Evaluating the Economic Viability of Solid Waste Recycling Facilities: A Stochastic Approach Using Monte Carlo Simulation

Solid waste management is crucial for mitigating environmental pollution, protecting public health, and promoting sustainable resource utilization. Municipalities play a central role in solid waste management (SWM) by overseeing collection, disposal, and recycling efforts within their jurisdiction, promoting sustainable waste management practices. This paper investigates case of Kuwait and presents a benefit-cost ratio (BCR) analysis of the economic feasibility of solid waste recycling facilities under uncertainty. To account for the inherent variability and risk factors, a Monte Carlo simulation approach is utilized. Results are examined under three scenarios: optimistic, moderate, and pessimistic. The findings show that investment becomes feasible in the optimistic case (avg. BCR: 1.070), slightly above feasibility threshold in the moderate case (avg. BCR: 1.006), and infeasible in the pessimistic case (avg. BCR: 0.936). Based on the overall analysis, it was concluded that such investments may not be economically feasible in all scenarios. However, they offer several benefits beyond merely economic ones. Therefore, environmental and societal benefits should also be considered when evaluating these types of investments.