectations design, construct, finance, own, and operate the Private investors typically seek a 15 to 20 percent new integrated waste system, the public sector return on investment (ROI) to consider the will still have a role and responsibility in its project financially viable. While a facility within 62 | IFC.ORG/HANDSHAKE an integrated waste management system may be able to achieve this ROI, most financial METHANE PRODUCTION assessments do not examine the associated waste infrastructure costs (i.e., collecting and transporting the waste to the facility). Although most solid waste projects need to The critical factor in demonstrate a guaranteed quantity of waste methane production over the project duration to receive financing, (CH4) is the amount of developing cities and countries typically do not biodegradable waste have the operating or maintenance equipment to sent to landfill sites. Over guarantee the delivery of waste. Therefore, while a 20-year period, one ton of methane the facility can be profitable, the waste system causes 72 times more warming than will not succeed if the public sector incurs the one ton of CO2. entire financial burden of improving the waste infrastructure. A waste PPP is a 10- to 20-year relationship— so it is paramount that all partners are com- mitted to collaborating, especially in the more CO2 = complex environment of an emerging market. For private sector developers and investors, this may mean allocating additional time and resources to educate their public sector partners on the technical and financial components of CH4 = their new waste systems. For public officials, establishing an unprecedented level of transpar- ency in their government procurement process may be required. Following this advice will help waste PPPs suc- ceed and yield systems where waste can become a resource for making new products and energy, rather than contributing to global warming. Sources: Environmental and Energy Study Institute, World Bank Group IFC | 63 CLIMATE By Jeff Cooper, International Solid Waste Association A way forward for the Clean Development Mechanism The Clean Development Mechanism (CDM), approval process could lead to a greater number introduced under the Kyoto Protocol, provided and better geographic distribution of imple- an opportunity for the waste sector to generate mented emission-reduction projects. revenue from the sale of carbon credits, thereby creating significant incentives for greenhouse- ARTICULATE BENEFITS gas (GHG) emission reductions. However, the The ways national governments and the private early development of CDM has faced a number sector can benefit from CDM have not been of challenges. To solidify and expand the post- well articulated. However, national governments Kyoto efforts, the following steps should be in developing countries can reap significant considered: rewards. Those that have sound proposals for the enhancement of their waste management STREAMLINE BUREAUCRACY practices set out within a Nationally Appropriate Although significant progress has been made on Mitigation Action plan, either as a stand-alone the CDM since its inception, a more streamlined proposal or incorporated within a suite of GHG 64 | IFC.ORG/HANDSHAKE emission-reduction targets, qualify for funding ABOUT THE KYOTO PROTOCOL through the Global Climate Fund. EXPAND ENERGY FROM WASTE The Kyoto Protocol is an international Nearly 90 percent of the more than 200 regis- agreement linked to the United Nations tered CDM solid waste projects involve landfill Framework Convention on Climate gas flaring and recovery. However, most of these Change, which commits its parties by employ controlled flaring of trapped gases and setting internationally binding emission reduction targets. do not convert those gases to energy. An example of an ambitious initiative is the landfill gas-to- Recognizing that developed countries energy scheme in Bogota, Colombia. The landfill are principally responsible for the cur- rent high levels of GHG emissions in the site accepts 6,000 tonnes of waste per day. By atmosphere as a result of more than 150 trapping the methane, the site produces electric- years of industrial activity, the Protocol ity and gas for up to 70 neighboring brick kilns, places a heavier burden on developed replacing the fossil fuels currently used. nations under the principle of “common but differentiated responsibilities.” ENCOURAGE USE OF TECHNOLOGIES Similarly, only a limited number of large-scale The Kyoto Protocol was adopted in December 1997 and entered into force projects involve advanced solid waste treatment in February 2005. Its first commitment technologies, such as large-scale composting, period started in 2008 and ended gasification, anaerobic digestion, and process- in 2012. ing refuse-derived fuel. These technologies are significant not only for tackling GHG emissions but also for providing secondary resources and renewable energy sources. The relationship between waste management and EVENLY DISTRIBUTE BENEFITS climate change is now recognized widely. This CDM projects have been unevenly geographi- should help secure greater funding for interna- cally distributed and have therefore not resulted tional agencies and allow access to improved in significant benefits for developing countries. financial mechanisms for waste management However, there is notable unrealized potential improvement in developing countries of the for additional CDM projects, including the post-Kyoto world. In addition to the traditional advanced technological solutions outlined and widely recognized health and environmental above. This potential includes host-country benefits of enhanced waste management, we can coverage that includes the least developed now add GHG mitigation and the production of countries (which currently have a very limited secondary resources and renewable energy. uptake of CDM projects). Photo © Troels Dejgaard Hansen, UN Climate Wall, Copenhagen IFC | 65 Integrating the INFORMAL SECTOR By Sanjay K. Gupta, Consultant Combining strengths to improve waste management 66 | IFC.ORG/HANDSHAKE COMMUNITY ENGAGEMENT In many cities in developing countries, the informal sector plays an important role in managing municipal solid waste. The informal recovery of recyclables from the solid waste system reduces overall solid waste management (SWM) costs for municipalities. Apart from this, informal sector waste management activities also allow munici- palities to achieve recycling objectives and reduce use of precious landfill space. Formalizing the roles of the informal sector and inte- grating their activities into municipal strategies could institutionalize and strengthen a labor market with valuable skills to offer. Photo © Deutsche Welle, Ghazipur Landfill, Delhi, | 67 IFCIndia Waste management systems in the cities of many The informal recovery of recyclables also reduces developing countries could not be coordinated overall SWM costs for municipalities by reduc- without the informal sector: waste pickers, scrap ing the need for collection, transport, and collectors, traders, and recyclers collect, sort, disposal. The savings on transport depend on process, store, and trade waste materials. In fact, the point at which the material is removed from many more tons of recovered materials come via the waste stream for recycling. If material is informal channels than formal channels. In most recovered at the disposal site, transport costs are developing countries, as much as 15 to 20 per- not reduced, but disposal costs are reduced. For cent of waste is managed by the informal sector. example, Delhi, India saves around €6.7 to €7.5 million annually. INDIVIDUAL AND PUBLIC ECONOMIC BENEFITS ENVIRONMENTAL BENEFITS The increased recycling activities help munici- Profit-making opportunities for materials with palities reach recycling targets and save precious high intrinsic value create incentives for much landfill space. It also reduces the extraction of higher levels of recovery and recycling in the raw materials and returns secondary raw mate- informal sector. WASTE RECOVERY RATE IN SEVEN CITIES BELO HORIZONTE, BRAZIL CANETE, PERU DELHI, INDIA 145,134 tons recovered 1,412 tons recovered 841,070 tons recovered 0.1% by formal sector 1% by formal sector 7% by formal sector 6.9% by informal sector 11% by informal sector 27% by informal sector DHAKA, BANGLADESH MANAGUA, NICARAGUA MOSHI, TANZANIA 210,240 tons recovered 78,840 tons recovered 11,169 tons recovered 0% by formal sector 3% by formal sector 0% by formal sector 18% by informal sector 15% by informal sector 18% by informal sector QUEZON CITY, PHILIPPINES 287,972 tons recovered 8% by formal sector Source: CWG-GIZ / 31% by informal sector Scheinberg et al., 2010 68 | IFC.ORG/HANDSHAKE COST SAVINGS OF WASTE PICKERS FOR MUNICIPAL WASTE COLLECTION AND DISPOSAL (AVERAGE CONTRIBUTION PER YEAR) Source: CWG, GIZ, 2010 CLUJ-NAPOCA, ROMANIA €63,000 LUSAKA, ZAMBIA €1.47 million PUNE, INDIA €2.2 million QUEZON CITY, PHILIPPINES €4.2 million CAIRO, EGYPT €14.47 million LIMA, PERU €15.76 million rials to the production cycle. Since recycling of waste at the source, by giving them rights requires less power than production processes over recyclables and guaranteeing them regular with primary raw materials, there is a significant access to waste. In 2006, the Pune Municipal- secondary benefit of reduced energy consump- ity in India granted waste pickers the right to tion. Additionally, informal sector recovery collect waste and a service fee from households. itself uses less energy since many informal In Bogota, Colombia, the appellate court struck activities rely on human or animal muscle down the exclusive right over waste of a munici- traction, rather than motors. pal waste contractor and restored the right to waste to the waste pickers. FORMALIZING THE INFORMAL To transfer these rights, municipalities must enter into direct contractual or covenant rela- Attitudes of municipal authorities toward the tions with informal sector organizations. Given informal sector vary: in some places there is hos- limited business knowledge, education, and tility, in others indifference, and in some places socio-economic means, the informal sector they are regarded as a useful part of the SWM needs support to organize into cooperatives or system and are given the opportunity to enhance other legal structures. Municipalities or NGOs their livelihoods. can provide legal support in establishing coop- The role of municipalities is critical to mobilizing eratives, providing training, and creating other the informal sector and organizing the informal services to improve working conditions (such as valorization sector. For example, municipalities identity cards and access to health insurance). can integrate waste pickers into the collection In Bangladesh, for example, Waste Concern IFC | 69 INFORMAL & FORMAL LIVELIHOODS IN SIX CITIES City/Indicator CAIRO CLUJ LIMA LUSAKA PUNE QUEZON Total no. of livelihoods in infor- 33,000 3,226 17,643 480 8,850 10,105 mal waste sector (persons) Total employment in formal 8,834 330 13,777 800 4,545 5,591 waste sector (persons) Average informal workers’ 2.721 3451/2.070 1.767 586 1.199 1.667 earnings (€/per year) 1 Represents actual earnings from about 50 days of labor per year of €345 multiplied by 6 for purposes of comparison with other cities. Source: CWG-GIZ, 2010 and other NGOs train waste pickers in organic In some cases, conflicts may arise with the waste recycling. The pickers then sell the com- private sector. For the private contractor or post to a large fertilizer company. enterprises engaged in collection on payment of paid-per-ton disposed at the landfill, the informal sector waste collection becomes a com- PARTNERING WITH THE petitor and cuts into their profits. These firms PRIVATE SECTOR have an interest in collecting the largest possible In the context of privatized waste collection quantity of waste to increase their revenues. In services, collaboration between the informal this context, they may be inclined to develop sector and the formal waste collection sector is strategies to access waste at the earliest possible possible. Waste pickers can partner with waste stage or to prevent the informal sector from collection enterprises or vice versa. For those collecting waste. who are not engaged in recycling, a partner- In such a situation, the public sector should ship with the informal sector would reduce either help integrate the informal sector to work the volume of waste collected and would cut with the formal sector or ensure that contracts their transport costs. In Brazil, for example, the for private sector operators are designed in a way private sector delivers recyclables to informal that ensure the informal sector has access to and sector recyclers, while informal recyclers make the right to waste. arrangements with formal recycling enterprises, Regularizing and integrating informal recovery processors, and waste buyers. into the overall solid waste system could enhance 70 | IFC.ORG/HANDSHAKE recyclable recovery rates and reduce overall solid waste management costs. Generally, policies that facilitate the SHOW ME THE MONEY integration of the informal sector will result in an increase Waste pickers’ earnings vary widely in the rate of material recovery. Consequently, disposal among regions, in terms of the rates will drop, allowing for savings in transportation type of work they do, and between and landfill operations. women and men. Although waste Many forms of waste valorization are found in different picking is the lowest paid part of combinations: personal or commercial reuse, reuse with the recycling chain in many places, repair, recycling, and composting. In all these scenarios, these workers often earn more than municipalities make a net gain and can therefore reach the minimum wage. In Brazil, for higher recycling and landfill diversion rates quicker than example, data collected shows that with their conventional systems. 34 percent of waste pickers earn 1 to 1.5 times the minimum wage, This article was adapted with permission from Proparco’s magazine, and 54 percent of them earn 1.5 to Private Sector & Development (Issue 15, October 2012). 4 times the minimum wage. INFORMAL RECYCLING SECTOR: WASTE TRADE PYRAMID REPROCESSOR TRADERS Includes retailers, stockists, and wholesal- . ally ers, many not registered as businesses. ific pec re s WASTE COLLECTOR Formal municipal garbage collection. mo ed ort es ITINERANT SCRAP BUYER st Purchase small quantities of waste (plastic, Wa paper, glass, metals, etc.) from households. WASTE PICKERS Engage in the free collection of waste from municipal garbage bins, streets, and dumps. IFC | 71 INTERVIEW TRASH TALK WITH THE 2013 CNN HERO Photo © Sean Suddes Photos, The Great Mississippi Cleanup Interview & Podcast by Alison Buckholtz In the new podcast conversation between Handshake and the 2013 CNN Hero Chad Pregracke, founder of the nonprofit Living Lands and Waters, Pregracke shares his strategies on communi- cating the need for cleanup. If you’ve ever tried to communicate how the volunteers who show up in each city. As some- world’s growing mounds of garbage threaten the one on the ground—and in the water—Pre- environment and worsen the effects of climate gracke’s perspective on what it takes to get others change, you already know that the scale of the invested in the environment is practical rather problem defies easy explanation. But that didn’t than theoretical. Although he does now work in stop Chad Pregracke, head of the nonprofit partnership with some of the local governments Living Lands and Waters. When he tried to work that first ignored his efforts, his corporate part- through local government to solve the garbage ners have been equally strong backers. In fact, problem in rivers near his home in Illinois, no as he tells Handshake, he reached out to his first one responded. So he started circulating pictures corporate sponsor when its name flashed on the of the trash in his community. These pictures screen while he was watching a NASCAR race. captured residents’ attention, and they volun- “If they’re interested in the community, they teered to pick up rubbish. With Pregracke at should be interested in the community’s the helm, they kept volunteering; eventually, environment, too,” he says. he launched a trash barge as a floating class- Though this particular “hero” is quick to give room to continue education and encourage credit to everyone on his team, Pregracke’s group cleanups. effort to engage his community in cleanup Fast forward 15 years: about 70,000 volunteers efforts started for the most personal of reasons: have pitched in, helping collect more than 7 mil- he was appalled at how garbage littered the land lion pounds of trash across the U.S. and in other he loved. The strategies he followed to attract parts of the world, including Belize and South others who shared his goals inspire and teach Africa. In 2013 alone, Living Lands and Waters those who want to make a difference. conducted 167 cleanup events. For his efforts to tackle the world’s waste problem starting at home, Pregracke was named 2013 CNN Hero of the Year. Pregracke literally lives his job: nine months out HANDSHAKE ORIGINAL: of the year, he resides on a barge with members PODCAST WITH CHAD of his 12-person crew. As recounted by CNN, the team goes around the U.S. with a fleet of PREGRACKE boats, and they try to make cleanup fun for the IFC | 73 KAMPALA’S campaign Whether a new technology for waste manage- ment is being developed, or an old dump rehabilitated to make place for a sanitary land- fill—and whether it takes place in a developed Engaging or an emerging economy—every solid waste the informal management (SWM) project will have to engage with concerned communities and other inter- sector ested parties. Successful SWM projects integrate community engagement into each phase of the project, giving the stakeholders the opportunity to contribute to the project, provide valuable information, and help identify key issues that will be prominent in the various project phases. The level of engagement depends on the project type, magnitude of the challenge, and stakehold- ers’ concerns. Therefore, planning and managing an effective community engagement process and keeping stakeholders in the loop is key to a project’s success. The informal sector plays a major role in the SWM system of many countries. Best-practice SWM strategies incorporate the views of the informal sector in the decision making process. A successful strategy will also integrate, organize, upgrade, support, and incorporate informal sec- tor individuals into the SWM system to ensure their livelihood and quality of life is restored or enhanced by the project’s activities. THE CASE OF KAMPALA In Uganda, the Kampala Solid Waste Manage- ment public-private partnership is shaping up to be an especially good example of how to By Delphine Arri, Eva Rossi, & structure SWM outreach to engage the informal Christopher Olobo, IFC 74 | IFC.ORG/HANDSHAKE Photo © Wastepickers Alliance Uganda COMMUNITY ENGAGEMENT sector. In Kampala, many people dispose of Formalize Strategy and Plan solid waste through indiscriminate dumping, burning, and burying. Only 55 percent of solid KCCA is setting clear objectives and measurable waste generated is collected, transported, and targets to be achieved with an effective stake- disposed of in the city’s one landfill site. Solid holder engagement, consultation, and commu- waste collection and transportation in the project nications strategy. The project uses tools such as area is currently carried out by the Kampala education and knowledge sharing campaigns, Capital City Authority (KCCA) alongside interviews with key stakeholders, stakeholder private sector and informal collectors, depending conferences, an on-site consultation forum, on an area’s income level. The city’s landfill is and tailored communications material. close to capacity and is in need of remediation. Require the PPP to Create Commercial Waste There are currently 380 registered waste pickers Picking Opportunities at the landfill. In addition, there are Community Based Organizations (CBO) involved in recy- KCCA is committed to improving waste pickers’ cling at source and collecting waste for a nomi- livelihoods while improving waste management nal fee from informal settlements. services through the project. KCCA will organize activities to engage and educate waste pickers To resolve these challenges, KCCA is developing and other informal recyclers about their poten- the new Kampala City Integrated Waste Man- tial reintegration in the new system. KCCA will agement System. The new system will improve also require the winning bidder of the landfill collection, transport, and treatment of municipal operation to incorporate the waste pickers into waste, and incorporate the informal sector as commercially viable operations, and develop part of an integrated approach across the waste a communication strategy and plan that will management value chain. ensure continuity. The informal waste pickers and other informal recyclers have the potential to be reintegrated in Encourage CBO Partnerships to Ensure the new system, and KCCA is undertaking the Sustainability following key steps to help them: The CBOs are also being encouraged to form operational partnerships with established waste Identify, Plan, Inform, and Consult collectors in the city so that working relation- KCCA is designing a strategy and plan to ships with the informal sector extend beyond identify, inform, and consult all relevant stake- the bidding phase of the project. holders. The goal is to communicate effectively the overall objectives and mechanisms of the proposed project, and collect and address key community comments and concerns. IFC | 75 CROWD SOURCING for waste management By Antonis Mavropoulos, CEO & Founder of D-Waste Waste Atlas is a crowdsourcing open source map that visualizes municipal solid waste management data across the world for comparison and bench- marking purposes. After 15 months of effort from more than 1,000 RESULTS ARE IN scientists around the world, the first Waste Atlas Report (www.atlas.d-waste.com) was published After analyzing almost 60,000 documents, this past fall. This is an important milestone the report concludes that more than half of in the global waste management community the world’s population does not have access to because scientists from 93 different countries regular refuse collection services. The negative cooperated to compile data from 162 countries, health effects are immeasurable. 1,800 cities, and more than 1,800 facilities. Other Waste Atlas 2013 Report findings are more easily quantified, but no less shocking. 76 | IFC.ORG/HANDSHAKE INNOVATION Every human being generates an average of D-Waste’s newest software tools include the app about 270 kg of solid waste every year, but only that allows measuring distances from facilities 15.4 percent of this refuse is recycled in official and dumpsites. These and other apps under schemes. (Until this study, there was no way to development to verify content and assure qual- quantify the contribution of informal recyclers.) ity will continue to make D-Waste essential in Furthermore, for every dollar spent in the global measuring the impact of waste. marketplace, about 47 grams of waste is pro- duced—with worldwide municipal solid waste Illustration © Aleksander Velasevic/istock generation totaling about 1.9 billion tonnes per year. At least 37 percent of this waste is disposed of at dump sites. The groundbreaking report and the free, interactive tool is published by the Waste Atlas partnership, a non-commercial initiative involving D-Waste consultants, the University of Leeds, the International Solid Waste Association, GIZ/SWEEP-Net, the Waste to Energy Research Council (WTERT), and the Solid Waste Network of Asian and Pacific Islands. IFC | 77 Photo © SWEEP-Net trash together in By Markus Luecke, GIZ / SWEEP-Net SWEEP-Net helps its partner countries make the shift from a conservative solid waste management strategy to an efficient, integrated resource management solution. Integrated solid waste management, which in generation, all of which are serious environmen- the Middle East and North Africa (MENA) tal concerns. Loss of valuable resource materials region has historically been administered by and income-generation opportunities are also local authorities, is one of the region’s major significant. On a regional level, organic waste challenges. But alongside the problem of fast- management and composting are key elements increasing quantities of waste, the region suffers for municipal waste management in countries from additional roadblocks—like poor political where about 60 percent of waste composition will, limited awareness, and lack of financial and is organic. technical capabilities to reduce the amount of waste going to landfills and disposal sites. THE PRIVATE SECTOR PILLAR The negative impact of current disposal practices Private sector involvement is an important pillar has dire consequences for the entire region. for the development of innovative approaches to Adverse consequences include groundwater and integrated solid waste management. A successful surface water pollution, foul odors, and methane 78 | IFC.ORG/HANDSHAKE INNOVATION partnership between the public and the private By assisting its partners through policy advice sector paves the way for clear political decisions and collaboration, SWEEP-Net can make a and a reliable legal and regulatory framework. difference in creating these much-needed recy- This allows both parties to develop and imple- cling initiatives. With proven regional models ment projects that create employment and and pooling of resources in place, local authori- protect the environment. ties can develop policies and market incentives SWEEP-Net was launched to facilitate these that have the potential to reduce the problem partnerships. Through pilot measures, guidelines, of capital misallocation. This in turn promotes training, and the identification of best practices, economic development that allows for sustain- SWEEP-Net helps its partner countries make able resource management. the shift from a conservative solid waste manage- ment strategy—based on traditional end-of-pipe solutions—to an efficient, integrated resource management solution. This latter approach replaces the use of fossil resources through inno- SWEEP-Net, the regional network for vative and cleaner production processes, as well integrated solid waste management in the as through a change of consumption patterns. Middle East and North Africa, launched This concept may open new doors for economic in September 2009 with the support of the opportunities that have not been seen before— German Ministry of Economic Coopera- especially in developing countries. tion and Development (BMZ) through the Gesellschaft für international Zusammenar- RECYCLING RESULTS beit (GIZ). Ten countries from the region, including Algeria, Egypt, Jordan, Lebanon, Recycling activities are one area of SWEEP-Net’s Mauritania, Morocco, the economies of focus that may lead to substantial resource sav- West Bank and Gaza, Syria, Tunisia, and ings and income generation. It is estimated that Yemen, joined to strengthen their capacity every ton of recycled paper saves up to 17 trees for an integrated waste management solu- and up to 50 percent of the water needed for tion. The SWEEP-Net network translates its production. But recycling initiatives require local experience into regional action, provid- a clear political commitment that is translated ing a platform for experts from the public into legal and administrative action. This in and private sector, academia, civil society turn allows the private sector to develop and groups, and regional and international implement innovative economic solutions. The organizations with the relevant expertise. absence of an adequate regulatory and legal framework hampers the development of a “green” sector in many countries of the MENA region. IFC | 79 Walking THE WALK Large organizations such as IFC produce a significant amount of waste from day-to-day operations. Reducing waste is a key part of IFC’s commitment to sustainability. IFC recycling and composting in FY12 EFW Donations Recycling Landfill (Office supplies, (paper, plastic, (energy from waste) furniture) metal, e-waste) ________ ________ ________ ________ 594,559 43,217 306,903 0 lbs. lbs. lbs. lbs. IFC’s ongoing initiatives IFC has used 100% recy- IFC’s carpet is 30% recycled IFC uses filtered tap water, IFC started composting cled paper since 2008 and and 100% recyclable. which reduces the con- in November 2013. plans to reduce paper use sumption of bottled water. by 15% this fiscal year. 80 | IFC.ORG/HANDSHAKE “ In the end, our soci- ety will be defined not only by what we create, but by what we refuse to destroy. —John Sawhill, former president and CEO of The Nature Conservancy ” Photo © buksy4free/flickr Subscribe: ifc.org/handshake Connect with us: twitter.com/ifcppp scribd.com/ifcppp ifcppp.tumblr.com handshake@ifc.org January 2014