Full implementation of EU waste legislation would generate 400,000 jobs and save €72bn (£60bn), according to the European Commission.
It said that preventing damage to the environment by applying the law would cost far less than long-term remediation.
Environment commissioner Janez Potočnik said: “Our environment is protected by some 200 pieces of well established law, but all too often they are not properly applied.
“This does not just harm the environment – it damages human health, leads to uncertainty for industry and undermines the single market.”
The EC set out suggestions for member states including better inspections and surveillance; criteria for dealing with complaints; more access to justice; and support for European networks of environmental professionals.