Addressing the Economics of Waste
OECD Observer

We live in a consumer society, but also a wasteful one. The EU will produce approximately 1.3 billion tonnes of waste this year. This is about 3.5 tonnes of solid waste for every man, woman and child.

The US processes 2 kg of municipal waste per person per day, the Europeans 1.1 kg; for OECD countries the total comes to over half a tonne per person per year. Only 16% of it is recycled. Apart from the 6% that goes to the compost heap, the rest is put in landfill or incinerated.

The treatment of waste is not only expensive, but causes environmental damage. Making producers of waste pay more of the direct costs can create an incentive to reduce waste generation, as well as increase recycling. The collection of papers in Addressing the Economics of Waste assesses the pros and cons of recycling waste, compared with landfill or incineration. One analysis by the Danish Environmental Protection Agency comparing treatments for PVC waste found that landfilling had the lowest costs, but also the least measurable environmental impacts. By contrast, both the treatment and environmental costs of incineration were found to be higher, whereas a mix of incineration and landfilling was cheaper than, say, chemical treatment processes.

Addressing the Economics of Waste looks at policy instruments like charges and taxes, and how consequent illegal dumping can be avoided by “advance disposal fees” which producers pay towards the estimated costs of eventually recycling their products. This builds on “extended producer responsibility” approaches where producers, importers and distributors organise the collection and recycling of defunct goods like old electrical equipment, used tyres, batteries and so on. Some measures require companies to ensure that new products placed on the market contain a given share of recycled material, though Addressing the Economics of Waste wonders if the benefits of such demands outweigh the costs.

An electronic version of Addressing the Economics of Waste can be ordered at But remember, while ordering online may save some paper, the hardware used to send and process your order may one day end up as toxic landfill.

©OECD Observer No 242, March 2004

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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