The relationship between municipal waste diversion incentivization and recycling system performance

•Study examines the effects of municipal recycling incentivization on municipal recycling rates and program costs in Ontario, Canada.•The amount funding a municipality receives for their recycling program is in direct proportion to their recycling rates and cost of material management.•There is no statistically significant relationship between municipal incentives, recycling rates or program costs.•Ontario's municipal recycling funding methodology fails to achieve its intended objectives, and as such, necessitates that the approach be revisited.

This study examines the effects of municipal recycling incentivization on municipal recycling rates and program costs in Ontario, Canada. Ontario is currently one of only two jurisdictions in Canada to fund municipal waste diversion programs using an incentive-based system that allocates funding in proportion to a municipality's recycling rate performance. Packaging fees remitted by packaging producers under Ontario's shared producer responsibility model are distributed to municipalities based on three factors: relative recycling performance, program costs and adherence to recycling best practices. Using a combination of panel data collected from 223 Ontario municipalities between the periods of 2003 and 2014 and semi structured interviews with recycling stakeholders, this study aims to examine whether municipalities respond to financial incentivization by increasing total recycling or decreasing costs. The results of the statistical modeling used in this study indicate that there is no statistically significant relationship between municipal incentives, recycling rates or program costs. This suggests that Ontario's municipal recycling funding methodology fails to achieve its intended objectives, and as such, necessitates that the approach be revisited to ensure maximum waste diversion.