Sweet Deal on Garbage

Posted on October 18, 2005
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Unless you're Oscar the Grouch, most people agree garbage is, well garbage, and they want it removed as soon as possible. Cities usually charge either a flat rate or use property taxes to pay for trash collection.  But this is a one-size-fits-all method of billing. Why should an elderly woman living alone and generating far less trash pay the same for trash collection as an apartment full of college students?

Thankfully, the market has a ready-made solution: prices. Gilbert will become the third Arizona community to offer a "pay-as-you-throw" program. Households producing less trash can now opt for a 65-gallon can to replace the previously standard 90-plus-gallon can and save a dollar on their monthly fee. It's a start.

Introducing variable pricing allows people to choose the best option for their needs, a determination only they can make. In this way, it avoids the over-use problem of single-rate schemes. If there is only one price for trash collection, the incentive is to throw away as much as possible. Recent studies estimate introducing a price mechanism reduces garbage collected by over 16 percent annually. It also encourages recycling, reuse, and reduction.

The next improvement to Gilbert's plan would be to privatize trash collection, freeing the city of administering this service altogether. It makes economic sense to pay more to throw away more. Gilbert has taken a good first step.

Key Links:

- Arizona Republic: "Small bin, small bill for trash"
-Reason Public Policy Institute: "Variable-Rate or 'Pay-as-you-throw' Waste Management"
-Property and Environment Research Center: "Trash: Pay-as-you-throw"

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