The municipal waste management is an essential public service (Italian Law no. 146/1990): its rational and efficient organization assumes considerable importance for the well-being of citizens and environmental sustainability. Despite the importance of this service, the scientific literature on the municipal solid waste costs is rather limited. This research is aimed at understanding which factors influence the municipal solid waste costs in Italy. This country presents some typical features that make the management of the service even more problematic, such as low compliance with environmental law (low separate collection rate, especially in the southern regions) and the infiltration of organized crime in the waste disposal, a critical phase of the industry being characterized by an infrastructure insufficiency. These variables have never been considered in previous literature regarding municipal solid waste costs and this research aims to fill this gap. Therefore, this research is aimed at understanding which factors influence the municipal solid waste costs. In addition to organized crime and the compliance with environmental law, we will consider the key predictors of municipal solid waste costs, such as the quantity of waste produced, the population density, the presence on the territory of treatment and disposal plants, the ownership structure of the company providing the service and the type of service management.
The analysis of the cost drivers for the service of municipal solid waste is worthy of study because the new waste tax (Tassa Rifiuti or TARI), determined by the Regulatory Authority for Energy, Networks and the Environment (ARERA) in 2019, will have to be cost-reflective. Therefore, this topic is relevant both from the point of view of the policy maker who must achieve a financially balanced budget through efficient administration and from the point of view of the citizen who bears the costs of service through the waste tax.
This research is aimed at analyzing the factors that influence MSW costs. The analysis of MSW costs in Italy is very important from the point of view of citizens, as the tariffs for the waste management service are established by the municipalities through a tariff system (waste tax, so-called TARI) based on the total coverage of costs (Law No. 147 of 2013).
The contribution of this research in respect of existing literature concerns the impact of organized crime and the compliance with environmental law on MSW costs. To our best knowledge, this is the first study to examine these aspects. In fact, previous studies have analyzed other aspects, for example, the criminal enforcement in the waste context (Almer and Goeschl, 2015; D'Amato et al., 2018), the environmental consequences of illegal landfills (Vaverková et al., 2019), the determinants of waste crime (Dell¿Anno et al., 2019) and the impact of organized crime on the waste disposed (D¿Amato et al., 2015). Also concerning environmental compliance, previous studies have not considered compliance with the environmental law on separate collection.
This research fills these gaps and considers a much larger sample, compared to all the literature noted above, consisting of about 5.400 Italian municipalities, representing 80% of the Italian population. Italy also presents one of the strongest European cases of regional disparities in economic and productive fabric: the developmental differences between the north, central and southern regions are significant. We, therefore, will conduct the research considering also the three regions separately.
The innovative aspects that we will consider in this research consist of factors that significantly characterize the waste cycle in Italy. The strong presence of organized crime in the waste cycle is a very significant phenomenon in Italy: in the period 1997-2019 the crimes committed in the waste cycle follow a constantly growing trend (except for some temporary decreases). To get an idea of this trend, consider that in 2019 the crimes amounted to 9.527, compared to 1.405 committed in 1997 (Legambiente, 2020). Understanding if and how organized crime affects costs of service is a very important goal for society. Indeed, the presence of organized crime could lead to a reduction in costs aimed at winning the tender for the concession. Or organized crime could cause an increase in operating costs, since the tender could still be won by resorting to threats and intimidation against competitors. In this second case, an increase in the cost of the service implies an increase in the waste tariff, being a cost-reflective tariff. Citizens should therefore suffer an increase in the waste tax deriving from the service entrusted to the organized crime that exploits the Italian infrastructure insufficiency.
The separate collection represents another critical issue of the Italian waste cycle. Despite the Italian Code on the Environment (D.Lgs. 152/2006) established that the minimum percentage for municipal waste separate collection to be met within each municipality is 65% by 2012 (Italian government, 2006), in 2019 the average percentage of waste collection is still 61,3%, and only 50,6% considering solely the southern regions (ISPRA, 2020). The assessment of how compliance with environmental law impacts on costs provides useful information to policy makers in defining strategies for a more circular economy, where waste can be used more efficiently and sustainably. Indeed, it is interesting to understand if there is a virtuous circle: if costs are reduced as the amount of differentiated waste increases, the policy maker could introduce an incentive in the waste tax aimed at increasing separate collection. Therefore, the policy maker would be able to meet both the efficiency objective of the service management companies and the environmental sustainability objective.
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