Two of the main pillars of the EU waste collection policy are the Proximity Principle and Self-Sufficiency Principle. According to those, waste should be disposed as close as possible to where it has been produced. The effect of such provision is to increase the market power of local disposers,...

In this paper, we use stochastic dynamic programming to model the choice of a municipality which has to design an optimal waste management program under uncertainty about the price of recyclables in the secondary market. The municipality can, by undertaking an irreversible investment, adopt a...