Blue Economy : Circularity and Blue Economy in the Caribbean: Drivers and Business Opportunities

Authors

Dr. Patrick Dorvil has been working as Senior Economist in the Circular Economy Division at the European Investment Bank since 2008. He is responsible for carrying out Due Diligence and monitoring of solid waste / circular economy projects both within and outside the European Union. Prior to joining the Bank, he worked as a consultant engineer for several international consulting firms in a variety of countries. Dr. Dorvil studied Civil Engineering in Stuttgart, Germany, and holds a Ph.D. in Economics from St Gallen University in Switzerland. Dr. Dorvil currently teaches Master-level students in the field of Circular Economy and Environmental Economics at University College London, UK and at the Institute “für Angewandtes Stoffstrommanagement – Hochschule Trier“ in Germany.

Dr. Clifford J. Louime is an Environmental Sciences Professor at the University of Puerto Rico (UPR) in San Juan. As the Coordinator of the “Renewable Energy and Sustainability” track, Dr. Louime has been tasked to develop the necessary tools to help secure the island's energy future. His main research focus is marine biomass valorization, thereby capitalizing on the island's readily available marine resources. Before joining UPR, Clifford was a Fellow of the Broad Institute of MIT and Harvard, created the FAMU BioEnergy Group in Florida and researched the Brazilian Ethanol Program. He is currently a Faculty Fellow of the US Department of Energy, visiting with the National Renewable Energy Laboratory (NREL) in Golden, Colorado. Dr. Louime graduated with a doctorate degree in Environmental Sciences from Florida A&M University and has been researching and teaching in the BioEnergy field for over a decade.

The findings, interpretations and conclusions expressed herein are those of the authors and do not necessarily reflect the view of the European Investment Bank.

Executive Summary

Caribbean countries shall explore all possible options to achieve climate ambition levels of the Nationally Determined Contributions (NDCs). This report highlights the substantial contributions of the circular economy (CE) and solid waste management (SWM) to adapting to climate change and meeting mitigation targets.

In fact, the Caribbean region generates more than 12 million tonnes of waste each year. However, less than 5% is properly disposed of. In fact, most of the waste is dumped in unsanitary landfills (dumpsites). The region has been facing unsurmountable challenges, including a low waste collection rate, including lack of financial resources, and technical knowledge. As a result, mismanagement of solid waste has become a serious threat to the climate, the environment, and economic development in the entire region. Sadly, between 400,000 and 1 million people are dying every year due to mismanaged waste. Therefore, there is an urgent need for a paradigm shift, where a new approach with sound waste management practices should be considered as a prerequisite to sustainable economic development, gender mainstreaming, and women’s economic empowerment. Further, the COVID-19 pandemic has shown us that waste service is considered systematically relevant such as food and police services. Simply put, proper SWM is a Human Right!

By considering the indirect contribution of waste prevention and waste recycling and direct emissions (methane from sanitary landfills and black carbon), the overall positive contribution of CE/SWM to climate mitigation can be within a range of 5-10% each. Material Recovery and Circularity are the driving force behind any recycling system. This represents a growing opportunity for indirect reduction of Greenhouse Gases (GHG). Moreover, most Caribbean countries depend mainly upon tourism and fishing as primary economic drivers for income and jobs creation. In 2019, the fishing sector provided stable employment to around 350,000 people in 17 Caribbean countries, generating production valued at over USD 500 million. Nevertheless, this sector has been negatively impacted by the COVID-19 pandemic, with billions of COVID masks and gloves landed into the oceans and less tourists visiting their beaches. The key challenge is how to rebuild this sector quickly and in a more resilient manner. Furthermore, the Caribbean harbours one of the planet's highest biodiversity. Unfortunately, that biodiversity is constantly being threatened – inter alia - by waste not properly managed. Regrettably, the SWM industry has seen few imperative investments. This study here reports that for the next 5 years, to implement basic CE/SWM infrastructure in the Caribbean, between USD 1.6- 2.5 billion is required for investment. This infrastructure includes collection equipment, implementation of recycling, composting, biogas facilities, production of Material Recovery Facility, construction of sanitary landfills, and rehabilitation of dumpsites. International financing institutions have recently raised up to $4.6 billion in funding to address the plague of ocean plastics. Nevertheless, in addition to the investment needs and funds available, by virtue of the lack of technical and managerial knowledge, this report is proposing a dedicated Technical Assistance (TA) as key to success. Thus, TA envelops of about USD 8-10 million shall be envisaged to accompany these investments.

Achieving the climate targets under the Paris Agreement requires global action and a fundamental shift in the way we prioritize and implement CE/SWM projects. Beyond its considerable mitigation potential, CE/SWM action furthermore has the potential to create economic and social benefits even in the short run. Finally, sound CE/SWM Waste Management and the transition to circularity can be an important instrument to fight pollution, global warming and restore favourable ecosystem to fight poverty in the Caribbean and with that substantially contribute towards the Sustainable Development Goals (SDG).

I. Introduction

This report first introduces the main challenges and drivers in financing CE and SWM in the Caribbean. It highlights relevant issues such as environmental protection, climate change, blue economy, and biodiversity. The second part of the report addresses business opportunities in terms of investment needed to implement integrated SWM in the region. CE, if properly designed and implemented, can in fact create tremendous opportunities for national and international entrepreneurs alike. Lastly, the report concludes with the most appropriate strategy to implement CE in the Caribbean region. The goal is to speed up the implementation of sound CE / SWM projects in the Caribbean region for economic and climate-change-related purposes. This report is dedicated to stakeholders and policymakers in the region involved in developing ambitious climate actions and can serve as input to define Nationally Determined Contributions (NDCs) to include CE and SWM.

II. Contextual Background

CE² and Circularity as a means to achieve climate mitigation targets were on the top agenda of the COP 26 in 2021 as all potential options are being explored to achieve the climate ambition level of the Nationally Determined Contributions (NDCs)^[2]. To be successful, it is highly relevant for all countries to understand the potential contribution of all sectors including CE and SWM. CE and proper SWM can make a substantial contribution to combatting climate change because

1. it addresses short-lived climate pollutants “SLCPs” (black carbon, methane, etc.) from open dumpsites,
2. it enables saving in virgin materials through recycling and
3. it protects biodiversity by avoiding plastics in the ocean.

In fact, according to the IPCC^[3] between 3-5% of GHG were allocated to the solid waste sector in 2010, whereby more than 90% of this contribution came from methane emissions. In addition, if you consider the indirect contribution^[4] of waste prevention and waste recycling, the overall contribution of CE / SWM towards GHG mitigation has been so far underestimated, but may well be in the magnitude of 30% (Circularity Gap Report, 2021).

Rapid urbanization is exacerbating the already pressing SWM issue worldwide. In fact, at present, there are 28 so-called “megacities^[5]” and by 2030, some 40 megacities are expected. As populations rise, Municipal Solid Waste (MSW) generation is also growing rapidly. Worldwide generation of waste has practically doubled over the past ten years and is expected to reach 2.5 billion tonnes per year by 2025. Nonetheless, one-third of the world’s population, mainly in low- and middle-income countries has hardly the needed access to basic solid waste services^[6] such as waste collection. Moreover, even collected waste ends up in dumpsites with harmful consequences to the atmosphere.

This rapid urbanisation poses formidable challenges to the governments of most Caribbean countries and their societies, making environmental degradation, declining quality of life, and untapped wealth of human resources a common issue. In addition, SWM in the Caribbean is a neglected sector of municipal services^[7] and infrastructure, characterized by low collection rates in most jurisdictions.

The Caribbean region (Figure 1) is also more prone to plastic marine litter washing up onshore. In fact, the Caribbean region^[8] generates more than 12 million tonnes of waste each year (see Annex I)^[9]. However, less than 5% is being properly disposed, while most of this is dumped in unsanitary landfills (dumpsites)^[10]. This situation results in harmful environmental, health and climate impacts such as diseases, land and water pollution, release of methane / black Carbon into the atmosphere, loss of biodiversity and ultimately more poverty. Therefore, there is a clear and urgent need for a paradigm shift to transpose those challenges into economic opportunities.

III. Challenges

Mismanagement of municipal waste directly leads to pollution of groundwater resources, worsening the already water scarcity in the region, emission of GHGs and fine particulate including black carbon emissions^[6],[11]. Given the low collection rate and the numerous dumpsites in most countries of the Caribbean region mentioned above (Figure 2), this has significant negative impacts on the entire economy and especially on public health, quality of life, the environment, and climate change. Thus, the costs to society and the economy through public health and environmental impacts are substantial: 5%-10% of GDP yearly per country (estimated). In other terms, inaction is costing some countries 5-10 times more than investments in proper waste management^[12].

In addition, the need for investment (see chapter VII) in the CE / SW sector in the Caribbean far outstrips their financial resources, challenging many national and local governments budget. Cost increases will be most severe in the Caribbean, which may experience more than 5-fold hikes. Municipalities in most Caribbean countries spend between 20-50% of their budgets just in waste collection, which represents a formidable challenge for poor nations.

Other challenges to design and implement sound CE / SWM include the lack of technical sector expertise, political ambition, planning tools, and, last but not least, the lack of capacity to prioritize and to tap the low-hanging fruit within budget constraints. Often by virtue of lack of technical and managerial expertise including the limited capacities to prepare sound projects, some targeted countries could not even manage to absorb available funds for CE / SWM projects. Furthermore, proper solid waste management is often not on the political agenda in most Caribbean countries. International Financial Institutions (IFIs), bilateral- multilateral organisations are often requested to support programme-related to biodiversity, drinking-water and climate-change. Nonetheless, a condition sine qua non to implement those programmes efficiently is that affordable and sustainable CE / SWM systems are in place. Simply put, without proper SWM, drinking water projects are costly and inefficient: phreatic water is polluted; canalisation is clogged with waste resulting into flooding, etc., jeopardising any concept of a sustainable city

IV. Drivers and triggers for the development of a new Strategy in the Caribbean

The main drivers for a paradigm shift in waste management in the Caribbean region include environmental protection and human right; climate change and circularity; blue economy and biodiversity. These are outlined in the paragraphs below.

i) Environmental Protection and Human Right^[13]

As developed earlier, mismanagement of municipal waste has significant negative impacts on both the climate and health. Uncollected solid waste in cities provides favourable habitats for insects, vermin, and scavenging animals, which represent a nuisance upon proliferation, while spreading air- and waterborne diseases, polluting ground- and surface water. Although the Covid pandemic has shown us how essential the provision of the SW services is. In Germany for instance, within the context of COVID-19, waste collection is considered systematically relevant^[14], such as food and police services. Moreover, open burning in dumpsites^[15], SWM releases black carbon particulates, which are persistent organic pollutants bio-accumulating in the food chain. Therefore, projects promoting proper waste collection and treatment services to avoid uncontrolled dumping or burning of wastes would have both direct and indirect health impacts and contribute to addressing climate change.

Direct health impacts include people coming into contact with uncollected wastes or breathing the fumes when waste is burned. Indirect health impacts usually occur via blocked drains and waterways, which provide breeding grounds for vector-borne diseases. Improper waste management leads to hundreds of thousands of deaths in the low- and middle economic countries. In fact, between 400,000 and 1 million people^[16] are dying every year as a result of such mismanaged waste. There is therefore an urgent need for a paradigm shift in the waste sector where a new approach with sound waste management is considered as pre-requisite to sustainable development. In summary, sound waste management is not only addressing the global warming, but this is also a Human Right!^[17]
Issue.

ii) Climate Change and Circularity

In relation to climate change, the deposition of waste leads directly to GHGs^[18] and Short-lived climate pollutants “SLCPs” (including black Carbons)^[19] emissions. Worldwide methane (CH₄) emissions from landfills/dumpsites were estimated to amount to 640 to 760 million tonnes of CO_2-eq in 2010. Between 10-15% of GHGs emitted in any given country could be avoided through proper waste management and recycling^[20]. Addressing the emissions of SLCPs has huge potential to mitigate near-term climate change and simultaneously deliver immediate benefits to human health and the environment.

CE and SWM involves not only reducing the volume of waste at source, but also improving sorting, hence increasing the quantity and quality of recyclates, increasing recovery in the form of energy and compost material. In effect, the waste sector is in a unique position to move from being a major source of global emissions to becoming a major reducer of emissions. Although minor levels of emissions are released through treatment and disposal, waste prevention and recovery (i.e., use as secondary materials or energy) limit emissions in all other sectors of the economy.

Material Recovery and Circularity are the driving forces behind the recycling systems. Recycling, re-use, and waste minimisation represent an important and growing opportunity for indirect reduction of GHG emissions through the conservation of raw materials, improved energy efficiency and fossil fuel avoidance. The intrinsic economic value of materials leads people to collect and sell recyclates as raw material. However, only 25% of worldwide recyclates is recovered as materials or energy^[21]. A holistic approach to waste management would have positive impact on GHG emissions. Simply put both material and energy recovery are key elements of a sustainable resources management, contributing to climate change adaptation and mitigation.

iii) Blue economy

The OECD has conservatively valued the blue economy’s^[22] yearly contribution to the global economy at USD 1.5 trillion in Gross Value-Added terms. Ocean assets are worth USD 24 trillion, with most of these assets reliant on healthy, productive, and resilient marine environments. Blue economy is expected to double in size by 2030, with the potential to outperform the global economy.

Most Caribbean countries mainly depend upon tourism and fishing as primary economic drivers for income and jobs creation in rural areas. According to estimations made in 2019, the fishing sector provided stable employment to around 350,000 people in 17 Caribbean countries, generating production valued at over USD 500 million^[23].
Nevertheless, this sector has been negatively impacted by the COVID-19 pandemic (less tourists and more plastic from face masks in the ocean). The key challenge is how to rebuild this sector quickly and in a more resilient manner. Furthermore, across the region, beaches and waterways scattered with waste are an increasingly common sight, where marine litter is seriously impacting the climate, public health, and the economy. Marine litter can be land- or sea-based and often results from mismanagement of municipal waste. An estimated 80% of marine litter originates from land-based sources. Inland rivers are also a major source of ocean waste. In 2010, an estimated 32 million tonnes of plastic waste were mismanaged in coastal areas, allowing between 4.8 and 12.7 million tonnes of plastic waste to escape into the oceans^[24]. The current COVID pandemic has exacerbated this situation.

According to the Secretariat of the Convention on Biological Diversity (CBD 2016), marine litter affects an estimate of 817 species, of which 453 species, without considering ‘ghost fishing^[25]. One study estimated that costs associated with ocean-based plastic consumer waste leads to losses of US$8 billion annually^[26], including revenue losses to fisheries, aquaculture, and marine tourism industries. To significantly reduce marine pollution by 2025, as envisaged by the United Nations Sustainable Development Goals, concerted international action is required. Substantial investment, as well as safeguards, are required to support the implementation of a sustainable blue economy.

V. Biodiversity

The Caribbean harbours one of the planet's highest biodiversity. The region is not only home to some of the world’s most productive marine ecosystems, but still has a large portion of the world’s remaining tropical rainforests. Unfortunately, that biodiversity is constantly under attack by extensive agriculture, overfishing and other anthropogenic activities linked to the generation of waste not properly managed. In effect, improper waste management is the cause of river and water bodies pollution, and subsequently of plastic in the oceans^[27]. Moreover, societal issues such as poverty and lack of political will have always hindered biodiversity conservation in the region. At the same time, the region has the highest potential for plastic pollution, where marine ecosystems are already at risk of becoming extinct by anthropogenic sources. In addition, the sheer inventory of biota has always represented a challenge for biodiversity research in the region, thereby making it a conservation priority for stakeholders.

In effect, in most countries of the Caribbean, waste management infrastructure is poor or lacking (See section III). Due to competing priorities, such as job creation, education, security, trade and health, waste management is not always part of the political agenda when it comes to public policy. Even in the area of environmental sustainability, waste management usually takes a backseat to climate change, land degradation, marine/coastal resources management, and loss of biodiversity. The latter, however, makes the waste management issue especially critical for long-term sustainable development in the region, due to its far-reaching global impact.

Countless studies have highlighted the impacts of improper waste management on biodiversity. According to several predictions, by 2050, the oceans are expected to have more plastic than fish. A report from the MacArthur Foundation estimated that there will be about 950 million tonnes of ocean plastic by 2050, versus total fish stocks of 900 million tonnes. Also, in a recent publication from IWA (International Water Association), the COVID-19 pandemic has contributed to a surge in ocean pollution, adding onto the existing plastic waste crisis (2021). Our oceans have been flooded with an estimated 1.56 billion face masks in 2020. In addition to micro plastics, wrongly disposed face masks have been shown to directly impact wildlife through direct and indirect ingestion. These have led to not only respiratory obstructions, but also to gastrointestinal problems, such as death by starvation. These impacts on marine biodiversity can also come from dangerous pollutants, including heavy metals and toxic dyes, released by improperly disposed facemasks. Such emerging challenges in SWM are now being addressed by scholars and policy makers the world over, trying to devise strategies to contain this global threat.

In a recent publication, Mazariegos-Ortíz (2020) has identified an abundance of microplastic in a marine preserve along the coast of the Caribbean in Guatemala. This nature reserve, intended for biodiversity conservation, was so excessively contaminated by plastic materials from land-based activities, that these findings reinforced the need to improve effective sustainable management actions of solid waste treatment and disposal in the region's major cities. Lasut (2018) also highlighted the impact of plastic waste on the global marine biodiversity, by providing observational data such as gut content analyses of fish. Further, Habib (2021) investigated the effects of electronic waste on five islands in the Caribbean and concluded that E-waste is having significant negative impacts not only on health, but also on the entire region's economy.

Most of these studies suggested that waste management in the Caribbean, which may seem to be a sign of neglect, is actually more of an indication of lack of political will, a lack of awareness of the negative impacts of waste on the climate and the economy. Tackling the waste problem in the region would therefore require more than changing consumer products. The scale of the problem calls for broader thinking, recognizing the relationships between waste and sustainable living. Such effort will require critical steps beyond implementing better recycling programs and cleaning up shorelines. Some practical lines of action to conserve biodiversity in the region should include not only green agriculture, but also strengthening environmental governance and coastal/marine resource management. Such efforts should also include data improvement on biodiversity data and policy evaluation.

VI. Gender equality and Women Empowerment

Women in the Caribbean perform and manage the household, including disposal of waste. They decide on buying items for the household and are important as consumers and contribute to waste avoidance (less bags, less plastics) and to proper sorting of waste generated. Thus, women are mainly responsible for the socialisation (waste awareness, sorting of waste in different bins) of their children.

Gender factors in the waste sector implies decision-making processes. In addition, women earn less as waste pickers and in waste collection services, women are less mobile. Training needs for women waste workers are different from the ones for men. Men determine payment for waste collection. However, women in small scale trading prefer risk-avoidance entrepreneurship. The waste economy is gender-biased. The role of women and men is defined in the waste economy. Women and men have different exposures to health risks, they have different tasks, different incomes and different social status.

Against this background, CE / SWM initiatives in the Caribbean region shall include a number of initiatives such as training, capacity building, education, etc. that will contribute to mainstream gender equality and, in particular, foster women’s economic empowerment. The main objective of integrating gender policy into CE / SWM programme implementation is to ensure that women and men have equal opportunities in leadership, access to socio-economic benefits, and control over decision-making. Specific tools are gender analysis and planning, needs assessment and evaluation with men and women at different stages of project implementation and monitoring.

VII. Investment needs and business opportunities

According to our own estimation, mismanagement of solid waste could cost up to 10% of the GDP of any given country. As proper waste management is vital for health, the climate and the economy. Substantial investments are needed in the Caribbean region. In order to assess the potential demand for capital investment in CE / SWM^[28], one needs to assess, in phase one, the need for investment in basic infrastructure / processes towards sustainable SWM. Those processes include waste collection, recycling, composting, anaerobic digestion (biogas plant), refuse derived fuel (RDF), rehabilitation of dumpsites and construction of sanitary landfills. Representative benchmarking unit CAPEX costs for each process / infrastructure are being used as calculation methodology. They are outlined below for each process. These representative unit CAPEX costs exclude the cost of land, which, of course, will be specific to each site. Additionally, treatment and disposal technologies in the solid waste sector benefit from economies of scale. Thus, unit costs should be adjusted to account for potential economies of scale under greater or lesser waste throughput. Finally, to come up with the investment needs two different scenarios have been considered, namely high-cost scenario and low-cost scenario. As a result, for phase one, between 1.6- 2.5 bn USD are required for investment in the CE / SWM sector in the Caribbean. Details are outlined below for each type of solid waste treatment infrastructure / processes that are understood to be feasible in the region.

i) Solid Waste Collection

Waste collection rate and scheme are essential to a sound waste management system. Ideally waste shall be entirely and separately collected to guarantee the efficiency of the downstream treatment facilities. In addition, as the region is dependent on tourism, waste generated by tourist equivalent is calculated and added to the total waste generated by the local population (See Annex I). It is evident that the waste collection coverage and rate in the region differ from country to country. Due to low-level collection in some countries for phase one, a target of collection ration in a range of 60-80% has been assumed. In relation to the high-cost scenario around USD 100/tonne have been considered and USD 50/tonne. As a result, around USD 980,000,000 based on a high-cost scenario and around USD 490,000,000 for a low-cost scenario, are required for solid waste collection and related equipment in the region. These include the acquisition of collection, disposal equipment as well as bins.

ii) Recycling

Recycling offers considerable economic advantages beyond climate mitigation. It reduces the extraction of virgin material (natural resources), create jobs and innovation, and help protect biodiversity. In other words, recycling is of paramount importance to climate mitigation. The sector is currently dominated by seven core groups of materials: glass, paper and cardboard, plastic, iron and steel, copper, aluminium and nickel, precious metals. A high fraction of waste generated by households in the Caribbean is recyclable. However, due to the lack of separate collection scheme in place, recyclates are always mixed with biodegradable wastes. This results to a low rate of recycling performance and poor quality of the output material. Recycling rates in the Caribbean are between 1-20%^[29], which is not in line with the Hierarchy Principle^[30] of waste. A basic solution could be the implementation of a collection system based upon dry and wet bins. Furthermore, there has been an increase in recycling activity over the last few years with most recycled material going for export. Given a large proportion of recyclates as packaging materials are being imported, this shall be strengthened due to the proximity of important market like the USA. There is only limited recycling of materials for reuse in the region. These recycling materials comprise metals, plastics, paper, cardboards, electronics and batteries. Sorting facilities for recycling depend on input materials and the collection service being used to deliver the materials. For lower and upper middle-income countries, a specific investment cost of USD 5-50 per ton has been considered in this report. Assuming a minimum of 10% of the total waste generated in the Caribbean region to be recycled, a range of USD 5,000,000 - 49,000,000 CAPEX has been calculated in the region for both low- and high-cost scenario.

iii) Composting

The economic and environmental merits of composting are given by recovering fertiliser and by reducing biodegradable fraction of waste that has so far end up in landfills. However, there is a challenge facing composting system worldwide – the separate collection of organic fraction of waste. In many Caribbean states separate collection scheme is not common. Thus, as a first step, a two bins system –dry and wet- would help to achieve good quality compost material. Different compost systems include Windrow^[31] and In-vessel composting^[32]. Windrow composting is more suitable for regions like the Caribbean, since food and green waste make up the highest share in waste composition. In-vessel composting, on the other hand, is expensive to implement in such regions. The biological conversion of organic material under aerobic process to produce compost has been estimated to cost between USD10 - 75/ton in lower and upper middle-income countries (World Bank, 2018). Even though it is difficult to find a unit cost of in-vessel composting for lower income countries, a 287 USD/ton is estimated for middle- and higher-income countries in the region. Generally, to meet the composting infrastructure of the Caribbean region, assuming 25% of the generated waste is composted, according to our benchmark a minimum cost of USD 49,000,000 and a maximum of USD 184,000,000 is required (See Annex II).

iv) Anaerobic Digestion / Biogas plants

Biogas from AD plant is rapidly becoming a valuable renewable energy source and this waste treatment process should play an important role in the designing of a new resource strategy for the Caribbean. It can be a decentralized solution in rural regions, even applicable if only a few cattle or swine and animal manures are available as input material. It can be also applied in schools and public institutions for food waste whereas also human faeces can be used as feedstock whereas this requires additional measures, pre-caution and techniques. Different biogas support programmes focus on rural families and use of human faeces are done as feedstock together with the addition of small amounts of kitchen waste. The products from this treatment method have numerous uses: as a source of gas for cooking activities, for electricity production. An Economic Feasibility Study conducted by the Caribbean Council in 2017 reported that Anaerobic Digestion (AD) is a technology, which can provide real benefits to varying waste management concerns in the Caribbean. In this report, it has been assumed that 10% will be shared with AD plants and a unit cost of USD 200/tonne for both scenarios. The investment costs of AD with gas-engines for CHP (Combined Heat and Power) are in the range of $3,000 to $5,000 kWe, with annual O&M cost of about $ 300/kWe. The investment costs are calculated as follows:

f (x)[21]
=2.076 X 0.582

f(x): cost (106 €) und x: Nominal capacity (‘000 ton/y)

As a result, around USD 98,000,000 would be required for anaerobic digestion plants in the region (See Annex II).

v) Refuse Derived Fuel (RDF)/Solid Recovered Fuel (SRF)

RDF is produced from combustible components of solid waste. This waste stream is usually coming from industrial or commercial units. It is shred, dried, baled and subsequently incinerated to generate valuable energy. RDF is often used as feedstock for incinerator or cement kilns. Taking advantage of the opportunity to process RDF / SRF in those facilities will result in decreasing waste management costs and likewise increasing the efficiency of the entire system. Precisely, many Caribbean islands depend on imported heavy fuel for energy production have some constraints in terms of land availability for new sanitary landfill sites. By virtue of the second law of thermodynamics there will always be residual waste which cannot be recycled economically. Thus, the production of energy through RDF / SRF could be an alternative. There is no clear recent data regarding the needs / demand on RDF use in the Caribbean. When RDF products are burned in an industrial boiler or cement kiln to replace fossil fuels, they are required to meet the same emission standards as in waste to energy facilities. It is therefore expected to implement the special emission requirements for any industrial burners or cement kilns using these fuels. By considering 5% of total waste generation to be processed as RDF and assuming a high cost scenario of USD 130/tonne unit cost, a total capital expenditure of USD 637,000,000 investment is needed for plants processing RDF in the Caribbean (See Annex II).

vi) Sanitary Landfill

An engineered sanitary landfill aims at protecting the environment, by spreading the waste in thin layers, compacting it to the smallest practical volume and covering it with compacted soil by the end of each working day or at more frequent intervals if necessary. According to the World Bank, a landfill construction serving a population of 1 million inhabitants, can cost a municipality roughly US$10 million, even though it depends on the technical capacity and local environment of that particular city. Per the World Bank report entitled “What a waste 2.0”, 20-65 USD/ ton of unit capital cost is required for construction of landfill in middle-income countries. In that report, it has been assumed that 50% of collected waste is going to landfill, consequently a high-cost scenario of USD 382,000,000 and a minimum cost of USD 117,500,000, respectively have been calculated for capital expenditure on landfill in the Caribbean region (see Annex II). However, it should be considered that aftercare cost for landfilling can be considerably high and are difficult to estimate for the long term, likewise environmental and climate impacts and related costs. Hence - whenever possible - recycling and waste treatment options as discussed before should take precedent.

vii) Dumpsites Rehabilitation (Landfill closure)

The negative impact of SWM very often focuses on methane emissions from dumpsites as well as “SLCPs”^[34] (methane, black carbon, etc.) from open burning waste, but also uncontrolled and scattered waste dumping. According to the UN Environment for Latin America and the Caribbean, there are at least 11,000 active dumpsites in the region, which shall be phased out by 2030^[35]. The cost of open dumping is difficult to quantify in the Caribbean region, because of a lack of data on construction and tipping fees. Dumpsite closures can also result in significant climate and economic benefits, but require some investments. The capital expenses may include the cost of final cover material (if to be imported into the site), drainage control systems, fencing of the area, leachate, and gas management systems, monitoring wells, relocation of informal settlers, planting and grading and costs for treatment of hazardous waste collected. As Dumpsite Rehabilitation Manual for developing countries states, typical cost of dumpsite closure, without a top line system, are in the range of USD 178,000- USD 213,000 per hectare for site exceeding an area of 10 ha and volumetric capacity of 2 million m³. In general, based on a high-cost scenario with rough calculation, the Caribbean region needs USD 128,600,000 investment for dumpsite rehabilitation. Even though, there is no data regarding the number and area of existing dumpsites in the region, these numbers have been estimated by converting the past 5 years total waste generated tonnage and assuming 50% of the wastes goes to open dumpsites (See Annex II). Depending upon the context, it may be relevant to exclude small dumpsites, e.g. less than 5 m in fill height (hardly methane generation) and less than 2 hectares.

VIII. Job Creation

Given that the Caribbean region is four times more dependent on tourism than any other region in the world, mismanagement of waste hinders the tourist industry in the Caribbean. Moreover, dumpsites and bad waste management have a negative impact on potential investors as it signals inefficient municipal administration. Low- and middle-income economy countries spend around USD 46 billion annually on Solid Waste Management (SWM), but it is estimated that they should spend another USD 40 billion to cover the service delivery gap. The thresholds for the countries is set for instance at 1.08 kg capita-1 day for Dominican Republic and 1.72 kg capita-1 day for Barbados, etc. (See Annex I). Considering the projected increase in SWM generation, their financing needs could exceed USD 150 billion annually by 2025^[37]. Fostering the waste sector requires investments, expertise and organisational structure that are lacking in the Caribbean.^[38] In addition, the sector has huge potential to create jobs for both skilled and unskilled workforce. According to the OECD, the waste sector provides up to 5% of urban jobs in low-income countries. Especially, the recycling industry has enormous potential to create jobs and incomes for socially disadvantaged groups of people including illiterates in line with Sustainable Development Goals^[39].

In case of the Caribbean region, the following assumptions were made to provide the estimated number of jobs that could be created due to investments in solid waste infrastructures.

International financing institutions have recently raised up to $4.6 billion in funding to redress the ocean plastic issue^[40]. Nevertheless, in addition to the investment needs and funds available, due to the lack of technical and managerial knowledge (See Section III Challenges) a dedicated TA envelop of about $ 8 - 10 million shall be envisaged to support those investments. This is urgently needed to prepare full-fledged technical feasibility studies including Environmental and Social Impact Assessment (ESIA) studies in selected countries and to enhance capacities of key stakeholders in the region. This will help to identify and develop sufficient and sustainable financing mechanisms to fund the necessary projects while raising awareness among stakeholders especially decision makers, and coordinating with national and international institutions. Moreover, this TA would embrace concrete steps to institutional reform, efficient organisational structure to fully support the sector. Finally, cooperation among national stakeholders and international organisations will allow resource sharing with higher leveraging effects and added value to the development of the CE / SWM sector. Besides, it may be relevant to explore how the proposed interventions for the enhancement of CE / SWM can be integrated into the National Climate Plans respectively NDCs as required by the Paris Agreement, also to tap international climate finance for options that are not yet in reach of the respective countries.

IX. Concluding remark

Global warming and the associated climate change is a concerning issue. Thus, climate targets under the PA cannot be achieved only by one part of the world. It requires a fundamental shift in the way we prioritise and implement CE / SWM projects worldwide, especially in island nations and in low-and middle-economies for various reasons. More precisely, investments in waste collection, recycling, rehabilitation of dumpsites, proper sanitary landfills would provide a substantial short-term “win” in terms of climate mitigation. These can be considered as low-hanging fruit to be harvested. In effect, phasing out dumpsites and increasing the collection rate towards 100% and increasing recycling is part of the Sustainable Development Goals (SDG Indicator 11.6.1) of the United Nations.

As one-third of the world population is still lacking basic waste management services, substantial investment is needed to cope with this situation. Given the high costs associated with infrastructure and equipment investments, capital expenditures are typically supported by subsidies or donations from the national government or international donors. The landscape of climate finance is differentiated by different donors’ organizations, instruments, and sectors. Bilateral and multilateral institutions should play a crucial role in both project preparation and implementation. In this report, a range of USD 1.6- 2.4 billion investment (including collection) is required for the Caribbean region over the next 5 years to adequately provide basic SWM infrastructures. This investment will lead to considerable mitigation potential, to create economic and social benefits in the short run.

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[1] The findings, interpretations and conclusions expressed herein are those of the authors and do not necessarily reflect the view of the European Investment Bank.

[2] Under the Paris Agreement, the objective of limiting global warming to well below 2°C by the end of the 21st century became the benchmark for global climate mitigation
ambition. NDCs represent the parties’ national climate goals.

[3] IPCC: Intergovernmental Panel on Climate Change

[4] According to estimation direct emissions (methane from sanitary landfills and black carbon) and indirect savings (prevention and recycling) would lead to a contribution within a range for each of 5-10% (source: Wilson, D.C., Reyna-Bensusan, N. & Pfaff-Simoneit, E.
2015, Topic Sheet 1: Waste and Climate In: UNEP &ISWA, Global Waste Management Outlook, op. cit., pp. 12-15

[5] Metropolitan areas with populations exceeding 10 million inhabitants (According to United Nations)

[6] https://datatopics.worldbank.o...

[7] Proper SWM is not a top political agenda in Low- and middle-Income Economies. In effect, almost all large cities in those countries are enjoying funding for the very essential drinking water projects. However, the link between efficient water projects and sound waste management is still lacking. As a result, international financing institutions are supporting water projects but request for solid waste projects is rather rare.

[8] The selected countries are presented in Annex II

[9] What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050, World Bank, 2018

[10] Dumpsites / landfills are the third largest source of global anthropogenic methane while open garbage burning emits black carbon and other pollutants, Climate & Clean Air Coalition www.ccacoalition.org

[11] Worldwide CH4 emissions from landfills/dumpsite waste were estimated to amount to 640 to 760 million tonnes of CO2-eq in 2010

[12] “Global Waste Management Outlook” UNEP, 2015

[13] “The United Nations passed a resolution in 2021 recognising access to a healthy and sustainable environment as a universal right” https://news.un.org/en/story/2...;

[14] https://www.bde.de/presse/covi...

[15] According to WHO, 92% of the world population people is breathing polluted air –among others- due to bad waste management three million people die every year in connection to unhealthy air.

[16] https://www.theguardian.com/en...

[17] The United Nations passed a resolution in 2021 recognising access to a healthy and sustainable environment as a universal right” https://news.un.org/en/story/2...

[18] Greenhouse Gases

[19]SLCP could reduce near-term warming by 0.4 to 0.5 °Celsius before 2050 and thus contribute to achieving the international community’s objective of keeping the rise of global mean temperatures below 2° Celsius.

[20] Dehoust, G.; Schüler, D.; Giegrick, J. Vogt, R. „Klimaschuntzpotentiale der Abfallwirtschaft“ Umweltbundesamt (Hrsg.) Reihe Texte 6/2010

[21] World waste survey, ISWA 2009

[22] According to the World Bank, the blue economy is the "sustainable use of ocean resources for economic growth, improved livelihoods, and jobs while preserving the
health of ocean ecosystem."

[23] https://www.caf.com/en/knowled...

[24] https://www.futureagenda.org/f...

[25] Secretariat of the CBD (2016) Marine Debris: Understanding, Preventing
and Mitigating the Significant Adverse Impacts on Marine and Coastal
Biodiversity. CBD Technical Series no. 83.P. 16-18. P. 28.
https://www.cbd.int/doc/public...

[26] It is estimated that every year at least 8 to 13 million tonnes of
plastic, the equivalent of one full waste truck per minute, ends up into
the world’s oceans.

[27] A solid waste project can be one or a combination of: procurement of containers, bins, vehicles, equipment for separate collection and transport of waste; Material Recovery
Facilities (MRF) for separately collected materials; Sorting station; Composting plant; Anaerobic Digestion facility; Construction of sanitary landfill; Closure / rehabilitation of dumpsite.

[28] Waste Management World, March-April 2019

[29]According to the Waste Hierarchy Principle, waste should be reused and reduced to a minimum, then recycled and treated properly. Residual waste should be disposed of in a safely engineered way, ensuring a clean and healthy environment.

[30] Windrow composting is an established technology for dealing with green wastes, where the material is piled in elongated rows and aerated through either turning of the windrows or through air forced through the material. Commonly, this takes place in open covered yards.

[31] Tunnel composting is a variation belonging to the contained systems. In the contained systems take place the biological process in which organic material is broken down by the action of micro-organisms. Contained systems include technologies that are all enclosed, either in buildings and/or specifically designed vessels (e.g. tunnels, drums, towers and boxes) and are typically known as in-vessel composting (IVC).

[32] Dorvil, P.“ Finanzierung von Abfallwirtschaftsprojekten in der EU: ein Paradigmenwechsel“, Müll und Abfall Fachzeitschrift für Kreislauf-und Ressourcen-wirtschaft, 07/2014

[33] Short-lived climate pollutants are powerful climate forcers that remain in the atmosphere for a much shorter period of time than carbon dioxide (CO2)

[34] Waste Management World, Special Edition Biowaste 4/2021

[35] Aerobe composting dumpsites (Prof. Rettenberger)

[36] Private sector & Development No 15 / October 2012

[37] Kreditanstalt für Wiederaufbau (KfW), 2008

[38] GOAL 1: Eradicate Extreme Poverty Goal 2: Hunger Goal 3: Good health and well being Goal 6: Clean water and sanitation Goal 8: Decent work and economic growth Goal 9: Reduced inequalities Goal 11: Sustainable cities and communities Goal 13: Climate action Goal 15: Life on Land

[40] https://www.reuters.com/busine...