A system dynamics modelling approach for municipal solid waste management and financial analysis

Abstract

In face of the population and economic growth of the 20th century, solid waste management (SWM) has become one of the most critical public policy issues challenging state and local governments. Although some developed countries are advanced in this matter, the regulatory acts that rule solid waste management in some developing countries is very recent. Public managers should have modelling and simulation tools at hand in order to make sound decisions, grounded on data and projections. This paper presents a System Dynamics (SD) model for municipal solid waste management which provides a comprehensive view of the involved resources, the destinations of waste and the cost structure of the service/system. Existing similar studies do not provide this extensive view, including the various resources involved (staff, fleet, other assets), the different destinations for waste, the different recycling streams and associated revenues and, specially, the cost structure, altogether, in the same model. Another branch of models concerns the assessment and optimization of specific policies, such as waste disposal charging fees (WDCF), which is not the aim of this study. Its main contribution is to present a financial planning tool for managers, allowing a scenario analysis to support strategic or tactic decisions, such as capacity expansions, investments in operational improvement, and so on. The modular design of the model aims at providing capability of generalization and application to different contexts and regions. As a case study, the context of a Brazilian city of 230,000 inhabitants was modelled and scenarios for 10 years were proposed. The scenario that presented better results with feasible investments prescribes an increase from 8.5% to 15% in the public collection of dry waste together with a productivity improvement of the sorting process. The simulations showed that the revenues from the recyclables do not cover the expenditures of the service provider and also allowed pointing out scenarios that make the provider less dependent of governmental subsidy. The results allowed proposing an extended conceptual SD model to be tested in future works, containing mechanisms suitable to the studied context for influencing recycling behaviour. Solid waste management in Brazil and in other developing countries is incipient and some managers do not have formal education in management. The improvement of managers’ awareness about the cost structure of the SWM system represents a relevant social implication of this study.