Sectoral Risks: Solid Waste Management in Germany and USA

Sectoral Risks: Solid Waste Management in Germany and USA
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Part A
Introduction
Sectoral risk affects the development of specific infrastructures such as solid waste management thus interfering with global economic development. This paper analyzes sectoral risks through a critical literature review that defines the types of sectoral risks and how they impact the solid waste management infrastructure. Also, the paper develops a case study that compares the demand drivers, regulations, and existing models for USA and Germany under solid waste management infrastructure.
Literature Review and Research
Sectoral risks are potential risks and shortcomings that different industries might experience within the economy. Infrastructural organizations will carry out a sectoral risk assessment to determine what risks are likely to face their industrial sectors as a way of managing them and protecting their businesses from making losses thus promoting sustainable growth (Semieniuk et al., 2021). Sectoral risks are influenced by both internal and external elements within which a business operates, for example, market changes, developments in technology, government regulations, and economic trends (Ani, et al., 2019). A sectoral risk assessment process helps policymakers, investors, and business owners to plan for uncertainties to achieve their goals.
Originally waste was dumped into unpaved streets and road paths where it accumulated posing health risks. A system for waste disposal was developed first in Athens when the rules for regulating waste management were first developed (Nathanson, 2023). In the 19th century, waste was managed through watertight waste cans and heavy vehicles that collected and transported waste. In the 20th century, most American cities adopted waste-burning technologies however a majority still dumped waste on land and water (Limited, 2022). Even with the changes in technology that brought grinders, compaction trucks, and pneumatic collection systems, health risks were still high due to pollution from incorrect waste dumping. Hence the emergence of sanitary landfills that separated waste through air pollution control devices that helped convert it to energy.
According to the world bank projections by the end of 2025, the world will have 2.2 billion tons of solid waste caused by urbanization, climate change, population growth, and complex dynamics addressing the issue (World Bank Group, 2023). Inadequate finances are one of the key challenges facing SWM. Examples of financial risks are such as inadequate financing of solid waste projects and improper planning that compromises the effectiveness of SWM strategies. Most developing countries lack funding to establish reliable collection and disposal infrastructure for efficient solid waste management. For effective SWM processes, countries require appropriate disposal facilities, infrastructure, and transportation to handle the accumulating waste from modern living styles (Bui et al., 2020). The challenge warrants the environmental, social, and health issues that the countries encounter. Poor financing has also been attributed to the wrong treatment of hazardous waste that threatens human health.
Political risks also impact solid waste management as political stability helps a country achieve sustainable environmental goals. Governments may fail to adopt strategic waste management methods such as effective waste collection and recycling plans (Fenetahun et al., 2021). Political risks such as violence and political instability and unequal distribution of resources affect the formulation of strategic policies for addressing waste management issues. The government is responsible to create fairly technological policies that regulate waste disposal and management for public and private agencies as well as its citizens (Khan et al., 2029). Also, political risks influence municipalities to lack sufficient resources for handling waste and establishing programs for recycling and composting.
Climatic changes also pose a risk to SWM as it interferes with how waste is generated, transported, and disposed of. Physical climatic risks such as natural catastrophes disrupt the normal operations of infrastructures (Basu & Chalmers, 2020). Climate risks such as harsh weather conditions and natural calamities such as flooding interfere with waste management processes. For instance, the covid 19 pandemic stressed municipal waste systems globally by disrupting waste collection patterns. These risks have progressively risen in the past three decades with losses from natural disasters affecting mostly property and infrastructure sectors. Physical climatic risks can also impact the economic growth of a nation since investors spend on understanding the risk and preparing for it (Hossain et al., 2021). In the event of the risk occurring, huge capital and operational expenditures are incurred that lowers the returns through incurring losses, and assets diminish and lose value fast.
Technological risks hiders the adoption of effective and sustainable waste disposal and management techniques. SWM firms are required to transition to the technological changes that will help minimize the cost, promote waste recycling strategies and enhance sustainable waste management methods (Prajapati et al., 2021). Failure to adopt new technologies poses the risk of accessing adequate public data, digital SWM processing through robotics, and inadequate predictive data thus lacking prompt emergency responses. Globally nations’ and multilateral government goals are to source energy from renewable sources with net-zero emissions targets that contribute to achieving a sustainable environment (Saldías, 2013). Companies established in various infrastructure need to adopt these changes to improve their profitability and social responsibility.
Other challenges facing the solid waste management sector are the lack of public participation and illegal dumping and littering. The citizens need to be responsible when it comes to managing solid waste and disposing of waste in an environmentally friendly way (Salsabila et al., 2021). Creating awareness among the citizens on the importance of recycling waste and the economic benefits attached to it is one way of ensuring waste is disposed of responsibly (Chen et al., 2019). Low and middle-level countries can adopt waste recycling methods through informal sector recycling that is economic and helps create employment.
Infrastructure sectors are intended to control the economic performance of a country but are exposed to various global risks that are both environmentally and technologically influenced by climatic changes and technological advancements (Bolton, 2021). Moreover, Beckers, & Stegemann recommend having a sound risk management approach for a successful infrastructure. An increment in the infrastructure assets correlates directly with the economic GDP of a country thus underdeveloped infrastructure deters the economic progress of a nation (Beckers & Stegemann, 2013). One of the major hindrances to infrastructure development projects is the discrepancies between the budgeted and the actual cost. As a result, the projects are delayed with wrong capacity plans such as an overestimated market share thus leading to losses (Taghizadeh-Hesary & Yoshino, 2020). This mostly is experienced in developing countries, for instance, China is known to struggle with medical waste. Despite the country using disposal methods such as landfills, solidification, recycling, and incineration, the country has increasingly generated hazardous waste of 20 – 40 tons every year. The country lacks sufficient medical waste facilities, despite the approval of construction projects for treating hazardous waste (Chen, 2022). Economic development continually creates the demand for effective waste management in China and other countries with increasing quantities of solid waste.
Consequently, solid waste can be managed through public–private–partnerships (PPP). A larger private sector takes part in managing public services strategically managing the sector, hence, the performance of the public sector is improved (Saadeh et al., 2019). Besides, the use of innovative methods cut the cost of rendering the service productively and efficiently. It also helps the country achieve its environment of sustainability by engaging skilled personnel that comply with legal and environmental laws (Alabi et al., 2020. However, the strategy is likely to experience challenges such as government interference with the agencies, pricing mechanisms that are not perfect, and a low signing rate. Many solid waste management projects under the PPP have been interrupted thus causing their failure and a waste of resources due to urbanization (Spoann et al., 2019). Also, due to the lack of financial resources, private company engagement might not be as productive as expected in developing countries since they lack incentives and motivation.
Part B
Case Study
Introduction
Waste management is a global concern due to the increasing population; waste generation has increased ranging from households, industries, building sites, refineries, and nuclear plants. Improving the standards of life, therefore, highly depends on effective waste management to prevent deteriorating human health and polluting the environment (Gören, 2023). Poor waste management can lead to polluting the air, soil, and soil erosion which does not positively impact the goal of a sustainable environment. Some of the strategies that define waste management are recycling of plastic glass and paper which attributes to efficient sewage treatment that preserves marine life (Tsai et al., 2020). Statistically, eight million tons of plastic land into oceans each year which is a threat to human health. Also, food waste if mismanaged produces methane gas that absorbs sunlight raising the global temperature (Margallo et al., 2019). In 2016, methane gas emitted from food waste products amounted to 50% of 1.6 billion tons which is likely to even go higher by 2050 as the population grows.
Advocating for effective waste management is important because it not only saves natural resources and human life but also offers job opportunities, an economic advantage (Nižetić et al., 2019). Further, recycling enables businesses to reduce the cost of manufacturing materials and higher business returns. This case study compares the regulations, demand drivers, and business models for solid waste infrastructure sectors for two economies, Germany and the United States of America (USA). The two countries have varying strategies for managing solid waste that can be insightful for other developing countries to effectively manage waste.
Solid Waste Regulations in Germany and USA
Hazardous waste management in the USA is regulated by the Resource Conservation and Recovery Act. Under the Act, waste management rules outline procedures for storing, transporting, disposing, and recycling hazardous waste in the country (EPA, 2023). Storage of waste material depends on the size and type of facility with guidelines on the deadlines for accumulating waste. Also, the act outlines technical standards, training requirements, and air emission restrictions. Waste management companies should have contingency plans for responding to emergencies (Auslander et al., 2018). Transporters should have an Environmental Protection Agency (EPA) identification number and abide by the EPA rules regarding waste spills and discharges. The act prohibits hazardous waste from being exported or imported and requires compliance with Department of Transportation Regulations. The Comprehensive Environment Response, Compensation, and Liability Act regulates responsible waste management by holding waste transfer companies liable for inappropriate insurance coverage with the waste disposal agents (Aslam et al., 2020). Additionally, EPA requires landfills from municipal solid waste, industrial waste, and hazardous waste to use double liner and leak detection systems that should be inspected and monitored closely for efficiency.
In Germany, on the other hand, under the waste management act, there is a waste disposal act that has undergone a series of amendments that have contributed to its amazing waste management regulations. The country aims at conserving the environment by preserving natural resources through its emphasis on waste prevention, reuse, recycling, energy recovery, and waste disposal (Klemeš et al., 2020). The role is shared by the national government, federal states, and local authorities, the municipal waste management system has outlined policies that have implemented greener practices making the company lead in recycling and waste management (Fischer, 2016). The policies are one; mandatory waste sorting policies such as the packaging ordinance, the green dot system, and the closed substance cycle and waste management act. The policies help regulate the manufacturers in taking responsibility for recycling as a way of preserving the environment. Two, the deposit refund scheme requires recycled bottles to be labeled for consumers to pay for deposits refunded upon emptying the bottle. Third, the “Energiewende” has enabled the country to work towards low-carbon and renewable energy (Oke et al., 2020). Member countries are given targets of recycling 65% of waste which was achieved in 2019
Solid waste demand drivers in Germany and USA
In the USA demand drivers such as urbanization and industrialization have necessitated the need to establish strategic solid waste management (SWM). Many people are settling in urban areas hence increasing the demand for SWM. The government, on the other hand, regulates entities through policy formulation that requires waste reduction and increase recycling (Nanda, 2021). Also, people ar...