Bridging Local Governments and Residents for Household Waste Source Separation Using a Business-Driven, Multi-Stakeholder Cooperative Partnership Model—A Case Study of HUGE Recycling in Yuhang, Hangzhou, China

Abstract

Rapid economic development has led to an overwhelming surge in waste generation, demanding urgent and comprehensive waste management solutions, particularly in developing countries. Source separation is a critical and indispensable step in integrated waste management and is featured as a government-led pattern in general. However, its implementation challenges persist in many cities because of complex waste systems and a lack of multi-stakeholder partnerships. Since there is a paucity of empirical research focusing specifically on the recycling business, this study presents a case study of HUGE Recycling, operating in Yuhang District, Hangzhou, China, to explore the effectiveness of a business-driven, multi-stakeholder partnership model in promoting source separation. The paper reveals that the recycling business plays a significant role in bridging the gap between local governments, residents, and the recycling industry and identifies some key factors in the business-driven, multi-stakeholder cooperative partnership model, fulfilling the requirements of multi-stakeholders. This case fosters collaboration between local governments, residents, and the recycling industry, encouraging active participation and alleviating the government’s burden. The findings highlight the potential applicability of the HUGE Recycling Model to waste management in resource-constrained developing countries for better resource management.

1. Introduction

Waste management has evolved significantly over the years, not only in order to meet the needs of the growing urban population for waste treatment but also to mitigate the depletion of resources caused by the over-consumption that accompanies a growing economy. It is shifting from a traditional approach focused on mere disposal to a more holistic perspective of resource management [1]. Recognizing the immense potential of waste as a valuable resource, policymakers and researchers are now emphasizing the importance of efficient waste handling, recycling, and recovery practices. Many cities are also trying to switch to integrated waste management that gathers all sectors and covers all stages of waste management to promote resource reuse and recycling [2].

In this context, source separation at the household level has emerged as an essential part of an integrated waste management system, as well as a critical component in sustainable waste management strategies [2]. After residents separate and dispose of their waste according to each category, the waste can be collected separately by category and transported directly to a range of treatment facilities, each one specialized in processing via recycling, composting, or incineration based on different waste categories.

Source separation plays a pivotal role in diverting valuable resources away from landfills and incineration facilities. As Chen et al. noted, source separation is the first step in effective household recycling compared with incineration and landfills, which are common methods of waste treatment worldwide [3]. Source separation can also prevent contamination to ensure high-quality recyclable resources, which leads to more efficient recycling and directly helps reduce waste incineration and landfills. According to UN Habitat, source separation is the main driving force behind the high recycling rates in high-income countries [1]. Encouraging residents to separate their waste into distinct categories not only reduces the strain on natural resources but also minimizes the environmental footprint associated with waste disposal.

However, various cities across the world have attempted to implement source separation over the last several decades. Some source separation schemes in developed countries are still underdeveloped and have a lot of room for improvement. Meanwhile, in developing countries, many attempts at source separation have ended in failure because of the limited human and financial resources of local governments and a lack of environmental education among residents.

For example, Sweden has a mature system of source separation. The country’s highly developed and convenient infrastructure enables residents to engage in source separation. Borås, a city in Southwestern Sweden, has been separating its waste since 1991 and has indeed seen a significant increase in resource recycling and a dramatic reduction in the landfill amount. However, despite the long history of waste separation in the city, Rousta et al. reported that 53 wt% of the waste in their study area was not separated correctly, which resulted in enormous economic losses for the city [4]. Another example is Vietnam, where the national government believes that source separation will help improve the country’s worsening waste problems. However, despite the implementation of a number of pilot programs with international cooperation, source separation has still not been established in Vietnam [5]. Most of these programs disappear after the projects are completed and financial aid comes to an end [6].

Urban waste management systems, especially those that prioritize source separation, often adopt a government-led pattern. Local governments play a crucial role in implementing policies and regulations that promote source separation, providing necessary infrastructure and ensuring efficient waste collection and treatment processes. In fact, the success of such initiatives heavily relies on active participation and cooperation from residents. Demands to implement source separation by local governments and the pursuit of convenient lifestyles for residents make source separation hard to implement. It must be pointed out that both waste treatment schemes for implementing source separation and pathways to a circular economy are very complex because of the huge number of stakeholders and the complicated relationships between them [7].

Thus, it is essential for source separation implementation and maximum resource recovery to create appropriate cooperative partnerships involving multiple stakeholders, which could bridge the gap between local governments and residents. Public–private partnerships (PPPs) have been widely recognized as instrumental in fostering collaborative efforts between governmental and private entities to address complex societal challenges. While PPPs have shown promise in various fields, there has only been limited research on their application in waste management, specifically in the context of source separation. There is a significant gap in research and empirical evidence regarding the design and implementation of business-driven, multi-stakeholder cooperative partnership models that effectively bridge the gap between local governments and residents in promoting source separation practices.

This paper aims to address this research gap. Drawing on the existing literature, case studies, and best practices, this study points out the requirements for local governments and residents regarding source separation implementation and clarifies the deficiencies of the government-led pattern. This research examines the performance of a new public–private partnership, namely, the business-driven, multi-stakeholder cooperative partnership model, which is expected to be a more appropriate collaboration pattern, and conducts a case study of HUGE Recycling, a recycling enterprise in Yuhang District, Hangzhou City, Zhejiang Province, China. In this case study, we propose the HUGE Recycling Model to act as a bridge between the local government and residents for source separation implementation using the capabilities of recycling businesses, and we hope this study will go some way toward resolving the predicament and that it will provide an alternative to implementing source separation to ensure residents can enjoy sustainable living and enable the city’s sustainable development.

2. Key Requirements for Different Stakeholders and Cooperation Patterns in Source Separation Implementation

2.1. Stakeholder Requirements

2.1.1. Local Government Requirements

First of all, a city that desires to mitigate its waste problems through source separation must have a set of streamlined waste treatment facilities since the standards of how to separate waste and how to collect and process it are determined by local waste treatment needs and facilities in the area [8]. The construction and operation of waste treatment facilities and the support for such facilities by local governments are prerequisites for achieving integrated waste management. However, many developing cities have prioritized economic development and put waste management on the back burner, so they have built landfill sites on the outskirts of cities and relied on landfill dumping to deal with their waste [9]. In many cities, such as Yokohama City, Japan, incineration facilities have been built to reduce the amount of waste so as to extend the lifespan of landfill sites [10]. Unfortunately, neither landfills nor incineration can lead to integrated waste management or a city’s sustainable development. Therefore, the first step for a local government is to review the waste treatment needs of the city, looking at the processing facilities already in place and then determining what additional facilities are required before implementing source separation for integrated waste management.

Secondly, publicizing and supervising residents’ source separation is another important action [11]. In 2000, China launched a project to promote source separation in eight pilot cities. One of these, Beijing, has made enormous efforts, but the popularity of source separation was still limited. According to Deng et al.’s survey of 13,935 respondents, only 15.5% of residents had a good understanding of how to separate household waste [12]. This resulted in as little as 31.2% correct separation and disposal on average. The implementation of a new system of source separation can only be carried out by providing sufficient information and carefully and repeatedly informing residents [13]. Even in developed countries such as Japan, where source separation has been implemented for several decades, there is still trouble with mixed garbage. In Japan, community committee members stand at the garbage collection points at garbage disposal time to supervise residents. Garbage collection staff even attach cautionary messages to garbage bags that have not been properly separated and leave them at the garbage collection points [14]. Supervising is essential for source separation implementation and maintaining the quality of the system. However, it is impossible to carry out repeated publicity or supervision over the long term with limited local government human resources. This lack of publicity and supervision is another obstacle to the progress of source separation implementation.

Thirdly, in order to build a waste management system suitable for a city, it is necessary to have a clear understanding of the residents’ waste generation status. The amount and content of waste varies depending on the residents’ family structures, lifestyles, and consumption patterns. Waste composition analysis is regularly conducted in Japan to determine the amount of waste generation per capita per day and the proportion of each type of waste material [15]. According to the results, the processing capacity of specialized plants for various resource materials is determined at the time of construction, and an annual operating budget is assigned. However, in developing regions, even though the amount of waste collected by the government itself is known, it is difficult to obtain reliable data on the number of various resource materials that are gathered by informal sectors [8]. Quantitative data are essential in an evidence-based approach. Collecting accurate and detailed waste-related data to the greatest extent possible will allow local governments to recognize forthcoming changes in society and residents’ lifestyles [16]. By analyzing the changes in waste-related data over time, it is possible to verify the effectiveness of waste reduction and recycling-related policies that will be put in place in the future. Based on the data, a waste management system can be updated so that more sustainable development can be achieved.

2.1.2. Resident Requirements

According to Ajzen’s model, both perceived behavioral control and actual behavioral control are the determinants of planned behavior [17]. Therefore, it is important to cultivate the impression to residents that source separation can be performed easily. Of the numerous determinants that influence residents’ source separation behavior, most empirical studies have confirmed the influence of the convenience of the source separation system itself [18,19]. The ease of garbage disposal [20], the distance from home to the garbage collection point [14], the simplicity of source separation [21], and the understandability of source separation [22] have all been examined to assess the impact on residents’ source separation behavior. A questionnaire survey was carried out in Saint Petersburg, Russia, to investigate factors influencing residents’ source separation behavior. Some 490 valid responses to that survey showed that it was the inconvenience of the waste collection system that had a negative influence on behavior [7].

Also, empirical studies have shown that motivators such as environmental campaigns and economic incentives could effectively encourage residents’ source separation behavior [23]. The 848 responses from six communities to a survey conducted in Guilin City, China, proved that environmental campaigns enhanced public environmental awareness and encouraged public participation in source separation [24]. Similar results have been reported by Okonta et al., who found that environmental campaigns and economic incentives are the main drivers of source separation [25]. Germany introduced a deposit system several decades ago, whereby extra charges paid when purchasing recyclable goods are refunded upon return [26]. On the other hand, it is common in developing countries for recyclers to go around to collect recyclables from households, who then receive payment by weight [27]. Smart boxes for collecting recyclables have emerged in recent years in China [28]. There are many other ways to provide economic incentives to residents to carry out material recycling. In any case, the effectiveness of economic incentives as a motivator in boosting residents’ source separation behavior has been validated.

After encouraging residents to conduct source separation, the next problem is how to maintain this behavior to ensure the continuation of source separation. Cultivating a sense of norm could be one of the solutions. Subjective norm, in terms of what someone’s family and friends expect them to do or whether the person will disappoint their acquaintances if they do not separate waste materials at the source, has the effect of encouraging the person to carry out source separation [29,30]. Moral and social norms are also important in this case. If someone believes that source separation is a good thing, or if the city in which they live promotes source separation, then source separation behavior will also be encouraged [31]. A questionnaire survey targeting university students who live in an on-campus dormitory in Beppu City, Japan, reveals that collectivism makes people more likely to follow what others do, so the pressure of others to conduct source separation and community expectations that all residents will conduct source separation could effectively motivate a sense of norm with regard to source separation behavior [13]. Thus, the system of monitoring staff who stand at garbage collection points and check the garbage brought by each resident to see whether it is separated correctly or not is effective, as the staff provides supervision then and there. This creates a community atmosphere for source separation and is also the most direct way to make residents realize that their community is committed to source separation.

The above review summarized several stakeholder requirements for local government and residents to smoothly implement and entrench source separation. A good cooperative partnership consists of multiple stakeholders fulfilling these requirements and bridging the gap between local governments and residents so they can work together to implement source separation.

2.2. Cooperation Patterns for Source Separation Implementation

2.2.1. The Government-Led Pattern

A number of countries are advanced with regard to implementing waste management source separation via a government-led pattern in order to reduce their waste treatment budgets and realize a circular economy. For example, in order to get residents to divide their household waste into 15 categories and dispose of it on different days as regulated, the Yokohama City government held over 10,000 public meetings and mobilized nearly 5000 government officers to promote and supervise separation on site. Direct and personal communication between local governments and residents has been verified as the key to effective source separation implementation [10]. Furthermore, the Minamata City government conveyed to residents its positive attitude and active commitment to environmental issues and indicated its serious commitment to source separation through a series of challenges and declarations.

After the waste management plan has been made, the local government outsources waste collection and treatment to the contractor and informs and supervises residents regarding source separation. Residents separate their waste and dispose of it at garbage stations. The contractor collects the waste, transports the recyclables to the recycling facilities, and incinerates and landfills the remaining waste.

Previous studies have pointed out that a city wishing to mitigate its waste problems through source separation must, first of all, have a set of streamlined waste treatment facilities since the standards of how to separate waste and how to collect and process it are determined by the local waste treatment needs and facilities of the area [8]. The construction and operation of waste treatment facilities and the support for such facilities by local governments are prerequisites for achieving integrated waste management. The recycling enterprises in this government-led pattern could alleviate the problem that local governments have in building and running recycling facilities. By building up long-term relationships with recycling enterprises, as well as providing a subsidy and introducing tax deduction policies, the recycling industry could be a counterpart to the high operation costs and market fluctuation, thereby leading to more stable development. Furthermore, it is much easier for the local government to manage the waste flow from collection to treatment because the flow is fairly simple and the number of stakeholders involved is small.

However, neither contractors nor recycling enterprises take part in residents’ source separation, so it is entirely up to the local government to inform and supervise residents to ensure they carry out source separation. Informing and supervising residents is crucial to source separation implementation [11]. It is impossible to accomplish the continuation of publicity or supervision over the long term with limited local-government human resources. Although communities and NGOs may assist local governments, there is a heavy responsibility and burden when it comes to implementing and entrenching source separation. The lack of publicity and supervision is often an obstacle to the progress of source separation implementation. For example, a pilot project by Thaihotel and Ratanaviboon in Thailand in 1999 failed after several months because of its traditional, top-down style of source separation and a lack of public participation [32]. Meanwhile, a survey of 100 households in Tenggilis Mejoyo District, Indonesia, revealed that 41% of residents conducted source separation because of their own self-awareness, followed by 30% of residents who stated that they carried out source separation in line with instructions from community leaders [33]. If there is not a proper connection to the residents and publicization and supervision are left to the local government itself, a government-led pattern is difficult for cities that have just begun to implement source separation.

2.2.2. The Business-Driven, Multi-Stakeholder Cooperative Partnership Model

It is clear that many cities do not have the ability to provide adequate waste management services, and the government-led pattern cannot successfully implement and entrench source separation to achieve integrated waste management. Thus, it is necessary to reconsider how to engage in cooperation with stakeholders, thereby outsourcing part of the obligation of the local government; promoting and monitoring source separation; and implementing waste collection and treatment. This outsourcing can be achieved in several ways, such as through cross-sector partnerships, full privatization, co-ownership, private-sector participation, and joint ventures. Public–private partnerships (PPPs) have a wider definition and are a common counterpart measure to deal with this situation.

Recognizing the necessity of PPPs for implementing source separation could ease the burden of local governments to better focus on planning and supervising and strengthen the bond between communities and local recycling industries. There has been a growing variety of PPPs for waste management and source separation implementation in recent years. Among them, recycling enterprises are carrying out interesting initiatives that attract a great deal of attention. The smart box system is one example [21]. Recycling enterprises obtained permission from the local government to install smart boxes in communities in Shanghai and Shenzhen, China, for collecting recyclables. Residents scan the barcode on their premade accounts to open the box door and drop in their recyclable waste. The smart box weighs the waste, and points that can be used for shopping are awarded to residents’ accounts accordingly. HUGE Recycling in Hangzhou China is another example of a recycling enterprise that is helping local government with source separation implementation by working in close proximity to the residents [23].

These kinds of cooperative schemes—in which a recycling enterprise plays a key role as the third party to fulfill the task of waste management on behalf of the local government and motivate residents to engage in source separation—are hereafter termed business-driven, multi-stakeholder cooperative partnership models.

In the business-driven, multi-stakeholder cooperative partnership model, the local government not only outsources the waste collection and treatment workload to recycling enterprises but also shares part of the responsibility of encouraging residents to conduct source separation behavior. With political and financial support from the local government, recycling enterprises can provide user-friendly services to residents instead of the local government. The recycling enterprises inform residents about the necessity and rules of conducting source separation; provide motivators and well-designed, convenient separation and disposal systems for the residents; and supervise source separation in parallel with the local government. During these processes, the recycling enterprise can generate profits and enjoy stable development. There are co-benefits for all stakeholders involved in the business-driven, multi-stakeholder cooperative partnership model.

As the business-driven, multi-stakeholder cooperative partnership model is relatively new and not much research has been accumulated, this research takes HUGE Recycling as a case study to examine its effectiveness in waste management, as well as whether the various requirements of both the local government and residents, as mentioned above, can be satisfied while promoting source separation.

3. Case Study

3.1. Waste Management in Yuhang District, Hangzhou

Located at the southern end of the Yangtze River Delta, Yuhang District covers an area of 1228 square kilometers and is one of eight administrative districts of Hangzhou City as of 2020. Both its total volume and growth rate, according to major economic indicators, show that the city ranks as a top-class city in Zhejiang Province, which indicates that it is a high economic development area. In 2019, the registered population was 1.16 million, GDP was CNY 282.4 billion, and the total amount of municipal solid waste generation was about 850,000 tons [34].

Although a market-driven recycling industry was established in Yuhang in the early 1990s, the focus of waste management in Yuhang, until recently, was concentrated on harmless treatments, with incineration and landfills as the main disposal methods. As its economy rapidly developed, there was a marked increase in waste generation, which put great pressure on incineration and landfill facilities. Because of the limited lifespan of landfills and the increasing awareness of the environment, Yuhang launched a pioneering series of source separation projects as one of the pilot areas in Hangzhou City in 2010. An operation and supervision system was gradually set up for separation disposal, collection, and treatment in cooperation with various recycling enterprises to positively explore collaboration and try to formulate a better waste management system with multiple stakeholders. HUGE Recycling is one of the recycling enterprises that helps collect and recycle recyclable materials in Yuhang District.

3.2. The Development and Services of HUGE Recycling

HUGE Recycling was established in August 2015. After months of operating on a trial basis, it reported the results of its trial operation and proposed the idea of extending the scope of the acquisition of residents’ household waste to the Yuhang District commerce department to carry out pilot work on source separation.

HUGE Recycling invented the “Dry and Wet Sorting Method”, whereby residents in its service area are required to divide their household waste into just two easily distinguishable categories: dry and wet. It distributes waste bags with QR codes to residents, and after the bags are full, residents can contact HUGE Recycling staff online with one click and have them collect the waste bags within 30 min. The waste is collected door-to-door and then transported to the sorting center for manual sorting and delivery to downstream recycling facilities.

In order to encourage residents to be involved, HUGE Recycling has developed an “environmental bonus” system, which pays residents according to the weight of their waste. The “environmental bonus” can be used to purchase goods at the “HUGE Mall” and “HUGE Recycling service stations”.

With the support of the Yuhang District government, HUGE Recycling expanded its service area gradually, and the coverage of its service area by the end of June 2020 is shown in Figure 1.

3.3. The Efficiency of HUGE Recycling’s Work

HUGE Recycling’s effectiveness in waste management will be discussed using data that are released monthly to residents [35]. It was founded in 2015 and is expanding at a tremendous speed. In terms of the amount of waste collected, 7667 tons of garbage was collected in May 2019. Although these data varied because of Chinese New Year holidays and lockdowns caused by the COVID-19 pandemic, the peak was 12,187 tons, and this amount has stayed above 10,000 tons since the latter half of 2022, with 10,754 tons of waste being collected in December (Figure 2). More than 10,000 tons of waste has been collected and recycled properly by HUGE Recycling, which is a massive contribution to waste management in Yuhang District and has contributed to extending the lifespan of the landfill site.

HUGE Recycling has gradually taken over the work of the local government in terms of source separation implementation and supervision, waste collection, transportation, and recycling in the main residential areas of the city. Yuhang has provided support through tax reduction, project bidding, government purchase services, and so on. The number of residents covered by HUGE’s service area started at 267,400 in March 2019 and jumped to 468,900 by December 2022. An enormous number of human and financial resources spent on promotion, supervision, collection, transportation, and recycling for these residents could be saved by the local government (Figure 3). Furthermore, HUGE Recycling hires retirees, housewives, and others who need jobs from the same community to promote source separation and collect garbage, which contributes to building the community and creating local job opportunities.

In terms of encouraging residents to conduct source separation, besides expanding coverage and increasing the collection amount year by year as described above, on average, CNY 3,060,000 in environmental bonuses were paid to residents every month from 2021 to 2022, and this shows the acceptance and passion of the residents’ source separation (Figure 4). In the short term, the HUGE Recycling service motivates source separation by providing residents with adequate environmental education, offering an easy source separation system with two-category separation, incentivizing residents with environmental bonuses, and guaranteeing the quality of source separation by collecting waste under supervision and monitoring. In the long run, HUGE Recycling’s activities are expected to enhance residents’ environmental awareness, create local employment, build communities, develop the recycling industry, improve the environment, recycle resources, and mitigate waste problems.

In addition to running its own business, HUGE Recycling also helps to develop the recycling industry as a whole. According to HUGE Recycling’s financial statements, it has four main business segments [36]. In addition to the waste collection service outsourced by the local government, the company’s main businesses include trading the sorted resources to recycling companies at the end of the recycling supply chain, operating the HUGE Mall, which is where residents can use their environmental bonuses, and providing technical assistance to other companies. In 2021, nearly CNY 250 million, which is about 69% of revenue, came from waste collection services outsourced by the local government, while 29.3% came from resource trading, amounting to CNY 105 million for recycling services alone. In addition, HUGE Mall had sales of around CNY 5.8 million, which accounted for 1.6% of total revenue in 2021 (Figure 5).

These quantitative data clearly display HUGE Recycling’s achievements in waste management through collecting and recycling recyclable materials. The company’s contribution to the local government by sharing waste management workloads, its contribution to residents with regard to implementing source separation, and the contribution it makes to the whole recycling industry have also been confirmed. Although the implementation of source separation in Yuhang District has not yet achieved full participation, and full implementation has also not been completed, source separation has shown positive results in the main residential areas. HUGE Recycling has been a key contributor to this. In terms of quantitative data and acceptance by the local government and residents, HUGE Recycling can be considered a very successful case.

4. Discussion

4.1. HUGE Recycling’s Characteristics and Advantages

4.1.1. Recycling Supply Chain

One of the keys to HUGE Recycling’s success is that it built up its own collection-to-processing supply chain for recyclable materials. HUGE Recycling’s founder established a recycling enterprise called Dadihaiyang in 2003 to detoxify hazardous waste and later in 2009 founded Shengtang to disassemble and recycle waste electrical appliances. After that, they continued to operate several recycling enterprises in Zhejiang Province, including medical waste and waste glass. Each of the recycling enterprises in this group has expertise in recycling different materials, with processing facilities and accumulated processing know-how. HUGE Recycling was created in 2015 to obtain recyclable waste as the raw material for this group of recycling enterprises. Besides the recycling enterprises of the same group, the collection-to-processing supply chain for recyclable materials downstream of HUGE Recycling has further expanded under the coordination of the local government. Since it has processing capability at the end of the recycling supply chain, HUGE Recycling can collect waste from residents at the front end without any hesitation.

Residents are asked to separate their waste into two categories, dry and wet. The dry waste is delivered to HUGE Recycling’s sorting facility, where the dry waste will be sorted according to the processing capabilities and demands of the end of the recycling supply chain, and then transported to the respective recycling processing facilities.

Currently, dry waste is sorted into nine categories: waste electrical appliances, waste paper, waste metal, waste glass, waste textiles, waste plastic, waste furniture, hazardous waste, and other waste. Waste electrical appliances are recycled into industrial raw materials, waste paper into paper pulp, waste metal into smelted raw materials, waste glass into recycled glass products, waste textiles into raw materials or for export, waste plastic into polyester raw materials, waste furniture for biomass power generation, hazardous waste is sent to detoxify facility, and other waste is sent to incineration plants for power generation. After the recycling processing step, the raw materials then return to the production line. The blue background in Figure 6 shows the scope of HUGE Recycling’s collection-to-processing supply chain for recyclable materials. Some of the plants belong to the same group of recycling companies; others are cooperating companies or referred by the local government.

The processing capabilities of the group of recycling companies at the end of the recycling supply chain are exactly one of the requirements of the local government in implementing source separation. In addition, the requirement of ensuring recyclable materials for the group of companies and the requirement of collecting household waste for the local government are in line with each other. Therefore, HUGE Recycling and its group of companies can take over a series of tasks from waste collection, transportation, and recycling processing. Along with assisting the local government with parts of its waste management work, HUGE Recycling is also leading the development of the whole recycling industry.

4.1.2. Motivating Residents

As already stated in the literature review section, one of the bottlenecks in source separation implementation is getting residents to actually separate their waste. There are too many stakeholders in the source separation implementation process, and it is extremely difficult to convince and motivate each of them to separate their waste every day. It is also difficult to provide services that satisfy everyone since there are limitations to the budget and human resources of the local government. Given that the more the company collects at the front end, the more profit it can make at the end of the recycling supply chain, HUGE Recycling hires more staff to provide a service that is more user-friendly than the government-run collection service, which is part of the public service funded by taxes. There is a huge difference in motivation on the collection side and the human and financial resources to do so. A more user-friendly service could be seen as another key to the company’s success.

According to theoretical behavior models and empirical studies of the determinants of source separation, there are three factors—attitude, norm, and behavior control—that are essential in determining residents’ source separation behavior [17]. HUGE Recycling services have the effect of promoting attitudes and norms and enhancing behavioral controls that structure residents’ source separation behavior (Figure 7).

In terms of attitude, Hangzhou was chosen as the pilot city to implement source separation in 2000, and since then, a series of environmental campaigns and promotional projects have been carried out. Despite the failure of source separation implementation, campaigns successfully raised the environmental awareness of residents. HUGE Recycling then carried out a series of environmental education programs for different groups of people using diverse methods such as word-of-mouth campaigns, on-site environmental workshops, posters, and regular news releases through social media. This further increased environmental awareness and the recognition of waste separation among residents.

As for the normative perspective, as well as a positive attitude toward source separation created by the publicity and the environmental programs, HUGE Recycling hires local residents as waste collection staff and has adopted a set of measures such as door-to-door collection and QR codes to track waste bags. Supervision by neighbors who live in the same community is more familiar and well accepted than that of the local government. Through social pressure from neighbors and the effect of tracking data, HUGE Recycling can effectively supervise and monitor the residents’ source separation behavior. For those households that often separate their waste improperly, HUGE Recycling staff who live in the same community can provide requests for correct separation during collection. Compared with throwing away waste at the garbage station anonymously, improper separation can be mitigated effectively. In the long term, it is easier to build a sense of norm among residents, and the efforts of people living in the same community doing good things together help strengthen community bonds and have a positive effect on community building.

In terms of perceived and actual behavior control, HUGE Recycling has adopted the wet and dry two-category separation method, where residents only need to separate their waste into organic waste and other, and then make a reservation for door-to-door collection service. The simple and straightforward separating method effectively avoids any trouble caused by complicated separation and reduces the difficulty of waste separation compared to the government’s waste collection system which requires residents to separate their waste into four categories and bring the waste to a specific collection point themselves at a specific time.

In addition, HUGE Recycling refunds an environmental bonus to residents’ individual digital accounts based on the weight of waste separated and disposed of. Chinese people are used to selling valuable resources to micro-enterprises, and as such, HUGE Recycling uses economic incentives to further incentivize residents to engage in separation. It is very important to have these kinds of incentives and motivations in the early stages of behavior formation.

4.1.3. Big Data Platform

Previously, waste management data were obtained by weighing garbage collection trucks and having the waste collectors periodically report to the government the amount of waste collected and processed. With these data, the waste collection and processing operations for the year could be evaluated, and the budget and plans for waste management for the next year could be made. Without this kind of basic data, it is impossible to clearly comprehend waste collection and processing amounts, nor is it possible to quantitatively analyze where and what kind of problems exist in the overall waste management system. It is impossible to promote waste reduction and recycling when there is no clear understanding of the current situation. However, in developing regions where economic development has been prioritized, waste collection and disposal have become a passive affair, and in many cases, only rough estimations of landfill amounts are available. In addition, it is extremely difficult to obtain data from an unspecified number of informal recyclers, as the waste has not been collected and recycled by the companies certified by the government. In many cases, the only way to determine the recycling rate is based on the processing amount reported by large recycling companies for tax purposes. Existing studies have also pointed out that a lack of data makes it impossible to understand the current situation and identify the problem.

HUGE Recycling weighs the garbage immediately when collecting it and sticks a QR code on the garbage bag. By simply scanning that code, the system is able to determine the origin, weight, collection staff, and whereabouts of the garbage. This thorough management allows for the special supervision of households that have separated waste improperly, as mentioned earlier. In addition, HUGE Recycling keeps track of the total amount of waste collected, its composition, fluctuations over time, residents’ collection appointments, staff distribution, and the amount of waste saved at each service station using data. Aside from detailed data on collection, HUGE Recycling’s group recycling companies cover the entire recycling supply chain, from front-end collection to mid-end sorting and end-of-chain processing, so data are consistently collected from both the middle and end of the recycling chain.

With big data, the government will have a clearer picture of waste problems and be able to make waste management plans for the next period more scientifically, based on evidence. HUGE Recycling also makes these data available to residents on a monthly basis. This builds a sense of accomplishment among residents, in that they have contributed to the recycling of resources by separating their garbage, and motivates them to conduct more source separation.

4.2. Proposal of the HUGE Recycling Model

HUGE Recycling’s service and processing flow, namely, the HUGE Recycling Model discussed in this study, is a business-driven, multi-stakeholder cooperative partnership model (Figure 8). It can solve the problem of the insufficient capability of the government-led pattern for involving the public in recycling. It can also make waste management more controllable and environmentally friendly. This makes for a smoother flow from waste collection to facility sorting to recycling processing. Local governments can outsource HUGE Recycling to manage the entire recycling supply chain.

In the HUGE Recycling Model, the local government defines the items to be recycled in advance according to the waste generation situation and disposal demand, and then, the local government and community inform residents on how to carry out source separation. HUGE Recycling’s series of services, as described above, thus encourage residents to actually separate their garbage. After that, the waste is divided into two flows, recyclables and incineration/landfill, and outsourced to specialized companies in charge of each flow. Given the large number of recyclables, the recyclables are sorted at a facility and then sent to various recycling companies, where they undergo different treatments. Incinerated and landfilled items are sorted into combustible and non-combustible groups and incinerated and landfilled.

In this model, the administration’s work is simplified into mainly determining source separation methods, providing environmental education to residents, and selecting and regularly monitoring companies in charge of the two flows of recyclables and incinerated/landfillable waste. By separating valuable materials to be recycled and valueless materials to be incinerated or landfilled, it is possible to design services and initiatives, such as environmental bonuses that promote more efficient resource recycling.

The HUGE Recycling Model fulfills the requirements of each stakeholder, as outlined in the literature review section, and appropriately addresses the problems of the governmental-led pattern.

4.3. The Application and Limitations of the HUGE Recycling Model

HUGE Recycling’s services are targeted at each determinant of residents’ source separation behavior, resulting in the effective implementation of source separation in Yuhang District, China. Thus, the HUGE Recycling Model proposed, based on HUGE Recycling, has high applicability in smoothing out source separation implementation, especially in Southeast Asian developing countries that have a similar situation to China, in that they have rapid economic growth and their residents are used to recycling valuable materials.

It is common for local governments to tacitly approve or rely on the informal sector to collect valuable materials, trading and recycling them as needed in the market economy, especially in developing regions where economic development has been prioritized and waste management has been carried out with limited human and financial resources. Mixed and improperly disposed waste is often hazardous to the health of the waste pickers who scavenge for it, and it may pollute the environment around the garbage collection sites. Furthermore, when there is a lack of formalized collection and recycling processes and there are too many unspecified informal sectors in the recycling supply chain, this makes an already complex waste management system even more complicated and difficult to manage [37]. Furthermore, if this was left to the market economy, only high-value materials would be recycled, whereas low-value materials such as plastics, which should be recycled from the perspective of waste reduction and resource recycling, would be incinerated or landfilled without being recycled.

By introducing the HUGE Recycling Model, a sound waste treatment scheme could be created to ensure better resource management. Instead of relying on the informal sector for recycling, the HUGE Recycling Model could effectively protect vulnerable groups of informal recyclers and sanitation workers and determine the materials to be recycled from a resource management perspective, not based on their trade value. Compared with the traditional door-to-door pickup collection by informal sectors, with handcarts or motorcars, the HUGE Recycling Model’s large-scale recycling supply chain is much more efficient in collecting and recycling.

For the cities where there is not only economic but also rapid technological development, we highly recommend introducing the HUGE Recycling Model. One of the features of the big data platform of the HUGE Recycling Model is that it could help them implement waste collection and treatment data, thereby recognizing the current waste management situation and enabling better and more feasible plans to be made for future waste management.

However, there are several obstacles and some suggestions for applying the HUGE Recycling Model to developing regions. Recycling companies such as Daidihaiyang have been engaged in recycling for decades, and the recycling industry has developed quite well in Yuhang District. Therefore, source separation could be implemented smoothly as soon as HUGE Recycling was established. However, other developing regions may not have a well-developed recycling industry like HUGE Recycling and its group of companies, and there may not be a complete recycling supply chain in that region. In such cases, the successful application of the model would require the local region to either invite recycling companies like HUGE Recycling that have recycling technology and know-how or provide support to small local recycling companies to build new facilities. In China, in areas where the economy is not as developed as in Yuhang District, local governments are making every effort to minimize the initial investment of local governments in the construction of recycling supply chains as well. BOT, for example, has been adopted in such areas.

After a recycling supply chain has been established in accordance with the waste generation situation and waste treatment budget, the source separation method should be decided according to processing capacity, and residents should be encouraged to carry out source separation with reference to HUGE Recycling’s service. However, as highly developed cities, both Hangzhou and Yuhang have made huge investments in waste management. In this context, HUGE Recycling and its group of companies could operate their services and provide environmental bonuses to residents as incentives. While is common in other cities to provide refunds when returning valuable resources, such as glass bottles or waste paper, HUGE Recycling provides an environmental bonus for all waste except kitchen waste. Away from market economics, it is difficult to engage in such a practice without government subsidies.

In this case, adjusting the economic incentive to match the local waste management budget and the market trading price of recyclables is recommended. Economic incentive is only a motivator, but it is not the determinant of residents’ source separation behavior. Residents’ attitudes, norms, and behavior controls are the determinants of their source separation behavior. Therefore, even if economic incentives are weakened because of budget constraints, this can be compensated by strengthening environmental education, enhancing community ties, and increasing the convenience of source separation and disposal. According to an interview with HUGE Recycling staff, it was indicated that HUGE Recycling will gradually reduce the environmental bonus after residents’ source separation habits have formed and that they would eventually collect and recycle waste under a waste fee system.

The HUGE Recycling Model has been inspired and formulated based on HUGE Recycling’s service and is a model to bridge the gap between local governments and residents to promote source separation. The key is to ensure that each stakeholder is facing the same direction and that they are working as one cohesive third party instead of the local government’s one-to-many approach for source separation implementation. Further ways to entrench source separation include maintaining a steady passion and collaboration for source separation over the long term and the establishment of a sustainable and profitable recycling industry.

5. Conclusions

This paper considered HUGE Recycling as a case to examine the performance of the business-driven, multi-stakeholder cooperative partnership model. HUGE Recycling collects and recycles more than 10,000 tons of resources every month from more than 450,000 residents. From the speed of its expansion, the acceptance of residents, and the amount of recycled waste, the business-driven, multi-stakeholder cooperative partnership model that HUGE Recycling and the Yuhang local government built can be seen as a success. Compared with the traditional government-led pattern, HUGE Recycling has effectively relieved the burden of the Yuhang local government.

As growing amounts of waste are fast becoming a severe problem across developing cities worldwide, local governments have limited options for the treatment of waste because of the large amount of money needed for waste collection services to cover all communities within a city. An integrated but easy-to-follow and low-cost cooperation model is required to bring the stakeholders together to implement source separation for integrated waste management. This paper proposes the HUGE Recycling Model based on HUGE Recycling and its services to build up a collaborative partnership to implement source separation.

By redistributing the workload of source separation implementation, the HUGE Recycling Model shares part of the responsibility of motivating residents to conduct source separation. As such, this model could alleviate the local government’s workload and effectively promote source separation by working closely with local residents. The keys to its success—a complete recycling supply chain; a well-designed, user-friendly service; and a big data platform—are factors to consider for other regions that are planning to implement source separation for integrated waste management.

Most studies on source separation identify the determinants of residents’ source separation behavior and propose policy intervention targets based on those determinants. This study focuses on the stakeholders and the cooperation between them. By conducting a case study on HUGE Recycling, the potential of a recycling business to act as a bridge between local governments and residents for source separation has been verified. As the business-driven, multi-stakeholder cooperative partnership model is relatively new, greater attention is warranted, and more research is required. Case studies of different recycling businesses in different regions or comparisons of multi-recycling business models could yield a more comprehensive understanding of the role recycling businesses play and methods of cooperation for better resource management.

Hopefully, the HUGE Recycling Model can leverage the capabilities of recycling enterprises to bridge the gap between local governments and residents and thereby boost source separation implementation, mitigate severe waste problems, and contribute to residents’ sustainable living, as well as the city’s sustainable development.