CM: SWC Credit – Solid Waste Collection Cost Transparency

The Big Picture

SWC Credit: Solid Waste Collection Cost Transparency

(2 points, Reciprocal)

Credit Summary

The purpose of this credit is for local governments and industries to calculate the cost of collecting and transporting waste, and to make this information available to customers. Increased cost transparency can boost trust between customers and waste management systems, as customers can understand what their money is being spent on. Industries and municipalities that have made their operating costs public have become more efficient, thereby contributing to environmental goals.

Impact Summary

Disclosing expenses improves customer trust,and consequently increases its reputation and the amount of customers that rely on the company for their waste management needs. If customers know exactly what their money is being used for, they could be willing to pay for environmentally friendly services that are more costly. In the past, companies have successfully garnered support for environmental initiatives by showing how exactly money will be used. Additionally, cost transparency can improve the budgeting of companies and allow them to gain a sense of how they compare to competitors in the industry. 

Submittal Summary

To meet the standard requirements, industries and municipalities need to compute the cost per ton, cost per household or per capita, or cost per collected yard per commercial customer of collecting and transporting municipal solid waste, recyclable materials, and compost. They then must illustrate how these costs are covered and lastly make this cost data available to its customers.

Case Study and Benefits Summary

The North Carolina Institute of Governmentthe researched the solid waste budget of seven cities. Their study found that cities in which people recycle more charge less per ton for recycling than for municipal solid waste. This discovery may incentivize customers to partake in recycling programs  and cause the industry to lower its prices due to its increased sources of revenue. 

A similar study in North Carolina showed that full cost analyses help industries and governments manage their budget more comprehensively, causing them to economize on extra costs and dedicate saved money to other environmental initiatives. 

Intent and Requirements

Intent

To provide transparency to the cost of collecting and transporting waste materials.

Local Government & Industry Requirements

Calculate the cost per ton or cost per household or per capita (single and multifamily) or “cost per collected yard” per commercial customer of collecting and transporting discarded materials, including mixed waste, recycling and organic material, from the Local Government jurisdiction or Company’s service area.

Submit documentation that verifies that:

  • Collection is from curbside to transfer station or final disposal.
  • Transportation is from transfer station to MRF/Landfill/Compost facility

Demonstrate a:

  • Break down cost by waste stream. MSW, Bulky, C&D, Recycling, Universal Waste, etc.

Demonstrate how costs are covered.

Make cost data available to waste customers in the Local Government and/or make cost data available to those serviced by the solid waste Company.

Why We Care

Providing cost transparency can occur at both the industry and municipality level, and it benefits all actors who play a role in the life cycle of waste. Firstly, disclosing expenses to customers adds value to the industry by increasing customer trust. As trust increases, other customers are likely to rely on the company for their waste management needs because of its honorable reputation. Furthermore, if customers know exactly what their money is being used for, they could be willing to pay for environmentally friendly services that are more costly. In the past, companies have successfully garnered support for environmental initiatives by showing how exactly money will be used.

Cost transparency also helps industries and municipalities become better at budgeting, as they can see trends over time and understand what part of the collection and transportation process incurs costs, causing them to change certain practices to save money. Also, cost transparency can incentivize them to switch over to fuel efficient technology to increase performance, which would lower greenhouse gas emissions. Lastly, companies and municipalities can gain a sense of how they compare to others in the industry, which can incentivize them to be innovative in order to lower costs and expand their customer base.1

How to Meet the Requirements

Potential Strategies:

  • Include performance/service and labor rate issues.
  • Evaluate whether there are cross subsidies between residential and non- residential collection.
  • Only top-level costs need to be presented, e.g. MSW collection cost = $75/ton; Recycling Collection $120/ton or $4.37/household/month. Breakouts of these costs are not required.
  • Indicate whether commercial material collected is compacted after collection and before disposal.

Required Documentation

Case Studies

The North Carolina Institute of Government conducted a study in which they analyzed seven city solid waste budgets. They found that cities in which people recycled more actually charged less per ton for recycling than they did for municipal solid waste. This is contrary to what is often perceived about recycling: that it is more expensive, and therefore is not worth the inconvenience. Knowing that the cost of recycling is not exorbitantly high can incentivize customers to partake in it and cause the industry to lower its prices because of the increased number of sources of revenue.

A similar study in North Carolina showed that full cost analyses help industries and governments manage their budget more comprehensively, causing them to economize on extra costs and dedicate saved money to other environmental initiatives. 

Reference Standards

N/A

Definitions

Bulky 

EPA Definition: Refers to those items that are large enough to warrant special collection services separate from regular residential curbside collection. Examples include major appliances and furniture.

C&D Waste

Relevant ReTrac Definitions:

Construction, Renovation and Demolition (CR&D) Waste – Construction, renovation and demolition (CR&D) waste, also referred to as demolition, land-clearing and construction waste (DLC), refers to waste generated by construction, renovation and demolition activities. It generally includes materials such as brick, painted wood, drywall, metal, cardboard, doors, windows, wiring, etc. It excludes materials from land clearing on areas not previously developed. It excludes materials from land clearing on areas not previously developed. CR&D waste can come from residential sources such as house renovations or from non-residential sources for example the construction or demolition of office buildings.

EPA Definition: Debris generated during the construction, renovation and demolition of buildings, roads, and bridges. Construction and demolition (C&D) materials are generated when new building and civil-engineering structures are built and when existing buildings and civil-engineering structures are renovated or demolished (including deconstruction activities). C&D materials often contain bulky, heavy materials such as: Concrete, Wood (from buildings), Asphalt (from roads and roofing shingles), Gypsum (the main component of drywall), Metals, Bricks, Glass, Plastics, Salvaged building components (doors, windows, and plumbing fixtures), Trees, stumps, earth, and rock from clearing sites

CORR Definition of C&D materials: Building materials from the construction, renovation or demolition of building structures (excluding land clearing, grubbing, and excavation materials).

Commercial Customer 

Law Insider Definition: Commercial Customer means a business entity that has procured or attempted to procure goods or services from another business entity for business purposes, as opposed to personal, family, or household purposes.

Compaction 

Cambridge Dictionary Definition: To press something together in a tight and solid way.

Labor Rate 

Accounting Tools Definition: Labor rates are used to determine both the price of employee time charged to customers, and the cost of that employee time to the employer.

Mixed Waste 

EPA Definition: A waste that has a hazardous component and a radioactive component.

 MSW 

EPA definition: Municipal solid waste (MSW) (also called trash) consists of everyday items such as product packaging, yard trimmings, furniture, clothing, bottles and cans, food, newspapers, appliances, electronics and batteries. Sources of MSW include residential waste (including waste from multi-family housing) and waste from commercial and institutional locations, such as businesses, schools and hospitals. The Environmental Protection Agency’s (EPA) definition of MSW does not include industrial, hazardous or construction and demolition (C&D) waste.

Organic Material 

SWANA Definition: Solid Wastes containing carbon compounds that are capable of being biologically degraded, including paper, Food Residuals, wood wastes, Yard Debris and plant wastes but not metals and glass or plastic. 

Recycling 

EPA Definition: Recycling is the process of collecting and processing materials that would otherwise be thrown away as trash and turning them into new products. 

Recycling Material 

SWANA Definition: Substance that can potentially be reused as or recycled into a recycled material or recycled product.

Universal Waste

EPA Definition: The federal regulations identify four specific categories of materials that can be managed as universal wastes: batteries, pesticides, mercury-containing equipment and lamps.

Waste Stream 

WM Definition: The “waste stream” is a term to describe the entire life cycle of the garbage we produce – from putting out the trash and recycling for pickup to landfilling, energy production and the reuse of recycled materials. 

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