E-Waste Management in the US: In Search of a Financial Model

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Abstract

This paper defines and considers the peculiar characteristics of electronic waste or E-Waste, and invites particular reference to the system of E-Waste management followed by the US federal government and the member States. The paper studies the legal and policy aspects of the entire issue of E-Waste collection, reuse and recycling. It lists the reasons for the urgent need to limit E-Waste from proliferating by referring to the toxic and harmful elements commonly present in such waste and also reviews the collection and recycling models followed generally by electronics businesses and the government in the US. While the defining legislation in solid waste management in the US is the RCRA, the EPA is perceived as the key agency in controlling E-Waste and managing EOL of electronic products. While there is some confusion in defining E-Waste as also in including possible materials in a comprehensive and definitive list of electronic products that can be called E-Waste, environmental issues do predominate and are attempted to be addressed through both voluntary effort and mandatory regulations. However, the most critical factor in implementing a satisfactory EOL policy and in maintaining an effective E-Waste collection, reuse and recycling system is the availability of finances. The NEPSI has tried to evolve 12 models for financing recycling of E-Waste and all the systems have their merits and demerits. Also, a consensus is yet to be reached among key stakeholders like government, producers, retailers, collectors, recyclers, and consumers in establishing either a satisfactory E-Waste reduction and recycling system or in generating finance for maintaining such a system continuously at both federal and state levels. The paper recommends more government involvement and the adoption of stringent systems similar to that followed in EU member countries so that the problem of E-Waste proliferation can be arrested quickly and at a low cost.

Introduction

The California Integrated Waste Management Board defines E-waste as “consumer and business electronic equipment that is near or at the end of its useful life”. The City of Los Angeles Department of Sanitation website describes the term Electronic Waste or E-Waste as a “popular, informal name for unwanted electronic products that include computers, TV’s, VCR’s, stereos, copiers, fax machines and telephones which are usually replaced by advanced and new products”. The Ohio Office of Compliance Assistance and Pollution Prevention website defines Electronic waste or “e waste” as “old, end-of-life electronic appliances and devices”. EU WEEE Directive (EU, 2002) defines waste electrical and electronic equipment (WEEE) as “Electrical or electronic equipment, which is waste… including all components, sub-assemblies and consumables, which are part of the product at the time of discarding”. Directive 75/442/EEC, Article 1(a) defines waste as “any substance or object, which the holder disposes of or is required to dispose of pursuant to the provisions of national law in force”. The Basel Action Network (Puckett and Smith, 2002) states that “E-waste encompasses a broad and growing range of electronic devices ranging from large household devices such as refrigerators, air conditioners, cell phones, personal stereos, and consumer electronics to computers which have been discarded by their users”. The OECD (2001) defines E-waste as “any appliance using an electric power supply that has reached its end-of-life”. Widmer, Oswald-Krapf, Sinha-Khetriwal, Schnellman, & Boni (2005) observe that electronic waste or e-waste is a generic term that embraces various types of electric or electronic equipment, which are of no more value to their owners and the term also defines a standard definition.

Whatever the definition, electronic waste includes outdated or obsolete electronic items used by businesses or the common consumer. The US EPA Office of Solid Waste (2008) estimates that US citizens own around 3 billion electronic items and the national electronics industry generates almost $ 2 billion annually in electronic products. Hence, with fast technological changes that generally occur in the electronics sector, it is no wonder that a huge volume of the products manufactured becomes quickly obsolete and is discarded for better, advanced and newer products. The EPA website estimated in 2005 that around 1.9 – 2.2 million tons of electronics products were obsolete or discarded, and of this, around 1.5 to 1.8 million tons were disposed of in landfills while only 3,45,000 to 3,79,000 were recycled. In spite of the fact that electronic wastes were only a small fraction of the total solid wastes generated -below 2 percent of the total municipal solid waste generated- the situation is alarming owing to the hazardous nature of the products discarded and the environmental and safety concerns that such electronic wastes cause.

Legal Framework for Controlling E-Waste

In the United States, the government Environment Protection Agency or EPA has adopted a waste management policy hierarchy that comprises three modes of E-waste treatment. E-waste can be either disposed of in landfills or recycled or reused. The EPA has in place various regulatory and voluntary programs as an integral part of its E-Waste management policy approach. US laws differentiate between waste and non-waste, and hazardous and non-hazardous waste, and the EPA attempts to manage E-Waste as per the Resource Conservation and Recovery Act (RCRA), which is the governing legislation in this regard. The Act contains provisions for exemptions so that reuse and recycling are encouraged. The RCRA defines hazardous wastes as wastes that are generated by non-households at more than 220 lbs/mo, have distinct hazard characteristics, and are those that are to be sent or are actually sent for disposal. Most E-Wastes in the US are non-hazardous wastes. Some wastes require special handling. However, rules pertaining to E-Waste are generally more stringent in the individual states and many states classify E-Wastes as hazardous or universal wastes. Also, both state laws and the RCRA have in recent years incorporated rules pertaining to cathode-ray tubes or CRTs, including the exports and disposal of the same.

Why E-Waste needs to be Controlled

E-Waste generally comprises electronic products like computers, television monitors, VCRs, mobile phones, stereos, radios, etc. Although unwanted and hence discarded as waste, such materials often contain useful materials like aluminum, copper, gold, silver, etc which can be recovered from them. But such waste does contain harmful materials like mercury, lead, cadmium, chromium, etc which need to be removed from the environment for ensuring overall health and safety. Added to this is the need to conserve energy and the earth’s fast-depleting natural resources. The rate of generation of E-Waste is also alarming owing to the fast-technological obsolescence rates. It has been estimated (US EPA, 2004a) that consumers store huge amounts of E-Waste in their homes pending their final disposal and which would if disposed of, yield as much as “four billion pounds of plastic, around one billion pounds of lead, two million pounds of cadmium, and around four hundred thousand pounds of mercury”. In another report, the EPA (2004b) also estimates that “around two million tons of used electronics equipment is thrown away annually”. The damage or harmful effects caused by the materials that compose E-Waste can be highlighted briefly as follows owing to the degree of harm that they cause to human life and ecology.

Lead

Lead is found to be highly toxic and causes damage to the kidneys and reproductive and nervous systems. It also retards mental growth in children and newborns. A major hazardous material present in CRTs, where they constitute around 4-8 lbs, they are also a necessary component of solder commonly used in circuit boards in the electronics industry.

Mercury

Mercury is found in flat-panel display screens, printed circuit boards, switches, etc. In high amounts, mercury can damage the kidneys. The metal also has the potential to affect the growth of the young and can be passed on through breast milk.

Plastics

Computers comprise around 13.8 lbs of PVC and other plastic material. Sometimes, the combustion of PVC results in the generation of Dioxin, which is a very harmful toxin. Plastic covers, connectors, cables etc, which are a part of PCBs, are also a part of the E-Waste generated.

Cadmium

Chip resistors, semiconductors, batteries, infrared detectors, and computer circuit boards contain this metal. It is also used as a stabilizer of plastic. It causes severe kidney and bone damage.

Other Materials

Printed circuit boards (PCBs) and plastic cables contain brominated flame –retardants. CRTs contain barium and lead oxide. Cell phone parts are among the most harmful and contain various materials like copper, lead, beryllium, zinc and arsenic. Batteries contain lithium and nickel-cadmium. Even the manufacturing processes can cause contamination by oils and solvents. Printer toner cartridges contain lead, barium and carbon that can contaminate drinking water and such water cannot be rid of these harmful elements even by boiling. Disposal of hazardous materials by dumping electronic waste in landfills can gradually cause river and drinking water contamination. Also, the typical lifespan of computers has decreased from five to two years (www.cleanuptheworld.org). Desha, Hargroves, Smith, & Stasinopoulos (2008) observe that E-Waste comprises around 1,000 different substances, many of these being toxic and causing significant health risks and severe pollution that is associated with their disposal. According to Schmidt (2002), the European Commission considers E-Waste to be the fastest-growing (at thrice the municipal waste) component of municipal trash. Also, Brigden, Labunska, Santillo, & Allsopp (2005) quote estimates by the United Nations Environment Program (UNEP) that assesses the existence of around 20 to 50 million tons of E-Waste, generated annually worldwide. Additionally, short-life equipment like computers and mobiles constitute the most severe risks (Greenpeace). The matter is also compounded further by the increased growth in personal computers worldwide (a five-fold increase in 2002 over 1988 levels) (World Watch Institute, 2005).

Solutions for Reducing E-Waste

Both individual nations and world organizations are concerned with the growing hazards from the disposal of E-Waste. In the United States, the EPA has played a major role in regulating the generation and disposal of E-Waste in the country. The EPA (2004) recognizes that E-Waste, unlike ordinary waste, is bulky, has potentially toxic components, and also needs substantial funding for effectively managing its proliferation. It has hence adopted a policy approach that classifies waste, non-waste, hazardous waste and non-hazardous waste. The EPA regulates E-waste collection and disposal as a part of its overall waste disposal policy while the RCRA stipulates legal exemptions and restrictions relating directly or indirectly to the disposal of wastes in the country. Various states have different programs and rules in place and these are generally more stringent than the national laws and regulations.

The E-Waste accumulated by consumers and businesses can either be disposed of in special landfills or reused. They can also be recycled. Generally, recycling is one of the better options for E-Waste collection and disposal, since important and costly materials can be recovered during the process of recycling and reused in the production process. However, recycling is cost-intensive and high costs prohibit most businesses from adopting recycling methods of E-Waste disposal. Recycling includes processes like sorting of the E-Waste to identify and recover reusable materials, altering the manufacturing process itself so as to produce reusable components, etc.

Another policy that is being propounded for effective waste management is Extended Producer Responsibility or EPR. As per the OECD (2001), EPR is an environmental policy methodology whereby a producer, in addition to the responsibility for production, is assigned responsibility also for the post-consumer part of the manufacturing process, even including the final disposal of the product. The producer is held responsible for pollution and hence has to bear costs or penalties for such action. Hence, by this principle, the additional cost of preventing environmental pollution is added to the production costs. The OECD (2001) observes both voluntary and mandatory approaches in implementing EPR. EPR programs could include programs like the product take-back programs, mandated regulations like mandatory recycling, banning hazardous substances, establishing product standards, etc., establishing voluntary codes through public and private partnerships with government, labeling, leasing, etc., and, implementation of economic approaches like the introduction of advance recycling fees, deposit-refund schemes, disposal fees and taxes and subsidies (OECD, 2001). The principle of EPR has been introduced in the US in the case of many important environmental laws relating to hazardous waste.

The US federal and state governments have attached considerable significance to end-of-life product management and have introduced take-back laws for introducing in practice the EPR principles discussed above. The laws devolve responsibility on producers for ensuring pollution-free E-Waste disposal for the entire life cycle of the products. The cost of products is incorporated into the pricing structure of the products and ultimately gets passed on to the consumer. The producers are thus required by law to manage the end-of-life stages of the products that they manufacture. However, high costs do inhibit a satisfactory system of take-back to be effective. Legislation to take back products at their end-of-life (EOL) essentially attempts to prevent the disposal of hazardous wastes into the soil, water or atmosphere through depositing in landfills or through incineration. The legislation also tries to strengthen the supply chain of recycled materials and also reduce the cost of the same. The recycling process often saves on energy consumption, in addition to recovering useful and costly materials present in E-Waste. Additionally, take-back laws also help in “preventing pollution by reducing the environmental burden of EOL products at their source” (Toffel, 2003). The producers of electronic products can incorporate EOL management tools by improving product durability, and also by ensuring a functional and effective repair, refurbishment, disassembly and recycling system. In the United States, it is only in recent years that a product take-back system has been introduced in various states.

Recovery of components for reuse from EOL products is another major concern for business enterprises. Generally, producers follow any one or more of seven strategies for product recovery from EOL products. Either they do nothing, i.e. producers do not initiate action in effecting product recovery for reuse. Or, they can promote the market for recycling programs. The producer company may also design its products so as to reduce recycling costs. It can also offer rebates to its customers. However, the company often enters into long-term contracts with recyclers, or into an alliance with a partner for establishing recycling facilities, and even establishes an industry consortium. The company can also actively promote dismantling and recycling operations through product recovery centers.

Effective Product Life Cycle Management

Any and every product has a life cycle right from raw material selection and purchase to the end-of-life (EOL) stage of the product. At the EOL stage, a product loses its functionality and fails to satisfy the needs of the original owner (Rose, 2000). Products that have reached their end-of-life can be either disposed of or their life span extended (Billatos & Basally, 1998; Rose, 2000). Business enterprises adopt any one of five available EOL strategies whose ranking or effectiveness is determined by their environmental, political and economic efficiency (Rose, Beiter & Ishii, 1999; Rose, 2000). Such EOL strategies include re-use, remanufacturing, servicing, disposal or recycling. While reuse essentially means the recovery and trade in used products or components, servicing attempts to extend the useful life of a product by maintenance or repair. Remanufacturing means the extraction and reuse of specific components from the waste product in making new products. Disposal includes the processes of landfill or incineration. Recycling means the treatment of the products for recovering vital components and then reprocessing or reusing the same. Most often, these strategies are combined for achieving maximum profitability and efficiency (Billatos & Basally, 1998; Rose, Beiter & Ishii, 1999; Rose, 2000). Usually, the efficiency of an EOL strategy is determined by both the design process and the method of collection for recovering discarded components (Rose, Beiter & Ishii, 1999). The collection method entails the recovery of discarded waste products (EPA, 1999), and the volume and quality of the incoming flow of recovered products constrain the efficiency of certain EOL strategies such as recycling and re-use (Billatos & Basally, 1998; Rose, Beiter & Ishii, 1999). Commonly employed collection methods rely on five models, namely, drop-off, curbside collection, permanent collection depot, point-of-purchase, and combined or coordinated system (EPA, 1999). Morioka & Jofre (2005) observe that diverse environmental and logistical matters need to be considered while choosing a suitable EOL strategy for a product. More particularly, electronic equipment has a high residual value after discard (EC, 2000). Substantial amounts of disposed of equipment can be effectively and profitably re-used or re-manufactured. The profit factor assumes significance particularly in the case of small manufacturing enterprises, which are required to incorporate costs of pollution control and conservation methodologies adopted by them as per legal and regulatory requirements.

E-Waste Recycling Systems

A viable and effective E-Waste recycling system comprises a clear definition of products to be covered in the model envisaged. Also, an effective system for the collection of waste materials needs to be implemented. The transportation system ensures the collected material is carried from the owner to the recycler. The system includes setting targets for maximizing collection and providing incentives for the same. But more than an effective collection and transportation system, it is the system of mandatory and voluntary regulatory mechanisms and the establishment of a cost-effective recycling system that can solve the problem of E-Waste accumulation. Waste needs to be minimized at the originating point. The reusable components are to be extracted in a cost-effective manner and again reused in manufacturing new products. Also, a market for recycled products needs to be created and all stages of the system backed up by a strong financial system.

Products Covered

Stakeholders provide diverse views on the products to be covered in an E-Waste recycling system. While some favor the adoption of a narrow product list, others recommend that the list of products covered be broad and all-inclusive at the very outset in defining the recycling model. Most state laws focus on CRTs in televisions and PC monitors. The US Dept of Commerce (USDOC) observes that whereas the Electronics Industry Association (EIA) has recommended as E-Waste only a small list of products including computer monitors, PCs and TVs having video screens more than nine inches in size (Jul 2006), NEPSI has recommended a more comprehensive list of products including CRT and flat-panel TVs, computer CRTs and flat panel monitors over 9 inches, laptop and notebook computers, CPUs, small peripherals like keyboards, cables, speakers, etc., and computer peripherals like printers (2001). On the other hand, observes the USDOC, the EU WEEE Directive’s approach is in contrast to U.S. state legislation and NEPSI is very comprehensive and includes electronics, tools, appliances, and medical equipment. Additionally, producers in the EU are required to affix the symbol of a wheeled trash bin along with an ‘x’ mark on the product. This serves as a reminder to consumers that such a product cannot be dumped as trash but has to be recycled as per EU laws.

Collection of E-Waste from Consumers

Processes of the collection generally include one or more processes like ‘curbside pick-up, local government drop-off centers, ongoing drop off at retailers of electronic products, one-for-one take-back by retailers, producer-established drop-off centers, mail-back to producers, ongoing drop off at non-profit or other private sector participants, and sporadic collection events” (US Dept of Commerce, 2006). A functional collection system needs to devolve appropriate responsibility and impart sufficient authority to government and private entities or stakeholders in the entire process. Collection also envisages a viable system of paying incentives and sufficient financial support for the effort to succeed. Other initiatives include the taking back of products by the producers or retailers themselves. Notably, the EIA affixes primary responsibility for the collection of E-Waste products on the government. The method of collection is also dependant on the type of waste products; whether such products can be collected and transported as a whole or whether they can be broken up into components and then transported for recycling. Also, the various systems for waste collection have their own advantages or disadvantages. For instance, curbside collection is convenient for collecting household E-Waste. The high cost of such a collection method can only be offset by increased volumes collected and higher returns and the process must be financially viable in order for the collection agency to carry on operations successfully and profitably. In contrast to curbside pick-ups, municipal drop-offs offer a cheaper option, particularly for collecting special waste products like obsolete or broken electronic items. However, other than the government or public bodies, retailers themselves can play a major role in minimizing E-Waste, ensuring their collection and promoting reuse and recycling of useful components in them. In fact, many retailers already have in place various buy-back or take-back schemes for ensuring that waste from their products re-enters the production cycle and E-Waste is not allowed to pollute or cause environmental and health hazards. However, such schemes are voluntary by nature and their effectiveness depends on the value perception of consumers on whether the incentive offered by such buy-back is attractive or not. Other options include a private mail-back program in which the consumers mail the product back to the producers, a private drop-off program in which the producers set up drop-off centers where the products could be dropped off by the consumers, etc.

Recycling

While the Environment Protection Agency or EPA controls the disposal and recycling of solid and hazardous waste, including E-Waste by organizations and large businesses and is given such authority by the provisions of the Resource Conservation and Recovery Act (RCRA) of 1976, household hazardous waste materials are exempt from federal environmental laws. However, non-hazardous household waste is covered under the RCRA provisions. Also, there are numerous recyclers already functioning in various parts of the United States, as in other parts of the world. There are already over 200 recyclers working to reduce and reuse E-Waste components in the country. However, the continuing operations of such recyclers depend on profitability and this can only be assured or even increased in case of increased volumes of E-Waste treated by these recyclers. However, most of the E-Waste in the United States as also elsewhere has been found to lie at consumer homes, pending their final disposal. In this situation, state financing is called for or even financing through private third parties is called for.

Financial Systems for E-Waste Recycling

Since recycling of discarded electronics products or E-Waste is perceived as technology and cost-intensive, the government at both federal and state levels is continuously seized of finding out ways of either minimizing the costs of recycling or effectively distributing the cost elements along the entire product life cycle. The National Electronics Product Stewardship Initiative (NEPSI) set up in 1999 is aimed at achieving this end generally; its major objective is the financing of a national recycling mechanism with particular emphasis on PCs and TVs. The US GAO observes in a report (2005) that economic factors play a major role in inhibiting the recycling and reuse of discarded electronic products. The costs of recycling and reusing E-waste components are due to both high re-furbishing and recycling fees charged by re-furbishers and recyclers and the costs of transportation involved and borne by consumers for effecting such recycling at the recycling centers. Recyclers also cannot maintain profitable services without charging fees for such collection of E-Waste. Additionally, even in the present day, most states generally do not provide incentives to consumers or enterprises to avoid using landfills and to go in for recycling, which process entails higher costs. The federal system neither provides for a financial mechanism for management of business enterprises nor has in place a system of oversight of products, particularly of products that are exported to other nations having less stringent environmental laws in force. Thus, the GAO report also observes that “the costs associated with recycling and reuse, along with limited regulatory requirements or incentives, discourage environmentally preferable management of used electronics. Generally, consumers have to pay fees and take their used electronics to often inconvenient locations to have them recycled or refurbished for reuse. Recyclers and re-furbishers charge fees to cover the costs of their operations. In most states, consumers have an easier and cheaper alternative—they can take them to the local landfill. These easy and inexpensive alternatives help explain why so little recycling of used electronics has thus far taken place in the United States. This economic reality, together with federal regulations that do little to preclude disposal of used electronics along with other wastes, have led a growing number of states to enact their own laws to encourage environmentally preferable management of these products” (2005, p. 8).

The Office of Technology Policy (OTP) of the Technology Administration convened a Roundtable on Electronics Recycling in Sep 2004 for consideration of key issues outstanding and relating to recycling. It considered particularly the financial issues of recycling. Attempts were made to collect suggestions from various stakeholders in matters like the type of products to be included in an E-Waste recycling program, collection methods to be adopted, methods of recycling and transportation of discarded products, the role of the government in such recycling program, and the sourcing of finance for recycling programs. Among the suggestions that emerged from the Roundtable, many related to financial aspects. However, most stakeholders agreed that the government must legally enforce manufacturers to participate in the financing of the recycling process. The need was also expressed to introduce a single financial system for the whole country. Such a national financial system could include mechanisms like the Advance Recycling Fee or ARF adopted by many states already. The states also felt that the system had to incorporate competition and market forces into the system at the very outset so that costs of recycling would be low. Some even recommended the use of the services of a non-governmental agency or third party to manage the financial system for recycling. By doing so, felt the stakeholders, the system would be both fair and uniform in approach. Also, cost control in recycling was recommended to be achieved through establishing EPR, already described earlier. Fishbein observed (2005) that “EPR shifts the responsibility for discarded materials that would otherwise be managed by local government to private industry, thereby incorporating the costs of product disposal or recycling into the product price of new products”.

Models for Financing Collection, Transportation and Recycling

There are various models followed in many countries including in the USA that relate to the financing of collection, transportation and recycling of waste and E-Waste. Many of these are briefly mentioned below.

General Tax Base Funding

This envisages additional taxation at national or state levels which can be used to collect funds for financing collection, transportation and recycling activities. Some countries have a household waste tax in place. Others have general taxes which are used by local boards or municipalities in funding the collection, transportation and recycling activities. Such taxation distributes the incidence of taxation among all taxpayers. There is no responsibility attached for the same on producers of electronic or other wastes. There is also no mandatory state or federal incentive structure in place to promote environmental conservation unless provided for by the government or by individual business enterprises causing the E-Waste pollution. The government collects and retains the taxes for use in its stated purposes of E-Waste disposal, component reuse, and pollution control. However, the government can also offer tax incentives so as to encourage recycling practices. However, since tax rates cannot be made too high, and costs of recycling are on the higher side, a sustained governmental effort, all-round stakeholder involvement and proper financing structure are needed to make the processes successful.

End-Of-Life Fees or EOL Fees

EOL Fees are the costs borne by the end-user at the point of discarding the electronic product. Largely unregulated, such fees offer some marked benefits. These fees are helpful in financing recycling quickly and also indirectly helps extend the EOL of products. The fees are also recovered as costs of products from the consumers rather than from the general taxpayers of the country. The EOL fees also help build a market for recycling and increased participation results in decreasing the fees in the long run. However, EOL fees can lead to dumping since consumers can often opt-out due to higher costs. EOL Fees can also be regressive (Daniele, 2004). Also, in cases where the reusable parts of E-Waste are a small portion of the total wastes and it is not profitable to recycle reusable components, high EOL fees tend to be counterproductive rather than beneficial.

Deposit and Refund

This is a system whereby the customer deposits a certain amount with the retailer while buying the products kept in containers and gets back such funds as a refund once he returns the used containers. Such a system entails large transaction costs and is also felt to be unviable in the case of electronic products.

Advance Recovery Fees or ARF

This envisages the payment of upfront fees while purchasing the products and such fees can finance a recycling program. It can be implemented and controlled by the government or even a third-party organization or TPO. Such a system helps in assuring funding across the entire recycling program and can be useful in funding recycling of products returned after their useful life span is over. The ARF also facilitates the involvement of various stakeholders like producers, government, retailers, consumers and recyclers. To further promote recycling programs, the government provides collectors of E-Waste a payment for such service rendered as an incentive to promote recycling. This payment is called Collection Incentive Payment or CIP. CIP only reinforces a frontline financing system like ARF or EPR. However, there are various models of ARF adopted by various states in the US. For instance, in one model, the ARF is collected and managed by the producers through a TPO while the funds are sourced from consumers. In another model, while the producers are responsible and manage the recycling process, they do not receive any part of the ARF. The collected funds are usually used in financing CIP to collection organizations. However, producers could also form a TPO to better manage the recycling and also to distribute the costs and responsibilities of the operations. Or the government could exercise full control over the system. Generally, administering an ARF entails substantial costs.

Producer Responsibility and Cost Internalization

This model also called EPR and discussed before was introduced in the 1990s. In it, the entire responsibility for the recycling of products generated by them and which can cause environmental harm devolves on producers. Producers can act singly or as a group of producers by means of a TPO to share responsibility for recycling their products and maintaining the system. Either producer undertakes to bear full costs i.e., in case of full cost internalization or CI, the producers absorb full costs of recycling and reuse of components of E-Waste. In the partial cost internalization or PCI method, the government undertakes responsibility for collection while the producers take on only the costs of consolidating, processing and recycling E-Waste or other solid waste products. Transaction costs are usually lower, the recycling market becomes more competitive, the overall cost for the government is low, and the design for the recycling system is a lot simpler and backed by incentives. Among States, California is the only state that has in place an EPR system. But one disadvantage of EPR is that the cost structure is non-uniform and varies from producer to producer.

Choosing a Financial Model: A Conclusion

The various financial models considered have their own merits and demerits. The National Electronics Product Stewardship Initiative or NEPSI considered 12 such models including the ones described in the foregoing paragraphs. The initiative was a multi-stakeholder program that was aimed at establishing a financial system for funding the reuse and recycling of various E-Wastes like TV and computer monitors, PCs, and other peripherals. The NEPSI recommended that the participation of producers of electronic equipment was necessary for managing the EOL of products better and in a cost-effective manner. The major goal of NEPSI was to “develop a system, providing for a viable financing mechanism, so as to maximize collection, reuse, and recycling of used electronics, while also implementing incentive system for proper product re-design that could result in source reduction, reuse, and recycling, reduce toxicity and increase the recycled content” (NEPSI, 2001). Even in the present time, there has not been any consensus among stakeholders as to the best system of financing the recycling of E-Waste to be adopted state-wise or federally.

Many financial models are better suited to financing other solid waste recycling while they can hardly be used in financing the recycling of used electronics products. Also, the social and economic conditions of the US are suitable for some, while not so for others. Thus, whereas the General Tax Based Funding system is a model that affixes higher taxes on general taxpayers, it does not shift the EOL costs of collecting, reusing and recycling E-Wastes on the originators of the products or manufacturers. This goes against the fundamental principle of costing that would ideally attach the responsibility for costs of recycling and maintaining an environmental conservation mechanism upon those originating the same. Nonetheless, such taxation can easily be incorporated into the monthly waste disposal fees of households. In another model, the responsibility for the entire process is shared among retailers, collectors, government and consumers. The taxpayers or the consumers pay for the collection services whereas the government, contractors and retailers would ensure such collection of EOL products. The producers would pay for the transport and recycling process either by means of the sale of new products or through internalization of costs. In yet another version of the same model, contractors have to ensure transportation and recycling, while disposal fees are to be collected from consumers.

It has also been found that most consumers indefinitely retain E-Waste in their houses or garages pending final disposal. Generally, consumers are averse to carrying their obsolete electronic products to the collection centers, owing to the distance from their homes or due to high transporting costs. Hence, the NEPSI also recommends a customer mail-in program by adopting which EOL products can be returned by mail to the producers or contractors. Although such a system can be used to serve rural and disadvantaged people in better managing their E-Wastes, the process is perceived to be costly and generally unviable owing to the bulky nature of electronic products. In circumventing similar hindrances for affecting an efficient and cost-effective system for financing E-Waste collection, reuse and recycling operations, concepts like ARF and CIP have been evolved at the NEPSI forum. However, most states are yet to reach a consensus in adopting a specific model of financing. Federally also, there is no uniform financing system mandated by law. Some systems like the Deposit and Refund System are found to be unsuitable for use in the electronics industry while, in general, no satisfactory system of sharing responsibility for and financing recycling processes has as yet been evolved specifically to cater to the needs of E-Waste management. Obviously, further and more involved government intervention and the institution of a clear, objective-oriented environmental conservation policy similar to the EU laws can help strengthen efforts in controlling E-Waste and the harmful fallout of hazardous E-Waste in the United States.

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