Garbage: What a waste!

Population growth, urbanization and increased consumerism have supported long-term growth in waste volumes generated by the society. Solid waste management affects everybody of us in the world, as individuals managing our own waste or governments that are providing waste management services to the society.

February 2, 2021

Dr. Patrick Kolb, Fund Manager

Credit Suisse Asset Management

The World Bank estimates global waste volume would grow by 70% from 2.01 billion tons in 2016 to 3.40 billion tons by 2050, if no further actions would be taken to reduce it. The authors calculate at least 33% of the waste volume is openly dumped and therefore not managed in an environmentally safe manner. 37% is disposed of in some type of a landfill, 19% undergoes materials recovery through recycling and composting and only 11% is treated through modern incineration. Across regions, Sub-Saharan Africa collects about 44% of waste while Europe, Central Asia and North America collect at least 90% of waste.1

Waste volumes: No peak waste in this century

According to researchers, our society is unlikely to reach peak waste in this century without drastic actions: Population growth and urbanization will likely outpace the efforts in waste reduction.2 Handling this growing volume of waste responsibly will become an increasingly important issue given the environmental, social and economic costs associated with waste. To highlight that, let us have a look at the situation in the United States:

Fig. 1: US Waste volumes have grown significantly, especially plastics and paper (in tons of waste)
Source: EPA

According to fig. 1 total volume of municipal solid waste (MSW) has grown from 88 million tons in 1960 to 268 million tons in 2017. During the same time period, the US population increased by more than 80% from 179 million to 325 million inhabitants. It seems that the US has become more wasteful over the last five decades (fig. 2).

Fig. 2: Total Municipal Waste in the US vs. US population, indexed to 100, and per capita waste generation (rhs)
Source:, US Census Bureau

From 1960 to 2000, per capita MSW generation almost doubled from 2.68 pounds per person per day in 1960 to 4.74 pounds per person per day. Since then it has stabilized and remains currently at 4.51 pounds per person per day.3

Back in April 2020, Global Markets Insights, a market research and consulting company, estimated that the US waste market would grow at a compounded annual growth rate (CAGR) of 2.2% from 2020 – 2026, attributing this growth to the increased waste generation.4

Fig. 3 shows a brief overview of the municipal solid waste segments. The four biggest of them, paper and paperboard products, food waste, yard trimmings and plastics, are commented in the following sections:

  • With approx. 25%, paper and paperboard products made up the largest percentage of all the municipal waste. Since 2005 this segment declined from 84.8 million tons in 2005 to 67 million tons in 2017. We believe this downward trend will continue, driven by the increased use of digital tools and recycling.

Fig. 3: Total municipal solid waste generated by segment, 2017

  • Food waste, such as uneaten leftovers or spoiled produce, is estimated at 40 million tons, or ca. 15% of total waste generation. About 94% of the food thrown away ends up in landfills or combustion facilities. Food waste is estimated at between 30% – 40% of total food supply. It is the second single largest category of material placed in landfills and represents nourishment that could have helped feed families in need.5
  • Yard trimmings, estimated at 35.2 million tons, comprised ca. 13.1% of total waste generation. Compared to 1990 with ca. 35 million tons (ca. 16.8% of total generation) it was more or less stable in the last 30 years. We think going forward this might decline mainly due to to state legislation which is discouraging yard trimmings disposal in landfills, including source reduction measures such as backyard composting and leaving grass trimmings on the yard.
  • Plastic waste is a rapidly growing segment of municipal solid waste: In 2017, plastic products generation was 35.4 million tons versus four million tons as of 2010. This segment has grown from 8.2% of total MSW generation in 1990 to 13.2% in 2017. It mainly came from durable goods and the containers and packaging categories, which includes bags, sacks and wraps, but also PET bottles, casings of lead acid batteries and other products. Plastic is durable with lifespans of up to thousands of years and still 95% of plastic packaging is only used once quickly and discarded. This throwaway behaviour of current plastic consumption is unsustainable in the long run, in our opinion.
Waste disposal: Not in my backyard
In the US the amount of MSW generated in 2017 was 267.8 million tons, of which 139.6 million tons ended in landfills. Recycled waste was at 67.2 million tons and the amount composted was 27 million tons. The amount of MSW combusted with energy recovery was at 34 million tons (fig. 4).6

The challenge is how to manage MSW efficiently and in an environmentalfriendly way. Not properly managed solid waste poses risk to human health and the environment by contaminating water, attracting insects and rodents, increasing flood due to blocked drainage of canals or gullies, among others.7 Its disposal has evolved over time, with waste deposited at landfills having peaked in 1990 on a volume basis and more waste being recycled, composted or combusted in later years. 

Over 50% of today’s waste is still stored in one of the 3’091 US landfills. This concept of collecting waste in a pit or pile has changed relatively little since the Middle Ages. Today there are various environmental-related regulations surrounding landfills to ensure that they are safe, starting from the design and construction to the operation and closing of the landfill. Solid waste landfills are constructed with engineering safeguards to limit the possibility of water and air pollution. 

Fig. 4: Landfills remain the main disposal sites for municipal solid waste


Recent trends are showing that governments are reluctant to approve additional landfills or incinerations due to environmental concerns, increased regulatory restrictions and also due to the fact that people simply do not want to live next of a landfill. With more landfills closing than opening, there are fewer and larger landfills and they are located farther away from population centers. As a result, the United States is today on track to having only 18 years of remaining landfill capacity left. While the landfills get scarcer, it is expected that the pricing power of those who own the landfills will increase.It is not surprising that some waste management companies have increased the price for landfill disposal at an average rate of 3.4% from 2015 to 2019. However, we think in the long run these businesses have to adapt to a society that is more focused on recycling and to new disposal methods becoming economically viable through government support or innovation.

Incineration is the process of burning waste to dispose of it by reducing its mass and volume. Its aim is to reduce the solid mass of the original waste by 80%–85% and the volume (already compressed somewhat in garbage trucks) by 95%–96%, depending on the composition and degree of recovery of materials such as metals from the ash for recycling. While incineration does not completely replace the landfills, it significantly reduces the disposal volume. Many incineration plants are waste-to-energy plants where the waste is burnt to drive turbines and to create electricity. Since the year 2000 the numbers of incinerators in the US have been falling from over 100 to currently 73.9 In our opinion, it is rather unlikely to see a significant increase in incinerator capacity over the next couple of years.

Recycling has increased in popularity, as environmental concerns have risen over the past years and consumers are becoming more aware of the importance of sustainable solutions. It is viewed as an alternative to "conventional" waste disposal that reduces waste volumes and helps lower greenhouse gas emissions. The largest recycled material is cardboard, with other materials consisting primarily of plastic, metals and glass. Recycling can prevent the waste of potentially useful materials and reduce the consumption of fresh raw materials. Solid waste companies operate material recovery facilities, where reusable materials from the waste stream are separated for processing or resale.

While recycling has grown as a proportion of waste disposal, fig. 4 shows that it has somewhat stagnated in recent years. Probably this has been driven by a combination of factors such as lack of consumer awareness.10 It seems many consumers still do not understand what can and cannot be recycled, or the importance of best practice in recycling.11 Clearly, recycling is preferable to landfill or incineration.12 However, in some areas such as medical or hazardous waste, we think permanent waste disposal remains the preferred solution.


In our opinion rising waste volumes is one of the toughest long term challenges for our society. The consequences of ignoring waste are serious: The cost of inaction from healthcare costs, lost productivity, flood damage and damage to business and tourism is 5x – 10x greater than that of proper waste management, especially for middle- and low-income countries.13 From a society’s perspective, the negative impact from growing waste volumes is therefore clear: Not properly managed waste ends up polluting the soil, water and air. We think recycling or composting will surely gain in attractiveness, but we also believe it is likely that total waste volumes will continue to grow in the near future.14 At the end of the day it seems that our society is facing a somewhat of a monumental task to reduce waste volumes. 

While some might view waste management firms negatively, in our opinion they present as of today the only true way of handling society’s waste at scale. An organized, efficient and environmental friendly waste management service minimizes the negative impacts from waste disposals. In countries where adequate waste disposal services are not available, we think it is unlikely that such a situation will drive to lower waste volumes. Unregulated dumping of waste will likely continue, thus leading to more pollution. 

For investors within the security & safety space, we believe waste management is an attractive structural growth area coupled to the themes growing world population, urbanization and stricter environmental regulations. We think that the global dynamics of waste volumes mean that waste management offers numerous opportunities for those with exposure to the value chain. Based on these underlying trends favorable for our theme in the Environmental Security area, we are shareholders of leading companies in the waste disposal area with a special focus on hazardous waste and medical waste.


  • No capital protection: investors may lose part or all of their investment in this product.
  • Focus on security and safety companies can lead to significant sector/regional exposures.
  • Exposure to small and mid caps can result in higher short-term volatility and may carry liquidity risk.
  • Due to the possibility of increased exposure to the emerging markets the fund may be affected by political and economic risks in these countries.
  • Equity markets can be volatile, especially in the short term.

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Source: Worldbank (2018): What a waste 2.0: A Global Snapshot of Solid Waste Management to 2050, URL:, 21.10.2020.
Source: Hoornweg et al. (2013): Environment: Waste production must peak this century, Nature International Journal of Science, Oct. 2013, URL: -1.14032 , 21.10.2020.
3 Source: EPA (2020): Facts and Figures about Materials, Waste and Recycling, URL:, 21.10.2020.
4 Source: Global Market Insights (2020): US Municipal Solid Waste Management Market, URL:, 06.11.2020.
5 Source: FDA (2020): Food loss and waste, URL:, 21.10.2020.
6 Source: EPA (2020): Facts and Figures about Materials, Waste and Recycling, URL:, 21.10.2020.
7 Source: Liu et al. (2015): A review of municipal solid waste environmental standards with a focus on incin-erator residues, in: International Journal of Sustainable Built Environment, December 2015, URL:, 24.10.2020.
Source: Wastedive (2020): Disposal capacity crunch paves way for more industry consolidation and price increases, Jan. 8th 2020, URL: , 25.10.2020.
Source: Tishman Environment and Design Center (2019): U.S. Municipal Solid Waste Incinerators: An Industry in Decline, May 2019, URL:
10 Source: Envirotec (2018): Incineration not the reason for recycling stagnation, comment, Sept. 26th 2018, URL: , 25.10.2020.
11 Examples of best practice in recycling are: 
- Buy products that can be recycled.
- Separate waste that can be recycled from other waste.
- Check the cost of recycling: It could be much less than sending your waste for energy recovery or disposal.
- Sell high-quality recyclable materials, such as construction materials.
Source: (2020): How to recycle your business waste, URL: , 30.10.2020.
12 The cost of recycling waste might also be a reason for the slow uptake in recycling. Recycled products have to compete with goods created from raw materials, which have been very volatile and can even be cheaper. As a result, high recycling costs coupled with competitive raw material prices mean that the recycling industry often struggles to stay competitive in a highly uncertain market.
13 Source: UNEP (2015): Global Waste Management Outlook, 2015, URL: , 26.10.2020.
14 Circular economy could be part of the solution: The aim of this approach is to 1) minimize the use of raw materials and to preserve the natural resources, 2) to maximize the yield from resources by reusing the materials as much as possible and 3) minimize negative externalities sich as air and water pollution. This approach involves the transformation of every aspect in the lifecycle of a good, starting from design, manufacturing, retail, consumption, reuse and recycling (source: Ellen MacArthur Foundation (2020): The Circular Economy In Detail, URL:, 29.10.2020.