Abstract
In light of the organizational dynamics of services of economic interest, the regulation of municipal solid waste management is a critical issue to deal with so as to achieve sustainability goals in the coming decades. The European circular economy targets limit the share of municipal waste in landfills to a maximum of 10% by 2035. Consequently, waste-to-energy plants may temporarily become the primary option for residual unsorted waste. The municipal waste management chain comprises two consequential stages: collection and transport, and the treatment and disposal stage, which characterizes as an oligopolistic market structure. After defining the relevant market and calculating market concentration measures, we analyze market power in the treatment and disposal of non-recyclable mixed waste, also known as residual waste. Our analyses are based on empirical data using well-known market concentration indices such as the Herfindahl–Hirschman index and concentration ratios. We report the results of three different market concentration scenarios based on alternative geographic and product market definitions. Considering only waste-to-energy as a product market, we present a situation of moderate concentration, typically involving the attention of competition authorities. On the contrary, considering both options as a single product market, no relevant evidence emerges due to the significant share of waste sent to landfills in 2019, i.e., 20.1% of the total municipal solid waste generated in Italy. Implications for future studies consist of new detailed information on the municipal waste treatment market structure in one of the leading European countries that may prompt comparative studies. Policy implications are derived from the possibility of taking cues from this paper to envisage appropriate regulatory models for an evolving sector in which market spaces are increasing.
Highlights
Municipal solid waste (MSW) management is one of the most important local services, and its effective economic regulation can be a driver for the sector toward innovation, sustainability, and efficiency
There is a significant information asymmetry preventing the sound regulation of the MSW management industry [18] and in this paper, we focus on the information inherent in market power
Our goal is to reduce the information gap to help overcome the regulatory failures that affect the functioning of the waste management market, since the degree of concentration in the treatment and disposal stage (TD) stage, in particular of TD of residual waste, is likely to increase in the short and medium-term
Summary
Municipal solid waste (MSW) management is one of the most important local services, and its effective economic regulation can be a driver for the sector toward innovation, sustainability, and efficiency. Among others, the analysis of the market structure [1], the regulatory frameworks [2], or charging models of waste management services [3]. It is no wonder that efficient regulation of the waste management chain is essential [2]. If environmental sustainability targets are to be met while economic efficiency is improved. From other utilities such as water, gas, or electricity, stages of the MSW management chain are virtually independent, i.e., not linked from physical elements used to transport the material from one stage to the following
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