Pay As You Throw (PAYT), Pay By Weight, Unit Base Charging & Producer Pays Principle
What is Pay as You Throw?
Pay as you Throw, Pay by Weight or PAYT is a usage-based pricing model for the disposal of municipal solid waste. A range of different models exist according to region and country. Municipal solid waste is measured by weight and size, unit counts, bags, tags, containers and in some cases different technology solutions. The system identifies and confirms what address the container is associated and how much waste is being thrown away. In certain circumstances PAYT can also be applied recyclable materials too.
There are numerous ways that PAYT can be administered. Users can pay for the waste they throw away by bag or tag or specific container. A local authority can decide on number of bags or containers of waste and collection to be paid for by taxes. Additional bags and containers can be paid for should the limit be exceeded by the household. Households can rent containers for a variety of waste materials and the municipality charges according to that container filled.
The most widely used methods of Pay as You Throw is a standard charge rate for resources discarded or a taxation method. However, there is no real incentives to reduce the materials thrown away. If the polluter pays by weight of materials not recycled then it is more of an incentive to recycle.
Some of the costs of waste management could be removed from property tax bills. This could provide more independence in the management of domestic waste management. Intelligent systems could provide more utilities focused models charged by unit of consumption.
Pay as You Throw can be effective in increasing materials separation and recycling and helping the waste hierarchy by minimisation of waste and the reduction in the consumption of materials. The environmental effects can be significant throughout the supply loop. Reduction on transport costs, increase in materials recovery and reduced GHG from landfills and incineration. Manufacturing and production also develop more efficient designs using recyclable materials with more sustainable life cycles.
Generally, the costs distributed in the Pay as You Throw model allocate charges fairly throughout the community to who produces or pollutes the most through the discarding rather than recycling of materials. Pay As You Throw supports community recycling schemes and sustainability initiatives. Lower income families are likely to produce less waste and therefore, pay lower waste collection fees.
Pay As You Throw can sometimes result in illegal dumping and fly-tipping, unlicensed and illegal disposal methods. In general however, increased litter and illegal dumping have not resulted in communities that have implemented Pay As You Throw, and the opposite occurs when combined with greater access to recycling and collective community based knowledge about sustainability.
What is the History of Pay as You Throw?
From records, Austria seems to be the first to implement a type of Pay As You Throw Scheme by charging individuals for waste. But more modern forms of PAYT were not introduced until the 1980s when secure electronic systems could account for materials discarded. Dresden, Germany, was the first city to implement identification and a billing system in 2004. Spain started in 2003. And since 1991 European Waste Policy has required that part of the costs not covered by material reuse must be recovered from the polluter pays principle and subsequently a range of different PAYT schemes have been introduced across municipalities in Europe.
In the USA PAYT schemes have operated as early as 1932 in San Francisco. California, Michigan, New York and Washington started PAYT programs in the 1970s. By 2000, some 20%, or 6000 communities were being charged for waste management and within these states waste declined by 38% and recycling increased to 40%.
In Asia, after early introduction in the 1970s, 2008 saw 954 municipalities introduce a PAYT scheme. Taipei operates a bag scheme, encouraging the recycling of packaging, which is kept out of the bags and not charged for, this has reduced waste by 35% and there has been a significant increase in recycling in general from 1999. PAYT is also widespread in Korea, Vietnam, China, Thailand and Taiwan.
What Countries are Best at Pay As You Throw?
It is difficult to compare countries recycling rates as there are a range of materials recycled by different methods. EU member states are high as are Asian countries. Wales in the UK is known to be high, currently the third in the world.
A report published by Eunomia and The European Environment Bureau (EEB) in 2017 identified the top 25 countries for recycling. It included a number of recycling practices in order to make a comparison. Legislation, policy, collection and service infrastructure conditions had an impact in the top 10 countries, which were identified as having a number of common recycling elements in place, PAYT is one of these common themes.
The adjusted recycling rates of municipal household waste of countries that have a variable rate charging scheme including Pay as You Throw are South Korea (53.7%); Switzerland (49.7%); Italy (49.7%); Belgium (49.4%); Netherlands (46.3%); Slovenia (45.8%); Singapore (34%). Germany (%56.1%) and Austria (53.8%) set there PAYT at regional and municipal level so weren’t identified in the report. 8 in total have a variable charging rate.
What are the Challenges with Pay as You Throw?
There is a general agreement that Pay as You Throw programs (PAYT) reduce the quantity of waste that households discard. There is a difference of opinion on the costs and benefits that PAYT can provide. Some critics believe that domestic waste collections should be provided as a municipal service and paid for with taxes. Critics believe that if PAYT is adopted local property taxes should decrease. Advocates point out that PAYT is an effective method in reducing waste, citing PAYT systems reward households that reduce waste, shifting the costs of collection and disposal to those who generate the waste.
There is also the thought that PAYT fees can cost lower income families a greater proportion of their income resulting in what can be referred to as a ‘regressive tax’.
Two reports completed in Maine, the first in 1996, found a significant reduction in waste and increase in recycling rates from Virginian households. However, the estimated costs savings did not cover the administrative cost of the program. Illegal waste dumping and fly tipping were also noted. In the latter report, authors Kinnaman and Fullerton (2000) highlighted that the demand for waste and recycling programs and the relationship between regional fees and waste unit pricing should be balanced. The authors also highlight that certain municipalities could be greater suited to unit pricing programs than other municipalities and therefore, average results may not be applicable to all municipalities.
Other methods used to reduce the waste fees alongside illegal disposal was discarding waste in public places, commercial container ‘opportunities’, burning of waste materials, transferal of waste to other sites and locations or disposing of waste at work. Although reported not a widespread problem, ‘waste shifting’ had been evident in some areas.
Pelican Communications Report March 2018 sampled a small number of UK households on PAYT. 54% said recycling is ‘very important’; 51% said they’re committed to recycling; 53% said they not always sure if something is recyclable; 37% said there is a lack of space in recycling bins; 86% said they had not heard of PAYT; 37% said they ‘maybe’ supportive of a PAYT scheme; 79% said a PAYT encourages recycling; 54% said that it will be more expensive; 42% said they would support a fixed fee scheme; 36% said they were very concerned about the increase in fly tipping; 30% were very concerned about lower income families ability to pay; 45% would prefer reward and encouragement to recycle more; Just 18% thought utility based schemes would be a better idea than PAYT.
What are the Systems Required to Manage Pay As You Throw PAYT?
In the context of Municipal Solid Waste Management, Pay as You Throw or Unit Based Charging, Differential, Variable Rate or Variable Fee Charge systems are economic instruments that apply to polluter pays principle at a municipal level by charging inhabitants according to the amount of waste they produce.
Technical implementation of the PAYT approach is based on the following three tracks: identification of the waste generator; measurement of the amount of waste sent to treatment; unit pricing of the unit by which the service is charged, container volume or weight.
The charge could be based on the weight of the waste generated and also the basic and variable service fee, reflecting to cost structure of waste disposal, which consists of fixed and variable costs. The inclusion of a fixed basic fee helps avoid illegal disposal methods, which can increase when applied to collected quantities.
Diagram 1. System Components to Manage Pay As You Throw Unit Based Charging (Source: Bangor University – The Impact of Pay-As-You-Throw Schemes on Municipal Solid Waste Management)
The PAYT approach means a substantial part of the fee is allocated according to the amount of waste collected. This motivates waste prevention and recovery. In accordance with the waste fee components, the PAYT approach can be implemented in different ways depending on the accounting method.
- Per User Identifier – Volume Based & Weight Based
- Per Bin Identifier (Individual / Collective Assigned Containers) – Volume Based (ID) Weight Based
- Pre-Paid System – Pre-Paid Bag / Tag, Sticker or Token
The most common forms of PAYT are volume based schemes (the choice of container size), bag based schemes (number of bags set out for collection), weight based schemes (weight of the container collected) and frequency based schemes (the frequency with which a container is set out for collection). This can be combined with volume and weight-based schemes. Bags are usually filled so that weight and volume are relatively constant in relation to fee paid per bag.
Past studies have shown that pre-paid sack schemes achieve good performance. But volume-based systems using varying bin sizes achieve comparatively poor performance in waste and recycling. The highest recycling rates and lowest residual waste are achieved with weight-based systems when they are accompanied by well-developed infrastructure and supported waste aware citizens.
Diagram 2. Functional Components and Interfaces to Manage Pay As You Throw Unit Based Charging (Source: Bangor University – The Impact of Pay-As-You-Throw Schemes on Municipal Solid Waste Management)
Implementation of Systems to Manage Pay As You Throw (PAYT)
Initiation of systems to manage PAYT require considerable effort to acquire data for billing, accounting and system optimisation. In container-based systems, all bins and containers need to be coded and collection trucks equipped with reading and weighing devices. Data is transferred to a central facility, in real time, where processing, accounting and the billing of end users occurs. There should be sufficient automated analytics in place to be able to interact with the data, providing robust information on both key aspects of operations and accounting to be able to refine and further optimise the process. This will be especially prevalent when experimenting with the best mix of unit-based charging for the specific territory and user group.
It may also be necessary to provide an identification chip that can be read by a transponder. A barcode can be used for identification and can also be used for ordering and delivery of containers. Multiple dwellings cause additional challenges and may in some circumstances require larger shared containers and require lock and key to prohibit unauthorised use. There are also additional difficulties with apportioning volume of waste materials to household in the case of multiple dwelling establishments such as flats and high-rise buildings.
Vehicles that are fitted or retrofitted with appropriate identification and weighing equipment. And require frequent calibration and maintenance to ensure all systems operate correctly.
Benefits arising from the PAYT system include the existence of well-developed infrastructure to separately collect and process the different types of material streams from homes as well as provision for alternative streams to be dealt with appropriately in recycling centres. It has been reported that socio-economic factors and environmental awareness are important for PAYT success.
Why ISB Global’s Solution Differs
Waste & Recycling One
Waste & Recycling One was originally developed in the software development kit of SAP Business One Enterprise Resource Planning (ERP). It is a fully integrated software application and covers processes from enquiry, quotation through waste logistics and recycling materials operations to accounting and finance. ISB Global has also extended the core solution to integrate a low code platform with a suite of applications that suits the field operations for waste materials collection. This includes a portfolio of mobile, web and connectivity applications, incorporating on board weighing functionality and its variety of components.
OutSystems is an enterprise low code platform utilised for building mobile and web applications quickly and effectively in half the time to traditional coding environments. ISB Global has refactored and extended the now standalone Waste & Recycling One application suite so that Waste & Recycling One can be integrated to existing operations, ERP and additional hardware, cloud, device or machine data sources. This furthers the effective planning, data capture, management of variance, confirmation and control of integrated back office functions (or use WR1’s own back office functionality). Ensuring accurate real time, fast data capture and transferal from field and operational job confirmation to accounting transaction.
Integration versus Interface & Separate Software Applications
The challenge with the software landscape detailed in Diagram 2 is that there can be a large amount of applications, storage and interfaces to manage the complex process of planning, capturing, managing variance and matching data sources. This hinders the swift and accurate billing and accounting transactions that are required when the data matching process happens upstream. This should all occur without putting additional strain on what could also be a separate application in a customer service centre environment, to follow up if there are problems with collection, billing and invoicing processes.
Separate, interfaced applications have their own sources of master data, require linking and matching multiple additional data sources. They also require a sequence of process and data and often a separate interface to be built to match data model and transferal up and downstream. The more interfaces that are required, the more the landscape needs to be maintained, it can quickly become outdated, costly, inaccurate and rely on manual intervention.
Integrated Waste & Recycling One
ISB Global’s Waste & Recycling One has been engineered with a Bi-Modal methodology. This allows for a focus on both operations (WR1) and the back office (ERP). Adding the latest low code technology to cope with the planning and tracking of in-field assets and operations. It is referred to as a suite of platforms as it also acts as an integration tool, using one set of master data to control the range of different processes. These processes are often relied on by the implementation of multiple separate software applications – Mobile, web, operations, CRM and accounting and the additional applications used to build interfaces.
Built for Rapid Change
Waste & Recycling One has been built for the current climate of rapid response and rapid change. The processes within the application have been carefully configured to be able to easily adapt to meet the needs of today’s changing and dynamic waste and recycling industry. This allows for quick implementation and if necessary, integration to separate data sources and existing applications. The architecture also allows for the rapid development of existing or new apps, workflows, process, user experience and modelling to allow for experimentation, innovation and scalable deployment of new connected, integrated systems to manage complex problems.
Diagram 3: ISB Global Waste & Recycling One Pay As You Throw Integrated Bi-Modal Process Flow. The diagram shows a simplified version of the bi-directional integrated process of Waste & Recycling One
BinLogix – An Internet of Things (IoT) multi sensor, trackable asset application, integrated to Waste & Recycling One. BinLogix ‘Smart Bins’ tracks a sensor in the container, monitoring and reporting a range of functions from the calibrated sensor. A range of functions, including fill forecast rate, are integrated to WR1 to optimise round collection schedules by only collecting full containers.
Onboard Weighing – Planning in Waste & Recycling One allows for master data route, job and customer asset match when identified by multiple matching technologies, sensor, GPS, or RFID. Weight is captured and accessed via API from onboard cloud storage application (or direct from hardware). As job is planned, variances against plan can immediately be captured and integrated to a number of users in real time.
Cloud Storage & API – Waste & Recycling One is a low code integration toolset and has been designed to integrate to external applications, storage and devices. The planned waste collection, captured asset and weight held in the onboard weighing application’s cloud storage is matched against planned work order information and master data in Waste & Recycling One. Any variances are captured against the work order and information on planned breach is sent to those users who require it to follow up in subsequent process.
RoutiLogix – Waste & Recycling One’s work order, route scheduling and optimisation engine. Planning and master data, which can be provided by alternative data sources, is easily managed in a highly configurable web application for planners and schedulers. Each job, driver, crew, vehicle asset, container asset, identification and weight confirmation can be tracked in real time at the web desktop. Each job is matched with the data from the onboard weighing cloud storage, if variance is out of tolerance a check is made and subsequent process invoked to rectify and inform through further automation or route to customer service.
DriviLogix – Is Waste & Recycling One’s Driver mobile app. Waste & Recycling One can work on any device and any operating system, making use of native applications and functionality on the device. This allows for greater cost efficiency and involvement of subcontractors. DriviLogix is the crew and driver’s interaction with RoutiLogix and Waste and Recycling One, displaying work order, routes, job advance, maps, transfer documentation and signature capture. As is the inherent nature of low code, Waste & Recycling One can include any further workflow additions that may result from greater innovation advances, experiments or requirements for dynamic in-field operations.
Optimisation – Waste & Recycling One uses an external engine to optimise routes, based on a world leading suite of products based in Europe. Due to the nature of optimisation and preferred products Waste & Recycling One can be integrated to a number of third-party engines for strategic and tactical optimisation with a range of parameters.
Order Management – Waste & Recycling One has both instructions for resource collection and for confirmation of materials received. Order Management is intrinsic to the planning, field data and variance capture and confirmation of materials received. Using master data, the meticulous automated planning and subsequent processes allow for control, governance and accuracy in multiple integrated processes downstream, from customer services to accounting transactions.
Weighbridge Reconciliation – Waste & Recycling One’s disposal order, confirmation for materials received, is the verification that what has been planned is receipted in the depot. ISB Global encourages collaboration between customer and supplier entities to ensure this process is as transparent as possible. Integrating between disparate applications using WR1’s advanced portal and workflow technology allows for greater automation of process. If planned materials receipted breach tolerance parameters, the confirmation part of the order is held for further investigation in service management queues.
Subcontractor Control – Waste & Recycling One’s master data instructs and controls all aspects of supplier management. Order management instructs subcontractors, WR1 field operations technology controls categorical instruction on container, material, locations and pricing (plus a range of additional master data controls) by use of advanced mobile, web, connectivity and integration technology. And the disposal order confirms the planned materials transaction and job completion, irrespective of who or where depot is located.
Operations Analytics – As Waste & Recycling One plans, collects, manages variance and confirmation on waste collection and recycling materials data in real time, so it can report, publish and analyse data in real time too. As soon as a transactions happens data can be sent to who needs it when they need it, whether for ongoing information on operations, update statutory reporting or greater analysis, intelligence, patterns and trends. A suite of scalable analytics applications can be further used for predictive and prescriptive analysis.
Integrated Accounts – Waste & Recycling One is integrated to SAP Business One for small to medium sized operations. For larger organisations Waste & Recycling One <OS LE> can be integrated to legacy, ERP or SAP finance and control environments. Master data planning in pricing and customer and supplier objects in order management allow for purchasing and sales transactions to be raised automatically when operations work orders have been confirmed. This allows for the correct operational transactions to be transferred to accounting, in real time, increasing accuracy, speed and organisation position, customer and supplier experience exponentially.
Customer Services – As Waste & Recycling One is integrated, planned, executed and variances throughout transactional processes can be managed and integrated to customer service teams. Service interaction can exist in a range of Waste & Recycling One’s preconfigured service environments. Alternatively, transactional data can be integrated to central service operations where real time collection, recycling materials, billing and invoicing confirmations and information can be published, queried, or written to in self-serving and tailored agent interaction environments.
Management Analytics – As Waste & Recycling One is integrated throughout field, operations and accounting, governed by master data sources, so real time reporting and analytics on key management areas of performance can be published and sent to who requires the information when they require the information. Ensuring the management team are always kept up to date on all aspects of operations as soon as they occur.
Experimenting with Pay As You Throw Unit Based Charging
Waste & Recycling One can aid in the support, experimentation and innovation required to sample, test and report on the best model of Pay As You Through (PAYT) Unit Based Charging. This is due to a focus and proficiency in two areas. Centered in the fundamental difference of Waste & Recycling One’s Bi-Modal architecture. Firstly, core master data and data modelling throughout process largely remains constant, this enables order transactions to take place in the normal manner, controlling key customer, and collection data, charging process and accounting transaction.
Secondly, operations master data, held in the innovation platform, allows integrated, controlled transaction on service and rental fees, volume, frequency and weights. Due to the existing range of variables and the inherent engineering of the low code platform, these variables can be switched, altered or new workflow, process and capture procedures added, either instantly or without the need for traditional coding lifecycles. This allows for research, trial and innovation to be executed immediately, omitting the traditional types of waterfall planning, coding and release cycle to amend and enhance the task. The result, simple, fast, easy and accurate testing as Pay As You Throw and Unit Based Charging experiments.
- Core master data and process remain constant
- Low Code operations delivers quick and effective process alteration
- Low Code allows for instant connectivity to third party devices and cloud
- Low Code delivers multiple testing scenarios and environments
Pay As You Throw Reference Section
- USA Environment Protection Agency Pay As You Throw Homepage Archive
- USA Environment Protection Agency Pay As You Throw Articles & Research
- USA Environment Protection Agency Pay As You Throw Success Stories
- org Tools Studies & Publications
- Bangor University – The Impact of Pay-As-You-Throw Schemes on Municipal Solid Waste Management
- European Commission Assessment of Separate Collection Schemes in 28 Capitals of the EU 2015
- Eunomia IEEP Pay As You Throw Schemes in the Benelux Countries 2016
- Financing & Incentive Schemes for Municipal Waste Management Case Studies DGE EC Eunomia ECOTEC
- HEC PAYT – The Development of Pay as You Throw Systems in Hellas, Estonia and Cyprus
- Impacts of Pay-As-You-Throw and Other Residential Solid Waste Policy Options: Southern Maine 2007–2013
- Waste Zero PAYT Overview
Source: Pay as You Throw Wiki; Eunomia Report ‘Recycling: Who Really Leads the World?’; Eunomia & EEB Report: Recycling Who Really Leads the World? Issue 2; Pelican Communications What UK Households Think About PAYT Report; Bangor University ‘The Impact of Pay-As-You-Throw Schemes on Municipal Solid Waste Management’;