Worldwide, municipal solid waste (MSW) management is a challenging problem. Specifically, in developing countries, it is an important concern due to the increase in waste generation and the lack of management infrastructure (collection and processing) . Globally, the annual solid waste generation was 1.3 billion tons in 2012 and is expected to go up to 2.2 billion tons by 2025 . Just in Mexico, the waste generation per day is approximately 0.13 MT . The use of open dump systems is particularly an issue in developing countries such as Mexico. This occurs because of the constrained landfill space, collection, and processing infrastructure in cities . The Mexican environmental protection agency (SEMARNAT) has reported that in 2012 from all the waste generated in Mexico, 72% was disposed at sanitary landfills and regulated sites, while 23 % was disposed at open dumps and the rest 5% was recycled . Accounting for this, our approach consists in proposing a coordinated market framework for municipal solid waste management. The framework allows the systematic operation of complex MSW systems by accommodating different stakeholders. These stakeholders include suppliers and consumers of waste, as well as consumers of derived products. The providers of transportation and processing technologies are also considered. The proposed optimization formulation seeks to maximize the social welfare and balance supply and demand for waste and derived products. To achieve this, the stakeholders submit bids to a market coordinator that solves the optimization problem to find the optimal allocations and clearing prices. The formulation includes the possibility of sending waste to sanitary landfills or plants for treatment. Furthermore, the waste that is disposed of at open dump systems is also considered. A taxation scheme to account for this environmental impact is proposed and analyzed. In this regard, the coordination framework also allows accounting for policy incentives and monetization of environmental impacts. To illustrate the applicability of this approach, an MSW system in Mexico was evaluated as a case study. Results reveal the minimum tax required to avoid open dump systems. The optimal allocations, profits, and prices of each stakeholder are also found. Besides, results show how the taxation scheme fosters the provision of services for all stakeholders and that the tax can be interpreted as a service provided by the environment to society.
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