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Optimizing Solid Waste Management by Integrating the Informal Sector

A Microeconomic Analysis of Ragpickers' Contributions to the Solid Waste Management Supply Chain

Samuel Janis

on 3 May 2010

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Transcript of Optimizing Solid Waste Management by Integrating the Informal Sector

Basic Facts: Buyers set the prices Municipal Corporation of Delhi pays on average US$6.15/ton for disposal of MSW Waste pickers gather up to 18% of total MSW and save the MCD on average $15,000 per day... Waste Management is a PUBLIC GOOD MArket Failure #2: Market failure #3: The Negative Externality Market Failure #4: Waste pickers are forced to handle toxic material and inhale dangerous gases such as methane
The resulting healthcare costs reduce their already meager income and create a financial burden to society
The inherent health risks and resulting costs of the waste picker occupation are not included (internal) in the total price of MSW management
The wages which trickle down to the informal sector are insufficient, thus waste picking is oversupplied in the current model Waste pickers do not have access to reliable market pricing information for recyclables
They have no means of real-time communication with Kabaris regarding fluctuations in price and demand for recyclables
This lack of information suppresses the overall market efficiency and keeps wages at a supotimal level and highly varied - similar to Jensen fisheries model before introduction of mobile phones
This leads to a positive externality The marginal social benefit of having a cleaner environment is greater than the private marginal benefit, thus SWM is undersupplied From Dumps to Dividends: daily earnings: 59.27 rupees ~ $1.33 = 54% of the legal Indian minimum wage of 110 rupees per day
hand-to-mouth only; does not cover the costs of job related illness and injury, education, sanitation, etc
insufficient Income Inadequate Housing homeless or makeshift hovels/tent houses
Average household size 5-6 persons
on occupied land (squatter colonies)
facing perpetual eviction threat
flood prone (see above)
no fixed infrastructure for utilities
often have pirated electricity - presence of television but no running water or sewage! Near zero primary school enrollment >5% primary school enrollment
Mean years of parents' schooling=2
children are compelled to participate in income generating activities; begging, waste collecting, window washing, hawking, etc Exorbitant levels of Health and disease risk Amongst waste picker households:
round worms in 17% of children and 24% of women
chronic GI problems in 17% of children and 12% of women
fever (11.41%)
upper respiratory tract infections (8.70%)
GITs (18.75%)
body aches of unknown origin (possible radiation poisoning) (18.75%)
cuts, scrapes, bruises (63%)
chemical burns (49%)
nausea from gas inhalation (32%) Extreme unhygenic work conditions with no protective equipment
Exposure to toxic and radiological waste with no protective equipment
Exposure to medical and biological waste with no protextive equipment
Discriminatory violence from police and local security apparatus
Marginal housing, zero fixed infrastructure, limited property rights, no assets
Children unenrolled in primary school A Policy Proposal to Improve
the Solid Waste Management economy
in New Delhi, India* Waste Pickers + the informal sector Thiawalas Small Kabaris + yet MCD does not invest in the informal sector 167,000 in Delhi
average age is 31
70% men, 30% women
80% migrants from West Bengal, Uttar Pardesh and Bihar
many are homeless; sleep at bus shelters or inside dust bins
collect on average 16o lbs per day
only equipment is a burlap sack
some are self-employed, many are indentured to a Kabari (dealer) lower-mid level collectors located near or inside marketswaste is brought to them by independent waste pickers or by employees of a nearby shops average daily income is $4.22 middle level, waste collecting/separating shopsupwardly mobile former waste pickersSmall Kabari owner typically employs 3-7 waste pickers average daily income for
Kabari owner is ~$5.10 Unacceptable levels of well-being is a nice way to put it... Summary of poverty and Vulnerability indicators: *Sources:
Space for Waste, Planning for the Informal Recycling Sector, Chintan Environmental Research and Action Group, 2003 available from: http://www.chintan-india.org//public_html/publication.htm
Sarkar, Papiya “Solid Waste Management In Delhi – A Social Vulnerability Study” in Martin J. Bunch, V. Madha Suresh and T. Vasantha Kumaran, eds., Proceedings of the Third International Conference on Environment and Health, Chennai, India, 15-17 December, 2003. Pages 451 – 464.
Vikash Talyan, R.P. Dahiya a, T.R. Sreekrishnan, State of municipal solid waste management in Delhi, Centre for Energy Studies, Indian Institute of Technology Delhi, Hauz Khas, New Delhi 110 016, India, 9 August 2007 Agarwal, A., Singhmar, A., Kulshrestha, M., Mittal, A.K., 2005. Municipal solid waste recycling and associated markets in Delhi, India. Resources Conservation and Recycling 44, 73–90. 255–262. Hayami, Y., Dikshit, A.K., Mishra, S.N., 2006. Waste pickers and collectors in Delhi: poverty and environment in urban sector. Journal of Development Studies 42 (1), 41–69.MCD, 2004. Feasibility study and master plan report for optimal solid waste treatment and disposal for the entire state of Delhi based on public and private partnership solution. Municipal Corporation of Delhi, Delhi, India. Monopsony Waste pickers, small kabaris, and thiawalas have no alternative markets other than the monopsony MArket failure #1; uncompetitive market structure Lack of competition at the top of the chain Incomplete Information 3 CORRECTIVE INTERVENTIONS The Macroeconomy of Solid
Waste Management in Delhi Delhi's current population = 13.9 million people
~7000 tons of waste / day; 2,675,585 tons/year

15-20% is currently recycled, or about 401,338 tons

Up to 80% or more could be recycled with improved separation and composting

Municipal Corporation of Delhi (MCD) spends $US 30 million annually on SWM

MCD is now required by law to provide residential, segregated collection to all households

MCD colllects 40-80% of total MSW depending on the neighborhood

The informal sector is being squeezed but still collects and sorts 15-50% of MSW

Public, private and informal systems exist simultaneously, BUT the informal sector carries out the majority of sorting and recycling services, saving the MCD up to $6 million US per year Create mechanism to pool information within the cooperative. Facilitate cooperative formation of small Kabaris and Waste Pickers to internalize the negative externality. IV. Measuring the Impact of the Interventions We'll measure income, health, and education for treatment groups (COOP members in Delhi) and control group (waste pickers in Mumbai) this is not a randomized intervention!

coop members SHOULD be self-selecting - we want to OFFER and ENTICE (but not obligate) them to take up the intervention 200-300 surveys (x2) baseline survey will be randomly assigned in both Delhi and Mumbai

-but in Delhi, survey area will include both catchment and non-catchment baseline will measure:
education Income will measure
past month wages from waste picking
past month wages from other IGAs
incoming detracting fees and bribes paid
Health will measure:
presence of round worms, hook worms, other parasites
monthly frequency of low-grade gastro intestinal illness
monthly frequency of minor injuries; cuts, bruises, burns
monthly frequency of clinical visits/treatments
monthly frequency of missed work/sick days Education will measure:
school enrollment of beneficiary households' children >18 years
given enrollment, school attendence
literacy and numeracy levels of parents Treatment Group: Coop members

Control Group 1: Non-member Delhi Waste Pickers
Control Group 2: Mumbai Waste Pickers What we aim to measure:
changes in above indicators over a 5-year period
spillover effects

What we aim to model:
Effect of Coop membership on development indicators
propensity to join (self selection determinants) A regression to
fit our potential results... Potential bias and presentation of results 1. 2. a quasi experiment,

thus difference-in-difference 200 waste pickers
50 thiawalas
50 small kibaris Null Hypothesis:

Wastepicker households that join a functional cooperative will have higher aggregate health status than non-coopted wastepicker households. The positive externality Part II. Causes Given the Market Failures... Yes you say! Theoretically sound, but how do we go about measuring the impact... lowest and most numerous link of the chain average daily wage is $1.33 Initiate advocacy project to pressure NDCM to subsidize waste picking through taxation. 3. Measurement error Selection bias Dissemination of results thanks!
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