PAYT Is SMART

Instead of taxes or flat fees, PAYT cities charge for trash services in much the same way we pay for electricity and gas.

As if cities need yet another compelling reason to adopt Pay As You Throw, or PAYT, a new 2010 study entitled “Unit-Based Garbage Charges Create Positive Economic and Environmental Impact” provides evidence of environmental and financial gains for PAYT cities.

Conducted by Green Waste Solutions and the EPA, the study analyzes PAYT in over 120 cities in New England, showing that transparent disposal costs fit the SMART model (i.e., save money and reduce trash). Indeed, residents in PAYT cities, even if they already recycle, dispose of about half as much waste as do cities where garbage costs are hidden in taxes-and they save commensurate amounts of their disposal costs in the process.

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Under traditional trash-collection systems, homeowners pay for trash services through the general tax base or through a quarterly flat fee whereby residents incur no financial consequence regardless how much or how little they throw away.

PAYT breaks with this old tradition. By attaching a unit price to the amount of garbage residents discard, the SMART financial incentive encourages people to conserve resources (e.g., by reusing, recycling, composting, or generally throwing out less).

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Economic Savings
In these delicate days of multiple, challenges, it is imperative that we conserve environmental as well as fiscal resources. According to Janice Canterbury of the EPA, marketplace forces “create a direct economic incentive for resource conservation rather than wasteful behavior. Clear and equitable price signals are the best way to sustainably change the way we each think about our wasteful consumptive patterns.”

But, while city managers appreciate the environmental benefits of PAYT, most admit that the main driver for implementation is that of saving money and creating good, green jobs. PAYT’s 45% less waste equates to about 45% less cost-for collection and disposal of the wastes. And, these savings accrue to the city coffers and to the citizens who chose to reduce wastes and recycle. As a result, PAYT approval ratings in SMART cities often exceed 90%.

Toward Zero Waste
“PAYT is the first step toward achieving any serious waste reduction goal” says San Francisco Mayor Gavin Newsom, whose city has set for itself the goal of 75% waste reduction in 2010.

According to Kevin Drew, the recycling coordinator in the San Francisco Department of the Environment, “The secret to sustainable behavior change is PAYT. Sending a price signal makes residents think twice about what they throw away. Using a linear-unit-based pricing system sends a clear message to residents and has provided the foundation that the city has expanded upon.”

Without this price signal, adding electronics and reuse programs would have fallen on deaf ears. Since residents have chosen a specific size of trash container, they have felt very receptive to alternative programs that pull additional materials out of their cart, whether it’s hazardous waste, electronics, used clothing, or home goods.

“San Francisco has had PAYT rates for decades, but we have gone further to create incentives for our residents, our businesses, and our garbage-collection company to divert more and throw out less,” Drew says. “Our citizens and businesses pay less when they reduce their garbage volume, and the collection companies get a bonus profit if they reach overall disposal targets and internal operations diversion goals. It’s a real win-win. This system of incentives has been paramount in spurring the growth of all our diversion programs, and it has led to our disposal in 2008 being the lowest since 1960s, over 40 years ago. We expect to keep driving disposal down toward zero and using a rate structure that rewards that behavior.”

“Green” jobs are another unexpected yet welcome benefit of San Francisco’s aggressive waste-reduction strategy, says Drew. “The city has hired squads of trash and recycling inspectors recruited from a pool of residents who were currently unemployed. Their mission is to examine what is left in the waste to help the city target geographic areas as well as specific items in the wastestream where residents need further education [e.g., cell phones, small household appliances, or used clothes]. As the waste continues to decrease, it’s important to recognize what is left in our garbage, so the city can develop mechanisms for collection and end-use markets.”


Per capita waste disposal: PAYT versus non-PAYT curbside

Goodwill Industries is a perfect example. “Many Americans don’t realize just how many reuse and recycling facilities Goodwill operates in every state,” says Richard Borer, president of Goodwill Industries in Orange, CT. “We employee people nationwide, and these are green jobs. Goodwill Industries has developed infrastructure, systems, and end-user markets and is poised for municipal partnerships into the next decade.”

The phrase, “One man’s trash is another man’s treasure,” is truer than ever as we approach the year 2020. Currently 60% of the waste buried in landfills comes from single-family homes.

“The state of South Carolina has a 7% residential commodity recycling rate, the resources needed to grow our state’s recycling industry are being buried in landfills. Recovering these valuable materials could create 8,000 jobs, with a $2.4 billion economic impact,” says Gerry Fishbeck, chairman of South Carolina’s Recycling Market Development Advisory Council.

One method for changing residential disposal habits is PAYT. It’s the perfect area to treat as a utility. Sending a price signal based on use could change the wastestream and turn our trash into treasure-and jobs.

Environment
“The really great thing about PAYT is that it aligns economic and environmental priorities so they are working to support each other,” says Richard Denison, Ph.D., with the Environmental Defense Fund in Washington, DC.

When residents recycle their waste rather than throw it away, their recycled materials are available for use in new products, helping to limit the demand for virgin materials and saving the energy that would otherwise be required to harvest, process, and manufacture products based on virgin materials.

According to the EPA’s Jan Canterbury, “Even better than recycling is source reduction-that is, waste prevention-which is the most valuable ecological benefit of PAYT.” Cities refer to it as “missing garbage” and residents say that much of the material goes to charitable organizations, to electronics recycling, or is given to a friend for backyard composting.

Trash is not a mindless thing anymore. “Placing an economic value on something at the curb definitely changes behavior, claims Daniel Morgado, town manager for Shrewsbury, MA. “In the first full year of PAYT, the town generated 25% less overall material [i.e., waste and recycling combined]. People consciously purchase differently. I know I do.”

Shrewsbury reduced the amount of trash taken to the waste-to-energy facility by over 40% and realized a commodity-only recycling rate of 34%. A clear price incentive may remind people to think twice about things they purchase and things they throw out.

In other words, PAYT may help establish long-term sustainable behavioral changes throughout all sectors of the community.

Equity
Another important reason more citizens are pressing their political leaders to adopt PAYT is its equity benefit. “The best analogy for PAYT,” says Canterbury, “is that it is simply the most fair and equitable way to pay for our trash services, based on how much of the service we use.”

In traditional systems, residents who recycle and prevent waste subsidize their neighbors’ wastefulness. That is simply not fair or sustainable, and citizens resonate with fairness. In an online Wall Street Journal poll, an overwhelming 84% of respondents voted that people who throw out more trash should, indeed, pay higher disposal fees.

Education
“PAYT is a great tool for educating the public. We now have an environmentally aware community where people are proud of what they are helping to accomplish” says Mick Mercer, from the Streets and Sanitation Department in Loveland, CO.

“PAYT is a SMART way to educate citizens about changing our wasteful habits. When you create a measuring cup for waste and put a value on it, people will think twice about how quickly they fill it up,” says Diane Duva, from the Connecticut Department of Environmental Protection. PAYT makes it easier for the city to educate residents about items that are not allowed in the wastestream, such as paint, motor oil, electronics, and chemicals, and offers a SMART financial reminder that these specific items should never be placed in their trash.


Overall generation (per capita waste plus per capita commodity recycling)

A case in point is in New Haven, CT, which recently had a council member call up and complain that when his container was dumped, the garbage attendant dripped paint across the driveway. The city response was, “The paint should not have been in the container in the first place.” In a SMART city, the space would be seen as valuable and the resident would be motivated to understand what goes in the trash.

So, can PAYT help us learn to distinguish between living comfortably and the profligate excesses of consumerism and planned obsolescence? Are we so addicted to our disposable/throwaway society that we risk “throwing it all away?” Can we break the stigma associated with being frugal and learn to conserve?

Successes Shines from Sea to Shining Sea to Shining Sea
Pick any region on the map and you will find SMART cities, such as San Jose, CA; Wyandotte, MI; Austin, TX; or Decatur, GA, all of which have reduced their residential wastestreams between 40% and 60%.

SMART cities are showing similar decreases in waste internationally. Seoul, South Korea, population 10 million, decreased its waste 42% after implementation, and countries like Austria, Belgium, and Germany, where unit-based pricing is the norm, dispose of 50% less per capita than the US.

“The success of this program can be attributed to the residents. They have embraced it. The people have really been the champions,” says Ellen Ryan, a city official in San Jose, CA. Out of the 200 municipalities surveyed in San Jose, 91% indicated that the majority of the residents like the new program better than the old program.  MSW_bug_web

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