A new computer based life cycle assessment model (EASEWASTE) was used to evaluate a municipal solid waste system with the purpose of identifying environmental benefits and disadvantages by anaerobic digestion of source-separated household waste and incineration. The most important processes that were included in the study are optical sorting and pre-treatment, anaerobic digestion with heat and power recovery, incineration with heat and power recovery, use of digested biomass on arable soils and finally, an estimated surplus consumption of plastic in order to achieve a higher quality and quantity of organic waste to the biogas plant. Results showed that there were no significant differences in most of the assessed environmental impacts for the two scenarios. However, the use of digested biomass may cause a potential toxicity impact on human health due to the heavy metal content of the organic waste. A sensitivity analysis showed that the results are sensitive to the energy recovery efficiencies, to the extra plastic consumption for waste bags and to the content of heavy metals in the waste. A model such as EASEWASTE is very suitable for evaluating the overall environmental consequences of different waste management strategies and technologies, and can be used for most waste material fractions existing in household waste.