Shamsunnahar KHANAM

Centre for Poverty and Development Studies, Faculty of Economic and Administration, University of Malaya, Kuala Lumpur, Malaysia. Phone: +60-166-708-083
(Corresponding author)

A.K.M. Muzahidul ISLAM

Malaysia-Japan International Institute of Technology, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone +60-111-6253-083

Megat Johari Bin MEGAT MOHD NOOR

Malaysia-Japan International Institute of Technology, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone +60-0197518700

Abu Bakar JAAFAR

Pardana School of Science, Technology and Innovation Policy, Universiti Teknologi Malaysia, Kuala Lumpur, Malaysia. Phone: +60-3-2615-4518


The continuing struggle of local authorities in addressing waste management issues would call for a close examination of the economics of waste management and the need to search for the most appropriate enviro-economic policy instrument that can be introduced in the context of a fast developing economy such as in Malaysia. A number of instruments had been put into practice by various authorities in Malaysia and in other countries, however, the effectiveness of each one of them is being questioned. Moreover, in Malaysia, there has not yet been any widely published research that has described the prospects of Indifferent Consumers Pay Principle. It is hereby proposed that a new instrument be introduced in Malaysia, which is a variation of the “Polluters-Pay” Principle, as outlined in the 9th Malaysia Plan (2006-2010), its first target ought to be the consumers, not necessarily the producers: those who participate in a recycling scheme are not required to pay a certain levy, when purchasing new goods. In return, when they deposit the unwanted items into recycling bins designated for different types of material, they will be rewarded with equivalent credit points which can be redeemed at points of sale. The anticipated positive impact of the application of the proposed instrument would be as follows: (i) waste-materials will be sorted at source into: “dry”, “wet”, and “toxic”; (ii) any litter in the streets or drains will be somehow picked up by “poor” souls, because of its value on redemption;  (iii) those indifferent consumers would in effect pay for the “collection” services; (iv) the costs of collection and sorting will be greatly reduced; (v) thus, the costs of production of packaging materials containing recyclables will be lower, (vi) the recycled goods will be more competitively priced; and (vii) any  Waste-to-Energy scheme will become more viable now than ever. Only under such a management that it would attract private investment to develop and finance the full-chain of waste sorting-to-materials, logistics, recyclables-exchange, and waste-to-energy streams, and waste-residue repository. In short, instead of carrying on only with the current 3R programme: Reduce, Reuse, and Recycle; the programme ought to be extended to 5R Scheme: Reduce, Reuse, Recycle, Recovery of Energy and Materials, and Repository, and not landfilling. Thus, the waste recycling industry, as envisaged since the 8th Malaysia Plan (2001-2005), would soon be realized.

Keywords: Waste, Indifferent Consumers-Pay Principle, Polluters-Pay Principle, Waste to materials and energy, cleaner production, Non-profit, Non-private Organization (NP2O), Recyclables-Commodity Exchange (RCE), Malaysia.

JEL classification: Q5,Q2
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