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In this article we analyse incentives, equilibria and implications
of the governance framework for the disposal of municipal solid waste.
The key decisions revolve around the flow of waste among regions
and the externalities (mainly pollution) associated with its final
disposal, be it via incineration or landfill. When the regions are
characterised by different levels of efficiency in the final treatment
of waste, a certain degree of mobility might allow to reap the benefits
of higher efficiency. On the other hand, as transportation and environmental
costs implied by mobility and concentration become significant, a
trade-off emerges. Our model evaluates the implications of this trade-off
for the optimal degree of decentralisation in waste management.
