Some degree of market failure can be expected with regard to waste creation.  There is little or no cost to individuals to get rid of their trash, but having large landfills entails costs to society.

To solve the problem created by this negative externality, the government may impose a landfill tax.  This would basically mean that people would be charged for the costs of garbage disposal.

A Landfill.

One method of doing this is to charge everyone a share of the total costs of the landfill.  Doing this means individual families would not have a large economic incentive to recycle instead of throwing out trash.  Though the total costs of landfills would decrease if one family recycled, the total savings achieved would probably be shared by so many families that the savings to the family that recycled would be negligible.

Another option is to use an incentive system in which the government charges families for the amount of garbage they throw out.

The amount of garbage could be determined by weight.  Alternatively, families might have to buy special garbage bags to have their trash removed.  They would not want to have to pay for the bags, and would thus have an economic incentive under this system to put out less trash.

To avoid paying for bags, families might recycle as much as possible and throw away as little as possible.  They might also create less waste, dispose of it themselves, or reuse potential garbage.

Unfortunately, people might also burn waste, or throw it away somewhere else in the city.  These responses would not help to solve the problem of waste creation or promote recycling.