Value of Solid Waste Management Improvement
Attributes
Medium: Land
Country: Malaysia
Analytical Framework(s): Contingent Valuation, Other
Unit(s): WTP, WTP (Choice Modelling)
Study Date: 2001
Publication Date: 2002
Major Result(s)
| Resource/Environmental Good | MYR, per household per month (2001) |
MYR, per household per month (2014)1 |
USD, per household per month (2014)2 |
|---|---|---|---|
| WTP for improvements in collection freqency | 2.46 | 3.23 | 0.93 |
| WTP for improvements in waste disposal methods | 3.99 | 5.23 | 1.52 |
| WTP for improvements in transportation mode | 3.26 | 4.27 | 1.24 |
About the Inflation Adjustment: Prices in Malaysia (MYR) changed by 31.11% from 2001 to 2014 (aggregated from annual CPI data), so the study values were multiplied by 1.31 to express them in 2014 prices. The study values could be expressed in any desired year (for example, to 2026) by following the same inflation calculation and being sensitive to directional (forward/backward) aggregations using your own CPI/inflation data.
Study Note: In Malaysia, the local government authorities have been responsible for solid waste (SW) management services. However, over the years, various weaknesses in the institutional, financial and technical aspects, have led to inefficiency in the provision of services at various levels. These contrast with the increasing waste generation rates and environmental awareness among the general public. To reduce the burden faced by the local governments, the privatization process was initiated in 1996 with the aim of attaining an efficient management system to enhance environmental quality through resource, re-use and waste minimization. However, there are uncertainties in consumers' attitude towards a number of waste management issues that may hinder the implementation of effective privatized solid waste management options. A critical issue relates to consumer demand or willingness to pay with the types of services characteristics and disposal options that the private contractors can offer.
Study Details
Summary: This study employs non-marketed goods valuation techniques - Choice Modelling (CM) and Contingent Valuation (CV) - to elicit consumers' willingness to pay (WTP) for different service options. The CM especially aims to estimate the implicit price for each service attribute such as the collection frequency, mode of transportation, the provision of facilities and containers to facilitate separation of waste at source and the tradeoffs among these attributes. Other important objectives include assessing the frequency of generation and magnitude of SW and to understand households' knowledge, attitude, and behavior on various wastes reductions strategies. The study found that households place a high value on improvements in SW management plan. Specifically, households are willing to pay a premium for improvements in collection frequency [MYR 2.46 (USD 0.65) per month], waste disposal methods [MYR 3.99 (USD 1.06)], and transportation mode [MYR 3.26 (USD 0.87)], ceteris paribus (assuming all other variables are unchanged or constant). However, the results on kerbside recycling attribute was inconclusive. The CM reveals that households derive positive utility from the provisions of recycling facilities and compulsory kerbside recycling. The CV, on the other hand, indicates that respondents are not willing to pay any additional waste charges for non-voluntarily compliance of kerbside recycling, despite the provision of free recycling facilities by service providers. The CV suggests that recycling costs on the part of participating households outweigh the utility derived from the provisions of recycling facilities and the resulting environmental gains. It is also conceivable that the lower WTP estimates under the CV (mandatory recycling scenario) are a consequence of strategic behavior. If this is true, then the CM estimates are a better reflection of the true household preferences for the recycling attribute. Further studies are clearly needed to gain a better understanding of such household behavior. Results from both the CV and CM can be used by service providers to identify any mismatch between what the public actually wants and are willing to pay for and the affordability of supply on the part of service providers. In this way, an efficient SW management outcome will be identifiable. Although there are some controversies on the recycling attribute, the CM results may lend support to the imposition of some additional levy for the provision and maintenance of kerbside recycling facilities. The study has also gained some insights on the pattern of household waste flows in the context of material balance analysis and has generated information on marginal pricing for solid wastes. This analysis is useful as a guide to help service providers and policy-makers formulate an appropriate unit-based or volumetric pricing strategy. Any policy proposal affecting solid waste management in Malaysia needs to be comprehensive, integrated, and incentive-compatible while yielding the needed environmental impacts. A mix of policy instruments including economic incentives, adequate recycling and related infrastructure, and moral suasion are imperative to shape households' behavior to be consistent with waste minimization philosophy.
Site Characteristics: Managing solid wastes (SW) has become a major problem for local governments in Malaysia. In 1998, Malaysia generated about 5.5 million tonnes of SW of which a quarter was produced in the Klang Valley alone, the most affluent area in Malaysia. In 1995, percapita generation rates averaged 0.77 kg/person/day. These rates are expected to increase steadily as the Malaysian economy grows. SW generation for 2000 was estimated at 3.9 million tonnes with 1 kg per capita daily. Some urban areas in the country have already generated MSW as high as 1.2 kg per person per day - substantially close to the major high-income economies. In Malaysia, to date, there is no single agency responsible for solid waste management (SWM). Legally, SWM is under the state government - the State Local Government Division. The main agencies implementing SWM are the Local Authorities. The Local Government Department in the Ministry of Housing and Local Government provides policy and technical guidance to Local Authorities. Related agencies include the Department of Environment (DOE) and the Town and Country Planning Department. There is also no comprehensive legislation on SWM in Malaysia. Existing legal frameworks involving SWM are the Local Government Act, 1976; Environmental Quality Act, 1974; Streets, Drainage, and Building Act, 1974, and the Town and Country Planning Act, 1976. A Parliamentary Solid Waste Act has been formulated and is proposed to amend all the above acts. Part of the proposal includes the transfer of responsibility of SWM from state to federal government.
Comments: This study provides two important insights for public and private policy-makers: (1) incorporation of demand-side information into the design of municipal solid wastes (MSW) management services/attributes and fee schedules, (2) programs to increase households' participation to reduce wastes at source. The results from this study can be used to produce estimates of the value of multiple service alternatives or the total value of a SW management package.