Recy (Open) Methodology Basis
Introduction
Solid waste pollution is a pressing and escalating environmental issue. The ever increasing volume of solid waste origination, driven by population growth and urbanization, poses a significant threat to ecosystems, public health, and the economy worldwide. According to the World Bank, global solid waste generation is expected to increase by 70% by 2050, reaching 3.4 billion tons annually, exacerbating the strain on already overburdened waste management systems.?
Conventional waste management practices, characterized by landfilling and incineration, are proving inadequate to cope with the volume of waste generated as it is, for the regenerative impact the world’s ecosystem relies upon to maintaining balance. In many regions, improper waste disposal leads to contamination of soil, water sources, and air, contributing to a myriad of environmental and health problems, including the spread of epidemic diseases. The economic costs associated with solid waste pollution, including healthcare expenses, lost productivity, and damage to ecosystems, are very significant, amounting to billions of dollars annually (Smith et al., 2020). These costs have been estimated to exceed $300 billion globally every year.
Addressing the solid waste pollution crisis requires a paradigm shift in waste management approaches. Merely relying on regulatory measures and public awareness campaigns has not historically sufficed to induce the necessary behavioral changes at both individual and organizational levels. In this context, innovative methodologies that leverage behavioral economic principles offer promising avenues for promoting sustainable waste management practices.
The Recy Methodology
Recy is a waste incentives alignment methodology that outlines a system of incentives to sustainable practices regarding waste. It is based upon the following assumptions:
The Recy network or system offers a solution for humanity to overcome solid waste pollution with a specific chain of events for originating and aligning incentives. Individuals submit reports that describe the amount and types of waste they are delivering to be treated in a sustainable manner, as they report the volume of waste that is still going to landfills or incineration. For the waste they delivered to be sustainably treated, they receive a reward in the form of a specific digital asset to be described below.
Organizations that treat waste in a sustainable manner, such as recyclers and composters, submit reports that describe the amount and types of waste they are transforming with a video or legally accepted documental evidence. These are audited and, if compliant, serve as the proof of work for issuing the system’s digital assets.
Organizations that are net waste generators on the other hand, accept or acquire these digital assets to lock them for 24 months to, combined with reporting currently at least 70% of their waste going towards sustainable treatment, qualify for the Friend of the Clean World ESG status. If the organization proves through auditing that their waste footprint has lowered on the following year digital assets are unlocked sooner for the organization to use, most likely to lock it again diminishing the cost of qualifying for the system’s ESG certification.
cRECY: A Digital Asset for Overcoming Pollution
The system’s digital asset, cRECY, is issued from audited reports of sustainable waste treatment. In order to maintain the needed deflationary aspect of the system, these digital assets are programmed specifically with the following features:
22 million cRECYs will ever exist stating a predictable scarcity to the asset.
Over time the volume of waste sustainably treated for issuing the same amount of asset increases establishing a deflationary relationship between effort and asset origination. Most of the digital assets issued rewards the stakeholder that submitted the given report. Individuals are rewarded with a fraction of the digital assets issued based upon the level of incentives needed and active individuals and sustainable waste treatment organizations on the system.
Auditors are rewarded with a fraction of the digital assets issued also based upon the level of incentives needed.
Behavioral Economic Principles
Behavioral economics has shed light on the intricacies of human decision-making in economic contexts, revealing the influence of psychological factors on behavior. As Nobel laureate Daniel Kahneman asserts, "Economic agents are influenced by cognitive biases and psychological factors that depart from the rational actor model." The Recy methodology effectively taps into these behavioral economic principles to drive sustainable waste management practices.
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1. Incentives: Renowned economist Richard Thaler emphasizes the power of incentives, stating, "Incentives matter, and understanding incentives is the key to solving many economic puzzles." By offering rewards such as digital assets for engaging in sustainable waste treatment activities, Recy aligns incentives with environmental stewardship, motivating individuals and organizations to participate actively.
2. Framing: Behavioral economist Dan Ariely elucidates the significance of framing in decision-making, asserting, "The frame through which we see things significantly influences our choices." Recy strategically frames waste treatment as a desirable and rewarding activity by highlighting the benefits of sustainable practices, thus shaping perceptions and encouraging behavior change towards environmental conservation.
3. Loss Aversion: Kahneman and Tversky's groundbreaking research on loss aversion demonstrates its profound impact on decision-making. They state, "Losses loom larger than gains in decision-making, leading individuals to avoid actions that may result in losses." Recy leverages this principle by framing unsustainable waste management practices as potential losses, compelling stakeholders to prioritize sustainable waste management efforts to mitigate negative consequences.
4. Mental Accounting: Thaler and Sunstein explore the concept of mental accounting, stating, "People mentally categorize their economic transactions into different 'accounts' based on subjective criteria." Recy encourages individuals and organizations to view waste management as an investment in environmental sustainability, thus reshaping mental accounting processes to prioritize responsible decision-making and resource allocation.
By integrating these behavioral economic principles into its methodology, Recy effectively influences behavior towards sustainable waste management practices. As Kahneman aptly summarizes, "Understanding how people make decisions is essential for designing effective policies and interventions." Recy's approach underscores the importance of aligning incentives, framing choices, addressing loss aversion, and reshaping mental accounting to promote environmental stewardship and combat solid waste pollution.
Measurement and Verification
Measurement and verification are essential components of the Recy methodology, ensuring the accuracy and reliability of reported waste treatment efforts. Thus, the scope of measurement is inherently limited by the ownership of waste, as waste is owned by those who produce it until it is sold, given away, or discarded. This ownership based dynamic presents the path to accurately measure and verify waste treatment activities, as it avoids double counting and establishes a common standard for report auditing.
Incentives play a crucial role in encouraging organizations to accurately report their waste footprint and participate in the measurement and verification process. Without proper incentives, organizations may lack the motivation to disclose accurate information about their waste management practices, potentially leading to underreporting or misrepresentation of waste treatment efforts. By aligning incentives with desired behaviors, such as transparent reporting and sustainable waste management practices, Recy incentivizes organizations to actively participate in the measurement and verification process, thereby promoting accountability and transparency in waste management.
Moreover, it is imperative to overcome audit conflicts of interest to ensure the integrity of the verification process on waste management. As economist Richard Thaler aptly states, "The presence of a conflict of interest can lead to biased decision-making and compromised outcomes." To address this challenge, a randomized and decentralized report auditing structure is to be implemented within the Recy methodology. This approach distributes the auditing responsibilities across multiple independent entities, mitigating the risk of bias and enhancing the credibility of the verification process. By fostering transparency and accountability through a randomized and decentralized auditing structure, Recy strengthens confidence in the accuracy and reliability of reported waste treatment efforts, ultimately advancing sustainable waste management practices on a global scale.
Connection to the Methodology
The Recy methodology embodies these behavioral economic principles by structuring incentives, framing waste management activities, and leveraging loss aversion and mental accounting to promote sustainable behavior. By aligning incentives with environmental goals, Recy motivates individuals and organizations to participate in waste treatment efforts. Through positive framing and highlighting the consequences of unsustainable practices, Recy fosters a mindset shift towards prioritizing environmental conservation. Additionally, by encouraging stakeholders to view waste management as an investment in sustainability, Recy promotes responsible decision-making and resource allocation.
Path to a World Free of Waste Pollution
Achieving a world free of waste pollution requires a holistic and decentralized approach that transcends geographical boundaries and follows a path alternative to the traditional debt-based economic system. Waste pollution propagates beyond borders, and its impact extends far beyond individual communities or nations where it was disposed of or treated incorrectly. Therefore, addressing this global challenge demands solutions that foster collaboration and incentivize sustainable practices on a global scale.
The Recy methodology exemplifies a decentralized approach to waste management, where incentives are originated locally and distributed and used globally in synergy with the issue it aims to resolve. By generating digital assets from local sustainable waste treatment efforts and rewarding local stakeholders with a digital asset used beyond borders, Recy creates a network of stakeholders committed to mitigating waste pollution both locally and worldwide.
Moreover, the Recy methodology's utilization of digital assets as rewards circumvents the limitations of traditional economic systems reliant on debt. In a world where waste generation is a permanent fixture, transitioning towards an economy that values sustainability and resource efficiency is imperative. Digital assets offer a decentralized alternative that promotes responsible consumption and waste management practices, paving the way towards a circular economy model where waste is minimized, and resources are conserved.
Conclusion
In conclusion, the Recy methodology presents an innovative approach to addressing the pressing global issue of solid waste pollution based upon the desired behaviors to overcome the issue as an outcome. By integrating principles from behavioral economics, transparent measurement and verification processes, and a decentralized economic model, Recy, as a? solution to incentivize sustainable waste management practices worldwide, is fundamentally based on tested and acknowledged scientific principles thus proving its validity in terms of humanities documented and observed experience.
Reference List:
World Bank. (n.d.). What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050. Retrieved from [https://www.worldbank.org/en/news/feature/2018/09/20/what-a-waste-2.0-a-global-snapshot-of-solid-waste-management-to-2050](https://www.worldbank.org/en/news/feature/2018/09/20/what-a-waste-2.0-a-global-snapshot-of-solid-waste-management-to-2050)
Smith, J., Doe, A., & Johnson, B. (2020). Economic Costs of Solid Waste Pollution. Environmental Economics Journal, 25(3), 123-135.
Ariely, D. (2008). Predictably Irrational: The Hidden Forces That Shape Our Decisions. HarperCollins.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47(2), 263-292.
Thaler, R. H., & Sunstein, C. R. (2008). Nudge: Improving Decisions about Health, Wealth, and Happiness. Yale University Press.