Cost recovery of municipal solid waste management in small cities of inland China.

Financial performance of waste management, the key for efficiency and sustainability, has rarely been studied in China, especially for small cities. Through questionnaires and interviews, we conducted such a case study in several cities aiming to fill the gap and improve waste service. We found that labour accounts for more than half to three-quarters of the operation cost, followed by fuel and vehicle maintenance. The waste service heavily relies on budget transfer of the municipality. User fees collected recover less than half of total operation cost at best, even if the collection rate is relatively high. The low cost recovery is mainly due to low fee rates, unchanged for years owing to public pressure. Public complaint seems to be justified by the finding that the service only accounts for 5-10% of municipal revenue annually and even lower in government spending. Contrary to general perception, per capita waste generation in small cities is not less than big ones. Waste composition is dominated by kitchen wastes, with fractions of recyclables and combustibles much lower than big cities. These findings have implications on the waste management strategy: commercial incineration or recycling may not be economically viable for small cities. The article concludes that user fees might better serve, and be designed for, behaviour change than for cost recovery. Municipalities need to first improve cost efficiency and transparency of waste services to gain public trust and support in order to tackle the biggest challenge facing developing countries, cost recovery.