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With the rapid growth of developing countries, their urban waste is increasing at the same pace, which, in turn, is worsening the environmental pollution and leading to an urgent demand for waste governance. Different waste governance modes will produce different social welfare levels. According to the principles of economics of maximizing the benefit of limited resources, the mathematical models of the three waste governance modes of government, market, and mixed government–market are constructed separately in this paper, and then comparisons are made as to which mode is optimal. The results show that, from the perspective of consumer surplus and producer surplus, the mode by government is optimal, while the mode by market is optimal from the perspective of total social surplus. Since the government acts as the provider of waste governance in China, its allocation of waste governance mode is not optimal from the perspective of total social surplus, as a result of which it fails to restrain the environmental pollution caused by garbage growth most effectively. Nevertheless, since the equilibrium point of waste governance quantity is dynamic, there is still much room for the optimization of waste governance in China, which will certainly inject new impetus to the high quality and sustainable development of its cities.

Study on the Optimized Mode of Waste Governance with Sustainable Urban Development—Case from China’s Urban Waste Classified Collection