United States
Environmental Protect/on
Agency
EPA/530-SW-91-005
February 1991
Solid Waste and Emergency Response (OS-305)
v>EPA Unit Pricing
Providing an
Incentive to
Reduce
Municipal
Solid Waste
Printed on Recycled Paper
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What Is Unit Pricing?
In recent years, solid waste
managers across the country
have found creative ways to
respond to the dilemma of
diminishing landfill space and
rising costs. Unit pricing, also
commonly referred to as variable-
rate pricing, is one method that
has proven effective in both
reducing overall waste and
conserving economic and
environmental resources. Under
unit pricing, customers are
charged for waste collection and
disposal services based on the
amount of trash they generate.
The theory is that if consumers
know they must pay more to
produce more garbage, they will
take advantage of source reduc-
tion and recycling opportunities
to reduce their trash—and their
trash collection bill. As with
other utilities, such as gas or
electricity, consumers will limit
usage if their actions directly
affect the cost of their services.
The U.S. Environmental Protec-
tion Agency (EPA) encourages
local governments and planners
to explore unit pricing as a tool
for addressing the municipal
solid waste needs of their
communities.
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How Unit Pricing Works
Consumers
turndown
thermostats and
turn off lights to
save on gas or
electric bills; with
unit pricing, they
have an economic
incentive to limit
their use of waste
management and
disposal services
as well.
Most U.S. households
currently pay for waste
collection directly
through a fixed monthly service
charge or indirectly through
property taxes. Under such
programs, people who generate
three or four bags of garbage per
week pay the same amount as
those who generate one-third
that amount Under unit pricing,
however, households are
charged only for what they throw
away, creating an incentive to
minimize household waste
generation, and to recycle and
compost
The unit price is the cost
customers must pay to dispose of
a specific quantity of waste. Unit
prices are based either on the
volume or the weight of waste
generated. Currently, most unit
pricing programs are based on
the volume of waste produced.
Typically, there are two types of
volume-based rates: a subscribed
variable can system and a pre-
paid bag, tag, or sticker system.
In a variable can system, custom-
ers subscribe to a level of service
based on the number of cans
they normally leave at the curb
each week. The lower the sub-
scription level, the lower the bill.
In a bag system, custom-
ers purchase "official" trash
bags, or tags to attach to their
own bags, from the town hall or
local stores. The fee for the bag
or tag pays for the cost of collec-
tion and disposal. Municipal
waste collectors then pick up the
specially designated bags on col-
lection days. Again, the fewer
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the number of bags put out each
week, the fewer special bags or
tags must be purchased, and the
less the customer pays.
Weight-based rates may
provide an even greater incentive
to reduce waste. With volume-
based systems, citizens must
reduce their trash by an entire
can or bag to see a difference in
their rate structure. With weight-
based systems, every item of
trash makes a difference. Al-
though weight-based rate
systems may be technically more
complicated to implement, some
communities are exploring the
feasibility of programs that weigh
garbage as it is collected. One,
for example, is retrofitting gar-
bage collection trucks with
scales and electronic bar-coding
equipment to enable the city to
charge customers by the pound.
Whichever unit pricing
method a community chooses,
the key to its effectiveness is
establishing a link between a
customer's solid waste disposal
practices and the fee the
customer pays for waste
management services. This
link provides the incentive for
customers to reduce their was.te
through source reduction and
recycling.
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The Benefits of Unit Pricing
With unit pricing,
members of a
community share
responsibility for solid waste
issues, working together to
accomplish waste management
goals. Potential benefits of unit
pricing programs include:
• Reduced waste generation.
• Extended life for existing
disposal sites.
• Reduced labor costs for waste
management.
• Improved utilization of recy-
cling programs and resulting
economies of scale.
• Increased resource conserva-
tion due to recycling and
source reduction.
Communities currently
using unit pricing have reported
decreases in overall waste
generation of 10 percent or more,
reductions in the frequency of
waste collection service, and
increased participation in volun-
tary or mandatory recycling
programs. Seattle, Washington,
for example, has achieved signifi-
cant results with its combined
volume-based unit pricing and
recycling systems. Since the
program's introduction in 1981,
households have reduced the
average number of trash cans
filled per week from 3.5 to just
over 1 can.
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The prospect of cost
savings leads many waste man-
agers to explore the implications
of unit pricing for their communi-
ties. Although the collection
costs for a volume- or weight-
based system may exceed those
of a flat fee or tax-funded system,
waste managers have found that
the switch to unit pricing usually
results in a net savings in terms of
"avoided" waste disposal costs.
Less waste is generated under a
unit pricing system, largely
because more waste is recycled
and composted; therefore, there
is less waste to collect and
dispose of. As a result, communi-
ties will save substantially on
tipping fees charged by landfills
and incinerators to dispose of
waste, which can run over $100
per ton. In some communities
where unit pricing is in effect,
overall waste management costs
have decreased by as much as 10
percent.
Implementing Unit Pricing
Communities have varying
waste management
needs depending on their
size, location, and economic
resources. Because of this diver-
sity, solid waste managers must
consider many issues in deciding
whether to implement unit
pricing and in tailoring a unit
pricing program to their own
needs.
Many issues, such as
who will operate the program,
how often waste will be collected,
and whether service will be
backyard or curbside pickup, are
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Public educa-
tion through
brochures and the
media can help
explain the new
system, allay
concerns, and
increase public
support through
understanding of
solid waste
issues.
similar for conventional and unit
pricing collection systems. Other
considerations, such as the
following, are unique to unit
pricing:
• Selecting a unit pricing
rate. The choice of rates
involves balancing waste
reduction and recycling incen-
tives with the need to cover
program costs. With higher
unit prices for waste disposal,
customers will probably
choose to produce less waste
and recycle more.Waste man-
agers need to keep this in
mind so that the rates they
choose will guarantee a mini-
mum revenue, no matter how
little waste each household
disposes of.
• Ensuring community
support. The program must
also be designed so that it is
appealing and convenient
for customers to use. At the
same time that they encourage
waste reduction, rates must
be perceived as fair, and
alternatives to disposal, such
as recycling, must be available
and cost-effective. Public edu-
cation through brochures and
the media can help explain the
new system, allay concerns,
and increase public support
through understanding of
solid waste issues.
• Enforcing and monitoring
compliance. Waste managers
may also need to address
problems that could arise if
residents try to avoid paying
extra for waste services
through littering, burning, or
dumping their garbage into
sewer systems or commercial
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or public receptacles. To com-
bat such "waste diversion"
tactics, communities may opt
to ban such activities as back-
yard burning and impose stiff
fines for dumping and littering.
Proper enforcement and
compliance monitoring can
significantly reduce such
problems.
• Choosing a system design.
Successful unit pricing pro-
grams have been based on
weight, volume, or some
combination of both. As
discussed earlier, there
are two major types of volume-
based systems: the "variable
can" and the "bag/tag"
system. The type of unit
pricing program selected
depends on the funds available
for implementation, customer
cooperation, and flexibility of
revenue requirements.
• Determining special rate
options. In some situations,
waste managers may need to
develop alternative rate
options. Multi-family buildings,
for example, present a com-
plex problem. These buildings
can vary widely in size from
two-family houses to apart-
ment buildings composed of
100 units or more. Garbage is
usually disposed of in a joint
area, and the tenant, or gar-
bage generator, is often not
the one paying the bills.
Ideally, a system should be set
up so that the waste reduction
incentives are passed on from
the building owner to individ-
ual tenants. Special rates, such
as those used by some electric
and water utilities, may also be
appropriate for low-income
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customers or for senior citizens.
Waste managers might con-
sider the need to subsidize
lower rates or special services,
the effects of alternate rates on
cost and efficiency, and
methods for determining
eligibility for such special
rates.
The Roles of Source
Reduction and Recycling
Case studies show that unit
pricing programs reduce
conventional waste collec-
tion most effectively when used
in conjunction with recycling and
composting programs. Removing
recyclables such as yard waste,
glass bottles, tin, aluminum,
newsprint, corrugated cardboard,
plastics, and paper from the
waste stream can drastically
reduce the amount of waste
requiring conventional disposal.
When people have access to con-
venient recycling options, such
reductions can be substantial.
In communities where
unit pricing is used in combina-
tion with recycling and com-
posting programs, residents give
more thought to the waste they
throw away. Consumers may
also try to reduce the amount of
garbage they generate by
purchasing fewer packaged
goods and throwaway items.
Households often find them-
selves saving money as well.
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How Communities Perceive Unit
Pricing Programs
Most communities with
unit pricing programs
have embraced them
enthusiastically. Overall, com-
munities perceive unit pricing as
more equitable than conventional
flat fees or tax-based programs
because households pay only
for what they throw away. In
addition, the programs are
viewed as "cleaner" because they
encourage habits that reduce
garbage generation. The bag or
closed cart system also restricts
the size and type of waste recep-
tacles and ensures that contain-
ers are not left open at the curb,
which could attract flies and
other pests. In the longer run,
unit pricing may lower the costs
of service, while at the same time
allowing customers to participate
in solving community solid waste
problems.
Sources of More Information
In cooperation with the City
of Seattle, Washington,
EPA has produced a hand-
book for solid waste officials that
explores the feasibility, design,
and operational considerations of
different types of unit pricing pro-
grams. (This two-volume
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publication, Variable Rates in
Solid Waste: Handbook for Solid
Waste Officials, is intended to
assist communities nationwide in
implementing similar programs
geared to their specific needs.
To order a free copy of Volume I-
Executive Summary (EPA/530-
SW-9(M)84A), call the RCRA/
Superfund Hotline at (800) 424-
9346, Monday through Friday,
8:30 a.m. to 7:30 p.m. EST, or
write to:
The RCRA Docket (OS-305)
U.S. Environmental
Protection Agency
401 M Street, SW.
Washington, DC 20460
Volume II - Detailed Manual
(EPA/53Q-SW-90-084B) is
available from the National Tech-
nical Information Service
(NTIS). To obtain copies of this
publication (PB90-272 063), call
NTIS at (703) 487-4650 or write
to:
National Technical
Information Service
5285 Port Royal Road
Springfield, VA 22161
EPA has published another
report, The Effects of Weight- or
Volume-Based Pricing on Solid
Waste Management (EPA/530-
SW-90-047). This report de-
scribes in detail how unit pricing
works, and explains the effects of
such a system on households
and communities. It also pre-
sents case studies from several
communities where unit pricing
systems have been implemented.
This report (PB91-111484) can
also be ordered from NTIS by
calling (703) 4874650 or writing
to the above address.
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Other Available EPA Publications
Bibliography of Municipal Solid Waste Management
Alternatives (EPA/530-SW-89-055). A listing of approximately
200 publications available from industry, government, and
environmental groups, including a section on educational
programs/curricula.
Characterization of Municipal Solid Waste in the United
States: 1990 Update. The most recent report in a series
characterizing the national solid waste stream based on data
through 1988. The report contains a breakdown of the waste
stream by both weight and volume, and presents statistics on
recovery for recycling, composting, and combustion. The
Executive Summary (EPA/530-SW-90-042A) is available for
free from the RCRA Docket (see ordering information below).
The full Report (EPA/530-SW-90-042B) is available from
NTIS at (703) 4874650.
Decision-Maker's Guide to Solid Waste Management
(Volume I) (EPA/530-SW-89-072). A guidebook designed to
help local and state decision-makers evaluate and resolve their
municipal solid waste management problems.
The Environmental Consumer's Handbook (EPA/530-SW-
90-034B). A handbook designed to help consumers make envi-
ronmentally aware decisions about the products and packag-
ing they purchase, use, and ultimately dispose of. A pamphlet,
Be an Environmentally Alert Consumer (EPA/530-SW-90-
034A), is also available.
Lef s Reduce and Recycle: Curriculum for Solid Waste
Awareness (EPA/530-SW-90-005). A curriculum package that
presents lessons and activities to teach students in grades K-
12 about solid waste generation and management
Recycling Works! State and Local Solutions to Solid
Waste Management Problems (EPA/530-SW-89-014). A
booklet describing 14 successful state and local recycling pro-
grams in the United States.
Sites for Our Solid Waste: A Guidebook for Effective
Public Involvement (EPA/530-SW-90-019). A guidebook for
developing a municipal solid waste facility siting strategy that
involves the community.
To obtain copies of any of the publications listed above; for a
complete listing of available documents; or to get on the
mailing list for Reusable News, the newsletter of the
Municipal and Industrial Solid Waste Division, write to:
The RCRA Docket (OS-305)
U.S. Environmental Protection Agency
401 M Street, SW.
Washington, DC 20460
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