Social cost–-benefit analysis of solid waste management options with application to Mumbai, India

Abstract

Managing solid waste continues to be an environmental, technical and economic challenge, especially for developing countries. Though these countries’ urban local bodies (ULBs) are moving up the waste management hierarchy, most waste is still openly dumped. One key reason for this choice is the non-accounting of (a) social costs associated with open dumping (OD) and (b) direct/indirect benefits of other options. The current study conducts a complete social cost–benefit analysis (SCBA) comparing OD to sanitary landfilling, composting, bio-methanation, incineration and gasification alternatives. The study finds that when only private costs/benefits are considered, a mix of OD and sanitary landfills is preferred; however, when external costs/benefits are factored in, the mix shifts towards alternatives like incineration and gasification. These learnings from the SCBA are then applied to Mumbai, which generates 9000 tonnes of waste daily. To determine the optimal mix for Mumbai ULB, a constrained optimization exercise is carried out considering the technical feasibility of the alternatives and the ULB’s capital budget. The study finds that with the current practice of OD, the net present value (NPV) of the social costs over a 30-year horizon will be over US$ 6–9 billion. However, even if one-fifth of the ULB’s capital budget is allocated towards other waste management alternatives, the mix would shift towards sophisticated technologies and the NPV of social costs would reduce to around half that amount.