Bank of Israel Research Department Analysis: Municipal Waste

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·         The quantity of municipal waste per capita in Israel is one of the highest among advanced economies, and the recycling rate is among the lowest in those countries.

·         The waste problem in Israel is liable to become more severe due to population growth and an expected rise in the standard of living.

·         Economic tools play an important role in mitigating waste quantity and improving waste treatment; Israel has been putting them to growing use in recent years. An improvement in setting the level of levies and expanding their incidence may enhance their contribution to dealing with the problem.

 

Municipal solid waste—household garbage, commercial garbage, and yard waste[1]—causes much environmental harm even when it is managed systematically. The nature and severity of the damage are affected by the quantity, composition, and methods of treatment of the waste in question. The growing worldwide awareness of these kinds of damage, together with the complexity of invoking policy tools to reduce the quantity of the waste and to treat it, are bringing the issue to the fore and spurring a continual search for appropriate tools.

 

The quantity of municipal waste per capita in Israel is one of the highest among advanced economies, and the recycling rate is among the lowest in those countries. The growth of municipal waste per capita in Israel over time, as well as the positive correlation between the income level in local authorities (measured by the average wage of the locality’s residents) and the quantity of waste per capita that they generate indicate that the waste problem is liable to worsen further, in view of an expected rise in the standard of living and population growth. However, such a deterioration is not inevitable; the data indicate that the recycling rate in local authorities also increases with residents’ income, so that there is not a significant connection between it and the quantity of waste sent to landfills. The notable differences in recycling rates among large cities in Israel also indicate that improved municipal management can increase recycling rates and reduce the quantity of waste sent to landfills. International experience shows that some OECD countries succeeded in markedly reducing waste per capita despite growth of GDP per capita.

 

From an environmental perspective, the first priority in dealing with the problem is reducing the quantity of waste at the source, followed by recycling, and lastly the optimal removal of the final waste. Economic tools, implemented in many cases together with regulation, have a central role in achieving these goals. It is also very important to enhance the public’s awareness of the harm occasioned by this waste and its ability to help mitigate the damage, particularly given the limitations of regulation and economic tools.

 

In Israel there has been growing use in recent years of economic tools to deal with the problem of waste in the various stages of the product lifecycle: a mandatory charge for disposable shopping bags at the purchasing stage, which is intended to reduce waste at the source; four extended producer responsibility laws are intended to encourage collection and recycling of several types of waste—beverage containers, tires, cardboard boxes, electrical and electronic equipment and batteries. These focus on the post-use stage of a product, in which the individual decides whether to discard the waste in a garbage can or to sort it and put some of it in recycling containers. A landfill levy that has existed since 2007 is intended to provide an incentive for the local authorities to reduce the quantity of waste that they send to landfills.

 

Looking forward, several improvements in the economic tools should be considered, such as indexing the various levies to average income in the economy in order to prevent the erosion of their effectiveness, a differential landfill levy in accordance with the locality’s income, and expanding the application of levies to other categories of packaging, disposable plastic products, and more.

 

In Israel, there is virtually no incineration of waste, making the country an exception compared to most advanced economies. The policy of the Ministry of Environmental Protection for the coming years is to prefer incineration over landfill. To the extent this is implemented, it will be important to establish a levy on incineration as well, which will reflect its environmental cost/benefit balance and will provide an incentive for reducing the quantity of waste sent away and for increasing the recycling rate.



[1] Commercial waste is the kind created by businesses such as shops, marketplaces, offices, restaurants, and shopping and entertainment centers. The definition of municipal waste excludes industrial waste, construction waste, and sewage. This discussion does not deal with them.