Electronic Scrap Legislation for a Sustainable, Green Economy

(The following is an editorial submitted by Linda McFarland, CEO of Paragon Green, a company involved in information technology asset recovery and electronic scrap recycling industry. The views expressed in this editorial do not necessarily reflect the opinions of Recycling Today)

It is no secret that the U.S. continues to face an electronic scrap crisis. An estimated 4.6 million tons of electronic scrap enters U.S. landfills each year, according to the United States Environmental Protection Agency. Current models for electronic scrap legislation are not adequate, so a more effective model must be developed as a basis for future state and federal legislation.

Since 2003, 20 states have enacted legislation for electronic scrap recycling. Most of the legislation is based on the extended producer responsibility (EPR) model, which puts the electronics End-of-Life (EOL) recycling responsibility on manufacturers and includes the collection and proper disposal of their electronics products.

California, which was the first state to adopt electronic scrap legislation in 2003, is the only state with the advanced recycling fee (ARF) model for legislation. ARF places the majority of the responsibility for EOL recycling on consumers who pay a fee upon purchase. Funds raised from this fee are allocated to a dedicated state agency, the California Department of Resources Recycling and Recovery (CalRecycle), which reimburses approved recyclers and collection programs.

Many of the remaining 30 states are beginning to develop their electronic scrap legislation and are looking to other states for best practices that stimulate an increase in electronic scrap recycling, green design for electronic products, and green job creation. What they are finding is troubling – there is no existing model for electronic scrap legislation that successfully accomplishes all of these goals.

Based on principles of a free enterprise system, we feel the ARF model is the best scenario for the environment and resource conservation of precious and non-precious metals and plastics, and should be looked to as a foundation for developing an alternative model for future state and federal electronic scrap legislation.

The optimal solution for an alternative electronic scrap legislation model is to combine the best practices of the ARF model with the best practices of the EPR model.

First, the ARF model must be evaluated to determine its strengths and weaknesses.

What ARF is doing right:

• Promotes a free enterprise system for the electronic scrap recycling industry that stimulates green collar job growth for registered recyclers and government departments managing the program. California’s ARF system has created an estimated 3,200 jobs since legislation went into effect.

• Serves households in rural, suburban and metropolitan areas, resulting in the collection of more electronic scrap. A 2009 report published by the National Center for Electronics Recycling shows California served more than 12 million households and collected 360.1 million pounds of electronic scrap in 2008.

• Builds a strong collection infrastructure that provides convenient opportunities for communities to recycle electronic scrap, since fees paid by consumers at the point of purchase of electronics relieve local governments of the cost of recycling.

• Covers the largest costs of electronic scrap recycling: collection, consolidation and transportation.

• Includes an educational program to create awareness for the electronic scrap crisis and how consumers can get involved.

• Provides a system to effectively manage the backlog of old products such as orphan waste, as there is little reliance on the viability of manufacturers for EOL recycling.

There are several areas where the current ARF legislation is lacking:

• Manufacturers are not responsible for EOL recycling of their products; therefore, there is little incentive for manufacturers to create greener designs for their products.

• TVs are more expensive to recycle than computers, yet fees paid by consumers under ARF vary slightly between the two.

• ARF has led to an increase in recycling of electronic scrap, but a decrease in reuse, according to the California Product Stewardship Council. ARF can be strengthened by offering a financial incentive to manufacturers to reuse products as a part of their recycling obligations.

Where ARF is lacking, EPR is doing it right. Unfortunately, the two groups that control electronic scrap recycling under EPR legislation, Waste Management Inc. (WM) and the Manufacturers Recycling Management (MRM) group, are employing monopolistic practices that limit the number of recyclers allowed to participate in their programs.* Additionally, these two groups are also limiting the number of collection events and locations for drop offs. The EPR legislation is allowing this to happen, and this is a model that the federal government and states cannot afford.

The Business Case for Modified Electronic Scrap Legislation

However, by integrating the areas where the EPR model is working into the areas where the ARF model is lacking, the result will be an improved model for electronic scrap legislation that will work for the economy, electronics manufacturers, communities and environment.

First and foremost with the new legislation, as is required under the EPR model, manufacturers must be responsible for EOL recycling of the televisions and computer monitors they produce that contain hazardous materials such as the lead-based glass found in CRTs. This will not only alleviate the issue of an imbalance in fees paid by consumers, but also it will give the manufacturers an incentive to create greener products.

Legislation must explicitly outline competitive contracting guidelines that allow for any registered recycler to compete for electronic scrap recycling business within these organizations. This will hold manufacturers responsible, while requiring groups like WM and MRM to operate within free enterprise principles, and will promote a balanced system where job creation and business growth can be stimulated to benefit local economies at the state and national level.

If states continue to implement the current EPR model of legislation, benefits for the environment and for the economy will be limited. In some states with EPR legislation, the manufacturers are actually recycling less now than prior to legislation because they only do what the law requires. As a result, more electronic scrap is entering landfills. Additionally, registered recyclers unaffiliated with WMI and MRM could be squeezed out of business which is bad for the economy and unemployment rates.

It is up to state and federal legislators to critically evaluate what is best for the economy, job creation and environment when developing electronic scrap legislation. Do not simply enact EPR legislation because it is easy to do so. The only option is to develop new, modified version of electronic scrap legislation that combines the best of the ARF and EPR models.

* While the author notes there are no official studies that verify the statement, through personal experience McFarland says that  in attempting to work with WM and MRM, as well as in discussions with industry colleagues, the sentiment on the difficulties with working with the two companies was  expressed. According to McFarland, the blanket response that they all receive is that WM and MRM are already working with a local electronic scrap collector and are not looking for additional partners at this time.