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Harnessing private interest

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I zipped in and out of the Sandwich transfer station this weekend with more recycling than rubbish.   Ten  years ago, I would have waited in a line of cars stretching onto Rt. 130 waiting to unload more rubbish than recycling.  There’s a lesson here that can inform the debate over landfills and the cost of trash disposal, noted in an end of the year Globe article by Beth Daley.

The town of Sandwich opted to achieve a couple of public goods by harnessing private interests.

Faced with rising fees for the disposal of its trash, the town adopted a pay as you throw system in 2011.  Residents, who must purchase a sticker to access the transfer station, must now use specially designated trash bags which cost more than your standard bags.  The prices for the bags will increase as the costs to the town increase.  The more trash you produce, the greater your costs.

Pay as you throw was controversial.  Residents objected to the costs, particularly to families, and fears were raised that trash would litter the roadway as people tried to avoid the additional fees by disposing of their rubbish in woods and fields.

That didn’t happen and the complaints have largely turned into praise for the program.  The town was hailed as one of America’s 2012 Crown Communities by American City & County magazine for its innovation.

That’s because Sandwich did not just impose a fee or simply attempt to regulate behavior by demand; it provided a financial incentive to change behavior.

In the past, when a resident only had to purchase a sticker to enter the transfer station, there was little incentive to reduce waste or recycle.  And there was every incentive to throw every thing away in the solid waste bin.  A resident who produced little solid waste and recycled assiduously paid the same rate as a resident who produced a lot of solid waste and put all of their recyclables in the trash.

Now, with incentives in place, a resident pays more only if they produce more solid waste.  The program recognizes the societal costs of individual behavior.

The results have been nothing short of amazing.  An article this past fall in the Cape Cod Times noted that “As of July 1, Sandwich residents had reduced their solid waste by 42 percent while recycling of plastics, metals and glass increased by 74 percent, according to Waste Zero, the company that supplies bags to the town. Recycling for paper has also increased by 20 percent, the Cambridge-based company said.”

Those kinds of numbers translated into a saving of $120,000 for the first year of the program, according to the town.

While the goal for Sandwich was to reduce the costs of solid waste transfer, the public good of greater conservation has also been achieved.  To that end the town made available low-cost composters with instructions in an effort to educate the public on how to reduce their solid waste.  One sits in our backyard as a result of the program.

Greater recycling and composting is a good unto itself but the larger community benefits as the cost of transferring waste out-of-town  declines along with the tonnage of trash produced by residents.  The transfer station is now only open 5 days a week, down from 6 last year.  Another savings to the town.

These kind of local policy innovations can inform statewide debates on issues as diverse as solid waste and transportation.  Yesterday’s Cape Cod Times had a piece by columnist Sean Gonsalves initiating a discussion about a market based solution offered by the Cape Cod Chamber to impose congestion pricing on the use of the two canal bridges.  The Globe had an opinion piece by Tom Keane on the use of a market solution to alleviate pressure on Rt. 3.

The experience of Sandwich with solid waste reduction offers a very good example of how market based solutions to public policy dilemmas can achieve great results.

 

 


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