Equipping county and municipal leaders to create a more resilient Maryland: Virtual Event Recap Part 2

Part 2: Economic Impacts

In part two of our three-part blog coverage of last week’s conversation with state and municipal recycling and organics diversion leaders, we share remarks from Eliza Johnston, Director of Public Policy at ICF.

ICF, a global research and advisory firm with expertise in the economic impacts of waste diversion and climate change, was commissioned by the state of Massachusetts to study the economic impact of the state’s commercial organics diversion legislation. In addition to managing economic impact analyses for Massachusetts’ organic waste ban, Eliza has studied and reported on NYSERDA’s Green Jobs Green New York program, California’s fuel-stock potential, green jobs in the DC Metro region, and national smart grid investment.

In her comments below, Eliza reflects on challenges, opportunities, and impacts of the Massachusetts organics ban, including conclusions from the ICF report, outlined in this presentation and summarized here:

CONCLUSIONS: Economic Impacts of the Massachusetts Commercial Food Waste Ban

  • Commercial Food Waste Disposal Ban has supported the growth of the industry and increased cultural mindset oriented towards organics waste diversion and broader waste management innovation.
  • Across all segments, growth in employment, investments, and tonnage of material.
  • Combined, the three industry segments generated:
    • 900 jobs
    • $46 million in labor income
    • $77 million to gross state product
    • $175 million in industry activity
    • $5 million in state and local tax revenue


From Eliza Johnston’s remarks


“I’m going to talk a little bit about an analysis we did a couple of years ago in Massachusetts of the commercial food waste ban that had just gone into effect in the previous year to understand the implications for the industry locally, as well as the economic impact that it can generate more broadly across the economy.

The commercial organics ban went into effect in Massachusetts at the end of 2014. It was part of a broader, long-range plan to offset and reduce the waste. A big piece of that was to divert the organic materials – about 350,000 tons per year – by 2020. They were finding a year into the program that there was actually pretty good adoption.

There were roughly 7,500 businesses and institutions that disposed of more than a ton of food material per week. And of those, even more businesses were actually participating in food waste collection services. So smaller entities were doing it voluntarily and there were also municipalities that were doing it. That said, despite adoption and enthusiasm from the customer base, the program required ongoing inspection, compliance, and enforcement to make sure that the waste was being properly diverted. And there were multiple entities within Massachusetts that were involved in this. And I should have said if from the outset, this project was done for the Massachusetts DEP – they were a partner, very much so in both this analysis and in making sure this program has experienced the success it has. So again, this study that was undertaken at the beginning of 2016 was really looking back on the first year of the waste ban’s enforcement and seeing what the impact was.

DPE had heard anecdotal evidence that the businesses involved in waste handling, hauling, and diversion were growing, that they were employing more people, that they were investing more in infrastructure and capital expenditures. But they really wanted to understand the economic impacts of this and confirm that the ban was leading to business development and job growth throughout the state. So ICF was asked to undertake a study of this impact, and this is typical work along the lines of a lot of other economic analyses that we have done. The study was broken up into three components. First, we surveyed 80 to 98 organizations in organic waste hauling, processing, and food rescue. We got about a 50% response rate on our survey, which is pretty good in these industries. And again, we were really targeting folks in the waste hauling component and the organic waste processing . . . And then the food rescue organizations, which typically were nonprofits engaged in food banks.

Then we took the results of that analysis, looked at patterns and trends in those industries, and conducted economic impact analysis using a tool called IMPLAN, which is an input/output model. It’s the most widely used tool in the country to conduct this kind of analysis, so it’s really valuable to provide parity across multiple studies. And what it does is look at the direct activity to the direct employment, the direct spend, and estimates out what the secondary impacts throughout the state would be. So again, this is looking at what the impacts would be in the industries that support the activities in hauling, processing, and food rescue, as well as the broader economic activity that’s generated when those who are employed in those industries go spend their dollars at the grocery store or pay their rent, etc. And so, we used the outputs from the survey of those entities around revenue, employment, capital facility and equipment, equipment expenditures, and plans for future business activity to generate these secondary impacts. And then, once we conducted the economic impact analysis, we held a series of stakeholder interviews to get the findings of our analysis.

[We worked to] make sure that [our results] passed the sniff test, as we say, and also to understand what challenges these entities had with complying with the ban and finding the labor force that they needed. If there were financing challenges – what opportunities they saw to grow their business as the ban went into its second and subsequent years of effect and what the impact of the ban was for them and the implications on the industry at large.

All of the activities experienced significant growth from 2010 to 2016, which again was the first year that the ban went into effect, and then anticipated growth for 2017 was based on the average employee per organization in each segment. We estimated that the total employment across all segments was roughly 500 or so (490 in 2016), with an expected growth rate of about 150% over that 2010 baseline.

That’s really where most of the labor was involved, and that’s really where most of the economic activity was. I should say this as a caveat, and I’ll mention it later – this analysis didn’t take into account the energy that could have been generated from anaerobic digestion. We’ve also looked at the value of that electricity, either to offset operations or to actually supply electricity for other uses. And when that is taken into account, we do see that waste processors, particularly, really increase their economic impact and their potential for future benefits down the line.


I’m going to talk a little bit about the economic impact, and I think this is really where the story comes in, you know, potentially for your stakeholders or for municipalities or other entities that are considering a ban such as this. So obviously, there is a cost associated with compliance, both for the municipality as well as the entities that are now going to be offsetting their waste. But I think the argument that we’re trying to make here is that the benefit significantly outweighs the cost. And so here’s where you can look at how that how that benefit sort of plays out and again, for haulers, processors, food rescue organizations and then total impact.

And this is again, not just the direct jobs or the direct value of industry activity, but the combined indirect and induced activity that comes out of the economic impact analysis. And so, the bottom line here is that we’re generating almost double the impact in terms of employment and other significant economic metrics. And one thing we found municipalities to be the most excited to share is the fiscal impact or the state and local taxes that are generated where you can start talking about offsetting the costs of programs by generating this additional fiscal benefit for the community.

“ . . . the bottom line here is that we’re generating almost double the impact in terms of employment and other significant economic metrics. And one thing we found municipalities to be the most excited to share is the fiscal impact or the state and local taxes that are generated where you can start talking about offsetting the costs of programs by generating this additional fiscal benefit for the community.”

And then particularly important to this client was to understand was what does the future looks like. Oftentimes, we do a little bit more of a longitudinal study so that we can see trends over time play out. But for this analysis, we asked the individual survey respondents to talk about their anticipated growth, most likely in terms of employment. For example, how were they planning to staff up? How were they planning to increase capital expenditures over the coming year to anticipate the growth? And here’s where you see again by each of the segments – haulers, processors, and rescue organizations. The total employment was expected to grow significantly in the second year. And in subsequent years, the program was close to [generating] 4,500 jobs.

As many communities consider bans like this, one of the things that they’re worried about communicating the value of it to stakeholders. Obviously, there’s an intrinsic environmental or sustainability value. But everyone’s also interested in the dollars and cents and particularly in terms of offsetting municipal expenditures. And so this analysis was looking specifically at this. As the growth of the industry takes hold, there’s an increased cultural mindset and focus on sustainability. But how can you articulate to stakeholders that there’s also a benefit from an employment perspective and a tax revenue perspective? And that’s really where these metrics come into play.

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