Keywords: economic tools, implicit costs, municipal solid waste, waste tax, India
Economic insight into municipal solid waste management in Mumbai: a critical analysis
Mumbai generates 6256 tonnes of waste every day, of which 17.20% is recyclable, but only a fraction of this is retrieved by rag-pickers. The economic value of the retrieved material is not considered by the Municipal Corporation of Greater Mumbai in valuing the waste management system as there is no retrieval mechanism except the informal rag-picking activity. Moreover, the cost of land used for the dumping of waste is also not accounted for. In the present paper, a comprehensive cost-benefit analysis for the present system of municipal solid waste management in Mumbai is carried out, with due consideration for implicit or hidden costs and benefits. Accounting for the implicit costs and benefits showed a difference of $6 per every tonne of waste disposal. This could show a considerable difference in policy development at the municipality level. Demand supply analysis proved that the present system of waste management would not yield a feasible market solution without private sector participation. With the increasing demand for improved waste management, private sector participation is essential and a Pigouvian tax is a necessary tool to make the private sector participation in solid waste management a success.