Achieving Sustainable Solid Waste Management for the City of Denver

Transcription

1 UNIVERSITY OF DENVER Achieving Sustainable Solid Waste Management for the City of Denver An Exploration of Volume-Based Pricing Policy Memorandum Institute for Public Policy Megan R. Marshall Faculty Advisor: Dr. Lapo Salucci Spring Quarter, 2014

2 Marshall 1 Table Contents Executive Summary... 3 Problem Definition... 4 The Threat Landfills Pose to Colorado s Environment... 4 The Flaw of the City of Denver s Policy Solution... 6 Methods Issue Analysis City of Denver: Current Solid Waste Management Policy Policy Incentives to Increase Residential Solid Waste Diversion Rates Case Study Ontario, Canada: Efficient Incentive Practices Oregon s State Government & Portland Oregon: Effective municipal & state diversion policies Boulder County: Zero Waste Action Plan Require construction and demolition project recycling and reuse: Volume-based collection and embedded recycling Pay-As-You-Throw: Recycling Expansion: Composting Expansion: Policy Stakeholders ) The City of Denver a. Environment ) Solid Waste Disposal Providers ) Single-family Unit Residents of Denver ) Multi-Family Residents of Denver ) Property Owners/Landlords Proposed Solutions Status Quo Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy Alternative 2: Denver Recycling and Composting Educational Outreach Cost Benefit Analysis Status Quo Policy Alternative Costs: Benefits Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy Costs: Benefits: Achieving Sustainable Waste Disposal for the City of Denver 1

3 2 Marshall Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy Costs: Benefits: Alternative 2: Recycling Educational Outreach for Single-family Units Costs Benefits Further Analysis of Alternative 1A Diversion Rate Projections Sensitivity Analysis of Diversion Rates Sensitivity Analysis of the Effect of Population Growth Strategic Recommendations Weekly Curbside Pick-up Mandatory Recycling Comprehensive Organic Collection Pay-As-You-Throw Fee Structure Weaknesses and Limitations Conclusion: Works Cited or Consulted Appendix I: Cost Benefit Analysis Matrix Appendix II: Cost Benefit Analysis Breakdown Status Quo Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy Alternative 2: Denver Recycling and Composting Educational Outreach Appendix III: Cost Benefit Analysis with Consumer Cost Index Adjustment Status Quo Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy Alternative 2: Denver Recycling and Composting Educational Outreach Appendix IV: Net Present Value Appendix V: CBA Diversion Rate Progression Alternative 1A Appendix VI: Sensitivity Analysis Varying Diversion Rates for Appendix VII: Sensitivity Analysis Population Growth Achieving Sustainable Waste Disposal for the City of Denver 2

4 Marshall 3 Executive Summary The state of Colorado currently disposes of most of its municipal solid waste in landfills across the state. As of 2008, Colorado disposes of 88% of its waste in landfills placing Colorado at the lowest 20% of states in terms of diversion, along with states like Mississippi, Alabama, and South Dakota (Lisa A. Skumatz & Freeman, 2008). While cities across the state of Colorado have implemented successful recycling and composting programs boasting diversion rates of 40% and higher, Denver has quickly fallen behind the other municipalities across the state of Colorado. The national average for recycling sits at 34% while the city of Denver dropped to a 14% recycling rate in 2013 (Vidal, 2010). The City of Denver is currently the only city in Colorado to provide a waste collection service as part of the city s services without an additional fee. Denver s residents currently do not have any incentive to participate in diversion rate practices. In order to increase Denver s overall diversion rate this memorandum explores different incentives and policy structures that alter peoples behavior to participate in diversion rate practices such as recycling and composting. In this piece, Denver is presented with three different policy options to address the city s program deficit and low recycling and composting penetration among residents. The first policy option, and the least cost prohibitive, would be for the city to boost its education and outreach program to increase recycling rates. The second option would expand both recycling and composting programs to single family units through a Pay-As-You-Throw (PAYT) incentive structure will be defined later in this paper. The third option, which may be the most cost prohibitive, but would increase both recycling and composting rates across the city the more drastically, would expand recycling and composting programs to all residents in the city limits including large multi-family homes. According to the cost benefit analysis, Mandatory PAYT Recycling and Composting Collection for single family units is the best option for the city to both increase its cost effectiveness and environmental efficiency. Achieving Sustainable Waste Disposal for the City of Denver 3

5 4 Marshall Problem Definition The State of Colorado disposes of the majority of its waste into landfills, which pose a health risk to the state s residents through toxic chemical emissions and leaching into ground water supplies. The City of Denver currently houses the largest concentration of residents in the state and therefore has the most promise to divert large amounts of waste from landfills. However, the City s current policy is cost ineffective and still sends the majority of its municipal solid waste to landfills. The Threat Landfills Pose to Colorado s Environment The State of Colorado utilizes landfills for the primary disposal of solid waste across the state. The State of Colorado provides no diversion rate goals, tools, incentives, guidelines, or regulatory measures in terms of diverting municipal solid waste (MSW) away from landfills to recycling or composting facilities. In 2012, the State of Colorado sent 6,190,799 cubic of waste to the landfill (CDPHE 2012). Landfills are incredibly harmful to the environment (degrading soil, water, and air qualities through leaching, pollution, et cetera). While landfills must comply with air quality and safety regulations, rural waste disposal areas are notorious for dodging safety procedures. Regulations state that landfills need to have a liner, a low permeable barrier that retards migration of leachate into the underlying aquifers and nearby water sources, but in Colorado and in rural areas especially, solid waste providers do not follow such landfill safety procedures. Failure to do so causes leaching of toxic compounds into both the solid and ground water supplies (Wolfgang 2013). Landfills are notorious for producing pollution that permeates ground water stores and the atmosphere (El-Fadel, Findikakis, & Leckie, 1997). They are also known for creating odor problems, killing surface vegetation, and contributing to global climate change. As refuse in landfills decomposes it breaks down to form what are called landfill gases (LFGs), including Methane (CH 4 ), Carbon Dioxide (CO 2 ), and non-methane organic compounds (NMOC) (CDPHE2012). Landfills also create smog causing volatile organic compounds (VOCs) and air toxin pollutants that are linked to cancer and other serious health ailments (El-Fadel, Findikakis, & Leckie, 1997). Solid Waste haulers are also known for creating Particulate Matter (PM) emissions that are Achieving Sustainable Waste Disposal for the City of Denver 4

6 Marshall 5 generated by fugitive dust traveling on paved and, especially, unpaved roads. Solid waste disposal in landfills, old or new, poses significant long-term risks to the environment and the health of the people of Colorado. Due to microbial decomposition, items in landfills cause gas and leachate migration away from landfills to the surrounding environments and water systems. Gases wafting from landfills contain toxic pollutants that are known to cause cancer, asthma, and other respiratory diseases. People who reside close to landfills are vulnerable to these emissions on a regular basis. Overall, the various negative externalities from landfill disposal practices impart a social cost of 9 for every ton of waste deposited in landfills (Acuff 2013). Landfill gas production originates from the chemical and microbial reactions during the decomposition process, emitting methane (CH 4 ) into the atmosphere. Methane comprises 60 percent of landfill emissions while carbon dioxide makes up the remaining gases, which are emitted from food and yard waste sent to the landfills. Landfills are the largest producers of anthropogenic methane emissions in the United States. While methane s lifespan in the atmosphere is shorter than that of CO 2, methane more efficiently traps radiation than CO 2. Pound for pound, methane is 20 times more potent to the atmosphere (El-Fadel, Findikakis, & Leckie, 1997). When landfills are not managed properly, they can develop landfill gas migration explosions caused by the building pressures of a variety of chemical compounds disposed of in landfills. Not only are landfills the most expensive kind of waste management service, but it perpetuates a cycle of using virgin resources to be extracted from the earth, processed, and in the end buried in local communities. In 2012 the State of Colorado disposed of 88% of its municipal solid waste in the landfill (CDPHE). During the same year, simply hauling the state s waste to be dumped in a landfill cost Colorado residents 6,069, In order to avoid depleting our landfill capacity over the next 50 years and incurring unmanageable costs and to help reduce the negative impacts landfills create, policies around waste minimization and waste diversion need to be examined. Since Colorado adopted the Climate Protection Plan under Governor Bill Ritter in 2007, a viable solid waste disposal plan will be a necessary. Achieving Sustainable Waste Disposal for the City of Denver 5

7 6 Marshall Some communities have found sustainable solid waste programs are relatively quick and cost-effective methods of achieving carbon reduction goals (Skumatz 2008). The Financial Barriers to Constructing New Landfills The Colorado Department of Public Health and Environment (CDPHE) estimates that Colorado s current landfills have a 50-year lifespan remaining. Colorado currently has 186 landfills operating across the state with over 27 million cubic yards of MSW generated in Colorado in The state s per capita daily waste production currently exceeds the national average (Infrastructure Report Card). If Colorado continues to dispose of 88 percent of its MSW in landfills it will lead to quicker landfill depletion especially as the state s population grows. Landfills have limited space therefore can only hold a limited amount of waste, when landfills are full they need to be replaced by new disposal sites, which can be a large expense to local municipalities. These new landfills are typically even more costly to construct, operate, and maintain compared to older disposal sites. According to the Colorado Department of Public Health and Environment the average cost to simply construct new landfills is 30 million dollars (Kray, Waste Diversion Update, 2013). This cost however does not reflect the additional process of getting a permit through the State of Colorado to build the new landfill disposal site. The prospective site needs to be vetted for the proper landfill area needed; the composition of the underlying composition of the soil, the flow of surface water over the site, and the impact the proposed landfill will have on the area s wildlife and environment. There is also an additional cost to close the landfill that has reached its capacity before beginning construction on the new landfill site to cover the waste, capture excessive emissions, and plant mandated surface vegetation, closing a landfill can cost an additional 30 million dollars. The state needs to preemptively develop MSW policies in order to minimize the total waste management cost for years to come. Colorado currently ranks 47 th in the nation for diverting the solid waste from the landfill (Colorado Department of Public Health & Environment, 2012). However, if recycling and composting rates around the state increase, it is possible to increase the lifespan of the state s landfills and postpone building new dumpsites. Achieving Sustainable Waste Disposal for the City of Denver 6

8 Marshall 7 The Denver Arapahoe Disposal Site for the City of Denver for example is one of the top ten largest landfills in the country in terms of disposed on a daily basis. The City of Denver has a vested interest in decreasing the amount of waste sent to the landfill to increase the landfill life of Denver Arapahoe Disposal Site. In recognition of the loss of natural resources, the environmental & health hazards of landfills, and limited City owned landfill space has led to the City of Denver developing a recycling collection program. The Flaw of the City of Denver s Policy Solution The City of Denver is one urban center that has sought to address landfill disposal rates within the state. Other Colorado municipalities working toward higher diversion rates include, but are not limited to: Boulder, Broomfield, Loveland, and Fort Collins. While the City of Denver began its recycling program almost twenty years ago, the city s diversion rates are considerably lower than other municipallymanaged programs. Denver averages a 20 percent diversion rate annually while Boulder has achieved 47 percent, Fort Collins 43 percent, Loveland 25 percent, and Lafayette diverts 66% of its waste (Denver Solid Waste Management, 2014). Denver currently contracts the processing of recyclables by requiring its processor, Waste Management, to offer recyclable revenue per ton to be payable to the city. The processor gives the city a share in revenues exceeding the base amount; this is known as the up market share (EPA). The City of Denver and Waste Management calculate the rate based on an agreed upon percentage distribution of commodities processed by the first of January each year, based on recycling markets. They find the base market value in the January issues of Official Board Markets: The Yellow Sheet and Recycling Markets and calculate the current market value monthly (Vidal, 2010). The processor is able to propose what percentage of its additional revenue the city will receive, computed on a per ton basis. Denver is one of the few cities in Colorado to provide a trash service as part of city services without an extra fee. While the city seeks to achieve a 30 percent diversion rate, it currently has only 40 percent of residents participating in the program, with a meager average 19 percent diversion rate in 2012 (Vidal, Achieving Sustainable Waste Disposal for the City of Denver 7

9 8 Marshall 2010). Denver Recycles just published a report declaring that Denver s recycling rate has dropped from 19 percent to14 percent in the last year (Meyer J., 2011). The city continues to struggle to entice residents benefitting from DSWM s collection program to full participate through recycling. The current recycling rate of 14 percent is 12 percentage points below the state s most recent diversion numbers and lags significantly behind the national average of 34 percent (Denver Recycles 2014). Currently, 75 percent of the waste Denver residents send to the landfill can be recycled or composted (Vidal, 2010). In 2012, Denver residents tossed 1,800,000 of recyclables alone in the landfill, which represents a significant loss of potential revenue for the city (Vidal, 2010). 70% Diversion Rate Comparison 66% 60% 50% 46% 43% 40% 34% 30% 20% 21% 14% 10% 0% United States State of Colorado Denver Boulder Fort Collins Lafayette Figure 1: Diversion rates of different areas compared to Denver (Vidal 2010, CDPHE 2012, Skumatz 2008, Boulder County 2010) Presently, the City of Denver provides recycling collection services through the city s General Fund. Denver s recycling program is facing a 30 million per year budget gap (Meyer 2011). The current trash and recycling program costs roughly 10 per month for the 172,000 homes that receive this service (Vidal, 2010). All administrative costs and operating expenses cost the city million in 2011, Achieving Sustainable Waste Disposal for the City of Denver 8

10 Marshall 9 which, divided by the number of homes Denver services, puts the cost of the recycling program at 120 annually per household. Denver residents currently have no incentive to increase their overall participation in waste minimization programs. The service is free whether they dispose of the majority of their waste into recycling or not. Programs that do not increase the cost from residents that dispose of the majority of their waste in the landfill are notoriously ineffective, while recycling programs that offer a cost incentive to recycle are proven to be much more effective (Lisa A. Skumatz & Freeman, 2008). Recycling and composting do take more effort on the client s part to sort the waste properly, while landfilling items is simple. Because of this, a cost incentive would be an effective way to motivate residents to make the extra effort. In 2008, Skumatz Economic Research Associates, Inc. (SERA) conducted research around the possibility of increasing overall recycling rates across the State of Colorado. The study concluded that in order for the state to increase diversion rates, current gaps across the state needed to be amended: curbside recycling collection, curbside Different Waste Streams Average Job Creation pick-up for food waste and yard waste, Pay-As-You-Throw penetration, large value commercial recycling, and education on diversion (Skumatz 2008). Curbside collection refers to waste diversion programs that Processor Recycling-Based Manufacturing Recycling Processing Composting Landfilling Jobs created(per 10,000 per year) provide a service through which Figure 2 (Institute for Local Self Reliance) trucks pick-up the waste at individual residences, rather than having residents commute to drop-off locations. Pay-As-You-Throw (PAYT) penetration refers to municipalities requiring companies to embed the cost of recycling and/or composting into the cost of waste collection. PAYT also known as volume- Achieving Sustainable Waste Disposal for the City of Denver 9

11 10 Marshall based collection requires greater levels of waste diversion through recycling/composting, but will charge customers extra for generating more than the allotted landfill waste. Once municipalities and states have created successful diversion programs, like the County of Boulder, they invest in end markets for recyclables to strengthen the recycling structure within the state. These types of investments lead to recyclables being processed locally, creating jobs within the state instead of elsewhere. It has been proven that recycling and composting programs create more jobs than landfilling (See Figure 2). One particular study found that composting creates 4 jobs per 10,000 of waste composted and 25 jobs per 10,000 of waste recycled, while landfilling only creates 1 job per 10,000 (Institute for Local Self Reliance). The City of Denver s program has failed to significantly increase diversion rates over the last 20 years of its implementation (See Figure 3). The city s diversion program has become costly and does not show a return on investment. The city does not utilize the policy interventions that have been proven to dramatically increase diversion participation among residents within municipalities around the country. In Colorado, the municipalities with successful diversion programs utilize PAYT, curbside weekly pick-up programs, and composting expansion and have seen 30 percent diversion rate increases over a five-year period (Ferrara & Colorado Diversion Rate Trends Missios, 2005). This policy memorandum explores the various policy options that would allow the City of Denver to increase its overall diversion rates while creating a Figure 3 (Lisa A. Skumatz & Freeman, 2008) return on the city s investment in the program. The policy options include: developing an education and Achieving Sustainable Waste Disposal for the City of Denver 10

12 Marshall 11 outreach program around recycling, creating an incentive system for single-family homes, and expanding the program to citizens who reside in apartments. Methods For this memorandum, I collected reports, news articles, and plans from a variety of recycling programs to compare different policy solutions. Policies around reducing waste sent to the landfills focus on both waste minimization and waste diversion. Waste minimization describes policies and practices that seek to reduce or eliminate waste produced, while waste diversion policy combines efforts around waste prevention, reuse, and recycling practices. In order to understand the complex barriers that Colorado faces in terms of waste diversion, I needed to find research about the current state of municipal solid waste (MSW) collection in Colorado and the costs of various policy approaches to MSW. I worked with the Colorado Department of Public Health and Environment (CDPHE) to obtain documents explaining the state s current MSW regulations at the state level and outlining the state s infrastructure to handle waste. State legislation and annual reports show that Colorado has increased its diversion rate each year since the late 1990s, but that it is still 4 th in the nation in terms of tonnage of waste sent to landfills. Reading these government documents allowed me to compare the different policy alternatives to address Colorado s low diversion rate. It is also important to analyze a list of a few municipal solid waste providers the Colorado Department of Public Health and Environment has compiled, from average diversion rates to the number of MSW providers that exist in the State of Colorado. Examining documents regarding Colorado s diversion rates, helped provide support to my claim that the government need to intervene in order for recycling rates to increase. The CDPHE hired Skumatz Economic Research Associates (SERA) to perform an analysis of Colorado s potential to increase waste sent to recycling and composting facilities. The report outlines various strategies, recommendations, and implications that a diversion plan would have on the state s economy. The final report compares the State of Colorado to four other states that have stronger diversion legislation and have similar economic compositions to Colorado to better convey the implications that Achieving Sustainable Waste Disposal for the City of Denver 11

13 12 Marshall diversion would have for the state. The study explains that Colorado s large expanses of empty land and small townships make it less cost effective for each ton of waste to be diverted, simply because the population density is too low in these areas (Lisa A. Skumatz & Freeman, 2008). Colorado s cheap tipping fees for landfill waste in conjunction with a void of state leadership on the issue leaves diversion to the local municipalities, which do not always have the resources and capital to develop waste diversion programs. Tipping fees are solid waste disposal rates assigned when refuse collection trucks empty or tip their loads at a landfill, transfer station, or incinerator. In order to determine a recycling/composting program s overall effectiveness, it is essential to track the pounds diverted from the landfill and captured by the facilities. This report outlined clear deliverables for successful waste diversion programs: curbside recycling, collection frequency, Pay-As-You-Throw (PAYT) penetration, ensuring basic, large-value commercial recycling, recycling end markets in the state, and education on diversion. I identified successful waste diversion potential policies for the city by examining the seven principal programs and procedures and then completing a cost benefit analysis. I also worked with Denver Solid Waste Management to obtain the city s strategic plan to increase overall recycling and composting rates for the next year. Denver s Master Plan for Managing Solid Waste in the Mile High City clearly outlines its strategic planning for the next three years to improve the city s overall diversion rate participation on the behalf of Denver residents. The main avenue of Denver s plan to increase recycling and composting participation will involve education and outreach campaigning, which has been shown to only increase diversion rates by a few percentage points (Lisa A. Skumatz & Freeman, 2008). While this policy approach is not cost prohibitive, it tends to have a low return on investment in terms of an increase in diversion rates. In the master plan, the city explores the current costs of the program and costs of alternative programs to increase participation. Denver is currently caught between trying to provide a cost effective program while trying to still provide good customer service to the residents of Denver. Since Denver s is the only program in the state without an additional fee to participate, the city is trying to not implement a Pay-As-You-Throw system, which most city residents Achieving Sustainable Waste Disposal for the City of Denver 12

14 Marshall 13 oppose. Using the city s master plan greatly helped me analyze and critique the city s current policy approach (the status-quo in this paper) and the cost effectiveness of the program in my cost benefit analysis section. To expand beyond the report SERA provided to the State of Colorado and the City of Denver s Master Plan, I researched the effectiveness of various recycling policy options by collecting research from different academic journals. For example, I found an article called Recycling and Waste Diversion Effectiveness: Evidence from Canada from the Springer Academic Journal on Environmental & Resource Economics. Journals like this analyze the relationship between recycling policy options and recycling behavior in order to identify the most effective systems to divert post-consumer waste from landfills. Academic journals offer insight into current waste diversion policy programs while measuring the social, economic, and environmental benefits of the various political approaches. In order to identify the best-suited waste diversion and waste minimization policy for the State of Colorado, it is essential to understand human behavior in relation to recycling policy. In order to understand the public s perception of waste diversion programs, I utilized Denver Post News articles about Denver s diversion program and articles from an agency called BioCycle that publishes pieces about various waste management programs around the country. News agencies can provide an opportunity to see how residents perceive the current policies and how it affects them. By developing an understanding of the public s opinion of their waste collection helps analysts predict how well the public will receive new solid waste management policies. Ideally, policies will be able to address any program inefficiencies while maintaining quality customer service for the residents of Denver. Recycling interest groups and non-profits can also be good sources of information. Ironically, some of these webpages can communicate the stories behind policy options and how effective they really are. For example, the California state government does not have much information about its recycling program in terms of the economic benefits of this program; however, internet sources such as BioCycle, the leading magazine on recycling and composting information, and the non-profit organization Achieving Sustainable Waste Disposal for the City of Denver 13

15 14 Marshall Californians Against Waste provide an insight into some of the social, environmental, and economic benefits of CalRecycle that the state government s page does not express. Since municipalities like Fort Collins and Boulder developed city-run MSW diversion programs, I found it beneficial to analyze their current policies, reports, and infrastructure as well. Both municipalities have 40 percent higher diversion rates than Denver, between both residents and the cooperate sector and use a very different infrastructure model from the City of Denver. Both Boulder and Fort Collins drafted Zero Waste master plans to divert a minimum of 90 percent of waste from landfills to recycling or composting facilities within the next decade (Boulder County, 2010). Their aggressive and proactive approach to waste minimization and waste diversion has made their programs some of the most innovative in the nation. Learning more about recycling and composting in these programs in terms of cost savings and diversion rates helped inform the various policy options for this policy proposal. For this analysis I examined the different effects various policy intervention programs have on landfill rates in the City of Denver. For the purpose of my research, the status quo will be the City of Denver s current recycling program. I assume that without new policy interventions the amount of the waste sent to the landfill will not significantly decrease. After establishing a baseline for Denver, I look at the effects of each policy alternative in the city and the ability of each alternative to reduce the amount of waste sent to the landfill. This study primarily focuses on single-family to multi-family homes of seven or fewer residential units. In 2004, Denver sent 254,489 of waste to the landfill (Vidal). Currently, Denver only diverts an average of 20 percent (this number recently dropped to 14 percent) of generated residential waste but seeks to increase its diversion rate to 30 percent (CDPHE). The cost of the recycling program will incorporate the costs of building the expanded recycling infrastructure to handle an increased diversion rate. I will calculate the upfront costs of each alternative for the city and calculate the benefits of each benefit to the City of Denver as well. The benefits will measure both fiscal and environmental gains from these policy alternatives. The problem can be measured through pounds of waste diverted or sent to the landfill and dollars saved/extra capital generated through Achieving Sustainable Waste Disposal for the City of Denver 14

16 Marshall 15 the program. There are environmental benefits which can be quantified, for example Greenhouse Gas Emission (GHG) reduction can be quantified. In terms of emissions saved and dollars saved, creating products out of already recycled materials can also be quantified. Figure 3 displays the Greenhouse Gas Emissions in terms of production between virgin and recycled materials (Acuff & Kaffine, 2011). Recycling by far is the most economical approach to divert waste from the landfills in Colorado. On average, a recycling collection hauler will charge a household 3-5/month while a landfill hauler will charger around 8-12/month (or more) to collect trash (Colorado Association for Recycling). Unlike trash, once collected recycling is sold as a commodity unlike other trash haulers that have to dispose of their waste in the landfills. Greenhouse Gas Emissions Virgin vs. Recycle Materials Figure 4: (Acuff & Kaffine, 2011) Achieving Sustainable Waste Disposal for the City of Denver 15

17 16 Marshall Issue Analysis To increase my understanding of the state s hurdles to decreases the amount of waste sent to the landfill, I met with both the recycling and compost experts from CDPHE. Wolfgang Kray, the Environmental Protection Specialist under the Colorado Department of Public Health and Environment, explained the various points of opposition the Department has experienced from the state legislature. Since tax increases have to be put to a vote by the residents of Colorado, any legislation passed by the state in terms of meeting diversion rate goals would involve unfunded mandates which are not politically popular among members of the legislature. He also discussed how CDPHE mainly regulates the safety of MSW facilities and does not have much enforcement power in terms of helping municipalities send more waste to recycling and composting facilities. Colorado s current waste disposal infrastructure is not only pollutant and cost ineffective; it also faces increasing pressures from the state s population growth. The fact that less than 20 percent of the municipal waste stream was recycled or composted in Colorado in 2009 shows that governments need to take a proactive role to decrease the waste sent to the landfill (CDPHE). The City of Denver can serve as a catalyst to help diffuse effective diversion rate policies across the Denver Metro Area. Denver is home to 10 percent of the state s population and is one of the most densely populated municipalities in the state; an improved diversion rate policy could be the most cost effective here (Colorado Department of Public Health & Environment, 2012). In order to reduce overall waste produced and waste disposed of in the landfill there are a number of effective policy approaches available, such as diversion rate goals, pay-as-you-throw, and increased curbside diversion pick-ups. In terms of population density, the Denver Metro Area houses 50.9 percent of the state s population, 2,645,209 residents (Colorado Department of Public Health & Environment, 2012). The various policy options that will be explored should focus on the most densely populated parts of the state providing the most potential in terms of recycling collections. More densely populated municipalities offer two opportunities. First, the cost of recycling becomes increasingly more economical in terms of Achieving Sustainable Waste Disposal for the City of Denver 16

18 Marshall 17 curbside pick-ups in cities. Also the Denver Metro Arena produces over half of the state s overall waste. In terms of making an investment, the program could be much more cost effective and divert the most waste if these areas were the focus of a waste diversion and waste minimization policy. In less densely populated areas in Colorado, the cost of recycling would double or triple in some cases in order to transport recyclables to the necessary facilities around the state (Jenkins, Martinez, Palmer, & Podolsky, 2003). In more densely populated municipalities like Denver, the distance between waste pick-up points is smaller, which leads to more efficient waste collection in terms of resources and costs (De Jaeger, Eyckmans, Rogge, & Van Puyenbroeck, 2011). Due to the ease of recycling in cities, an increase of population density by 1000 people per square mile creates a 1.3 percent increase in the probability a typical household will recycle (Ferrara & Missios, 2005). Denver has a population of 634,265 and covers 44.7 square miles in Denver, roughly 14,189 people inhabit each square mile. This should increase the chances of the typical household recycling by over 18.2 percent compared to less densely populated municipalities. Due to Denver s population density, it has the greatest probability of convincing its residents to participate in recycling programs. City of Denver: Current Solid Waste Management Policy 101 Denver Solid Waste Management (DSWM) said it set out to meet four guiding principles, good customer service, worker safety, environmental stewardship, and efficiency/cost containment, when it started the Denver Recycles program in 1991 (Denver Public Works 2010). However, the current program has proven to not only fail to meet its environmental mission, but to also be cost ineffective. In 2006, Mayor John Hickenlooper established an action agenda titled, Greenprint Denver to promote sustainable development throughout the City of Denver in hopes it would become one of the most sustainable cities in the country. Spending 22 million, Greenprint Denver set a 30 percent diversion rate target for DSWM to reach by 2011 which the program failed to meet (Vidal, 2010). The target tried to encourage successful resource conversion through waste minimization and waste diversion practices. While the program set rigorous standards, it did not have any real accountability to encourage residents to Achieving Sustainable Waste Disposal for the City of Denver 17

19 18 Marshall participate in diversion practices. Not only does the city s solid municipal waste collection program need to be environmentally salient, it should also produce revenue for the city. The current system utilizes capital allocated from the city s general fund to pay for residential solid waste collection and disposal. This funding primarily comes from sales taxes from commercial establishments and some funding from property taxes for both single and multi-family homes. While both single-family and multi-family properties fund DSWM, only single-family homes and small multi-family homes of fewer than 7 units receive the service. According to data Denver Resident Housing Composition 69,200 from the Colorado State Demography Office in 2009, there are 144,000 26, ,000 single-family units in Denver and Single Family Units Small Multi-Family Units Large Multi-Family Units Figure 5(CDPHE 2010) 95,000 multi-family units (Kray, Waste Diversion Update, 2013). Only 26,000 of these multi-family units have seven units or less, which means the remaining 69,200 large multi-family units are not serviced by Denver Solid Waste Management (DSWM). DSWM pays a tipping fee for waste disposed of in the Denver Arapahoe Disposal Site s landfill. Denver also receives a rebate from the contracted landfill operator. However, the tipping fee is still a net cost item in Denver s budget while DSWM is not charged a tipping fee for recycling or composting disposal. Denver also receives payments for a percentage of the recycled materials from Waste Management. Currently, DSWM services 170,000 households and collects 220,000 of landfill waste each year. Under DSWM, Denver Recycles does not mandate recycling under the current city s model, so only Achieving Sustainable Waste Disposal for the City of Denver 18

20 Marshall 19 32,000 of waste is typically recycled each year. DSWM also manages Denver Composts pilot program, which is a pay to participate program with only 2,200 participants across the city. It is estimated that residents would reduce their landfill waste production by 50 percent if all residents composted their food and yard waste (Vidal, 2010). While Greenprint Denver and DSWM set a goal of a 30 percent diversion rate by 2011, three years later the city is still struggling to increase its recycling rates, with the most recent report showing a drop in recycling from 19 percent to 14 percent (Denver Solid Waste Management, 2014). After 23 years of service, it is becoming increasingly clear the City of Denver needs to find a new approach to increase diversion participation among residents. Denver s voluntary residential recycling program utilizes 65-gallon rolling totes with a collection service provided every other week. The recycling program is currently comprised of both mixed pick-up of 43 percent ally collection and 57 percent household service collection. Unlike other cities in Colorado, Denver currently contracts with Waste Management s recycling program to process and market recyclables. As part of the contract, Denver receives revenues for the sale of these materials a flat rate based on the weight of the recyclables brought to the facility and market revenue, which Waste Figure 6 Denver Arapahoe Disposal Site (Marshall) Achieving Sustainable Waste Disposal for the City of Denver 19

21 20 Marshall Management pays when commodity markets are above the benchmark in the contract. The processor gives the city a share in revenues exceeding the base amount; this is known as the up market share (EPA). The Waste Management proposes the percentage of its revenue from recycling profits Denver will receive on a per ton basis. Denver is one of the few cities in Colorado to provide a trash service as part of the city services without an extra fee. In an attempt to gauge public opinion on improving the waste management program, DSWM surveyed 3,000 households in Denver (See Figure 4). Out of those surveyed, 72 percent of respondents felt recycling should be mandatory for DSWM customers and 84 percent of residents believed the program should be expanded and made mandatory for large multi-family units to recycle as well (Vidal, 2010). Another 18 percent of Denver residents surveyed were supportive of a PAYT user fee system over the current tax subsidized program (Vidal, 2010). While Denver Recycles boasts about its city provided services, it may be time to look into a user fee structure to promote higher rates of recycling amongst resident participants. Denver residents currently do not have any sort of disincentive to throw the majority of their waste into the landfill or any incentive to increase their diversion participation. Recycling Points % of Respondents Endorse Increased Recycling 88 Reducing environmental impact Important to reduce environmental impact of personal lives 70 Important for Denver to reduce citizen's impact 73 Most important solid waste system component to public health 58 Priorities in waste services: After refuse collection, recycling collection was a top priority 78 Mandatory Recycling: Recycling should be mandatory for DSWM customers 72 Recycling should be mandatory in large residences 84 How to Pay for Waste Services: All services through taxes 57 Some services pay through user fees 25 All services by user fees 18 Willingness to pay for services to offset DSWM costs: Reducing LIP collection to 4 times per year 31 Adding yard waste diversion 30 PAYT refuse pricing 19 Add drop-sites for recyclables 18 Figure 7 (Vidal 2010) Results from Denver Solid Waste Management Survey Achieving Sustainable Waste Disposal for the City of Denver 20

22 Marshall 21 If the City of Denver continues to send over 86 percent of its residential waste to landfills, the program will continue to be cost ineffective. Landfills are the most costly means to dispose of waste due to tipping fees, while the city can collect revenue off of recyclables collected and sold to various end markets (Acuff & Kaffine, 2011). Other local governments both in the United States and Canada have proven the cost effectiveness of waste diversion programs. States with economic and geographical landscapes to Colorado, like Oregon, have also passed successful statewide initiatives to improve overall diversion rates from the landfills (Oregon Department of Environmental Quality). Even local municipalities in Colorado have implemented highly successful diversion programs in areas such as Boulder, Loveland, and Fort Collins. While Ontario has implemented province-wide effective waste collection practices, Boulder has now passed Zero Waste resolutions for its municipalities. Zero Waste is defined by the EPA as diverting 90 percent of your waste from the landfill to composting or recycling facilities. Policy Incentives to Increase Residential Solid Waste Diversion Rates Over the last several years, consultants from groups like Skumatz Economic Research Associates, Inc. (SERA) have studied the various recycling policy incentives available to municipalities to increase diversion rates. While some policy options spare cities from making heavy investments in new policies, some of these programs have a small return on their investments. Other policies however have a larger upfront cost but can increase diversion rates by 17 percent or more when they are successfully combined with one another. In order to understand how the varying success of these various policy incentives from the state to local levels, it is important to first discuss the various mechanisms of each policy option. Volume-based Pricing: Pay-As-You-Throw Pay-As-You-Throw systems exhibit a volume-based pricing model that charges residents for the collection of municipal solid waste based on the amount of waste they generate. Similar to water bills, users are charged a higher user fee for increased consumption and save money when they send less waste to the landfill. Landfill is the costliest form of waste disposal; high landfill rates can cause municipalities Achieving Sustainable Waste Disposal for the City of Denver 21

23 22 Marshall like the City of Denver to lose money disposing of recyclable and compostable items in city landfills. PAYT systems typically charge additional fees for excess landfill waste generation while embedding recycling and composting disposal costs in the fee. While residents are charged for larger landfill disposal carts, residents can always request larger compost or recycle carts free of any additional cost. When residents are charged for landfill waste generated, it creates a direct economic incentive to recycle and compost more and also to generate less waste. Residents become more mindful of their waste generation and even the types of disposable products they purchase. The less individuals throw away the less they will have to pay. Using a volume-based system, households sign up for a specific size and number of containers for landfill collection service and receive a bill that is higher or lower depending on the volume of waste disposed. In most cities with this type of program, disposal decreases 16 to 17 percent (EPA 2009). One of the important advantages of a volume-based program is its equity. According to the EPA (2009), When the cost of managing trash is hidden in taxes or charged at a flat rate, residents who recycle and prevent waste subsidize their neighbors' wastefulness. Weekly Curbside Collection At present, the City of Denver utilizes a weekly dumpster system for residential landfill collection. Dumpsters encourage residents to dispose of the majority of their waste in the landfill and encourage illegal dumping among residents since several different households dispose of waste in the same container. When each household has a personal cart in which to dispose their waste, they feel more personal responsibility to dispose of waste properly (Jenkins, Martinez, Palmer, & Podolsky, 2003). When there are communal dumpsters, residents dispose of large items into them, but cart collection limits they can dispose of for landfill pick-up. The recycling program is also only collected every other week. When landfill waste is collected weekly and recycling is only twice a month, it incentivizes residents to dispose of most of their waste in the landfill, especially if their recycling bins fill up. Weekly curbside collection of all waste, recycling, organics, and landfill products incentivizes residents to dispose of their Achieving Sustainable Waste Disposal for the City of Denver 22

24 Marshall 23 waste in the proper bins when the city collects them each week. SERA shows that curbside recycling and composting collection can increase diversion by 20 percent or more. Curbside collection is also a necessary component of volume-based pricing. Individualized cart collection allows the city to adequately track the waste disposal of each household while communal dumpsters make it impossible to track an individual s disposal (Lisa A. Skumatz & Freeman, 2008). Weekly collection of all MSW streams also makes it easier to track disposal patterns since people are less likely to have their compost and recycle bins overflow between collections. Mandatory Recycling and Composting Participation Denver s current recycling program is an optional subscription only system. There is no compulsory diversion program with the City of Denver. When recyclables and compostables are banned from the landfill with the penalty of a fine, residents will become more conscious about their waste disposal practices. When it is estimated 86 percent of the waste sent to the landfill can be diverted through composting or recycling, governments need to pass a ban on landfilling organic and recyclable items (Lisa A. Skumatz & Freeman, 2008). In the United States, 22 state governments have banned the disposal of yard debris in landfills due to the high levels of methane emissions (EPA 2009). The City and County of Boulder implemented mandatory composting and recycling in an attempt to reach a 70 percent diversion rate for the municipality (Boulder County, 2010). Education and Outreach Education outreach through the use of pamphlets and move-in packets can increase diversion rates. Expanded education and promotion of both recycling and composting helps notify residents of the proper waste disposal for various items and encourages source separation. Residents rarely understand the difference between recycling and composting and dispose of items improperly into each stream. Oftentimes, people think plastics are also compostable or food contaminated paper (pizza boxes for example) are recyclable when these items are actually contaminants when disposed of in the wrong streams. The utilization of mailers, web-based campaigns, move-in packets, and diversion education in Achieving Sustainable Waste Disposal for the City of Denver 23

25 24 Marshall schools can be effective in disseminating information on how, what, and where to recycle (CalRecycle). Education can also tell residents the benefits of composting and recycling in terms of energy savings along with the economic benefits. Not only does education lead to lower contamination rates but it can also help increase residential participation in a recycling and composting program, education can increase diversion rates between 1-3 percent (Ferrara & Missios, 2005). Education promoting recycling and composting can also create lifelong habits for diversion. Producing pamphlets and other educational materials are also the least cost prohibitive of the available recycling policy options, costing approximately 1 per resident annually. Case Study Ontario, Canada: Efficient Incentive Practices In Ontario, Canada Springer studied the relationship between diversion behaviors and various incentive structures to determine which combinations of policies are most effective. Micro-data sets were collected from households and communities across Ontario, Canada. The study analyzed the relationships between commonly recycled materials, house holder characteristics, recycling attributes, and garbage collection methods to determine what increased diversion rate participation among residents. User fees on garbage collection have a significant impact on recycling levels and mandatory recycling programs for Figure 8 (Young 2013 Toronto) particular items also increased the recycling rate of all other materials (Ferrara & Missios, 2005). Weekly curbside recycling pick-up has a positive effect, especially on glass, aluminum, and toxic chemicals. On average, weekly pick-up is shown to increase recycling rates 4.3 percent for glass, 4.4 percent for aluminum, and 11.6 percent for toxic chemicals (De Jaeger, Eyckmans, Rogge, & Van Puyenbroeck, 2011). Recycling is more appealing when it is collected at the same frequency as landfill waste, which results in a higher recycling intensity. Weekly collection limits the level of recyclables that a Achieving Sustainable Waste Disposal for the City of Denver 24

26 Marshall 25 residence needs to store week to week. When recyclables are collected each week, people are more likely to dispose of recyclables properly instead of simply throwing them into the landfill. Mandatory recycling also has a positive effect on increasing recycling rates. Curbside recycling across a municipality also increases non-curbside recycling, such as people taking toxic chemicals to drop-off locations to recycle them properly. Home ownership is also found to have a positive effect on recycling participation, suggesting that homeowners, when compared to renters, are more attached to the community and want to participate in recycling practices. The study also found that municipalities that mandate residents to recycle see higher participation rates. Moving from optional participation to a mandatory recycling program increases the likelihood of recycling 100 percent between 6.4 percent and 29.7 percent and lowers the probability of recycling nothing by 3.4 percent to 29.6 percent (Ferrara 2005). Mandatory recycling policies create penalties, in the form of steep fees, for people who throw prohibited items in the landfill. When city residents are required to dispose of their recyclables, they are more conscious of their waste disposal practices in order to avoid additional costs and fees on their waste disposal bills. While some townships have a designated fee structure for violations, many others use the mandate as a symbolic gesture. Even without a fee penalty, residents still increase their overall recycling density. Pay-As-You-Throw (volume-based pricing) payment structures are shown to increase diversion on the order of 6 percent-17 percent (Ferrara & Missios, 2005). Boulder, Fort Collins, Loveland, and Broomfield all use PAYT systems and require recycling from their residents, which has increased their overall recycling rates over the last five years. Oregon s State Government & Portland Oregon: Effective municipal & state diversion policies Oregon has developed a successful diversion program over the last several years and can demonstrate a good economic, population, and waste model for this memorandum. As Colorado and Oregon have similar geographic and demographic characteristics, they are good states to compare. Both states populations are comparable; while Colorado has 4.81 million residents Oregon has 3.5 million residents (Oregon Department of Environmental Quality). The average community size in Colorado is Achieving Sustainable Waste Disposal for the City of Denver 25

27 26 Marshall 12,900 people while Oregon s average community size is 10,100 (Oregon Department of Environmental Quality). Both states have a similar makeup in terms of the industries that comprise the major economies including health and social services, accommodation and food, construction, and retail and trade (Lisa A. Skumatz & Freeman, 2008). Like Colorado, Oregon had a number of barriers to implement a recycling program; however, the state government has crafted ways to overcome both the physical and perceived barriers facing the state. Similar to Colorado, Oregon has large expanses of land with low population densities and remote rural areas, while the majority of the state s population is clustered along the coast. The Portland area resembles the Front Range of Colorado due it s the high population density. When Oregon passed the Opportunity to Recycle Act, the legislation led to new curbside residential collection programs and the Oregon Recycling Act of 1991, which strengthened recycling requirements and encouraged recycling end market development (SERA 2008). Through assistance from the state, Oregonian municipalities effectively implemented new garbage collection practices and improved recycling and composting collection. Through a volume-based Pay-As-You-Throw system, Oregon has significantly decreased the amount of waste sent to the landfills. The rates charged to residents for waste collection are charged on a monthly basis, depending on the size of landfill that can be utilized (30 gallon can=10-21; 60 gallon can=13-30; 90 gallon can=13-35) (Oregon Department of Environmental Quality). The municipalities now all provide curbside recycling services and yard waste curbside collection to help improve diversion rates as well. Most municipalities also participated in a mandatory and single stream recycling program to increase accessibility to diversion practices and to further incentivize participation. By 2006, Oregon generated 4.3 million of municipal solid waste (MSW), sent 2.2 million to landfills, 1.6 was recycled, and 431,000 were composted, reading an overall diversion rate of 46 percent (Oregon Department of Environmental Quality). In 2011, Oregon recovered 2,302,794 out of the 4,740,561 generated within that year, achieving a 52.3 percent diversion rate for the entire state (Oregon Department of Environmental Achieving Sustainable Waste Disposal for the City of Denver 26

28 Marshall 27 Quality). Compared to Colorado s 6,190,799 landfilled in 2012 (about 88 percent of the state s waste produced), Oregon is diverting nearly 50 percent of the entire state s generated waste (Colorado Department of Public Health & Environment, 2012). In 2006, Portland developed a prevention and recycling plan called the Portland Recycles plan, which aimed to increase the city s recycling and composting rates in concordance with the state s recycling policy. The plan has four main goals: 1) to have a recycling rate of 75 percent by 2015; 2) reduce toxins and greenhouse gases; 3) to have zero growth in the waste stream as population rises; 4) to make the system as a whole more sustainable (Portland Recycles Plan 2006). In Portland, all residents have separate containers for landfill, recycling, and composting disposal. All three Figure 9 (City of Portland, 2012) of these streams are collected on a weekly basis, although residents can choose to limit their landfill collection to as little as one time each month. The city also promotes Fix-It Fairs to help promote repair and reuse of products instead of disposing them in the landfill (Oregon Department of Environmental Quality). As of 2011, Portland has already reached a 59.3 percent recycling rate. Boulder County: Zero Waste Action Plan Unlike Denver, Boulder does not have a single solid waste provider. Instead, it requires that the MSW companies provide recycling programs embedded in the waste collection fee (Boulder County, 2010). Boulder passed the 2005 Zero Waste Resolution to attaining Zero Waste by 2025 throughout all of Boulder County, along with the unincorporated municipalities in the area. The county created an action plan to lead to a comprehensive approach to sustainability in order to generate more recycling jobs for the Achieving Sustainable Waste Disposal for the City of Denver 27

29 28 Marshall county, limit greenhouse gas emissions, and promote healthier soils (Boulder 2010). The Zero Waste approach will use a design principle to target manufacturing, purchasing, reuse, recycling, and composting all of the materials used with a safe closed-loop disposal system as a last resort (Boulder County, 2010). The county decided to use a Zero Waste approach to both improve its current waste diversion approach while creating an economic development plan for the people of Boulder County. Boulder County disposes of 250,000 of garbage each year, including 5,200 of paper and cardboard, 5,100 of building materials, and 25,000 of food and yard debris that create methane (Boulder County, 2010). All of these materials represent value that is simply wasted when disposed of in the landfill. In addition to saving resources, Zero Waste can have the following economic benefits as well: encourage smart purchasing choices, repair and reuse, reduced use of harmful products protects community health and safety, conserving resources contributes to long-term economic stability in Colorado, local economies are stronger when recycling, composting, reuse, and repair jobs are created and sustained, and when recycled and composted materials are use locally, everyone benefits from lower transportation and purchase costs (Boulder 2010). After reaching a 50 percent diversion rate, the Boulder County wanted to create a more comprehensive waste disposal program (Boulder County, 2010). To date Boulder s Pay-As-You-Throw collection programs in Boulder, Lafayette, Longmont, and Superior, along with parts of unincorporated Boulder County, has proven to be the most successful waste diversion plan in the state and one of the most effective programs in the nation (Boulder County, 2010). The residential recycling and composting program has reached a 60 percent diversion rate, and has reduced the government s garbage cost by 25 percent (Boulder 2010). While the municipality invests in the infrastructure to recycle and compost, both streams are actually less expensive to the city than sending items to the landfill. In order to increase the diversion rate across all the various municipalities, the resolution utilizes intermediary goals and strategies. The county designed a plan with a four-pronged approach to target: 1) the amount that could be recycled; 2) the amount that could be composted; 3) construction debris that could be diverted; 4) to Achieving Sustainable Waste Disposal for the City of Denver 28

30 Marshall 29 address the remaining waste (Boulder County, 2010). Some of the main and most influential expansions include complete at-home curbside compostable materials, construction and demolition project recycling and reuse, Pay-as-You-Throw, and the banning of food scraps and recyclables going to the landfill (Boulder County, 2010). Below is an explanation of each section of Boulder s diversion plan and the deliverables for each. Require construction and demolition project recycling and reuse: Boulder County has established centralized drop-off locations for Construction and Development (C&D) waste in each city. This is expected to divert 150,000 of C&D waste across Boulder County annually, increasing the overall diversion rate by 3.6 percent (Boulder County, 2010). Volume-based collection and embedded recycling Pay-As-You-Throw: In 2007, Boulder County implemented volume-based disposal to single-family homes. The cost of recycling is embedded into the fee customers pay for waste collection, but they are charged more for producing excess waste for the landfill. Residents pay per month for recycling, composting, and landfill services, and, if residents create excess landfill, they are charged more (Boulder County, 2010). This system is currently being expanded to businesses within the county as well. Recycling Expansion: Residents living in multi-family apartment buildings will soon have access to single stream recycling at their apartments. Boulder County estimates 13.4 percent of materials currently disposed of in the County landfills could be recycled through the existing markets (Boulder County, 2010). The county is also banning the disposal of recyclables in the landfill, making it mandatory to participate in recycling programs. This initiative alone is expected to increase diversion rates across the county by 10.6 percent (Boulder County, 2010). Composting Expansion: Boulder has begun expanding its composting to the residents throughout the County. The County plans on expanding the curbside compost pick-up program to its municipalities. Multi-family units will also soon have access to commercial composting pick-up. This will give people residing in apartments the ability to participate in food waste composting, while also making it mandatory Achieving Sustainable Waste Disposal for the City of Denver 29

31 30 Marshall for citizens to participate in composting programs, whether it is commercial or backyard composting by banning yard waste and food waste disposal into landfills. Between both of these expansions, it is estimated to increase diversion by another 10 percent. Boulder has developed the most successful approach to composting and recycling n the state, while Denver lags behind most other large municipalities in the state. Denver Solid Waste Management needs to consider the successful participation incentives executed by other local and state governments throughout the country. Currently, the city is losing money to the inefficiency of Denver s city-run diversion collection program. While DSWM has a greatest financial stake in any new city recycling and composting policy, there are other stakeholders who will also be affected by the new approach the city takes to collect residential municipal solid waste. Policy Stakeholders In order to identify the most suitable diversion rate policy model for the City of Denver, it is important to identify the key stakeholders who will bear the costs and benefits of the policy proposed. 1) The City of Denver- The city government will be greatly impacted by the policy the city decides to use. The city ultimately has to foot the upfront cost of the current waste management program. The City of Denver will be in charge of creating a diversion rate plan, choosing the solid waste provider for their residents. DSWM will have the responsibility and the authority to decide what new programs are the most cost effective and politically viable within the City of Denver. a. Environment- DSWM needs balance the financial costs and benefits of each alternative with the environmental costs and benefits of each option. While there is a cost savings to recycling programs, the main reason to improve the city s diversion rate is to protect the environment. The less waste is sent to the landfill, the less methane will be emitted into the atmosphere, the fewer toxic chemicals percolate into the soil, and the less natural space would be used for new landfill space. 2) Solid Waste Disposal Providers- These providers will have to analyze their waste capacity and find a means to expand their facilities to include recycling. Both Waste Management, which processes Denver residents recycling and landfill waste, and A-1 Organics, which processes Denver residents compost waste, have a stake in any increased diversion rates, as it would lead to more business and greater profits for them from selling the raw compost and recyclable materials. Achieving Sustainable Waste Disposal for the City of Denver 30

32 Marshall 31 3) Single-family Unit Residents of Denver- There are 240,000 residents (172,000 homes) participating in single stream city provided program (Vidal, 2010). The success of the program depends on the rate at which Denver residents dispose of their waste through waste diversion programs and improve their overall waste reduction. It will be their buy-in and knowledge of proper waste disposal that determines whether or not the program succeeds. Of the 166,000 households served, 140,000 are single-family units (SFUs) and the remaining 26,000 are multifamily units (MFUs). DSWM only serves multi-family units that contain seven units or fewer. 4) Multi-Family Residents of Denver- There are 360,000, (69,200 large multi-family units) are not serviced by Denver Solid Waste Management program (Vidal, 2010). Denver residents that reside in multi-family apartments of eight units or more currently do not receive any benefits from Denver Recycles. Each landlord selects the apartment complex s waste provider. More often than not, the companies only provide landfill collection. These tenants do not have the option to participate in any diversion program and are forced to either dispose of their divertible waste in the landfill or illegally dump recyclables in private bins, which the City identifies as one of their greatest priorities. 5) Property Owners/Landlords- If DSWM decides to expand collection to large multi-family homes, the primary costs will be billed to the landlords. It will then be up to the landlords to encourage their tenants to recycle and compost. It is also up to the property owners to decide how to pass on the cost to their residents. Success or failure can be measured by the weight of total waste diverted or sent to the landfill and dollars saved/extra capital generated through the program. The problem is diagnostic in a sense because, without an infrastructure for recycling and/or composting programs in the state, people do not have an avenue/opportunity to increase the diversion rate. The current structure around MSW management limits the diversion rates the state can achieve which, in turn, limit the capital that can be generated through diversion programs. Policy intervention is needed in some capacity to reduce the tonnage of waste sent to the landfill annually. When local governments set diversion rate goals for Municipal Solid Waste and provide incentive structures around recycling and composting waste generated, diversion rates increase. Proposed Solutions The proposed solutions below discuss policy options to correct the externalities in household waste production and to promote recycling or post-consumer waste products. The policies explored range Achieving Sustainable Waste Disposal for the City of Denver 31

33 32 Marshall from expanding educational outreach to expanding diversion services that the City of Denver provides to multi-family homes. Each potential policy solution has costs and benefits to the Denver Solid Waste Management, the residents of Denver, and the environment. Status Quo While the Colorado diversion rate is ranked 47 th in the entire country, some policy analysts would disapprove of local governments dictating what policies waste providers need to use (Lisa A. Skumatz & Freeman, 2008). Currently DSWM provides recycling and, in some areas, composting to single and multi-family homes with seven or fewer units, but it does not provide a trash service. When the city proposed a trash service to its residents, many residents were displeased with the fact they would no longer have the ability to choose their landfill hauler. The City of Denver program costs 68,620,000 and DSWM currently suffers from a 30 million deficit annually from the program (Vidal, 2010). Denver currently contracts the processing of recyclables by requiring Waste Management to offer recyclable revenue per ton to be payable to the city. The processor gives the city a share in revenues exceeding the base amount, this is known as the up market share (EPA). It is calculated based on an agreed upon percentage distribution of commodities processed by the first of January each year based on recycling markets (Vidal, 2010). Denver will continue its residential waste collection program through its contract with Waste Management. Landfill waste will be picked up weekly while recycling will be picked up biweekly to keep recycling collection costs low. Only single-family and multi-family units up to 7 residences will fall under Denver Solid Waste Management s jurisdiction for waste collection while multi-family units consisting of more than seven units are not provided this service (Vidal, 2010). Denver s current recycling program is a single stream recycling system that allows residents to throw all recyclables (paper, cans, plastic, glass, and aluminum) into one bin to help increase recycling participation by keeping the number of containers low. Denver s program will also continue to be a free service to the residents of Denver, it will be funded through city taxes, but customers will not be charged extra for participating in the program (Vidal, 2010). Achieving Sustainable Waste Disposal for the City of Denver 32

34 Marshall 33 Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy PAYT for recycling and composting are the most successful policy interventions to increase diversion rates (Environmental Protection Agency, 1999). These diversion options can be offered at no additional cost to the city government and sometimes applied within a rate structure as a cost reduction strategy to the consumer. PAYT has been implemented in the Colorado municipalities of Aspen, Boulder, Fort Collins, Lafayette, and Loveland over the last decade (Meyer J., 2011). It increased residential diversion rates from 28 percent (Lafayette) to over 55 percent (Loveland) and city-wide waste diversion rates from 14 percent (Aspen) to 27 percent (Fort Collins) (Meyer J., 2011). For the City of Denver PAYT would not only increase diversion rates, it would also help solve a growing 30 million deficit that continues to grow annually (Kray, Waste Diversion Update, 2013). Residents in Denver would have to opt in to the city s waste management program. If residents only wanted to receive trash collection they would pay 16 per month while a recycling and landfill package will cost 15 a month (Meyer). Residents in Denver would only pay for the landfill waste they generate in order to encourage people to lessen their trash load via recycling and composting. This program would provide free composting and recycling pick-up but charge for trash pick-up based on weight. Mayor Hancock stated, "By weighing trash, it pays for those services to be offered to those residents for free if they do the right thing. This collection model has been proven wildly successful in cities like Boulder, Portland, Fort Collins, and even Loveland (EcoCycle 2008). These cities residents only pay for the amount of trash they produce. This approach incentivizes residents to reduce their overall trash production and increase their diversion disposal methods instead. Pay-As-You-Throw creates a polluter payment principle in MSW management, the principle that costs of collection and processing of waste are to be paid for by those who produce the waste. Each home in Denver would receive a 64-gallon (or larger) recycling container and another 64-gallon compost container while initiating a fee for the residents of Denver. However, the cost of the recycling should be embedded into the sum trash fee and not charge extra for a recycling and composting program. A Pay-As- Achieving Sustainable Waste Disposal for the City of Denver 33

35 34 Marshall You-Throw (PAYT) rate would be placed on Denver residents and would charge higher fees for the collection of larger volumes of trash per household. Variable rates refer to a fee structure for waste generation that charges the generators based on how much waste they create. This structure would resemble Denver Water utilities where users pay only for the volume of water they consume. A PAYT structure is a more equitable service fee for users, which incentivizes waste diversion by giving Denverites the opportunity to reduce their cost of service for MSW collection by minimizing their landfill waste generation and disposal. Incentives will be further increased if Denver uses PAYT requirements to include collection for recycling and organics composting. Both recycling and composting should be offered at no additional cost. Disposing of waste in the landfill is by far the most expensive stream for the city to pay for so not charging extra to give residents recycling and composting services will help incentivize residents to dispose of their waste properly in both recycling and composting containers instead of landfill containers. The PAYT system should be implemented at the same time that composting is expanded in Denver. If residents view the fee structure as paying for a new service, it should be better received. The city would make it mandatory for residents to participate in recycling and composting programs by outlawing food waste and recyclable waste disposal in landfills. When mandatory participation is coupled with PAYT policies, it can increase diversion rates between 12 and 26 percent over a five-year period (Lisa A. Skumatz & Freeman, 2008). Also, a composting expansion with curbside pick-up can also increase diversion rates 20 percent-35 percent (Ferrara & Missios, 2005). Tools such as volume-based pricing (PAYT), mandatory recycling and composting, and weekly curbside pick-up would increase the diversion rate by 35 percent or more among single-family units (Ferrara & Missios, 2005). Expanding the composting program will create an additional cost for the city; it would be up to the city to provide a container for industrial composting or tools for at-home composting and improve the current composting facility to handle a greater volume of compost disposed. While the up-front costs for composting and logistics may be significant, organics comprise 59 percent of all residential waste Achieving Sustainable Waste Disposal for the City of Denver 34

36 Marshall 35 generated and, if Denver is ever going to increase diversion rates above 30 percent, commercial composting will be a necessity (Vidal, 2010). Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy In the majority of municipalities, recycling programs are usually geared toward single-family homes, where curbside pick-up is feasible which has resulted in increased waste diversion rates (CalRecycle). Unfortunately, cities neglect multi-family recycling programs, resulting in low waste diversion rates from multi-family housing (CalRecycle 2010). In order to increase diversion rates as much as possible, increasing recycling rates in multi-family homes is imperative because these units generate large volumes of waste due to their high population densities. This landfilled waste material is a cost to society and the environment. In fact, 90 percent of the waste landfilled can be converted into profitable materials that benefit society, have great energy savings, conserve our natural resources, and limit the amount of land dedicated to disposal of waste materials (Environmental Protection Agency 2010). In order to increase the city s overall participation in the diversion program, DSWM could expand recycling and compost collection to multi-family residences in Denver. Due to the cost constraints placed upon the City and the ordinances around commercial (private) property contracting (MSW), Denver should use a franchise model for multi-family units within the city. The SERA Report for the State of Colorado explained that single stream, weekly curbside recycling programs can increase diversion rates to 20 percent (Ferrara & Missios, 2005). While there are drop-off locations available to residents residing in multi-family units, the majority of residents do not participate. It is difficult for residents to find information about drop-off locations and drop-off locations can actually discourage participation because it places the primary disposal responsibility on tenants, as it requires them to transport recycling loads to a drop-off location. It is much easier for tenants to dispose of their waste in the apartment complex s provided landfill containers (Environmental Protection Agency, 2001). Under the system, every large MFU contracts with the MSW provider of their choosing, as long as the hauler meets the new regulations dictated by the city. All buildings would have to provide recycling Achieving Sustainable Waste Disposal for the City of Denver 35

37 36 Marshall collection to their residents by January 2016, along with landfill collection. By 2017, all large multifamily units must also provide organic waste collection to all residents. The private haulers are also mandated to implement a Pay-As-You-Throw structure to penalize the complexes for generating excess landfill waste. While property owners can pass these costs on to their residents, it is in their best interests to incentivize recycling and composting to their tenants through financial incentives. In other municipalities, building managers pass reduced waste disposal fees on to tenants in the form of decreased rent and fees (Environmental Protection Agency, 1999). The city would help provide support to property owners to develop incentive structures throughout the rollout of the integration of MFUs in diversion practices for the City. While landlords are mandated to provide recycling and composting, residents do not have an incentive to produce less trash unless landlords pass the costs to them. A Pay-As-You-Throw system is harder to implement as landlords would have to provide bag tags to residents in order to track what waste is coming from particular units or apply cost increases and savings to all tenants uniformly in the building. Yet, if Denver prohibits the landfill disposal of recyclable goods, compostable diversion rates will increase in these housing units because the landlords will be incentivized to make sure their residents are participating. In other cities, landlords have passed on the costs to their residents, at an average of 2 per tenant (Environmental Protection Agency, 2001). Building managers would also be required to submit annual reports of diversion rates to the City and provide proof that both recycling and composting services are, in fact, provided to all residents. In other municipalities, waste providers submit these results directly to the city governments on behalf of the building managers. This model would help reduce the costs placed on Denver s government while ensuring that all residents are provided a more uniform solid waste collection structure. Alternative 2: Denver Recycling and Composting Educational Outreach This policy option would seek increased recycling participation through public outreach efforts from the City of Denver government. While all homes with fewer than seven units qualify for the Denver Achieving Sustainable Waste Disposal for the City of Denver 36

38 Marshall 37 recycling program, only about 40 percent of citizens participate in the program they qualify for (Vidal, 2010). Even then, the people who participate in the program still dispose of compostable and recyclable products into the landfill. If the city seeks to divert 76,347 of waste to recycling and/or composting facilities, DSWM needs to show the public the importance of increased waste diversion. The city could invest in educational tools such as print media including newspapers, handbooks, billboards, and direct mail. Print media are found to be much more effective at changing public awareness and behavior than electronic media since direct mailers and flyers are sent to residents directly (Lisa A. Skumatz & Freeman, 2008). However, that is not to say the City of Denver should not also invest in electronic media such as television, radio, and Internet adds since the City of Denver is home to over 600,000 residents. The goal of this policy option would be to educate and reach out to the residents of Denver to teach them the value and importance of the waste diversion program they are provided. However, since Denver does not charge residents for the landfill waste they produce, there is no financial incentive with this policy to encourage residents to divert more of their waste from the landfill. Educational outreach is shown to increase overall diversion rates and participation by 3 percent over a five-year period of time (SERA 2008). This alternative would be the least cost prohibitive option presented to Denver Solid Waste Management. Education and outreach is a politically popular option because the City provides the materials to educate residents about proper disposal. Educating and reaching out to citizens is viewed as an additional benefit/service provided by the city government in contrast to a penalty of an additional tax or user fee. Education is a politically popular means of increasing recycling because it does not have incentives or economic costs that mandates and volume-based pricing do. While education does not provide incentive structures both Alternative 1A and Alternative 1B do, this education policy utilizes targeted outreach to decrease contamination rates and increase diversion rates. Education is an inexpensive means through which the city can keep the costs of the solid waste collection program low. Education campaigns are also flexible, as they can be implemented in phases and Achieving Sustainable Waste Disposal for the City of Denver 37

39 38 Marshall evolved with the addition of new technology and changing media. Beyond pamphlets and social media, Denver can also use schools as an educational avenue. By working with schools and teaching students about recyclables, the city can also teach families about proper waste disposal techniques and practices. Cost Benefit Analysis For this analysis I examined the different effects the various policy intervention programs have on landfill rates in the City of Denver. It is important to note the total waste currently collected by the City of Denver is 253,600 ; 220,000 are currently sent to the landfill and 32,000 are sent to recycling facility (Vidal, 2010). I will assume that without a new policy intervention, the amount of the waste sent to the landfill will not significantly decrease. After establishing a baseline for Denver, I looked at the effects of each policy alternative in the city and the ability of each alternative to reduce the amount of waste sent to the landfill. The policy options include implementing a PAYT system and expanding composting program for single-family homes, implementing PAYT and expanding the composting program to also include multi-family residences in Denver, and a comprehensive proper waste disposal campaign for the city. I calculated the upfront costs of each alternative for the city and calculate the benefits of each policy to the City of Denver as well. The benefits will be measured in both fiscal and environmental gains from these policy alternatives. The problem can be measured through pounds of waste diverted or sent to the landfill and in dollars saved/extra capital generated through the program. There are environmental benefits, which can be quantified. For example, Greenhouse Gas Emission (GHG) reduction can be quantified. In terms of emissions saved and dollars saved, creating products out of already recycled materials can also be quantified. Cost Benefit Analysis of Denver Solid Waste Options for Denver ALTERNATIVES Status Quo Alternative 1A Alternative 1B Alternative 2 Costs 49,530, ,813, ,692, ,067, Benefits 27,074, ,072, ,926, ,756, NET PRESENT VALUE (22,456,518.49) 30,258, ,233, (21,310,363.56) Figure 10 Net Present Value for the policy alternatives for the City of Denver (Vidal, 2010), (Environmental Protection Agency) Achieving Sustainable Waste Disposal for the City of Denver 38

40 COSTS BENEFITS Marshall 39 Cost Benefit Analysis of Denver Solid Waste Options ALTERNATIVES Status Quo Alternative 1A Alternative 1B Alternative 2 City & County of Denver 49,530, ,524, ,692, ,067, Waste Management 7,079, ,744, ,034, ,836, A-1 Organics 74, ,393, ,559, ,000 Single Family Units 257, ,960, ,960, Multi-Family Units 8,640,000 Property Owners 272,371,200 TOTAL COSTS 56,942, ,621, ,257, ,975, ALTERNATIVES Status Quo Alternative 1A Alternative 1B Alternative 2 City & County of Denver 27,074, ,072, ,926, ,756, Waste Management A-1 Organics 24, , ,136 24, Single Family Units Multi-Family Units Property Owners TOTAL BENEFITS 27,098, ,710, ,564, ,781, NET PRESENT VALUE (29,843,438.49) 7,088, (323,693,009.98) (28,194,108.92) Figure 11 Net Present Value for all policy alternatives (Environmental Protection Agency), (Lisa A. Skumatz & Freeman, 2008), (Vidal, 2010) Status Quo Policy Alternative Costs: The current waste collection program uses 2.5 percent of the city s general fund (Vaccarelli J., Denver gearing up to get rid of alley trash bins, 2014). To analyze the areas that will be directly affected by any policy changes to the City s solid waste program, I calculated the main costs and benefits to each stakeholder under the current program. I would like to note that my calculations primarily focus on the costs and benefits from the City s perspective and I do not delve as deeply into the individual costs of the contracted waste provider Waste Management because their production should not affect their contract with the City of Denver. The current structure of the program costs the city 23,936,308 annually (Vidal, Achieving Sustainable Waste Disposal for the City of Denver 39

41 40 Marshall 2010). While Waste Management disposes of both recyclables and landfill item, the city has a fleet that collects the waste and maintains the bins given to residents. It costs 3,318,080 to collect recyclables and 14,984,200 to collect the landfill from single-family units and small multi-family units across the city (Vidal, 2010). It is also important to note that at roughly 16 per ton, tipping fees add an additional cost to the city s landfill collection at 3,645,400 (Vidal, 2010). The city also collects compost for 2,200 Denver residents and currently pays A-1 Organics to properly compost the waste, although there is not an exclusive contract as of yet with the city (Vidal, 2010). Due to the mileage to take loads to the A-1 transfer station and the tipping fees the 1,600 collected by the city, the compost program currently costs the City 44,928 annually (28.08 dollars per ton) (Vidal, 2010). It is also important to note that because Denver residents send so much of their recyclable waste to the landfill, it is estimated that residents are throwing 1,943,700 of recyclables alone in the landfill, which represents a loss of potential revenue for the city itself (Vidal, 2010). According to the EPA for each MT/CO 2 created, there is a social cost of 137 per metric ton. Currently, 75 percent of the waste Denver residents send to the landfill can be recycled or composted (Vidal, 2010). Every 1.2 of landfill waste generates an average of one metric ton of carbon dioxide (1 MT/CO 2 ) (EPA 2009). Denver generates 220,000 of landfill waste and produces 183,333 metric of carbon each year So Denver s landfill waste alone produces an annual social cost of 25,801,621. The overall cost of the program for all of the stakeholders is a total of 56, annually. Overall the program costs Denver 49,530,549 annually. For the 220,000 of waste sent to the landfill in 2013, Waste Management spent 7,097,600 at a ton for the City s landfill disposal (Vidal, 2010). While the CBA does not reflect WMRA cost for recycling, the company does make up those costs by selling the raw recyclable materials for manufacturing. It costs A-1 Organics per ton to process the 1,600 Denver currently produces, A-1 pays 74,800 to process the current compost levels each year (Vidal, 2010). All 240,000 residents that are allowed to participate in the recycling program do not have to pay any additional fees. Denver residents pay property tax and sales tax that go toward funding the services as they are today through Achieving Sustainable Waste Disposal for the City of Denver 40

42 Marshall 41 Denver Solid Waste Management. It is important to note residents in large multi-family units do have to pay for the program via taxes, about 360,000 Denver residents residing in the 69,200 units that are not serviced by the city is not calculated. While these residents pay sales taxes to the city, they do not reap the full benefits of their taxes since they are excluded from the DSWM diversion program. Benefits The city reaps benefits from the contracted recycling processing agreement made with Waste Management. The city is paid for each ton of recyclables turned over to WMRA for 95 percent of recyclables delivered. 32,000 of recyclables are currently generated each year (Vidal, 2010). 95 percent of that total represents 30,400. Therefore, the city receives 1,076,160 annually from WMRA. The city also receives 5,578, in landfill royalties from Waste Management. However, it is important to note that while the total revenue from landfill royalties is more than the recyclable revenue, as Waste Management pays more for each ton of recyclables. For each ton of trash, the royalties are only 25.36, while WMRA pays for each ton of recyclables sent to them (Vidal, 2010). Within the current program Waste Management is currently the sole provider for single-family homes in the Denver area and benefits from that monopoly, and currently does not post their revenue sold just from the City of Denver recyclables. The residents do not suffer from any cost; it is a service provided from the general fund for the City of Denver so the main benefit is that the program is free to them. By recycling 32,000, 26,666 MT/CO 2 are prevented from being emitted into the atmosphere. This prevents a social cost of 3,653,242 each year. Achieving Sustainable Waste Disposal for the City of Denver 41

43 42 Marshall Estimated Impacts from Key Diversion Programs Activity % Notes Increase PAYT 9-17 PAYT dramatically improves capture from curbside composting and recycling programs. It leads to source reduction. Generation avoidance. Mandatory Recycling & Composting 6-29 Mandatory recycling and composting through bans of sending divertible items to the landfill and fine penalties increase the likelihood of recycling 100 percent by between 6.4 percent & 29.7 percent. Decreases the chances of recycling 0 percent by 3.4 percent to 29.6 percent Curbside recycling Curbside collection coupled with weekly collection increases the chances participants will divert more of their divertible items compared to pick-up every two weeks. Recycling needs to be collected when the landfill is collected. Composting Expansion Especially critical for single-family homes, collect 31 pounds of compost a week due to the yard waste from summer months and 12 pounds a week during the winter per unit. Multi-Family Recycling 2-4 Ensuring large multi-family unit residents have access to diversion collection through recycling and composting Education 1-3 Increasing expenditures on education and public outreach effects diversion Figure 10 Range of Impact for each Policy Alternative (Lisa A. Skumatz & Freeman, 2008) (Ferrara & Missios, 2005) (Boulder County, 2010) Alternative 1A: Mandatory PAYT Single-family Residential Recycling and Composting Policy The combination of PAYT, mandatory diversion of both recyclable and compostable products, and curbside weekly pick-up of recycling and composting is expected to increase the city s diversion rate to 51 percent by Costs: Assuming the City of Denver implements a mandatory Pay-As-You-Throw system, utilizing curbside collection, and expands compost collection to all single-family residences, Denver could expect to see an increase of an additional 32 percent over the next fifteen years. Out of the total 253,600 disposed of annually, 134,756 would be diverted from the landfill to recycling and composting facilities. The cost to collect recyclables will increase to 8,458, at per ton 81,578 annually. To collect landfill waste, it would cost DSMW 7,958, at per ton, with an expected decrease in landfill waste to 116,844 produced annually. Denver s costs for tipping fees have also decreased to 1,936, at per ton for 116,844 each year. Due to the increase in Achieving Sustainable Waste Disposal for the City of Denver 42

44 Marshall 43 diversion rates I predict the residential recyclables sent to the landfill will nearly disappear. The value of recyclables sent to the landfill will be negligible. The increased compost rates will increase the compost tip fees with A-1 Organics to 1,545, each year for per ton for 53,178 each year, unless Denver Recycles is able to lower the costs to the city with A-1 Organics due to the increased volume/business from 1,600. Over a five-year period, DSWM will need to invest in infrastructural updates to implement the PAYT program over a three-year period. In order to use a volume-based system, the City needs to develop a billing function within DSWM to develop a utility pricing system similar to Denver Water uses to raise revenues from one or more sources to cover the utility costs, Denver residents will be charged for the amount of waste they generate. It is estimated to cost 200,000 to implement the payment structure. To pay for new systems DSWM will need to purchase hauler trucks that can lift cans and record the waste from each household it is estimated to cost 500,000 for the City s system. The City will need to transfer over to a cart system for recycling and landfill collection in order to switch to curbside pick-up, which is estimated to cost another 500,000 to get them to all 172,000 households (Vidal, 2010). Expanding the composting program to all residents with green compost carts will cost 375,000. The new PAYT updates are estimated to cost an additional to the City of Denver 1,575,000. All together, the program will cost 21,474, for DSWM. The landfill disposal costs for Waste Management will decrease due to the 104,000 decrease in landfill waste produced, at a cost of per ton for 116,844 for a total of 3,774, A-1 Organics on the other hand will see an increase in their processing costs for the city at 45 per ton for 53,178 for a total cost of 2,393,010 annually. The single-family units will see the greatest cost increase as a whole, seeing as that the city has been providing the service as part of property and sales taxes. At minimum, residents will pay 180 annually for a minimum of 30,960,000 each year. For the 116,844 of waste sent to the landfill, it will produce 97,370 MT/CO 2 for a social cost of 137, producing a total social cost of 13,339,690. The total costs for all of the stakeholders are estimated to be Achieving Sustainable Waste Disposal for the City of Denver 43

45 44 Marshall 71,940, Benefits: The PAYT program will raise revenues for the City of Denver. The minimum revenue from PAYT fees will be 30,960,000 from all single-family units and small multi-family units. DSMW is also paid per ton of recyclables, which will bring in 2,692,074 for 81,578 of recyclables. The city will also receive 2,761,023 for landfill royalties for per ton 116,844 produced. There is also an avoided cost of 1,650,496 in tipping fees due to the high diversion rates from the landfill. The city will divert 53 percent of its residential waste from the landfill in 2030 with 81,578 being sent to recycling and 53,178 sent to a composting facility. The City will receive the equivalent of 38,063, in revenue and cost savings annually. A-1 Organics will see increased revenues of 638,136 annually due to the 53,178 organics sent to them annually. Residents will also see increased services in terms of organics collection, even though they are paying for waste collection. In terms of environmental benefits the social cost savings will be 9,313,397. Alternative 1B: Mandatory PAYT Single & Multi- Family Recycling and Composting Policy In addition to the funding structure and policy recommendations in Alternative 1A, Alternative 1B expands the mandatory diversion policies from the City to Denver residents residing in large multifamily units. While the original proposal examined the possibility of the city expanding its collection services to MFUs, the variability in size and scope from building to building made it difficult to calculate the precise costs for Denver. The startup costs also would have also been difficult for the City to rationalize with the other proposed expansions due to even more investments in three new dumpsters for every MFU in the city, new trucks, and the cost of working with Waste Management to create another recycling transfer facility. This approach does prevent the City of Denver from reaping the profits from compost and recycling end markets, but it also protects the City from the costs of such a program. It is important to note, that as of now, no municipality in the country offers a city-provided compost, recycling, and landfill collection to large MFUs. Instead, cities implement this private, regulated franchise Achieving Sustainable Waste Disposal for the City of Denver 44

46 Marshall 45 diversion model instead. Due to expanding diversion practices, MFUs will increase their diversion rate by 4 percent (Environmental Protection Agency, 1999). The PAYT system and composting/recycling collection is estimated to increase diversion rates by 15 percent when combined (Environmental Protection Agency, 2001). Including the large multi-family units in the City s diversion rate increases the total collected from 253,600 to 683,600. The city is currently neglecting 432,000 from the MFU facilities. It is anticipated that by 2030, 349,920 will be sent to the landfill, 60,480 to recycling, and 21,600 for composting. Costs: This program would expand upon the recommendations made in Alternative 1B by including multi-family units. To ensure that property owners are cooperating with the program, the city will spend 24,800 to create a verification program for MFUs. Also, the city will spend 10,000 on audits of 16 apartment buildings each year to ensure apartment diversion participation. The city will need to pay 21,456, as an upfront cost for the new policy recommendations. After upfront costs, it will cost the City 19,881, It is expected that the expansion will cost haulers 11, 260, to include the extra tonnage. The processing cost for compost will also increase by 1,166,400, just for the MFU organics collection. It is expected that property owners will pass the increased fees for collection on to their residents at about 2 per resident with 360,000 residents, which adds up to a total of 8,640,000 each year. In terms of how much collection will cost landowners, I made estimates in terms of the average volume for apartment buildings. Assuming buildings will need five cubic yard containers for landfill, two cubic yard containers for compost, and four cubic yard containers for recycling, the annual cost of weekly pick-up for the all MFUs will be 272,371,200 (Figure 13). It is important to note that these numbers come from price quotes of one provider, Alpine Waste & Recycling, but that property owners would have the option to choose from any licensed providers approved by the City of Denver. Multi-Family Units Average Container Size and Costs Waste Type Size of Container (Cubic Yards) Charge Per Month Annual Cost Landfill 5 95 per MFU 78,888, Compost 2 81 per MFU 67,262, Recycling 4 71 per MFU 58,958, Figure 11 Alpine Waste and Recycling Price Quote (Bengeri, 2014) Achieving Sustainable Waste Disposal for the City of Denver 45

47 46 Marshall The social costs of the waste landfilled will still cost 137 per ton and MFUs will produce 349, ,600 MT/CO 2 while SFUs will produce 116,844 97,370 MT/CO 2. This will produce a total social cost of 44,235,930. It is important to note the number is larger than in Alternative A, the Status Quo, and Alternative 2 because those policies do not currently measure MFU waste production. Benefits: In terms of emissions reductions, this is the policy that has the greatest impact. For every 1.2 generated, 1 MT/CO 2 is created. For 81,578 ton 67,981 MT/CO 2 is saved for SFUs and for 60,480, 50,400 MT/CO 2 are saved from MFUs. All together, the generated savings is 16,218,197. Alternative 2: Recycling Educational Outreach for Single-family Units Costs In order to create an education and outreach campaign to improve recycling diversion rates, Denver would spend 1,279, in 2014 dollars (Vidal, 2010). The money would go toward creating and distributing educational brochures, move-in packets, and educational programming targeted for single-family homes. According to both the City of Denver and the SERA Colorado report, educational outreach is predicted to increase diversion rates between 1-3 percent over a five-year period (Lisa A. Skumatz & Freeman, 2008). If there is a three percent diversion rate, this increases recycling rates to 37,548 per year. Therefore it would only cost the city 3,795,054 to collect recycling and 14,470, to collect landfill refuse annually at per ton with 212,452 produced annually. The tipping fees would also decrease to 3,520, annually and while composting tipping fees would remain the same since the education campaign would mainly target recycling diversion rates. The lost value of recyclables landfilled would decrease (assuming that 30 percent landfill composition is currently recyclable material) at 27 per ton with 59,400 of recyclables landfilled, there would be a lost value of 1,603,800 annually. The tipping fee for compost at A-1 Organics has remained consistent from the status quo policy to this policy since this recommendation will not expand the compost program. The compost collection will still collect 1,600 annually with a tipping fee of per ton Denver is charged 44,928 annually. The total cost to the City of Denver is expected to be 24,812, annually. Achieving Sustainable Waste Disposal for the City of Denver 46

48 Marshall 47 Waste Management s landfill disposal costs will also decrease since 7,548 fewer will be disposed of in the landfill. 212,452 of landfill as a cost of per ton would cost WMRA 6,836, annually. I am assuming the processing costs for A-1 Organics will remain the same since the educational campaign is not targeting compost diversion rates, which is a cost of 72,000 a year for A-1 Organics. In terms of costs to the environment, the 212,452 of landfilled waste will produce 177,043 MT/CO 2 annually, with a social cost of 24,254,891 (EPA). The total estimated costs are 56,233, for all of the stakeholders each year. Benefits The City will receive 1,262,753 annually for 95 percent of recyclables sent to Waste Management, which is estimated to be 35,671 each year at a price of per ton. Denver is also projected to receive 5,020, for landfill royalties at per ton for the 212,452 sent to the landfill annually. The policy also decreased the level of emissions from the status quo. Annually, 31,290 MT/CO 2 are saved from being emitted into the atmosphere with a social savings of 4,286,730. In total the educational outreach policy is projected to have 10,715, in benefits annually. Further Analysis of Alternative 1A Since the net present value shows that Alternative 1A has the most financial benefits for the City of Denver I wanted to include further analysis of what fiscal implications the policy will have on DSWM. The first table shows the projected diversion rate increase from year to year until The second table shows the fiscal impact different diversion rates will have on Denver s costs and benefits. The third and last table shows how population growth will affect the costs and benefits. Diversion Rate Projections Costs 2016 (20%) 46,423,316 Projected Diversion Rates Annual Diversion Projection by Year (25%) (30%) (35%) (40%) (45%) 43,235, (50%) Achieving Sustainable Waste Disposal for the City of Denver (53%) 41,445,137 39,518,073 37,930,762 36,206,703 34,504,918 33,428,805 Benefits 61,144,533 61,144,533 61,144,533 61,144,533 62,123,840 63,143,438 64,163,036 64,995,871 NET PRESENT VALUE 14,721,217 17,908,806 19,699,396 21,626,460 24,193,077 26,936,735 29,658,118 31,567,066 Figure 12 Project Diversion Rates over Time Alternative 1A

49 48 Marshall This table shows how the PAYT policy would help increase diversion rates from to achieve the projected 53% overall diversion rate for Denver s residential single family unit waste. The first year the financial benefits are not as great to DSMW since they have to make an initial investment into the new policy. The initial investment includes new carts, trucks, new PAYT tracking program, and to expand the composting program will cost the City of Denver 1,575,000 to get the program up and running. From that point on the city will no longer have to pay that 1.5 million. The table shows as the diversion rates increase, the costs decrease since landfill disposal is so expensive. Between landfill collection costs and tipping fees each costs DSMW a ton. As diversion rates also increase the cost of recyclables landfills decreases and the social cost of landfill emissions also declines. The benefits increase as the diversion rate increases over two years. By 2030 with a 53% diversion rate the City is projected to have a benefit of 31,567,066 annually. The caveat of the benefits projection is even in 2016 each household only pays 15 a month even though many residents will have to pay more due to their high landfill rates when the program first starts. Sensitivity Analysis of Diversion Rates Projections for Different Diversion Rates in 2030 Alternative Diversion Rates 53% Diversion 50% Diversion 45% Diversion 40% Diversion 35% Diversion Costs 33,438,747 34,578,058 36,279,843 38,003,903 39,664,353 Benefits 65,072,682 64,234,742 63,207,973 62,181,205 61,196,162 NET PRESENT VALUE 31,633,935 29,656,684 26,928,130 24,177,302 21,531,808 Figure 13 Possible Diversion Rates 2030 This table demonstrates the greater diversion rates will have a greater return on investment in terms of net present value than lower diversion rates. The range displayed in the table 53% to 35% which demonstrates the range of predicted outcomes from the policy interventions outlined in Alternative 1A. TA 35% diversion rate would give the city a net present value of 21,531,808 while 53% would give the city a greater return of 31,633,935. Achieving Sustainable Waste Disposal for the City of Denver 48

50 Marshall 49 Sensitivity Analysis of the Effect of Population Growth Effects of Population Growth on the Costs and Benefits of Alternative 1A Annual Diversion Projection 2015 (14%) 2016 (20%) 2020 (30%) 2025 (42%) 2030 (53%) Costs 51,105,549 48,160,218 41,090,586 39,757,678 42,222,679 Benefits 58,360,623 64,290,410 69,436,870 76,356,657 84,421,907 NET PRESENT VALUE 7,255,074 16,130,191 28,346,283 36,598,979 42,199,228 Figure 14 Projected NPV of Program with Population Growth The first two tables analyze diversion rate assuming Denver s population will not growth between 2015 and I referred to the Colorado government s projected population growth rate for the City of Denver with about a 1% growth rate annually after Using the population growth rate I assumed that roughly 75% of city residents will continue to live in single family homes or small multi-family units as the population increases. Then using DSMW s data, households generate 1.45 I then applied the projected diversion rates to total tonnage created to get the numbers above. With population growth this table demonstrates by 2030 the net present value will be over 11,000,000 greater than my first projection that did not take population growth into account. The increasing return on investment due to population growth projections suggest that the Denver should revise their policy to incorporate large multi-family units to continue to see both greater profits and increased diversion rates for the City and County of Denver. Strategic Recommendations Considering the different policy options the City of Denver is faced with, I recommend the city implements Alternative 1A: Mandatory Pay-As-You-Throw for Single-family Units for recycling and composting collection. This alternative best address the weaknesses of Denver s current solid waste collection program in the most cost effective way possible. Instead of generating a deficit through a DSWM collection program, the CBA demonstrates that Denver will reap benefits within the first year of the policy expansion and see growing returns on its investment each successive year. Achieving Sustainable Waste Disposal for the City of Denver 49

51 50 Marshall Weekly Curbside Pick-up DSWM currently collects an unrestricted amount of refuse each week (for the landfill). The current alley dumpster system that most single-family homes have at their disposal actually encourages residents to dispose more of their waste into the city provided landfill dumpsters. It also encourages illegal dumping among residences. Since the dumpsters do not belong to any one person, some residents feel justified disposing of their waste in dumpsters that are not their own. Dumpsters allow residents to enjoy some level of anonymity; they represent a communal disposal system and, because of this, people feel less guilty about the amount of landfill waste they produce and the illegal dumping of items into other landfill containers. The city needs to swap out dumpsters for a landfill container system to decrease the overall landfill waste generated by residents. Not only will a smaller container discourage residents from landfilling divertible items, it will also help make residents more accountable to how they dispose of their waste. Dumpsters account for more per household than landfill containers do, with dumpsters accounting for 48 percent of total waste by weight (Vidal, 2010). In order for residents to also participate in recycling and composting effectively, both streams also need to be picked up weekly by the city when the landfill Figure 15: Carts for Denver curbside collection (DSWM 2014) containers are also collected. With the exception that compost, all waste will be collected every week. During the winter months DSMW will collect compost for everyone other week due to decreased production of organic waste December through March. A fully automated cart system compared to a dumpster system will help reduce costs for the city. It will eliminate the need for special side-loader trucks used for dumpsters in the alleys which cost 17 more per mile in terms of fleet maintenance charges over the course of a truck s lifetime (Vidal, 2010). It will also reduce the staff needed to manage Achieving Sustainable Waste Disposal for the City of Denver 50

52 Marshall 51 illegal dumping and to oversee dumpster maintenance. Mandatory Recycling Mandatory recycling usually combined with unit pricing has a positive impact on recycling rates when they are also combined with user fees (Ferrara 2005). User fees actually boost customer participation in diversion collection programs because they increase their stake in the program when coupled with mandatory programs. In terms of curbside recycling services, the frequency of recyclable collection matters; weekly recycling results in higher recycling intensity (Ferrara 2005). Weekly recycling increases buy-in because it reduces the necessary storage capacity for recycling (Ferrara 2005). The City needs to ban the disposal of recyclable and compostable products in city landfills. If citizens are obligated to recycle they will be Figure 16 Waste Management Recycling Facility Denver (Marshall 2014) more likely to be conscious of what items they dispose of and how. Comprehensive Organic Collection Since organics are estimated to comprise 60 percent of Denver s residential waste stream, DSWM must develop a city-wide organics recovery program. Capturing yard and food waste holds the greatest diversion rate potential for Denver. Similar to Denver s organic collection pilot program, compost would be collected weekly from April through November but only biweekly December through March due to the decrease in organic waste produced during the Figure 17 A-1 Organics Compost Facility Rattler Ridge (Marshall, 2014) Achieving Sustainable Waste Disposal for the City of Denver 51