The dynamics of landfill diversion: Economic drivers, policy factors and spatial issues: Evidence from Italy using provincial panel data

Waste disposal is an issue that is becoming increasingly important in policy terms in the European Union, and in Italy, a country showing strong geographical heterogeneity in waste management. This paper analyses the process of decoupling/delinking between economic growth and landfilling trends in a framework where economic, policy, geographical elements and spatial issues are all considered as drivers behind the phenomenon. We exploit an original and very rich provincial panel dataset over 1999–2005 for the 103 Italian provinces. Evidence shows that the observed ‘absolute’ decoupling between economic growth and landfilling is driven by a mix of structural factors. Among the main factors, population density, more than the provincial income level, emerges as a crucial driver: local opportunity costs and landfill externalities matter in shaping waste policies and local commitment to a transition away from landfilling of waste (landfill diversion). However, not only structural factors are relevant. If on the one hand landfill taxes are not a significant driver of the phenomenon, waste management tools, such as separated collection for recycling, and the tariff system connected to waste services, bring about significant effect on the amount of landfilled waste. Moreover, regarding the analysis of spatial interrelations across provinces, we note that the presence of incinerators in nearby provinces increases landfill diversion, due probably to free riding behaviour or intra-provinces ‘agreements’ on waste management; this is not true for nearby landfill sites, that cause for a given province a strong lock in effect. Future research could strengthen the analysis of policy effectiveness at regional level, focusing on policy endogeneity, and the full investigation of spatial correlations in waste disposal performances.