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The latest on pay as you throw

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Pay as you throw waste programs help municipalities achieve significant increases in landfill diversion and recycling without adding to city costs. PAYT, as it’s also known, can save cities money by reducing landfill tipping fees, increasing recycling income and generating revenue from sale of bags, tags or other fees charged to citizens for disposing of waste.

The Environmental Protection Agency (EPA) said in 2006 that nearly 7,100 towns and cities across the United States operated some sort of PAYT system. That included 30 of the largest 100 cities, according to the EPA. The technique is also widely used in Europe and some Asian countries.

PAYT, also called variable rate pricing, is a way of disposing of municipal solid waste that charges residential users based on how much they throw away. The two main traditional methods for handling waste disposal charges are to have all users pay a flat rate, or include trash collection and disposal costs in tax rates. With both these approaches, unlike PAYT, everybody pays the same no matter how much trash they dispose of.

With PAYT, users who throw away more, pay more. Those who throw away less, pay less. The resulting incentive to generate less trash results in significant decreases in solid waste, along with large increases in recycling rates.

WasteZero, a Raleigh, North Carolina-based company that provides PAYT services and products, reports an average 44 percent reduction in solid waste volume average in communities it has served over 20 years, and a doubling or tripling of recycling rates. The EPA reports more modest diversion increases to 32 percent from 26 percent, and recycling rates rising from 11 percent to 14 percent when communities implement any kind of PAYT.

PAYT Savings

Some programs offer rebates and rewards.

The resulting shift in waste and recycling streams produces significant financial benefits for cities, according to Stephen Lisauskas, vice president of government relations for WasteZero. Cities gain revenue from the added recycling materials, plus more revenue from selling bags and also on savings from landfill disposal. “There are three streams of benefit – bag revenue, recycling revenue and tipping fee savings,” Lisauskas said.

Bags are typically sold in local stores at about $1 per 30-gallon bag. The bags may be sold in rolls of five or more bags apiece. Bags are typically printed with labels and brightly colored, such as orange, so they will be easy to separate from other bags.

A community can realize significant revenues from bags. Lisauskas said one town of 50,000 residents records bag revenues of about $2 million, and also saves about half that in annual tipping fees.

PAYT Power

The EPA hasn’t updated its count of PAYT programs since 2006, but Lisauskas said conditions are ripe for a surge of interest in PAYT. For one thing, tipping fees are rising in many locations. In Massachusetts, for example, the number of landfills is shrinking and tipping fees are growing. Lisauskas said tipping fees there are increasing to around $50 to $80 per ton, up from as low as $20 not too long ago.

As many communities are struggling to cope with the lingering financial effects of the last recession without raising taxes, PAYT is seen as useful way to save money and generate more income. “There are changing dynamics at a municipal level and other levels that are putting strong incentives to go to PAYT,” Lisauskas said.

PAYT Changes

There are a few main approaches to PAYT. The bag-based system WasteZero employs sells special pre-paid bags to residents, who can then dispose of trash using them. Some variations use special pre-paid tags that can be affixed to regular bags to show disposal has been paid for.

Variable-rate carts are another approach in which residents are offered a choice of different sized carts, with larger carts costing more. Whether they fill up the cart or not, they pay the rate for that size cart.

Recently, new technology applications have been tried in PAYT. For instance, radio frequency identification (RFID) attaches tags carrying identification data to carts. The tags are automatically scanned when picked up by disposal trucks, so residents are only charged when they actually put their carts by the curb.

Changing Attitudes

One of the changes in PAYT has been a shift in public sentiment. In the last several years, two WasteZero clients in the Northeast, the cities of Sanford, Maine, and Plymouth, Massachusetts, decided to opt out of PAYT programs after committing to do them. Both cases were connected to residents’ growing unwillingness to pay extra for trash disposal they felt they were already paying for with taxes and trash collecting fees.

However, recently both these cities returned to the PAYT fold with re-started PAYT programs. In Sanford, council decided to give PAYT another try because of an innovative program that issues monetary rebates to customers who buy pre-paid PAYT bags.

Although Sanford ultimately opted not to include rebates in its PAYT program, WasteZero reports lots of interest in the rebate option. The way it works, at the end of the year the city gives each customer a debit card worth the average amount that customers paid for PAYT bags during the preceding year. So, if a resident buys fewer than the average number of bags, he or she will get back more than they paid. Those who buy more than the average will get back less. The result is an added inducement to generate less trash, and also a way to avoid the “double-taxation” complaint.

Although the “More In Return,” as WasteZero has named its rebate solution, should help overcome objections from people who don’t want to pay more for a service they regard as free, most PAYT programs experience good acceptance. The company cites studies showing about approximately 90 percent of residents like pay-as-you-throw programs once in operation.

PAYT Future

PAYT and PAYT-like programs have been around in at least a few places since before World War II, and have achieved significant penetration in cities around the country and the world. But with the recent innovations and the current financial situation many municipalities are finding themselves in, PAYT could be poised for much greater growth in the near future.

“There’s a lot of interest,” Lisauskas said, “because you reduce your tipping fees and increase recycling and with More In Return you can do it without charging anybody anything.”