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New article highlights waste-management challenges in emerging markets

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New article highlights waste-management challenges in emerging markets

29 February 2016,16:00

McKinsey & Company (a global management consultancy) released an article in February 2016 exploring the link between growing economic prosperity and increasing waste volumes in emerging markets.

A rapid rise in waste volumes in recent years has severely strained waste-management systems in many developing countries. According to McKinsey, negative economic, health and ecosystem impacts have emerged as a result.

While sub-national statistics are often unreliable, McKinsey estimates that municipalities in developing countries often spend 20-50% of their budgets on solid-waste management. One response from municipal authorities has been to provide private-sector actors with incentives to tackle waste management, including concessions and public-private partnerships. However, this solution does not always lead to value recovery (namely cash generation from recycling), as this is typically outside the mandate given to private-sector operators. As a result, potential income streams are not being utilised. For instance, there is generally more gold in electronic scrap than in gold ore, according to McKinsey.

The consultancy suggests that the lack of income derived from waste is partly due to an under-estimation of perceived value. In addition, there are difficulties in achieving the scale and volume required to justify the necessary investment in technology and infrastructure.

McKinsey identifies the key to success for waste-management systems in emerging economies as the ability to aggregate waste flows from diverse sources into meaningful volumes. Furthermore, McKinsey recommends organising associated supply chains to achieve high levels of operational efficiency, and environmental and social effectiveness.

Click on the following link to read the full article by Hauke Engel, Martin Stuchtey and Helga Vanthournout: Managing waste in emerging markets.

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