The Link between the Compliance with Environmental Legislation on Separate Collection and the Municipal Solid Waste Costs

Promoting Agenda 2030 through Circular Economy transition requires improving waste system management and increasing separate collection. In Italy, municipal solid waste management is entrusted to the municipalities, most of which have not yet reached the minimum threshold of 65% for the separate collection imposed by the Environmental Code in 2012. This research aims to investigate the effect of compliance with environmental legislation by Italian municipalities on the total cost of municipal solid waste management, filling a shortage of literature studies on this issue. It also investigates the other significant factors affecting municipal solid waste costs, analysing a large dataset of 1914 municipalities. The study uses regression analysis on aggregate and regional samples and population-based subsamples to verify the existence of economies of scale or density. The results show that environmental compliance determines cost reduction in the northern regions, thanks to more efficient separate collection management and recycling activities in the downstream phases of the process. Instead, environmental compliance produces a cost increase in central regions due to the lack of waste recycling and composting infrastructure. Finally, in the conclusions, policy implications are drawn for the Italian case