h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

There are several local municipalities here in Pennsylvania that do something similar.

They charge a fee per trash bag which is an easily identifiable 'official' color. The theory is that by paying for what you throw away, you're more likely to recycle and find ways to divert re-usables from the waste stream.

Senior citizens really love this type of a system because they generate such a small amount of trash. Families with young children hate it because it's a huge extra household expense to get rid of diapers or the large amount of waste families tend to generate.

Where I live, we pay a flat fee for our trash service each month with no limits so there's no fiscal incentive to recycle or compost.

It ultimately comes down to politics and in areas with large senior citizen populations you find the pay as you go system. Surprisingly it's also very common in university towns - mainly because college students generate so much waste that it causes everyone's trash bill to go up.

Senior citizens always vote in US elections and college students rarely do in the community where they attend school so you find these practices most often in those communities.

I live in ontario, where we are limited to two bags a week. if you need more bags, you can buy tags to attach to the bags.
Seems to work ok. I've had no problems with it.