Trash II - the revenge

This post is a follow-up to Helena’s post on trash in India. I have been studying the financial aspect of the waste management in Mexico for the past weeks and I have to agree with Helena: it’s a fascinating topic.

Mexico – as most of developing countries - has a huge problem with waste. Only 50% of all the waste produced here has a safe destination. I’m not saying it’s properly recycled and used for biofuel, no, I’m just saying that only 50% of the waste is taken out of the open air. Waste has a long list of negative externalities: health, pollution, and here in Mexico even air traffic disruption. “What did you just say?” you might ask. Let me explain.

Municipalities spend a great percentage of their budget on waste collection – from 20 to over 60%. And they just can’t handle efficiently the piles of waste that is produced daily. One Mexican municipality did what most municipalities do: pile it up on an open-air landfill. After years and years of waste disposal, the piles were so high that they were endangering the air traffic to the airport nearby. Picture that!

I think waste management has many aspects:

• Broken window effect

In urban centers, if the streets are clean and you can find trash cans everywhere, people would respect more the social optimum and wouldn’t throw trash on the street, as they would do in absence of these signs of cleanliness. How to change the social norm of what is accepted in term of dumping waste?

• Social aspect

In developing countries, there are people that make a living from collecting recyclables from the trashcans. Yes, it’s degrading human condition. This lumpenproletariat works in inhuman conditions, exposed to all kind of health threats. However, any attempt to make waste management more efficient has to integrate these people, that found a way of making a frail living from the waste, so they do have jobs after.

• The limits of Government efficiency

Governments that cannot deal with the waste management have to find partners to do so. The obvious answer is PPP – Private Public Partnership. However, private sectors companies involved in waste management vary from absurdly corrupt (as any paulista* will tell you) to innovative companies that use waste to recycle, produce biofuels and are able to minimize the negative externalities from the waste. The difficulty is how to design a proper contract, an efficient monitoring agency and a fair price to pay.

• Ecology

How to minimize the effect of the waste we produce everyday? Recycle and reuse seems to be a good policy as long you already have an ecological social norm in place. I think we could expect some entrepreneurial activities focusing on using waste in more efficient ways than dumping.
For some reason as I write this, I have the car from "Back to The Future" in mind, it used trash as combustible. Does anyone remember that?


*paulista=born in São Paulo.