Developing public-private partnerships for integrated waste systems can be challenging, especially in developing cities and countries. The Clinton Climate Initiative can help guide municipal and national governments in changing waste systems to reduce methane emissions.

While the term “carbon footprint” is so widely used that it is now included in the Webster-Merriam dictionary, the impacts and origins of methane are just beginning to be recognized. Methane is the second most prevalent greenhouse-gas emitted from human activities. Methane’s lifetime in the atmosphere is much shorter than carbon dioxide, but methane is more efficient at trapping radiation than carbon dioxide—and also more damaging. Pound for pound, the comparative impact of methane on climate change is over 20 times greater than carbon dioxide over a 100-year period.

Methane 101

Methane from human activities can be emitted from natural gas and petroleum systems, raising livestock, and discarding organic wastes in landfills and wastewater treatment facilities. When organic wastes, such as food, garden trimmings, wood, paper, and sludge decompose, methane is released into the atmosphere.

For many communities, landfills and waste water treatment systems can be the largest single source of methane emissions. But these emissions can be significantly reduced by initiatives that divert waste from disposal, such as composting, or capturing the methane to use as a biogas for generating energy. This is one of the reasons why the William J. Clinton Foundation’s Clinton Climate Initiative (CCI) is guiding municipal and national governments in chang-ing their waste systems in a manner that reduces the emission of methane.

The other reason for the CCI’s focus on methane is that the annual quantity of waste generated, especially in emerging markets, is growing at an alarming rate and is expected to triple by 2025. For most of these cities and countries, waste management systems are still in their infancy. Without guidance, there is high potential for waste to be improperly managed. This can create serious health and environmental consequences.

Globally, waste accounts for approximately 3 to 5 percent of greenhouse-gas emissions from human activities. However, waste has the potential to become a significant contributor to the reduction of greenhouse-gas emissions. This is because recovering waste to manufacture new products or create energy avoids emissions during the product life cycle.

A waste PPP is a 10- to 20-year relationship—so it is paramount that all partners are committed to collaborating, especially in the more complex environment of an emerging market.

Developing Successful PPPs

Because of the limited financial resources, institutional capacity, or technical knowledge, many developing cities and countries are considering the use of PPPs to implement their integrated waste systems. However, for PPPs to succeed and flourish in the waste sector, the risks to the private project developer, public officials, and financial investor must be diligently assessed and mitigated.

Public-private partnership (PPP) projects in waste carry unique risks. Overall, the most common challenges for developing cities and countries include an unclear delineation of roles and responsibilities, inability to regulate, and unrealistic financial expectations.

Unclear delineation of roles and responsibilities

Even if the PPP mandates a private company to design, construct, finance, own, and operate the new integrated waste system, the public sector will still have a role and responsibility in its implementation. Unless roles and responsibilities are clearly understood, the success of the PPP can be compromised.

For example, it is not uncommon for the market conditions for the products and energy to be assessed only after a private project developer and waste technology has been selected. The private developer will assume that the public officials are securing off-take agreements for the products and energy that the waste system will create unless the tender documents clearly indicate that responsibility. Conversely, public officials often think that identifying a market’s product and energy is the responsibility of the private developer.

Inability to regulate

Regulations to govern waste systems and advanced waste technologies are either non-existent or severely insufficient. Consequently, ascertaining public and political support can be an insurmountable barrier for developing waste systems. This is due largely to safety, health, and environmental concerns. These concerns are justified as cities without regulations are often targeted by developers and technologies that would never be considered in North America or Europe. Thus, it is essential for regulations to be in place before the procurement process commences, along with training for public officials to monitor and inspect waste systems.

Unrealistic financial expectations

Private investors typically seek a 15 to 20 percent return on investment (ROI) to consider the project financially viable. While a facility within an integrated waste management system may be able to achieve this ROI, most financial assessments do not examine the associated waste infrastructure costs (i.e., collecting and transporting the waste to the facility).

Although most solid waste projects need to demonstrate a guaranteed quantity of waste over the project duration to receive financing, developing cities and countries typically do not have the operating or maintenance equipment to guarantee the delivery of waste. Therefore, while the facility can be profitable, the waste system will not succeed if the public sector incurs the entire financial burden of improving the waste infrastructure.

A waste PPP is a 10- to 20-year relationship—so it is paramount that all partners are committed to collaborating, especially in the more complex environment of an emerging market.

For private sector developers and investors, this may mean allocating additional time and resources to educate their public sector partners on the technical and financial components of their new waste systems. For public officials, establishing an unprecedented level of transparency in their government procurement process may be required.

Following this advice will help waste PPPs succeed and yield systems where waste can become a resource for making new products and energy, rather than contributing to global warming.