Evaluating the Eco-Efficiency of Municipal Solid Waste Management: Determinants, Paradoxes, and Trade-Offs

The management of municipal solid waste (MSW) plays a crucial role in advancing sustainable development and circular economy goals across the European Union. In Italy, despite improvements in separate collection, significant regional disparities in MSW performance and costs persist. This study assesses the eco-efficiency of MSW services in 5516 Italian municipalities to uncover performance gaps and their underlying drivers. Eco-efficiency is measured using a Data Envelopment Analysis (DEA) model based on the Generalized Directional Distance Function (GDDF). This model incorporates per capita cost as an input, sorted waste as a desirable output, and residual waste as an undesirable output. A second-stage quantile regression is then utilized to explore how contextual factors influence eco-efficiency across various performance levels. The results reveal significant territorial disparities, with only 0.13% of municipalities achieving full eco-efficiency. Paradoxically, higher levels of separate waste collection—typically a policy goal—are associated with increased costs, especially in more efficient municipalities, suggesting a trade-off between environmental performance and economic sustainability. Similarly, population density negatively affects eco-efficiency but may facilitate economies of scale in collection systems. These findings highlight a tension between achieving optimal sorting rates and maintaining cost-effectiveness. Policy interventions should consider these trade-offs, prioritizing basic performance in lagging areas while promoting cost-control strategies in high-performing municipalities.