Life cycle assessment (LCA) and life cycle costing (LCC) analyses were utilized to assess decentralized anaerobic digestion (AD)-based solid waste management (SWM) plans for a remote community. A hypothetical developing community of 20,000 habitants was selected with an average municipal solid waste (MSW) generation of 0.51 kg/capita/day. Sustainable SWM is needed to ensure both the environmental and economic aspects. In order to exploit the resource value of the high food fractions in developing countries, sustainable waste management alternatives have been emerged and compared to the commonly used SWM scenario (landfills). The scenario included, collection and transportation of waste, material recovery facility (MRF), AD, and landfilling processes. WRATE software databases were used to obtain data for the life cycle inventory (LCI). The functional unit has been selected as the management of 1 ton of MSW for a study period of 20 years. The scenarios were evaluated via the CML 2001 impact assessment method covering 6 categories including climate change, eutrophication potential, acidification potential, freshwater aquatic ecotoxicity, human toxicity, and resource depletion. The findings revealed that the proposed strategy improved the life cycle environmental performance in all impact categories and resulted in significant economic savings.