The presentation discusses the economic risks and opportunities associated with new waste legislation in Cape Town, emphasizing the need for waste minimization alongside traditional waste management services. It highlights that landfilling remains the primary waste management option despite sustainability concerns and outlines the financial implications of various waste diversion strategies. The document calls for a systems approach to waste management, integrating stakeholder input and assessing costs and benefits of alternative service delivery mechanisms.

1. Economic risks and opportunities of new waste legislationEvidence from Cape TownPresentation at Waste In Business Seminar, 14 April 2011byMartin de Wit(As based on inputs to a study for City of Cape Town by the Akhile Consortium)

2. Legislative driversThe National Environmental Management Waste Act, into effect on 1 July 2009requires that waste minimisation be considered by municipalities in addition to municipal services such as cleaning, collection and disposal to landfill.City’s Integrated Waste Management BylawWaste minimisation as specific functionSection 78 (3) Assessment of Alternative Service Delivery (ASD) mechanisms (Local Government Municipal Systems Act (MSA)) One of the requirements of the MSA is to assess costs and benefits of alternative service delivery mechanisms.

3. International evidenceno one preferred waste management option is identified, highlighting the importance of an assessment based on local conditions. with the exception of a few countries,landfillingremains the default option, even in several highly developed economies. waste collection and sorting options are vital in a sustainable waste management system, as this choice determines which downstream waste management treatment option(s) will be most effectivecomposting options struggle to be financially viable and only have a chance of being successful at high volumes with a marketable qualitythermal treatment yields net environmental benefits when compared tolandfillingand mechanical-biological treatment options, but is financially expensiverecycling proves difficult to implement in relatively large volumeslandfillingremains the most widely used waste management option, but once the full costs are taken into account the sustainability of this option may be questioned

4. Systems approachEmphasisesthe needfor a systemsapproach. A system has a purpose and consists of an interrelated set of elements or components An integrated waste system is one that recognises:the different elements of the waste system as a whole from generation to disposala range of options on various scales (e.g. household, neighbourhood, city)interactions between the waste system and other systems (socio-economic systems for example) inputs from various stakeholders and interest groups in the design of a system that is acceptable and feasible

5. Economic Systems ModelNet Additional Cost = Total Additional Costs – Total Additional BenefitTAC mainly include:Additional Cost of Collections (incl. Transport)Additional Cost of ProcessingDecrease in Revenue from DisposalTAB mainly include:Avoided Disposal CostSavings on Planned Expansions (airspace saved)

6. Data on generation and diversionFormal waste management system in Cape Town (MSW and private) handled over an est. 3 million tons of waste in the 2008/2009 financial yearRound ¼ of the waste in the formal waste management system diverted from landfillMostly commercial and industrial re-use and recycling, but also by MunicipalitySource: Wise, C. Jeffares & Green

7. Financial baseline dataR1.5bnR317m+/- R480ppSource: Akhile Consortium (2011) as based on City of Cape Town data, 2009/10

8. Baseline costs per ton MSWThe estimated average cost per ton of waste that was handled by municipality for the year 2009/10, including operational and capital expenses is estimated at approximately:R1 700/t for cleaningR1 200/t for collectionsR400/t for disposalR120/t for support and administration servicesEstimates are very sensitive to costs and MSW generated

9. Additional Waste CostsEconomic assessment of alternative service delivery (ASD) options:The additional direct and indirect costs per ton diverted lowest for the Builders’ Rubble ASD, followed by;The Organic Waste Management ASD at an additional cost of between R750–R960/t;The Co-mingled Waste ASD at additional cost between R1 350–R1 660 per ton; and The Household Hazardous Waste ASD at additional cost between R2 900–R3 500/t.Note: These are estimates based on high-level systems analysis.Project level figures likely to vary

10. Model limitationsReduced cost to collect solid wasteNot included as normal service delivery proceedsReal potential for cost savings only be seen once implementedPossible savings to waste generators not includedMonetary estimates of environmental costs excludedincrease costs oflandfillingin mostly poor control landfillsInternational studies suggest increase of 20-45% above baseline landfill costs, but much lower for land-fills with best practice controls*Important fraction, but not likely to change results on ranking of alternative service mechanisms, even if assume poor controlsMore research likely to shed more light on quantum*BDA Group, 2009. The full costs of waste disposal in Australia

11. Discussion of resultsWaste is not for freeInterventions are costly, in general more costly than defaultlandfillingoptionEstimated costs of landfilling at R220–R250/t*Estimated large volume diversionsOrganic Waste & Composting and Builders’ Rubble optionsOrganics & Composting option by far largest air space savings>5 times that of second option, builders rubbleSmaller volumes and air space savings from separation of comingled wasteFrom diversion perspective focus on alternative Organics & Composting and Rubble mechanisms*subject to changes in medium term budgets on disposal

12. Implications for businessRationale for businesspossible private benefits from waste (Income > Cost)consider dynamics of supply and demandSupply of waste: Relative large additional costs (over and above costs of waste service delivery) to ‘unlock’ suitable streams of solid waste from municipalityRealistic to assume that municipality will not be in a position to carry all these costsModel to share risks and costs between municipality and private operators needs further attentionAssurance of waste volumes and quality of waste streamMunicipality’s imperative to divert relatively large waste from landfillDemand for waste products:Possible focus for business on waste capture earlier in cycleMarket development for recycled products is an important business functionNot a municipal mandate and functionBoth aspects vital for a sustainable waste recycling and re-use economy

13. Risks and opportunities for waste economyRelative high additional cost of diversionbut lowest for Rubble, Organics & Compostinghigher than default landfill optionAbility to divert large volumes to be testedOrganics, composting and rubbleMixed results earlier smaller scale attemptsAbility to deliver quality products to market to be demonstratedHigh quality compost and rubble prerequisiteNeed for market development of waste productsSome options for higher market value, smaller diversion waste streams (comingled)Negotiate sharing of risks, costs and benefits between municipality and private operators