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Multi-Criteria Analysis for ERST-310: Public Policy and the

Canadian Environment

A Policy Analysis of Toronto’s


Municipal Solid Waste System

by

Timothy M. Shah

November 2008

Prepared for
Professor Karen Morrison

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Introduction

Disposing of municipal solid waste has historically been a challenging responsibility for cities
across Canada. Municipal solid waste (MSW) has become an environmental issue pushing
political agendas and having multiple implications for public policy decisions. Canadian cities
with rapidly growing populations such as Vancouver, Montreal and Toronto, will often have the
greatest challenges with waste disposal. In spite of a recent political impetus to expand recycling
and composting programs, growing cities will often encounter challenges with disposing waste
in an environmentally sound manner. Consumers, producers, the municipality and taxpayers are
all affected by this issue because they have to bear the environmental, social and economic costs.
The purpose of this analysis is to consider policy reforms that could significantly address this
environmental issue.

Municipal solid waste management is becoming more expensive. Higher costs in the MSW
process are encouraging cities to reconsider and explore new policy options that are
environmentally, socially and economically sound. Toronto has encountered obstacles with
waste disposal due to a booming population, the reluctance of other cities to accept its waste, and
numerous issues with consumer behaviour i.e. improper recycling and composting, illegal
dumping, burning and littering (Maclaren, 2004). Costs are not always rationally allocated for
waste management, forcing cities to resort to low cost waste disposal solutions such as landfills.
But clearly this policy option is not the most equitable, environmental or socially sustainable
alternative to the disposal of municipal waste. Typically, waste is shipped from one jurisdiction
to another because of cheaper disposal costs or less rigid regulatory requirements (Tammemagi,
1999).

Toronto’s dependence on landfills requires numerous garbage trucks to transport the city’s waste
to a landfill site, which is often located in other jurisdictions outside the city limits. The notion of
transporting a city’s waste to another jurisdiction has proven to be problematic. Therefore, other
policy options are warranted, particularly for large cities like Toronto. Cities are among the
heaviest polluters and producers of greenhouse gas emissions through their waste generation
practices. These garbage crises have created an increased awareness and concern regarding the
long-term effects of landfills, and provided a renewed interest in considering other alternatives.
This multi-criteria analysis will compare and examine four environmental policy options for
dealing with municipal solid waste in Toronto. They include full user pay systems, extended
producer responsibility, landfill tipping fees and maintaining the status quo. An equal decision
criteria will be used to ascertain which policy option is worthy of implementation.

Description of Policy Options

Policy Option A: Full User Pay Policy


A full user pay system or program requires city taxpayers (residents, companies, businesses) to
pay for the pick-up of general waste based on volume or weight rather than through general tax
levies that are unrelated to quantities of household waste (Dewees, 2002). Full user pay systems
can be flexible and allow the household to set out one or two bags for free before being charged
for collection (Maclaren, 2004). By attaching a cost to each bag of garbage a household
produces, the economic incentive will encourage householders to recycle more and to reduce the
amount of waste they produce (Maclaren, 2004). Due to the cost involved, the household would

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theoretically re-think how much waste it produces. Hundreds of municipalities across Canada
including Toronto rely on property taxes for financing residential waste management costs
(Kelleher et al., 2005). This municipal service can be advantageous because it has low
administrative requirements and provides a secure predictable revenue stream (Kelleher et al.,
2005). However, property tax systems may lack a cost incentive to reduce the total amount of
waste a household generates because residents can continue to produce waste and pay their taxes
at a fixed rate. The rationale for a full user pay system would be to replace the property tax
mechanism, thereby sensitizing residents about their waste generation practices and providing
them with an incentive to reduce and divert waste. When there is a direct cost involved for each
garbage bag a household creates, the household will have a better understanding of the actual
costs of waste (Ready & Ready, 1995).

A jurisdiction that has had success with a full user pay system is the Peel Region in Southern
Ontario. With a population of 1 million people, Peel is the largest municipality to adopt a user-
pay three bag system, where the first three bags are free, and the city charges $1.00 a bag after
that (Kelleher et al., 2005). In 2005 alone, Peel generated 442,015 tonnes of garbage under a
two-bag limit, diverted 60 percent of its waste from landfills through recycling, reusing and
cutting down on household waste production (Kelleher et al., 2005). Oxford County, with a
population of 100,000 is another jurisdiction that has adopted a full user pay system. Its system
charges a fee of $1.00 a bag on all bags (Kelleher et al., 2005). Both user pay systems have
resulted in a substantial increase in recycling tonnage and a reduction in garbage tonnage
(Kelleher et al. 2005). Such a policy can relieve pressure on municipal property taxes and
ultimately reduce the quantities of waste requiring disposal.

Policy Option B: Extended Producer Responsibility


If Toronto plans on achieving a high waste diversion rate and to encourage sustainable business
practices, it must consider the merits of an extended producer responsibility (EPR) program. This
policy option is premised on the prevention of waste disposal involving the manufacturing
industry and giving them the responsibility to collect their products after use by consumers.
Moreover, there is a shift in responsibility for waste from government to private industry with
aims to oblige producers, importers and/or sellers to internalize waste management costs in their
product prices (Maclaren, 2004). There must be transparency and collaboration between the
producer and the sellers for the waste management process. As a growing environmental
concern, municipal solid waste requires all stakeholders to be accountable for their actions. The
EPR policy is largely premised on recycling and reuse of materials and has the potential to
impact materials management systems for manufacturers and drive pollution prevention efforts
(McKerlie et al., 2006).Without direct preventative action through EPR policy, waste levels can
continue to rise, threatening to compromise the quality of life and health for Canadians over the
long term.

British Columbia has been a Canadian leader in its commitment to EPR. EPR policies as
illustrated in British Columbia can stimulate innovation in manufacturing companies through
reducing materials, resources and energy usage (McKerlie et al., 2006). Manufacturers can also
increase the recyclable and recycled content of their products ultimately extending the useful life
of the product and saving them capital over the long term (McKerlie et al., 2006). Through
British Columbia’s ‘full product stewardship’ legislation, all parties with a role in designing,

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producing, selling or using a product are responsible for minimizing the environmental impacts
of the product over its life (McKerlie et al., 2006). This progressive EPR policy aims to prevent
rising levels of waste and pollution. British Columbia’s EPR policy is a full management
responsibility which means that producers have to finance and operate all aspects of solid waste
management for their products including consumer education, collection, recycling, responsible
disposal, and providing recycling services. All of which create a more equitable process.
Producers may initially be concerned about this policy approach because they are responsible for
the internalization of the production costs. However, over the long-term, they can profit by
taking materials back and reusing them.

When manufacturers internalize the costs of production, the price of a product may rise which
can subsequently change consumer behaviour. The internalization of the process results in price
increases thereby forcing the consumer to pay more and account for the environmental costs.
This is critical because by transferring the costs from taxpayer funded municipal waste
management systems to manufacturers and consumers, it can enforce the polluters pay principle
where level of effort to conserve or pollute is reflected in the cost. These costs can prompt
producers and consumers to examine their waste reduction strategies to consider how to
optimally benefit environmentally and economically. EPR teaches both producers and consumers
about their waste habits and educates them about the steps needed for creating a sustainable
society prone to high waste diversion (Maclaren, 2004).

Policy Option C: Landfill Tipping Fees


The city of Toronto recently purchased the Green Lane Landfill in St. Thomas, Ontario for $220
million (Toronto, 2006). Municipal governments may charge tipping fees for non-residential
waste or for waste from other communities that are higher than the full costs incurred by these
operations (Dewees, 2002). Toronto currently has no tipping fee policy but by introducing one, it
can potentially induce more waste reduction efforts, resulting in a total decrease in the flow of
waste sent to the landfill. The main impetus for this policy tool would be to control and price
external waste which could offset the city’s own waste management costs. For instance, through
establishing a tipping fee to external users, it could cover the operating costs such as land taxes
and property fees, environmental monitoring costs like repairing liners to prevent groundwater
contamination, and service costs to offset payments for employees who work at the landfill.
With a tipping fee, Toronto could provide a stronger incentive for external municipalities to
reduce waste and reduce costs. Through maximizing economic efficiency, Toronto benefits by
charging these external users a designated tipping fee which can help offset some of the annual
costs. If municipalities continue to send their waste to the landfill because it is simply more
convenient and efficient to do so, then Toronto can consider raising its tipping fee which can
provide additional revenue to fund increased waste diversion activities. For instance, increased
revenues can be directed towards Toronto’s Greenbin composting program, blue box recycling
program or even for consumer education, teaching consumers about the merits of conservation
and waste reduction effort.

Policy Option D: Maintain Status Quo: Do nothing


There is always the option of doing nothing and not bringing about a new policy for municipal
solid waste. In effect, this would allow Toronto to continue shipping its waste to the Green lane
landfill. Waste diversion rates would eventually be ameliorated through expanding the Greenbin

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and blue box programs, both of which could see higher rates of composting and recycling. The
city has a goal of 70 percent solid waste diversion from landfill by 2010 (City of Toronto, 2008).
Achieving such a rate would extend the life of the Green lane landfill until 2034 (City of
Toronto, 2008). However, waste diversion programs would require more funding in the range of
$50 million annually to achieve this goal (City of Toronto, 2008).

Property tax revenues would still be the predominant practice for funding residential waste
management services. Municipal tax bills for waste can range from $150 to $300 depending on
your household income status (Kelleher et al., 2005). The property taxes generated from waste
management services are directly allocated to the city’s budget, which in turn provide the basis
for municipal property tax assessment (Kelleher et al., 2005). Administrative fees would still be
inexpensive and waste management would continue to be a principal and essential municipal
service. Inevitably, the cost of doing business will rise making it more expensive to truck waste
to landfills, thereby providing the impetus to expand current waste diversion programs. By
maintaining the status quo, the city could avoid any opposition or resistance to any new policies
that would have otherwise been implemented. The convenience of having household garbage
picked up at the curb for residents would continue, but as society becomes more educated about
waste management issues, the city’s position about landfill use may be challenged .

Justification of Evaluation Criteria


The ultimate objective for resolving this pervasive environmental issue would be to implement a
policy that is equitable and involves the public in decision-making. The policy goals for this
analysis will maximize economic efficiency, account for social justice, and incorporate a high
degree of environmental sustainability. The first criteria that will be used for the policy options
are the environmental impacts under the goal of environmental sustainability. Both a full user
pay system and the extended producer responsibility policy have the ability to significantly
reduce the amount of waste being trucked to landfills. Limiting the number of trucks will reduce
emissions like volatile organic compounds, nitrogen oxides and carbon dioxide, which in turn
can have benefits for society’s health. The objective for the policy is to ensure that all waste
produced from the municipality is properly accounted for and not disposed in a manner that
undermines or jeopardizes the state of the environment. Moreover, environmental impacts for
waste management should be measured to ascertain the effectiveness of waste policy.

Another criterion under the goal of environmental sustainability is collective responsibility. This
criterion is centred on diverse involvement and is indispensable for measuring waste policy
because in order for municipal solid waste to be effective and efficient, it must ensure that all
stakeholders are responsible for their waste production. Collective responsibility is a multi-
faceted approach to waste management and can be essential for waste prevention and
minimization. For environmental sustainability, everyone that produces waste is responsible for
it either through taxation, recycling, reusing or through other costs. If each party has a legal
responsibility over its own waste, then they must learn how to dispose of it in a manner that is
environmentally and economically sustainable. This has implications for waste conservation and
can dissuade parties not to resort to environmentally deleterious options like landfills and
incineration.

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The goal of providing social justice should include a criterion that is based on collective
participation. Cities will always have problems with facilities like landfills due to the resentment
and opposition from residents who live within close proximity. Alas, most environmental
burdens end up being imposed on communities with the least amount of resources. In terms of
the status quo, the Green lane landfill is situated near residents of St. Thomas, and the mass
influx of garbage trucks from Toronto would cause traffic problems in nearby townships,
consequently creating opposition. This criterion is useful because it can help facilitate the
deliberations of stake-holders by involving them and provides opportunities to develop a
consensus based approach to decision-making (Solomon & Hughey, 2007). Trust, equity and
public participation are elements of adequate social justice, but using landfills without public
consultation is not a characteristic of social justice by any degree. Collective participation under
the goal of social justice can give concerned citizens a chance to voice their concerns, and
therefore include them as stakeholders in the municipal solid waste process. Incorporating
diverse views and involvement creates a sense of ownership and accountability which can
enhance the effectiveness of the policy (Solomon & Hughey, 2007).

Another criterion under social justice should include ability to pay. Low-income households or
larger families in general, typically produce more garbage bags in a given week, and when they
are obligated to pay by the bag, it can be economically burdensome. If the household has a high
waste reduction effort, they will save money. But some may perceive this is unjust because they
simply do not have the finances to pay for the amount of garbage they produce. A producer
under an EPR policy will have the ability to pay for taking back their products because of the
cost savings from such a process. A landfill tipping fee policy can either advantage or
disadvantage a municipality if it chooses to dump waste in a landfill. The more the municipality
conserves, the higher their ability to pay because of a smaller amount of waste sent to the
landfill. Ability to pay is a useful criterion for measuring the costs of municipal solid waste and
to ascertain whether they are socio-economically inclusive. For the status quo, property taxes are
determined by a household’s income and can be regressive because there is no correlation
between the tax rate and the amount of waste generated. In addition, there is no direct incentive
for the household to reduce waste disposal because it is financed by property taxes and is a
regular municipal service.

Economic efficiency is always a high consideration in municipal solid waste. The criterion to be
used under this goal is universal cost savings, where cost savings accrue to multiple parties.
Municipalities will attempt to find options that are economical and have the ability to maximize
economic efficiency. All four policies include some degree of economic efficiency because they
are all cost effective and have the ability to save capital. The objective of such a criterion would
be to induce good consumer/producer behaviour through transparency in costs. A user pay
system for instance, can cut the costs of waste disposal as the household consumes less garbage.
A landfill tipping fee can provide additional funds for Toronto’s waste management services, and
more funding for current and future waste diversion programs. The city gains through its
ownership of the landfill and maximizes economic efficiency by charging municipalities for
dumping. An EPR policy can save a producer/manufacturer economically through reusing
products and minimizing the need to extract further resources which may be more costly. Finally,
the status quo keeps the property tax scheme in place and allows Toronto to send its waste to

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landfills which is the cheapest option in the short term. Waste diversion programs are still
operating and the city runs a budget surplus for its waste management services.

Equal Decision Criteria Alternatives


Goals Criteria Status-Quo EPR User Pay Landfill Tipping
Fee
Maximize Universal Reasonable- Very Good- if all Depends if tipping
Economic Cost Savings manufacturers good households fee is re-directed
Efficiency have limited cost participate into waste diversion
savings
Aim for Ability to pay Depends on Excellent Depends on Reasonable- can
Social Justice household waste discriminate against
income reduction poorer
effort municipalities
Collective Good- waste Very Very good Unclear-hard to
Participationdiversion good determine
programs involve
all households
Incorporate Environmental Poor- continued Excellent Good- Poor-waste still
Environmental Impacts dependence on depends on being dumped in
Sustainability landfills compliance landfills
and
participation
Collective Good- taxpayers Excellent Good- Unclear- hard to
Responsibility contribute conserving evaluate because
funding for waste less is better municipalities can
diversion for the avoid tipping fee
programs environment and dispose of waste
cheaper; less
environmentally
friendly.

Discussion of Results
Based on the matrix above, policies will have their advantages and disadvantages. The EPR
policy appears to be consistent for the criteria evaluation. In terms of economic efficiency and
cost savings, all parties have the opportunity to benefit because of incentives. Producers can
reuse and recycle their products which are less expensive than extracting more material to create
new products. Consumers also have an economic incentive through a deposit return system to
bring back their goods to the manufacture after its use. Such a process induces collective
participation, collective responsibility and accountability, all of which lead to waste prevention
and minimization, and have fewer impacts on the environment. A user pay under universal cost
savings received a “very good” because households can save significantly. Moreover, if
households reduce waste, the municipality is not required to send as much waste to landfills
which also cuts down the cost for the city, taxpayer and consumer.

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In examining the cost savings and ability to pay for the status quo versus the user pay, a formula
can be used: where tc represents total cost of municipal solid waste, pt is
the fixed property tax rate, h is the number of household residents, b(c) is the total number of
bags multiplied by the cost of the bag, and w represents the number of weeks. If Toronto had a
fixed property tax rate of $300 per year, and a household of four produces three bags of garbage
a week at cost of $1.00 per bag, then the following would occur: .
Therefore, if a family of four is using 1.3 bags per capita every week, their total waste
management costs will be:
1.3 * 52 = $67.6 per year. Thus, by subtracting the property tax of $300 from the user pay
amount of $67.6, the difference is $232.4. To calculate the percentage decrease: amount of
decrease 232.4/initial value of 300 * 100 = 77 percent. This shows that a user pay system can
have higher cost savings if households choose to consume less and recycle more. A household’s
ability to pay is determined by their waste reduction effort; generating less waste results in lower
costs. Therefore, for the goal of economic efficiency, it is clear that a user pay policy option
may be more economical for households than the status quo which relies on property taxes from
households to finance municipal solid waste. With a user pay system, the city would not bring in
as much revenue (to finance public services) however, they would not need to send as much
waste to landfills because of the decrease in waste consumption. This would ultimately save the
city capital.

A landfill tipping fee has the potential to achieve high economic efficiency but depends on
universal cost savings. Optimal pricing for tipping fees should include the costs of service and
labour, environmental monitoring, and operating the landfill including property taxes. The
following scenario explains how a landfill tipping fee policy would work. Two municipalities
decide to send their waste to the Toronto-owned Green lane landfill. They both send an average
of 150 tonnes of garbage every week to the site equalling 300 tonnes in total. Toronto
implements its landfill tipping fee and sets an arbitrary price of $100 per tonne for external users.
This translates into:
300 tonnes * $100 per tonne * 52 weeks = $1, 560,000. This amount represents the revenue from
the tipping fee in just one year. On the cost side, the following equation can be used:
t = oc + e + s, where t is the total cost of managing the landfill, oc is the operating costs, e is the
environmental monitoring cost, and s is service cost.
Therefore, if operating costs oc were $700,000 per annum, e was $400,000 and s was $500,000
then the total costs of managing the landfill would be $1,600,000 per annum. Therefore, the
money collected from the tipping fee can considerably offset the total costs of operating the
landfill. This can provide Toronto with more economic flexibility when it manages waste
diversion and provides waste consumer education. It can also discourage municipalities to send
their waste to the landfill because of the exorbitant tipping fee in place.

The goal of social justice produced mixed results. Collective participation and ability to pay
varied for each criterion. As shown in the equation, a user pay can work out to be more equitable
and reasonable for the household if they choose to produce less waste. The status quo involves
households in municipal solid waste because they ostensibly participate in waste diversion
programs. However, this policy received “reasonable” because Toronto would continue to send
waste to the landfill and fuel opposition in nearby townships. As exemplified in Michigan, the

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trucking of waste from one jurisdiction to another is problematic because the people are not
adequately consulted or engaged in the process. Striving for a higher waste diversion rate will
require enhanced participation from the public and ensure that their needs are being addressed
from the municipality. For collective participation, it is hard to determine where a landfill
tipping fee would place because the process only involves the municipality who is willing to use
the landfill, the municipality who owns the landfill. For ability to pay, the landfill tipping fee
received a “reasonable” because the owner of the landfill can discriminate against poor
municipalities through setting a high tipping fee. This can be good because it can force willing
municipalities to encourage better waste diversion to cut down on their waste. However, it can
also be bad because these municipalities may take their waste to another landfill that does not
have a tipping fee in place, or to a poorly monitored dumpsite.

Under the goal of environmental sustainability, the landfill tipping fee policy received a “poor”
because waste is still being sent to the landfill and thus may continue to have environmental
impacts. Though revenue collected from the tipping fee can be theoretically directed to waste
diversion programs, this would not compensate for the environmental impacts caused by the
overuse of landfill. EPR was given an “excellent” because it is premised on waste prevention and
this ultimately has no environmental impact and involves responsibility by all parties. Producers
and consumers only win environmentally, socially, and economically if they collaborate in the
municipal solid waste process. An EPR policy significantly cuts down on aggregate extraction
from the natural environment. It can minimize environmental impacts because manufactures cut
down on the exploitation of resources, thereby sustaining resources and encouraging
environmental sustainability.

As shown in the matrix, each policy alternative is unique to its set of criteria. Based on the
discussion of results, this paper would recommend the EPR policy. This policy is consistent
with all three goals- maximize economic efficiency, provide social justice and strive towards
environmental sustainability. In addition, each set of criterion appears to be achievable under an
EPR policy. Again, collective responsibility is an indispensable component of municipal solid
waste. The optimization of the EPR policy depends crucially on the presence of household
waste reduction effort and more importantly by placing the environmental, economic, physical
and informative responsibilities on the producer. EPR teaches both producers and consumers
about their waste habits and educates them about the steps needed for creating a sustainable
society prone to high waste diversion

Conclusion
Municipal solid waste is an environmental issue insofar as it relies on conventional waste
practices like landfill use and incineration. MSW can be revitalized through the alternative
policies that this paper has identified. Each policy option is not exclusively environmental in
nature, but encompasses a broad range of criteria to evaluate the efficacy of including such a
policy. Waste prevention should be the utmost consideration for MSW, and extended producer
responsibility would be capable of fulfilling such a task. Recycling initiatives and waste
diversion programs are also important to municipal solid waste, but first and foremost, initiatives
for reducing waste should involve all parties and an EPR policy is capable of doing this.
Toronto’s population is expanding and its purchase of the Green Lane landfill will give the city
more flexibility with municipal solid waste. As discussed, although a landfill tipping fee is not as

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all-encompassing as an EPR, it is something the city could consider for maximizing economic
efficiency and for the potential augmentation of waste diversion programs. The twenty-first
century is going to encounter several issues around the environment, economy and social justice.
Public policy decisions should be inclusive and feature a plethora of criterion so that all factors
are taken into consideration to make the most optimal choice. For this environmental issue which
is projected to worsen if no action is taken, there are numerous policy alternatives available.
However, in terms of economics, environmental sustainability, social justice and involving
several stakeholders in the process, an EPR policy is worth considering, for it remains the most
logical and rational decision based on this analysis.

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