Using Ex-Ante Cost–Benefit Analysis to Improve Waste Management in the Pacific

Solid waste management (SWM) is one of the most pressing issues in the Pacific. Historically, low island population levels have generated small volumes of solid waste that were easy to manage. However, due to economic development, many countries and territories have started to generate and consume significant amounts of consumer and disposable goods. This has resulted in large volumes of organic and inorganic solid waste from residential, institutional, commercial, and manufacturing sources. More recently, electrical and electronic waste, construction and chemicals, ship-sourced pollution, and natural hazards have become new sources of waste. The coronavirus disease pandemic also increased the medical and pharmaceutical waste burden in the Pacific in the form of masks, personal protective equipment, and syringes.

Using Ex-Ante Cost-Benefit Analysis to Improve Waste Management in the Pacific

KEY POINTS
• This brief outlines how cost-benefit analysis can help policy makers assess potential solid waste management projects by quantifying the estimated economic, environmental, and health impacts.
• It analyzes two cases-a hypothetical incinerator project in the Marshall Islands and a new landfill in Solomon Islands-to show how this type of analysis can support decision-making.
• The authors estimate that against a 9% economic opportunity cost of capital, the economic internal rate of return would be 11.8% for the Marshall Islands case and 17.1% for the project in Solomon Islands.
• The potential reduction in greenhouse gas emissions would contribute the largest share in total economic benefits.

INTRODUCTION
Solid waste management (SWM) is one of the most pressing issues in the Pacific.Historically, low island population levels have generated small volumes of solid waste that were easy to manage.However, due to economic development, many countries and territories have started to generate and consume significant amounts of consumer and disposable goods.This has resulted in large volumes of organic and inorganic solid waste from residential, institutional, commercial, and manufacturing sources.More recently, electrical and electronic waste, construction and chemicals, ship-sourced pollution, and natural hazards have become new sources of waste.The coronavirus disease pandemic also increased the medical and pharmaceutical waste burden in the Pacific in the form of masks, personal protective equipment, and syringes.
Urban agglomeration has brought an overall increase in solid waste generation that public utility services cannot keep up with.This has led to worsening pollution levels, an increase in the incidence of infectious and communicable diseases, and a potential reduction in revenues from the tourism industry that serves as the backbone for many Pacific economies.To this end, three regional SWM strategies that outline Pacific countries' common vision and challenges have been developed (SPREP 2005, SPREP 2010, and SPREP 2016).
The latest strategy for 2016-2025 identifies priority areas for SWM and provides a joint framework to address solid waste and pollution problems that threaten the sustainable economic development of the region.
In Solomon Islands, the Honiara Solid Waste Management Roadmap (2021-2032) was prepared to address SWM in the capital city (Honiara City Council 2019).The territory covered in the roadmap is the Greater Honiara Area (GHA), consisting of Honiara City and parts of Guadalcanal Province with the Honiara City Council area as a priority.The roadmap actions are set out over three phases.The first phase (2021)(2022)(2023) is designed to set the foundations for sustained improvement in SWM (and to prepare Honiara for the 2023 Pacific Games).Phase 2 (2024-2027) seeks to scale up improvements in collection, waste recycling, and disposal.Phase 3 (2028)(2029)(2030)(2031)(2032) completes the transition to a more sustained SWM system and positions Honiara for continued improvement in SWM outcomes.
In the Marshall Islands, the Majuro Atoll Waste Company (MAWC) completed the preparation of the Solid Waste Management Plan for Majuro Atoll (2019-2028) (MAWC 2019).It included an action plan for 2019-2023 that aims to address crucial issues for SWM in Majuro.The action plan proposed four strategic actions: (i) proper operation of the final disposal site, (ii) reduction of final disposal amount by composting and recycling, (iii) maintenance of waste collection services, and (iv) examination of new SWM technologies.The most pressing issue is the Rairok dump site, which has exceeded its capacity with waste piled high, and the need to construct a new landfill.Incineration, composting, and recycling are also considered as solutions to the accumulated waste.
SWM projects are large and costly, requiring prioritization of the allocation of scarce public resources.In deciding which infrastructure projects to implement, governments typically select projects that represent the most efficient allocation of public funds while still achieving intended outcomes.These projects should increase overall welfare yet minimize any negative impact on the socioeconomic and environmental objectives of the country.
Cost-benefit analysis (CBA)-a methodology that compares economic benefits against economic costs-is a useful tool for guiding investment decisions.
This brief uses the CBA methodology to identify and estimate the economic, health, and environmental impacts of improved SWM in the Marshall Islands and Solomon Islands.CBA is a simple methodology that can be used by governments to guide whether the investment is economically viable from a national welfare perspective and can significantly contribute to decision-making in the prioritization of resource allocation (ADB 2017).The brief applies the cost−benefit analysis methodology to quantify the economic, environmental, and health impacts of SWM projects.2019).In 2017 it was estimated that 8.4% of the generated waste was re-used for livestock feed or fuel, 0.2% of the generated waste (mostly aluminum) was recycled through the MAWC, 1.3% was self-disposed, and 9.9% of the generated waste was not collected and disposed of into the local environment or burned.

SOLID WASTE MANAGEMENT IN THE PACIFIC
The MAWC collection services collected 50.77% of the generated waste, while 29.43% of the waste was directly transported to the dumpsite.However, these data are based on the time before the container deposit scheme (CDS) for aluminum and plastics was introduced in 2018, so the 2023 percentage of recycled material before discharge and collection is likely to be higher than at the time of the survey (Project for Promotion of Regional Initiative Solid Waste Management, Japan International Cooperation Agency, SPREP 2020).In 2017, the collection of recyclables at the dumpsite was estimated to be only 0.25%, and incineration at low temperatures was 2.37%, with the result that 97.38% of the collected waste was estimated to be deposited at the Rairok dumpsite.
The SWM plan for Majuro includes details of waste generation based on a limited baseline survey conducted in 2017.It is estimated that 61% of municipal solid waste is generated by households and 39% by non-households such as shops, restaurants, businesses, and public institutions.The unit generation of waste is 0.868 kg per capita per day (kgpcd) for households and 0.546 kgpcd for non-households.In the future, the per capita waste generation is projected to increase with economic growth at a rate of 1% per year (Table 1).Total per capita generation is projected to increase from 1.456 kgpcd in 2020 to 1.609 kgpcd by 2030.The generation rate is assumed to remain the same after 2030.The population of Majuro was estimated to be 30,638 in 2017 but has reduced significantly since then due to out-migration.
It is assumed that the future population of Majuro will remain at this level with natural growth balanced by continuing out-migration.
Based on waste composition surveys in 2017, the waste in Majuro is composed of 55% organic material (brief, wood, leaves, grass, and kitchen garbage); 15.8% plastics; 9.6% metals; and 3.2% glass and shell.Nappies (diapers) make up 9.5%.However, these data are based on information that was collected before the introduction of the CDS, so the 2023 amount of recycled aluminum and plastic entering the waste stream is likely to be considerably less.
In the Ebeye Atoll, a simple incineration plant was funded by the Asian Development Bank (ADB) to support sustainable and effective SWM.
The ADB project included building a high-temperature incinerator, upgrading the dump site and equipment for municipal SWM, and strengthening institutional capacity to sustain SWM services.This infrastructure project is used as a proxy for the CBA for Majuro (ADB 2020).
The Majuro incineration plant would have the capacity to treat 2.4 tons of waste per hour, which is based on 7,000 hours of operation per year, and the full capacity to treat and incinerate 16,907 tons per year.The incinerator will have an airlock feed, primary chamber, secondary chamber with one second residence time at 850°C, stack, grade burners, and control panel, complete with blowers, pumps, access platforms, ladders, and stairs.The complete system is constructed in 316-grade stainless steel to prevent corrosion.
In addition to the incinerator, a small track loader would be required to move waste and transport bottom ash from the incinerator to the landfill.Total costs including an allowance for tax and physical contingency are $6.371 million (Table 2). 2 The costs include $2.5 million for land development and site preparation for an abutment retaining wall and construction of a new area for expansion of the landfill adjacent to the 2 Although taxes and duties are usually covered by the recipient country, they are included in the total project costs in the economic analysis for completeness.
existing dumpsite.The most updated operating costs provided by MAWC for existing SWM services were $1.062 million in 2018.
The largest item of expenditure is the staff payroll making up 47%.For the CBA, the average annual operation and maintenance (O&M) costs for the future with-project scenario are assumed to be $1.10 million per year.The proposed operational expenditure (OPEX) is like the 2018 OPEX since automation is foreseen to reduce collection expenses despite the anticipated higher volume of waste disposed of.2019) estimated that in 2017, 59% of the waste from Honiara City was collected and transported to the Ranadi disposal site while 12.6% was recycled, leaving 28.3% to be burned, buried, or disposed of where generated.Waste quantities collected from the outskirts of the city are far lower, leading experts to estimate that only about 40% of all municipal solid waste is collected within the Greater Honiara Area including parts of Guadalcanal Province.

Solid Waste Management in Solomon Islands
Organic waste including food, yard waste, grass, and wood comprises around 65% of the waste generated in the capital city (Centre for Environment, Fisheries and Aquaculture Science 2019).Plastic comprises 10%, metals 7%, glass 4%, and others 14% of the municipal solid waste.Nappies make up 6% in some estimates and this amount is reportedly increasing.To address the multidimensional SWM problem, the Honiara SWM roadmap offers a mixture of hard and soft interventions to be implemented throughout three phases.The roadmap proposes four policy options that the government could pursue.Option 1 includes a controlled landfill without landfill gas collection and treatment.Option 2 allows for a new sanitary landfill with landfill gas collection and flaring, including new waste collection vehicles, bins, and containers, and the closure of the existing Ranadi landfill.Option 3 proposes the use of an incinerator.Option 4 proposes constructing an incinerator with air pollution control.
Considering the necessary capital costs, existing technical capacity and ensuing O&M costs, Option 2 was evaluated as the option to which CBA would be applied.Option 2 includes the development of a new sanitary landfill and the closure of the overflowing Ranadi landfill.
A waste segregation facility would be installed as part of the new landfill, including a composting plant to convert biowaste to compost.The waste collection areas would be expanded, and new collection trucks as well as bins for waste segregation at the collection points would be purchased.The governance and management of solid waste would be improved with dedicated annual operational funding and a user-pays tariff regime to improve cost recovery introduced.
The behavioral change would be targeted via the promotion of the 4R Principle (reduce, reuse, recycle, recover), supported by a ban on single-use plastics.Training would be provided for the dismantling and recycling of end-of-life vehicles and potential export markets for waste developed.The management of healthcare waste would be strengthened with support for functional incineration at the hospital.The total cost would be $5.515 million over a 5-year construction period (Table 3).The operating costs of SWM were based on the 2020-2021 annual budget by the Honiara City Council, estimated to be an average of $605,368 per year.For the CBA the average annual O&M costs for the SWM services are assumed to remain the same at $605,368 per year.The proposed OPEX is assumed to remain the same since automation is expected to reduce OPEX expenses despite the higher volume of waste disposed of.
It is assumed that the volume of waste that is collected and transported to the landfill site progressively increases from 98 tons per day in 2025-when the facility is assumed to be fully functional-to 169 tons per day by 2040, in line with the projected population growth in the GHA and the increase in the percentage of the total waste generated that is collected.By 2040, the cumulative amount of waste in the new sanitary landfill will be 531,369 tons.

METHODS Assumptions Used for Cost−Benefit Analysis
CBA compares project costs with project benefits to determine whether social welfare gains can be derived from an investment.CBA is a useful decision-making tool to determine resource allocation for large-scale publicly financed infrastructure projects whose outputs may be sold in distorted markets (for example, water supply projects where tariffs are subsidized) or not sold at all (for example, SWM projects).
The principle for quantifying the social benefits of a project is to assess the marginal impact by applying the logic of the future with-project scenario minus the future without-project scenario.
In both the Marshall Islands and Solomon Islands, the future without-project scenario is the business-as-usual case with no major changes in SWM.In Honiara, solid waste dumping would continue at Ranadi, spilling over the landfill boundaries into residential and non-residential private land.In Majuro, household waste would continue to be disposed of at the open seaside dumpsite in Rairok, with the potential to spill into the ocean.The future with-project scenario assumes that SWM will be improved according to the proposed plans.For purposes of the CBA, the incineration plant was selected for the Marshall Islands, while the new landfill was selected for Solomon Islands.The authors selected these large-scale investments to illustrate two types of infrastructure assets upon which to apply CBA methodology.When performing the CBA, the following general assumptions are used: (i) Costs are expressed in United States dollars and all prices are estimated in constant 2021 prices.(ii) Goods and services tax is assumed to be included in the costs. 3 The ADB guidelines for the economic analysis of projects details how the conversion of project benefits and costs to economic prices is carried out.(iii) Project financial costs are converted to economic costs.
(iv) Salvage values of the initial capital costs for assets are included at the end of the project economic life.
The economic valuation of project costs and benefits involves converting financial values into economic values, also known as "shadow pricing."The basis for estimating economic prices differs between internationally traded and nontraded goods and services, between project outputs and inputs, and between incremental and non-incremental outputs and inputs. 3For the CBA, capital costs (i) need to be converted from financial costs to economic costs, allowing for the taxes and duties that are included in the costs (called transfer payments); (ii) need to have price contingencies removed to reflect constant real prices; and (ii) need to be adjusted for the shadow exchange rate and the shadow wage rate of labor by applying a shadow exchange rate factor and a shadow wage rate factor (SWRF).
The economic price of labor-also termed the shadow wage rate-captures the cost to the economy of employing an additional worker on a project.Previous ADB project analyses prepared in Solomon Islands have used an SWRF of 0.85 for unskilled labor so the same SWRF is applied for the unskilled labor involved in the construction of the new facilities and the operating and maintenance cost (ADB 2021). 4The Marshall Islands had a relatively high rate of unemployment of 18.3% in 2011, reduced from a historical unemployment rate of over 30% (ADB 2021).
For the CBA, an SWRF of 0.67 is applied.According to official data on Solomon Islands imports and exports, the estimated shadow exchange rate as determined for other ADB projects is on average close to 1.0. 5Thus, the shadow exchange rate factor is also estimated to be of unity, which reflects an undistorted currency exchange market.As the Marshall Islands uses the United States dollar as their currency, the shadow exchange rate for the Marshall Islands is 1.0.
The impacts of improved SWM were categorized into three broad areas: (i) economic, (ii) environmental, and (iii) health (Figure 1).The potential impacts were further subdivided into parameters for which benefits could be estimated.Dashed boxes represent the final variables used for which data was available.Also, due to data issues, not all identified benefits could be applied to both investments.The value of compost was not estimated for the Marshall Islands while the health benefit of reduction in infant mortality was not estimated for Solomon Islands.

Economic Benefits
Savings in collection, transfer, and disposal costs.The savings in the time and costs of disposing of waste by households and commercial entities can be quantified through the estimation of the amount of time and associated costs that they incur in disposing of their waste in the current situation that was in place in 2021.
The costs of waste disposal also include any travel costs and the cost of bags and containers that they employ for disposing of waste in the absence of a proper collection service.This benefit was estimated at a nominal amount of $5 per household per year in recognition of the relatively low percentage of generated waste that is not collected or recycled in the future without the project scenario.
Value of recycled material.The opportunities for the sale of recycled materials such as brief, glass, and plastic from Pacific island countries are limited because of the lack of a local market, low commercial value, and high transport costs.Apart from the recycling of aluminum cans, there is limited opportunity for export unless subsidized.The Solomon Islands SWM Roadmap assumes that all the waste collected as of 2021 (59% for Honiara City, and 40% for GHA) is deposited to the Ranadi landfill with no formal recycling or composting at the landfill.The volume of waste that is collected and transported to the landfill site progressively increases from 98 tons per day in 2025, when the facility is assumed to be fully functional, to 169 tons per day by 2040, in line with the projected population growth in the GHA and the increase in the percentage of the total waste generated that is collected.By 2040, the cumulative projected amount of waste in the new sanitary landfill will be 531,369 tons.Aligned with the assumptions of the roadmap, the with-project scenario assumes that 10% of the generated waste collected would be recycled through the material recovery facility, 20% would be converted to compost at the central composting facility, leaving 70% of the collected waste to be deposited to the new sanitary landfill.In the Marshall Islands, a container deposit scheme was started in 2018 with importers paying a deposit of $0.06 per container (aluminum cans, polyethylene terephthalate, and glass bottles) of which $0.01 is refunded to the consumer for redemption (Pacific Regional Infrastructure Facility 2018).MAWC has recently expanded the CDS to include recyclable plastic.Almost all the aluminum cans will likely be collected and recycled through the CDS incentive.
Increase in international tourists.The improvement to the local cleanliness and attractiveness of the local environment will contribute to an enhanced reputation and demand as a tourist destination, which in turn will contribute to economic growth.While the Marshall Islands is not noted as a substantial mass tourist destination-like Fiji for example-and is unlikely to be more than a niche destination appealing to the eco-tourist and more adventurous tourists, it is likely to achieve some benefit from improved SWM.According to the World Bank, Solomon Islands had 28,900 international tourists in 2019, with an average of 23,400 per year during the period 2010−2019 (World Bank n.d.).The average expenditure per tourist was $2,722.Expenditure by international tourists made up an average of 9.8% of the total cost of imports.The economic benefit from an increase in international tourists resulting from the improved SWM is assumed to be a nominal 1% increase in the average number of international tourists during the 2010-2019 cycle (per year, 239) with a marginal benefit of $408.30per tourist based on 15% of the average expenditure per tourist of $2,722.
Similarly, the Marshall Islands had 6,100 international tourists in 2019, with an average of 5,478 per year during 2009-2019.
The average expenditure per tourist since 2016 was $4,719.
Expenditure by international tourists made up an average of 16.4% of the total cost of imports.The economic benefit from an increase in international tourists resulting from the improved SWM on Majuro Atoll is assumed to be a nominal 1% increase in the average number of international tourists per year since 2016 (61) with a marginal benefit of $707.82 per tourist based on 15% of the average expenditure per tourist.

Environmental Benefits
Value of compost.The value of compost was estimated for Solomon Islands but not for the Marshall Islands due to a lack of data.In Honiara, the market for compost is still developing.For the CBA, the compost produced from the new facility was valued at a conservative price of $50 per ton.This is projected to produce an economic benefit of $129,729 in 2025, increasing to $199,517 per year by 2045.
6 This is according to the ADB guidelines for economic evaluation of projects ( 2017) that based the value of GHG at $36.30/ton in 2016 prices.This value was updated to $43.20/ton in 2020 by inflating by 2% per year in real terms following the International Monetary Fund gross domestic product inflation guidelines.The inflation accommodates potential increases in the marginal damage of global warming over time that was proposed by the Intergovernmental Panel on Climate Change.

7
A study in the Marshall Islands showed that sustainable dengue prevention strategies should incorporate long-term solutions to manage solid waste and outreach to households on the importance of preventing mosquito development around their home (Sharp et al. 2014).
Reduction in greenhouse gas emissions.Indiscriminate dumping of municipal waste contributes to carbon dioxide (CO 2 ) and greenhouse gases (GHGs) from the burning and decomposition of the waste (Zero Waste Europe 2019).Uncontrolled decomposition in a dumpsite leads to the production of methane (CH 4 ), an important GHG.Improved SWM through the development of incineration, sanitary landfills, and recycling is likely to have a large positive impact on reducing GHGs and on mitigating climate change when compared with the ongoing use of dumpsites and indiscriminate dumping of rubbish.In the Marshall Islands, results of the calculation of the net savings in GHG emissions resulting from the project will result in a net saving of 15,761 tons of CO 2 equivalent (tCO2 e ) in 2023, the first year of the operation of the new incinerator, increasing to 16,905 tCO2 e per year by 2045.Net saving is envisioned since a significant share of the solid waste will be diverted via composting and recycling.In Solomon Islands, the net saving in avoided emissions is valued at the social cost of carbon set at $43.20 per tCO2 e in 2020 and projected to increase by 2% in real terms per year thereafter in recognition of the increasing cost of carbon emissions in the future.The economic benefit of reduced GHG from a reduction in indiscriminate dumping, burning of rubbish, and the closure of uncontrolled dumpsites is valued at the price of carbon.The ADB guidelines for valuing the social cost of carbon is $43.20/tCO2 e in 2020 and is assumed to inflate by 2% per year thereafter in real terms. 6Please refer to the Appendix for a sample procedure in estimating production and reduction of GHGs.

Health Benefits
Savings in health-related expenditures.In Majuro, the average per capita expenditure in 2017 for out-of-pocket health care was $77, or $470 per household for an average house of 6.1 persons.
In the absence of a definitive amount of the likely savings in health care costs and lost productivity, a conservative amount of $5 per household per year is included to represent this benefit.This represents a relatively small percentage of 1% of the average annual household expenditure on health care in Majuro. 7 For Solomon Islands, in the absence of a definitive amount of the likely savings, the same amount of $5 per household per year was estimated as a health benefit.This represents a relatively small percentage of the reported $119 for total health expenditure per person per year.For an average household of seven persons, the total household expenditure on health is $833 per year and the saving of $5 per household is less than 1% saving in health expenditure per year for the residents of the GHA (Global Burden of Disease Health Financing Collaborator Network 2020).
Reduction in infant mortality.The estimation of the value of a life saved is typically applied to the economic evaluation of the impact of improvements to water supply and sanitation, and transportation projects where there is a direct correlation between improved services and a reduction in illness and death.8A reduction in disability adjusted life years was used to quantify the impact of improved SWM allowing for a marginal reduction in the under-5-year-old mortality for Majuro.The percentage of the population represented by the under-5 age group is taken as 15% in 2021 and the under-5 age cohort mortality was 16.75 per 1,000 live births (Knoema 2020).The average death rate for this cohort is estimated to be 0.335% per year, which for the estimated population for Majuro Atoll in 2020 represents 16 deaths per year and remains at this level based on the 2021 census preliminary results.If it is assumed that the impact of improved SWM will result in a 2% reduction in mortality, then this would result in a saving of 0.23 deaths in 2023 when the improved SWM facilities are first in full operation and remain at this level until 2045.At an average present value of lifetime earnings of $143,251 per child, this results in an economic benefit of $32,784 per year from 2023.

RESULTS OF COST−BENEFIT ANALYSIS
The results of the CBA for both investments show internal rates of return higher than a 9% economic opportunity cost of capital and are summarized in Table 4.
A sensitivity analysis was conducted testing changes for three main variables: (i) increase in capital costs, (ii) increase in O&M costs, and (iii) decrease in total benefits.For both countries, economic internal rates of return remain robust against a 20% change in the three variables.A 1-year delay in the benefits reduces the economic internal rate of return of the Marshall Islands to 9.8% and Solomon Islands to 13.9%.
Table 5 shows the contribution of the various types of benefits to total benefits.The value of the reduction in GHG emissions is seen to contribute the most to benefits, followed by the value of recycled material and international tourism.

DISCUSSION AND CONCLUSION
The Majuro CBA was based on a hypothetical public investment in a simple incineration facility while for Solomon Islands, the CBA was prepared for the investment option that includes a new sanitary landfill and associated facilities.The economic benefits of improved SWM that were tested can be categorized into three broad areas: (i) economic, (ii) environmental, and (iii) health.The resulting economic internal rate of return was robust against a 9% economic opportunity cost of capital and remained economically viable when tested against various negative scenarios.The reduction in GHG emissions contributed the largest share to total economic benefits in both cases, confirming that significant environmental benefits are to be derived from investing in SWM.Moreover, the brief shows that CBA is a simple yet powerful methodology that governments could use to test and estimate the economic impact of public investments and prioritize resource allocation.The simplicity of the tool allows it to be used for evaluating other types of large public investments in the Pacific.
Developing assumptions for estimating economic benefits relies on data.The lack of readily available data in the Marshall Islands and Solomon Islands posed challenges to the estimation procedure.For example, data to estimate the value of the reduction in marine  pollutants, increase in tourism-led employment, willingness to pay for improved SWM services, and savings in health-related expenditures to those related to vector-borne disease-like dengue fever, which is caused by poor SWM-were not available.
In addition, while the analysis used data that can be quantified and monetized, some data cannot be quantified and expressed in a monetary value.These include leachate containment from the existing dumpsite, reductions in blocked drains and flooding, and increases in land value.
The reduction in GHG and the value of the carbon credits can be traded internationally as part of the emission trading scheme and could be a monetary benefit to the SWM process through monetizing and selling the carbon credits to other emitters who need to offset their emissions.There is a precedent for monetizing and selling carbon credits from improved waste management through the carbon-offset scheme of the United Nations called the Clean Development Mechanism.The scope for receiving carbon credits for the capture and reduction in GHG from improved SWM is an aspect that should be further investigated and quantified in the economic analysis of improved SWM in the Pacific.Although the scale of SWM is lower than in other countries, if the waste sector could receive carbon credits, then this income could be used to offset the O&M costs and provide funds for future development costs of the waste management system.It might also provide sufficient financial resources to fund the operation to be contracted out to the private sector.The actual reduction in GHG and the carbon credit would need to be validated by an independent agency, which would add some additional costs to the operation.

APPENDIX: ESTIMATING THE REDUCTION IN GREENHOUSE GASES
Carbon dioxide (CO 2 ) and greenhouse gases (GHGs) develop from the burning and rotting of waste.Depending on its composition, the incineration of 1 ton of municipal waste at low temperatures releases about 0.7 to 1.7 tons of CO 2 into the atmosphere. 1 Methane (CH 4 ), an important GHG, comes from the uncontrolled decomposition of waste in dumpsites.Improved solid waste management (SWM) through the development of incineration, sanitary landfills, and recycling is likely to have a large positive impact on reducing GHGs and on mitigating climate change when compared with the ongoing use of dumpsites and indiscriminate dumping of rubbish.
Sanitary landfills (SLF) can be designed and operated to overlay the rubbish and capture gases that are either flared off or used for electricity generation.This converts the more harmful CH 4 portion to less harmful CO 2 , thereby contributing to a net saving in GHG emissions.Through time as the landfill gets bigger, the production of landfill gas under anaerobic conditions will progressively increase.
By volume, landfill gas is composed of 50% CH 4 and 50% CO 2 .Over 100 years, CH 4 becomes a potent GHG that is 28 to 36 times more effective than CO 2 at trapping heat in the atmosphere.Burning CH 4 produces 2.75 times the weight of CO 2 , but as CH 4 is 25 times more harmful than CO 2 there is a net gain in GHG emissions of 9 for every unit of CH 4 that is flared off.The conversion of CH 4 to CO 2 through burning can be included as an economic benefit valued at the price of carbon saved.It can be assumed that up to 60% of landfill gases are captured and converted to CO 2 , although this factor will vary according to the site and the configuration of the landfill.
Incineration of municipal solid waste in high-temperature incinerators (such as has been proposed for the Marshall Islands) also results in a reduction in GHGs compared with low-temperature incineration that can be valued as an economic benefit like the impact of an SLF.
The Kreditanstalt für Wiederaufbau and Deutsche Gesellschaft für Internationale Zusammenarbeit Solid Waste Management Greenhouse Gas Calculator Various online Excel-based calculators are available for the calculation of the production and saving of GHG in SLFs from incineration and improved SWM.For this example of the calculation of the saving in GHG due to the improved SWM, the GHG calculator developed by the German aid agencies Kreditanstalt für Wiederaufbau (KfW) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) is used to quantify the effects of proper waste management on GHG emissions. 2 The KfW and GIZ SWM-GHG calculator quantifies and compares GHG emissions for different waste management strategies early in the decision-making process.Default values allow approximations to be made even if basic data are not available.In addition, the SWM-GHG calculator also guides what different waste management strategies would cost.The SWM-GHG calculator can be used by people having only basic knowledge of the sector.
The calculation method used in the SWM-GHG calculator follows the life cycle assessment method.Different waste management strategies can be compared by calculating the GHG emissions of the recycled (typically glass, brief and cardboard, plastics, metals, and organic waste) and disposed of waste fractions over their whole life cycle.The tool sums up the emissions of all residual waste or recycling streams respectively and calculates the total GHG emissions of all processes in CO 2 equivalents.The emissions calculated also include all future emissions caused by a given quantity of treated waste.This means that when waste is sent to a landfill, for example, the calculated GHG emissions, given in ton CO 2 equivalents per ton waste, include the cumulated emissions this waste amount will generate during its degradation.Up to four waste management systems can be compared using the SWM-GHG calculator; in addition to the status quo, three user-definable scenarios can be analyzed in one step.The model allows for the comparison of the production of GHGs in the current future-without-project-situation (called business as usual in the model) with the production of GHGs in the future-with-project situation (implementation of the roadmaps).It allows policymakers to estimate how much GHGs could be reduced via SWM projects and translate this reduction into to a monetized value.
The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of ADB or its Board of Governors or the governments they represent.ADB does not guarantee the accuracy of the data included here and accepts no responsibility for any consequence of their use.
Solid Waste Management in the Marshall IslandsMajuro suffers from low levels of waste collection, recycling, and disposal activities.Based on the projected waste generation per capita and population, the total amount of waste generated in Majuro from all sources was estimated to be 33.48tons per day in 2021 and should increase to 36.64 tons per day by 2045 (MAWC
Honiara suffers from low solid waste collection and disposal, and almost no recycling activities are performed.Estimates of the waste generated in Honiara place the volume at 126 tons per day or equivalent to 0.969 kg of waste per capita per day(Honiara  City Council 2008).It is assumed that this volume will increase at the same rate as the population increase, approximated by the National Statistics Office (2009 Census) at 2% per year.
According to the Solomon Islands National Infrastructure Investment Plan, uncollected waste from Honiara is either dumped, buried, or burned in back yards, or tipped into either streams or the ocean (Government of Solomon Islands 2013).The Honiara City Council Solid Waste Management Plan (

Table 2 :
Capital Cost Assumption for Incineration Facility Option t = ton.Source: Asian Development Bank (table is compiled by authors using consultant data).
Figure 1: Economic, Environmental, and Health impacts of Improved Solid Waste Management DALY = disability adjusted life years, EOLV = end-of-life vehicles, SWM = solid waste management.Source: Asian Development Bank (figure prepared by authors using consultant data).

Table 4 :
Results of Cost−Benefit Analysis

Table 5 :
Contribution to Economic Benefits (%) Note: Numbers may not be exact due to rounding.Savings in health-related expenditures and value of reduction in infant mortality were estimated as one benefit for the Marshall Islands due to its small value.Source: Asian Development Bank (table is compiled by authors using consultant estimates).