Computers, E-Waste, and Product Stewardship:
Is California Ready for the Challenge?

_________________

A Menu of Policy Options for
Computer Extended Product Responsibility

Report for the
U. S. Environmental Protection Agency
Region IX

Prepared by
Global Futures Foundation
The Future 500
25 Maiden Lane, 6th Floor
San Francisco, CA 94108 USA
Ph: 415.248.0011
Fx: 415.821.2736
http://www.globalfutures.org/

Contributing Authors:

Tachi Kiuchi
Cate Gable
Steve Cassel
Bill Shireman

Project Manager: Cate Gable

Table of Contents

Executive Summary

• Overview of the Problem
• Menu of Solutions

Acknowledgements

Introduction

Background

Objective of this Report

Project Methodology

Overview of the Problem

The Stakeholders

'Value Loop' Solution Possibilities and Impacted Stakeholders

Menu of Computer EPR Policy Options

Selected Stakeholder Discussion of EPR Policy Options

Summary of Provisions for Six Selected EPR Policy Options

Cost of Computer EPR Policy Options

• Figure #1 Foundational Costs for Recycling
• Figure #2 Cost Comparisons for Various Policy Options: High/Low Projections

Additional Cost Analysis Details

• Figure #3 Advance Disposal Fee and Return Rates
• Figure #4 Advanced Disposal Fee for 50% Return Rate: High/Low Projection
• Figure #5 Consumer Deposit Chart
• Figure #6 Labeling Costs

Cost and Benefit Analysis by Policy Option

Next Steps - Overview

• Western Electronic Product Stewardship Initiative WEPSI

Summary and Conclusions

EXECUTIVE SUMMARY

Overview of the Problem

Computer waste poses two core problems: the volume of computers and related electronic equipment improperly disposed of in municipal landfills, and the toxicity of both the computer chip manufacturing process and the computer and CRT itself as a waste product.

• More than 2.2 million computers are sold each year in California. Most of these are obsolete in little more than two years.
• Based on this, more than 6,000 computers go to waste every day in California. Most of these are stored in back rooms and offices because people are unwilling or reluctant to discard them as trash. However, an increasing number are entering the waste stream.
• E-waste represents from two to five percent of the U.S. municipal solid waste stream.
• An estimated 300,000 tons of e-waste ended up in U.S. landfills in 2000, and the problem is expected to grow four-fold in the next few years.
• E-waste contains significant quantities of toxic materials. Each computer or television display monitor contains an average of 4-8 pounds of lead. Monitor glass contains about 20 percent lead by weight.
• About 70 percent of the heavy metals (including mercury and cadmium) found in landfills come from electronic equipment discards. These heavy metals and other hazardous substances found in electronics can contaminate groundwater and pose other environmental and public health risks.
• The State of California Department of Toxics has established that it is illegal to dispose of CRTs in landfills. (A copy of this letter can be found on the Materials for the Future website http://www.materials4future.org/,)
• Because of advances in chip technology, the life span of a computer has been reduced from perhaps 4-5 years to approaching 2 years or less
• Currently the cheapest e-waste recycling option in the U.S. is to send e-waste overseas: how it is used or disposed of there is largely unknown
• Despite aggressive toxic standards mandated by the WEEE initiative in Europe, OEMs in the U.S. are waiting or reluctant to act until there is clear regulatory direction. And yet they want 'a level playing field'-i.e. the same regulations applied the same way for all competitors.
• OEMs lack a system of 'end-of-life feedback,' so currently it is not in their individual or mutual benefit to design computers for standardization or use of interchangeable parts, since end-of-life problems do not impact them.
• Second hand dealers (Thrift shops, Salvation Army, Goodwill,) and Waste Haulers or those in the recycling business are unsure about how to handle equipment they are receiving and what disposal options are legally available to them. Additionally, with no certainly about market volume, infrastructure investment is risky.
• While computer waste is relatively valuable when delivered to a recycler, the high cost of transportation and handling generally makes it uneconomical.
• There is insufficient infrastructure to support increased recycling of CRT/computer waste and few economic incentives to create one.

Menu of Solutions

This report examines six policy options which could catalyze the creation a system of extended product responsibility for computers, through feedback mechanisms that intended to foster better up-front design for environmental considerations. Additionally, these economic models could provide seed monies for infrastructure development. The options and their projected costs include the following:

The projected costs in the table above are preliminary and intended to foster discussion. The provisions of the policy options are summarized in this report.

*

ACKNOWLEDGEMENTS

Over the course of this project, team members' knowledge and experience was influenced and enhanced by the many people who took the time to speak to us on a variety of topics related to Extended Product Responsibility (EPR), computers, and electronics. We, at Global Futures Foundation, would like to acknowledge those who contributed to this document, either informally or formally.

At the same time, we want to make clear that the opinions and information offered here are of our own making. This report does not represent the formal position of the US EPA, funder of our study, nor is it endorsed in any way by any of the people we mention below. Nonetheless, we greatly appreciate the support and assistance provided by the following people:

Mary Casserly Keil, Office of Solid Waste, USEPA / Region 9, CA
Heidi M. Hall, Manager, Office of Pollution Prevention and Solid Waste, USEPA/ Region 9, CA
Gordon Hui, USEPA / Washington, D.C.
Clare Lindsay, Project Director, EPR, USEPA / Office of Solid Waste, Washington, D.C.
Viccy Salazar USEPA / Region 10, OR
Eileen Sheehan, Office of Solid Waste, USEPA / Region 9, CA
Keith Smith, Electronic Product Stewardship, Cal/EPA
Bob Tonetti, USEPA / Washington, D.C.

Steve Apotheker, Association of Oregon Recyclers
Larry Chalfan, Zero Waste Alliance, OR
Sheila Davis, Materials for the Future, CA
Bette Fishbein, Senior Fellow, INFORM
Mark Murray, Californians Against Waste (CAW)
Wayne Rifer, Recycling Advocates, Director, WEPSI- NW
Lori Stole, Recycling Advocates, OR
Lynn Rubinstein, Northeast Recycling Council
Ted Smith, Silicon Valley Toxics Coalition, CA
David Stitzhal, Full Circle Environmental, Inc., and Northwest Product Stewardship Council, WA
Steven Wyatt, Executive Director, Computers & Education, Computer Recycling Center, CA

Shirli M. Axelrod, Sr., Environmental Analyst, City of Seattle, Resource Planning Division, WA
Patty Baggese, City of San Jose, CA
Rory Bakke, Senior Program Manager, Alameda County Waste Management Authority, CA
Jeff Bickford, Marion County Solid Waste Mgmt., OR
Karen H. Brown, Deputy Director, Nat. Institute of Standards and Technology, US Dept. of Commerce
Cathy Buller, Pollution Prevention Research Center, WA
Alfred Chaney, Specialist, Policy and Analysis Office, State of CA
Greg Cooper, Dept. of Environmental Protection, MA
Angela Deckers, City of Boise Public Works, ID
Sherry Enzler, Office of Environmental Assistance, MN
David Friedman, Nevada Div. of Environmental Protection, NV
Michael Foster, City of San Jose, CA
Steve Grealy, City of San Diego - Env. Services Dept., CA
Robert Haley, City and County of San Francisco, CA
Peggy Harris, Dept. of Toxic Substances Control, CA
Garth Hickle, Minnesota Office of Environmental Assistance
Maureen Hickman, Office of Environmental Assistance, MN
Sego Jackson, Snohomish County Solid Waste Div., WA
Ken Kelly, County of Santa Clara, CA
Mark Kennedy, Integrated Waste Management Board, CA
Isao Kobashi, Western Region Pollution Prevention Network
Michael Paparian, Board Member, Integrated Waste Management Board, State of CA
John L. 'Jack' Price, Environmental Manager, Dept. of Environmental Protection, Tallahassee, FA
Jay Shepard, Dept. of Ecology, WA
Dick Schmidt, City of Portland, OR
Jan Whitworth, Dept. of Environmental Quality, OR

June J. Andersen, Manager, Environmental Conscious Products, Product Safety and Asset Protection, IBM
Diana Benz, Head of Environmental Product Design, IBM, IEEE
Terry Berke, Semiconductor Equipment and Materials Intl.
Fabio Borri, Corporate Director, STMicroeletctronics SRL
Tania Cortez, Recycling Superviser, EHS, Apple Computer
Daniel J. C. Herr , Director, Materials ad Process Sciences, Semiconductor Research Corporation
John Keller, Kodak,
R. Bruce Paton, EVP, Rolltronics
Richard K. Stagg Director of Quality, Epson
Karl Tiefert, Product Stewardship Manager for Semiconductor Products Group, Agilent Technologies
Dani Tsuda - R&D, Apple Computer
Michael D. Sauvante Chairman and CEO, Rolltronics
Renee St. Dennis, Roseville Plant Manager, Hewlett-Packard,
Joe Shimsky, Pitney Bowes
Douglas S. Smith, Sony Electronics
Ab Stevels, Phillips, University of Delft
Wayne Young, Senior Engineer, Environmental Conscious Product Program, IBM

Anders Benson, TCO
Heather Bowman, Manager, Environmental Affairs, Electronic Industries Alliance
Judith Curtis, Communications Manager, SEMATECH
Bob Duffin, Director, Environment Safety ad Health Division, SEMATECH
Holly Evans, Director, Environmental Affairs, Electronic Industries Alliance
Christina Ohrvall-Bergstrand, TCO
George M. Scalise, Presdent, Semiconductor Industry Association
Phillip White, Industrial Design Society of America

David Caiuchi, Asset Recovery Group
D. Heath Hildebrand, Operations Mgr., Earth Protection Services, Inc (EPSI)
Mark Lotzkar, General Manager, Pacific Metals LTD.
Kevin McCarthy, Municipals Programs, Electronics Recycling, Recycle America, Asset Recovery Group
Andre Weiglein, Allied Electronic Recovery

Carlos A. Benito, Department of Economics, Sonoma State University
Gary Davis, Director, Center for Clean Product and Clean Technologies, Univ. of Tennessee
Scott Cassell, Product Stewardship Institute, Univ. of MA
Robert H. Girling, Professor of Business Administration, Sonoma State University
John Bullock, Attorney, Basel Convention

Henry Norr , San Francisco Chronicle, CA

*

INTRODUCTION

The report is prepared by Global Futures Foundation (GFF) and the Future 500. GFF is a 501(c)(3) non-profit that resolves conflict and forges partnerships between corporations and advocacy organizations. GFF administers a global business network called the Future 500, which consists of member companies interested in corporate sustainability and practical programs to promote it. The contributing authors of this report include the former CEO of a major computer and electronics manufacturer, the former executive director of one of the nation's largest recycling organizations, and an expert on strategic planning.

There are two root computer and electronic waste (hereafter, e-waste) problems:

• the volume of computers and related e-waste improperly disposed of in landfills
• and the toxicity of both the computer chip manufacturing process and the computer or cathode ray tube monitor (CRT) itself as a waste product

When we talk about product stewardship as a general solution framework for the computer and electronic waste problem, we are referring to the ideals that promote a closed-loop manufacturing process. By that we mean the concept that product manufacturers are responsible (or share responsibility) for the system that brings these products, at end-of-life, back into the reuse, repair, or recycling stream. Product stewardship also includes a design for the environment commitment (DfE). In Europe these concepts together are generally called Extended Producer/Product Responsibility or EPR.

We should acknowledge immediately that the computer and electronics disposal problem is a complex one that requires a systems thinking approach to solution making. There are a network of causes and effects that explain why the current situation is not working in the best interests of all stakeholders. These causes occur at many points along the product manufacturing cycle. But in order to find a systemic solution, we must reconceive of the manufacturing process not as a linear chain, which leaves unused computers in a heap at its end, but rather as a loop, which brings the equipment back into the design and manufacturing process as raw information or material to be re-used.

This report outlines a menu of EPR policy options for computers and e-waste. Although a variety of solutions are proposed at each step of the product loop from design to manufacturing to disposal, we present a preliminary review of six policies selected from among those options. These six represent a reasonable cross-section of policy options that have floated to the top in discussions with more than 50 stakeholders in the computer and recycling industries, environmental groups, and government.

The six policies examined in detail in our report are the following:

ADVANCE DISPOSAL FEE
1. Charge industry for costs of disposal, as hazardous waste, for all computers sold

ADVANCE RECYCLING FEE
2. Charge industry for costs of recycling for all computers sold

DEPOSIT
3. Government institutes a $25 deposit on each computer sold; fund managed by government; or
4. Industry institutes a $25 deposit on each computer sold; fund managed by industry

LABELING
5. Label the materials, energy, and toxics (MET) content of each computer (model: TOC )
6. Award "Eco-Star" to best 25% MET (model: Energy Star)

Our report goes on to analyze the costs and benefits associated with each of these six options and to make suggestions about next steps in order to move toward a consensual solution acceptable to a majority of stakeholders.

BACKGROUND

The life span of computers used to be decades, then years, and now often months. Millions of computers, screens, and peripherals are being rendered obsolete after little more than a year of active use. Just a small percentage of these are reaching the solid waste stream. Most are stored in attics, garages, and warehouses, their owners unwilling to throw away something they perceive to have so much value.

Their perception of value may be accurate. Xerox has earned more than $1 billion through an asset management program through which it takes back, disassembles, and remanufactures copy machines. Pitney-Bowes earns millions each year with its own postage meter remanufacturing system. In both cases, systemic barriers originally made the systems uneconomical. Only when a whole-systems approach was adopted did the companies find ways to profit from remanufacturing.

If computer remanufacture were highly profitable under today's systems, it would already be happening to a much greater extent. There are clear technical, marketplace, political and other systemic barriers. Computers are faster-cycle products with shorter life spans, and face an additional host of systemic obstacles. Nevertheless, they too could be made more durable, upgradable, reusable, and recyclable. Hewlett-Packard, Sony, Sharp, IBM and Mitsubishi Electric are among the manufacturers now examining or testing product take-back and rebate systems. Yet no manufacturer has yet initiated a financially successful program.

Why did Xerox and Pitney-Bowes succeed where computer makers failed? One contributing factor is that they had established a de facto system of voluntary extended producer responsibility (EPR). Both had built their companies on leasing rather than selling machines. Both had accumulated millions of returned machines, which they stored in warehouses on the assumption that one day they would find a way to discard or reuse them. Both eventually benefited from the initiative of interested staff members, who took on the challenge and found ways to make use of the returned machines. And most important, both eventually used the knowledge they gained from the machines they took back to redesign their products at the front end, to enhance durability, reusability, and recyclability.

Soon, the computer industry will face a similar challenge and opportunity. States and agencies, including the EPA, are pursuing a variety of projects dealing with computer EPR. Pressure is building to impose systems of extended product responsibility by law. Environmental activists are developing proposals to mandate changes in computer design and disposal. The push for legislation will compel the industry to offer its own more voluntary approach as an alternative. Now - before positions have hardened and enmities have deepened - there is a brief window of opportunity for the development of a logical, workable system that all sides can ultimately embrace.

OBJECTIVE OF THIS REPORT

This report is intended to seed discussion of EPR options for computer and electronic equipment recycling. It provides estimates of the costs and benefits of several EPR options. Because the data on such costs and benefits is limited, our report is likely to provoke discussion, especially with those who may have differing data than those proposed here. This is part of our intent. We recognize that by publishing the best available cost estimates at this time and specifying the assumptions made, we will stimulate others to develop or share more complete data, and we hope, ultimately, to improve on the quality of data available.

Cost estimates can be extremely useful, even given the limits inherent to the data at this time. They can provide a valuable comparison of the cost dynamics of different policy options and the ways in which costs can be reduced and benefits enhanced.

PROJECT METHODOLOGY

Global Futures' consultants prepared our report by taking the following steps:

1. Reviewed existing literature: Project staff reviewed existing literature relating to computer and electronics EPR, including the following:

• Assessment of the Semiconductor Industry Source Reduction Planning Efforts (CA Dept. of Toxic Substances Control), prepared by Pauline Batarseh, Office of Pollution Prevention & Technology Development, October 1994.
• Electronic Product Recovery and Recycling Baseline Report, National Safety Council, May 1999.
• Electronics Recycling Initiative, National Recycling Coalition; various documents: Procurement and Contracting Information, Management Practices and Background Documents, 5/9/00.
• Electronics Re-Use and Recycling Infrastructure Development in Massachusetts, US/EPA Region 1, Christine Beling and Robin F. Ingenthron, January 20, 2000.
• End-of-Life Computer and Electronics Recovery Policy Options for the Mid-Atlantic States, 2nd edition, David Biddle, Center for Solid Waste Research, March 2000.
• Florida's Strategy for the Management of End of Life Cathode Ray Tubes (CRTs), Computers and Other Electronic Equipment, September 2, 1999 discussion paper.
• Just Say No to E-Waste, Clean Computer Campaign, Silicon Valley Toxics Coalition, May 16, 1999.
• Minnesota's Multi-Stakeholder Approach to Managing Electronic Products at End-Of-Life, Tony Hainault, Douglas S. Smith, et al; Minnesota Office of Environmental Assistance, with Sony Electronics, Waste Management Asset Recovery Gourp, Matsushita Electrtic Corp, of America, American Plastics Council, 3/00.
• Notes from the IEEE International Symposium on Electronics and the Environment, 5/12/2000.
• Notes from EPR2/SUMMIT, Arlington, VA, April 2001.
• Plastics from Residential Electronics Recycling: Report 2000, American Plastics Council
• Product Stewardship Policy Initiative, Office of Environmental Assistance, (discussion draft) 2/8/99.
• Resolution Relating to Management of Waste from Manufactured Products and Packaging, Town of Carrboro, North Carolina, Resolution Number 10/98-99.
• The San Jose Computer Collection and Recycling Project, US/EPA, Common Sense Initiative, Prepared by Leah B. Jung, Vista Environmental, July 10, 1998.
• Shared Responsibility for Waste Reduction Resolution, US Conference of Mayors, June 25, 2000.
• Silicon Valley Environmental Partnership Report, with Silicon Valley Network and the Santa Clara Country Pollution Prevention Program,
• Waste Electrical and Electronic Equipment, draft proposal, European Parliament and Council Directive, Commission of the European Communities, 5/10/00.

Press releases:

• Environmental Protection in the home electronics sector: Sony Leads the Field, March 29, 2000.
• New Study Shows that Product Leasing Can Be Effective, January 24, 2001.
• Best Buy Teams with OEMs to Provide Product Take-back, April 26, 2001.
• Various others

2. Conducted internal brainstorming session: After a review of relevant documents, key members of the Computer and E-waste project team convened to discuss the problem network and to analyze possible solution scenarios.

3. Prepared a situation analysis: Project staff identified the following: Extent and selected impacts of computer waste; computer industry positions on product take-back and EPR; computer companies that have engaged in, tested, or explored computer take-back and EPR; computer industry initiatives in take-back; third party initiatives in take-back; economics of computer take-back and EPR; critical barriers to financially successful take-back and EPR (systemic, programmatic, political, financial, attitudinal); potential options for computer EPR, including reduction, reuse, and recycling.

4. Interviewed key players: Stakeholders consulted included computer manufacturers, government agencies, successful remanufacturers, unsuccessful remanufacturers, potential product and service providers, recyclers, computer retailers, e-component manufacturers, consumers, non-profit organizations, and activist groups with a stake in computer EPR. Additionally, project team members attended large group stakeholder meetings conducted by Sheila Davis, Materials for the Future; moderated computer take-back and e-waste panel discussions at Industrial Ecology 2000 (U. C. Berkeley, Haas School of Business, October 2000); attended WEPSI founding meeting (Portland, OR, Feb, 2001); presented PIBA keynote and panel moderation (Santa Clara, March 2001); attended and presented at MFF Stakeholders mtg. (Jan.-March, 2001); and attended EPR2/Summit and NEPSI dialogue (April, 2001).

5. Developed options: Based on the situation analysis, interviews, and brainstorming session, GFF staff developed a menu of options for computer EPR representative of the stakeholders consulted.

6. Prepared draft report for review: Staff created this report to document the process; it is being sent to a broad group of stakeholders for review in its final draft form. It will also be presented at a WEPSI Steering Committee meeting in May, 2001.

7. Prepared final report: Project manager collated review comments from EPA managers and the final report was presented to EPA Region 9, Solid Waste Section, for wider distribution.

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THE PROBLEM

There are two root-problems, as mentioned in the Introduction:

• the volume of computers and related e-waste improperly disposed of in landfills
• and the toxicity of both the computer chip manufacturing process and the computer itself as a waste product

According to EPA, e-waste represents from two to five percent of the municipal solid waste stream. An estimated 300,000 tons of e-waste ended up in our landfills in 2000, and the problem is expected to grow four-fold in the next few years. State and local governments do not have the capability to continue to bear the full responsibility and costs for managing the ever-growing quantity of used electronic and electrical products.

Each computer or television display monitor contains an average of 4-8 pounds of lead. Monitor glass contains about 20 percent lead by weight. About 70 percent of the heavy metals (including mercury and cadmium) found in landfills come from electronic equipment discards. These heavy metals and other hazardous substances found in electronics can contaminate groundwater and pose other environmental and public health risks.

These root problems, however, are only part of a network of related problems that implicate and involve all stakeholders. The following findings summarize the current situation regarding computers and e-waste (stakeholder groups are underlined):

1. Consumers have created a demand that sparks increased production of more sophisticated CRT/computers and other electronic appliances (microwaves, cell phones, handheld devices, etc.) without having the proper means of disposal
2. Consumers are unclear about how to dispose of or get rid of old computers & e-waste; most consumers have 2-3 unused computers in an attic or storage space
3. Because of advances in technology by microchip manufacturers, the life span of a computer has been reduced from perhaps 4-5 years to approaching 2 years or less
4. Currently the cheapest e-waste recycling option in the U.S. is to send e-waste overseas: how it is used or disposed of is largely unknown
5. . Despite aggressive toxic standards mandated by the WEEE initiative in Europe, OEMs in the U.S. are waiting to act, waiting for clear regulations/direction: they want 'a level playing field'-i.e. the same regulations applied the some way for all competitors
6. OEMs are supported by a complex supply chain of materials and electronic component suppliers; this makes design standardization and tracking of e-components difficult
7. Municipalities are unclear about how to handle the e-waste they are receiving: they too want clear direction about whether e-waste is hazardous and/or whether it can legally be disposed of in their landfills
8. Government agencies seem unable or unwilling to lead with aggressive legislation or to provide clear guidelines about current legislation and its enforcement
9. Most retailers are either ignoring or are uninformed about the problem. (Note though that Fry's Electronics in California has made an effort to take back computers; and that during the recent EPR2 Conference, Best Buy announced a take-back program that they will initiate in selected outlets.)
10. Second hand dealers (Thrift shops, Salvation Army, Goodwill,) and Waste Haulers or those in the recycling business are unsure about how to handle equipment they are receiving and what disposal options are legally available to them

    Related Problem Specifics:

11. The high cost of handling and transport of CRT/computer waste inhibits the creation of an economically viable e-waste recycling infrastructure
12. No infrastructure to support increased recycling of CRT/computer waste
13. Recycled materials (like plastics) are not labeled so cannot be efficiently separated for reuse
14. Disassembly and labor costs are high
15. There is not a matching volume for recycled material reuse (i.e. glassàglass - even if a plant were established on the west coast, there would be no matching volume use for materials, so shipping would still be needed)
16. Regulations are unclear, not consistently enforced, or inconsistent from municipality to municipality, county to county, state to state, state to national, national to international
17. CRT/computer waste is a complex waste: various plastic types, lead solder in memory board, lead (and now barium) in monitor glass
18. CRT/computer waste in effect can't be 'returned to the manufacturer' because the end product is one of component parts that have different OEMs (housing, keyboard, mouse, screen, hard drive, etc.)
19. There is no standardization in product manufacturing requirement for design or disposal
20. There is no labeling or standardization process to assist in the disassembly process
21. There is no clear understanding of when a product legally becomes 'hazardous waste'
    

THE STAKEHOLDERS

A complete product chain analysis for computers/CRT and other electronic appliances would include mining, materials suppliers, component manufacturers, final assembly companies, transportation companies, and retail & sales outlets.

For the purposes of this document and its recommendations, we will focus on the loop from component manufacturers forward (leaving out raw materials suppliers and other component vendors ) including the back-end or post-consumer disposal process, second hand dealers and thrift shops, local landfill facilities, recyclers and waste haulers.

Current stakeholder groups include the following:

OEMs (original equipment manufacturers): for the purposes of our document, this group is comprised of strictly computer and electronic appliance and component manufacturers: (i.e. Apple, IBM, Agilent, Intel, Toshiba, Sony, Motorola, Mitsubishi, Hewlett-Packard, Philips, etc., and contract manufacturers for these brands)

Municipalities/local governments: generally municipalities contract with waste haulers for curbside waste and recycling pick-up. Municipalities who own their own landfills would be good choices for model computer/CRT recycling programs since they have the most incentive to manage their waste effectively.

Consumers: for the purposes of our document, we have grouped all purchasers and users of computers/CRTs together. Corporate and government users (and procurement officers) and individual users could be broken into separate categories. There are many reasons why environmentally preferred purchasing programs for government would support EPR.

Government & regulartory agencies: any local, county, state or national agency that has regulatory jurisdiction regarding computer/CRT or waste disposal issues: i.e. regional and national EPA, Department of Toxics, CA (and other states) Waste Boards, etc.

Retailers: any 'brick & mortar' or online sellers of computers/CRTs: i.e. Dell, Gateway, Fry's, Computer USA, Best Buy, etc.

Second hand dealers: any local independent thrift shops or thrift shop 'chains' such as Salvation Army, St. Vincent De Paul, Goodwill Industries, etc.

Waste Haulers/Recyclers: the thrift shop chains mentioned above would be included in this category if they provide curbside/door-step pickup. Also included are commercial firms like Recycle America, as well as scrap metals dealers and processors.

'VALUE LOOP' SOLUTION POSSIBILITIES AND IMPACTED STAKEHOLDERS

In a bias-neutral world where society recognizes the economic value of sustainability and a reduced environmental footprint for all human endeavors, the solutions we enumerate below might easily flow from a simple analysis of the problem. There would be no need for stakeholder position-taking and negotiation.

As we have indicated, the interconnected nature of the computer and electronics industry requires a discussion of possible solutions in a product or value loop, rather than the more traditional 'product chain.' In this case, a complete product-loop life cycle goes from design, to manufacturing, to use, to reuse or disposal, and back to design. The product or value loop emphasizes that product stewardship requires an awareness of end-of-life disposal, reuse, de- or re- manufacturing. It is a cycle that loops back to influence design and manufacturing processes based on new system values.

In a systems thinking framework, a system needs feedback in order to continue to exist and increase its vitality. Since there has been no consistent end-of-life product awareness/responsibility that feeds into computer design and manufacturing, the electronic manufacturing system is only beginning to understand that it has a sustainability problem, and it has no way of knowing how to correct itself without proper feedback.

Below, we enumerate an array of solution options that have been discussed by a wide range of stakeholders in forums that were established to create a bias-free environment. This range of solutions and suggestions have been compiled from a variety of sources including one-on-one conversations, conference panel discussions, large-group stakeholders meetings, and project team brainstorming sessions.

Each of these possible changes would impact one or another group of stakeholders; and in each phase of our product loop, selected stakeholders would be agents with more or less to gain from taking an active role in creating these initiatives.

An initial system of solutions, with accompanying stakeholder agents, might be mapped as follows:

Phase One: Design for Environment (DfE)
Impacted Stakeholders: OEMs

1. Label materials to assist in recycling (particularly plastics)
2. Standardize components for easy disassembly
3. Re-evaluate 'cheap products' use, makes product cycle 'cheap' and therefore it has no inherent value that would encourage a recycling infrastructure build-out
4. Change sales model to 'computing services' where appropriate to decrease waste
5. Create a computer 'box' with upgradeable components
6. Create computer components and peripherals of biodegradable materials
7. Utilize technology sharing particularly for manufacturing and demanufacturing
8. Encourage/promote/require green procurement for corporate buyers
9. Look at green packaging options - the consumer box costs $30; is it always needed?
10. Create or support other consortia for CRT/computer problem solving, like the IEEE green design group
11. Form investment consortia (and patent sharing programs) for green R&D

Phase Two: Legislation and Regulation Harmonization
Impacted Stakeholders: EPA: State and National, Dept. of Toxics, County and Local Municipalities

1. Ban CRTs from landfills nationwide (during the period that this report was being prepared, California regulators determined that CRTs are banned from landfill disposal)
2. Clearly define/agree on definition for 'hazardous waste'- create educational/marcom programs to broaden awareness of the definition/problem with consumers
3. Create/encourage an EPR/Product take-back mentality or formal program
4. 'Harmonize' state and local laws regarding CRT/computer waste
5. Consistently enforce current/future regulations
6. Create green procurement programs for government agencies and promote selective group purchasing (and recycling) of computers and electronics

Phase Three: Investment Incentives to Build Collection/Transportation Infrastructure
Impacted Stakeholders: Retailers, Thrift Shops, Waste Haulers, Consumers,

1. Create advance disposal fee (ADF) in conjunction with retail purchases (including online and mail order)
2. Or create a rebate coupon for returning CRTs/computers at point of sale (car battery model)
3. Partner with Goodwill Industries, Salvation Army and others for pick-up and transport system
4. Partner with Waste Haulers to create a consistent disposal fee (Recycle America currently uses $7-10)
5. Consider e-waste pick-up from curbside - (many think the weather makes this impossible in certain parts of the country in that it degrades working equipment)
6. Create a web-based directory of recycling facilities and or pick-up services/sites
7. Create education for consumers about the problem, in order to create a consumer demand for solutions
8. Require industry to produce a 'seed money fund' for infrastructure build-out
9. Encourage collaboration between stakeholders to development shared facilities for centralized storage and transport
10. Encourage collaboration between stakeholders to development shared de-manufacturing facilities

Phase Four: Expand/Create More Disassembly/Recycling Plants
Impacted Stakeholders: Manufacturing Industry, OEMs, Recyclers, Rehab and Reuse Orgs, Schools

1. Partner with re-use and rehab centers (or create community development and investment programs) to fix and distribute pre-owned CRTs/computers
2. Establish Public/Private partnerships so machines made obsolete by yearly corporate upgrade programs find a home in the public sector (digital divide tie-ins)
3. Establish technology sharing consortium for plastics to facilitate materials recycling issues
4. Establish Public/Private/Government investment partnerships to create more recycling facilities
5. Create use for end waste, or build by-product synergies: for glass-glass, plastics, etc.
6. Note that Phase One items 1,2, and 3 impact these Phase Four items

Phase Five: Educate Consumers on Current Disposal Options
Impacted Stakeholders: OEMs, Non-profits, Activist Groups, Government Agencies, Media

• Disseminate information about computer and e-waste disposal dangers and options
• Encourage municipalities and other local government organizations to host public awareness meetings and sponsor programs to encourage correct computer and e-waste disposal
• National gov. orgs and interested parties/orgs spread the word via Public Relations efforts to media
• Create regional web sites to assist consumers in locating the closest recycling facility and to get relevant computer and e-waste information
• Fund computer take-back pilots and model programs regionally

Phase Six: Provide Feedback Loop back to Design for Environment
Impacted Stakeholders: Consumers, OEMs,

• Utilize recycled products to inform general design process
• Utilize recycled products to inform materials use (especially to reduce the number of plastics resins currently in use) and parts standardization where possible
• Utilize recycled products to inform design for disassembly (sometimes referred to as DfD)
• Create dialogue between the general public and OEMs about computer features and product options, especially regarding earth-friendly manufacturing specs

This broadcast list of product-loop solutions cannot, of course, be easily embarked upon by any of the stakeholders without agreements between and among themselves about costs, liabilities, and corresponding responsibilities. We believe, however, that the problem of computers and e-waste has matured enough to warrant a discussion of next steps; and we propose that all stakeholders begin the difficult but timely process of negotiating for a variety of these solutions. (In fact, a national dialogue on these issues has begun. It will be discussed in "Next Steps.")

MENU OF COMPUTER EPR POLICY OPTIONS

For purposes of this report, we have selected a reduced menu of policy options from the array of solution possibilities listed in the previous section. Of these solution categories, we have further selected six specific options for discussion and exploration in the following sections of this report. (Note: the six options underlined are analyzed in the next section of this report.)

ADVANCE DISPOSAL FEE
Charge industry for costs of disposal for all computers sold
Charge industry for costs of disposal only for computers disposed
Charge industry for costs of disposal, as hazardous waste, for all computers sold
Charge industry for costs of disposal, as hazardous waste, only for computers disposed

ADVANCE RECYCLING FEE
Charge industry for costs of recycling for all computers sold
Charge industry for costs of recycling only for computers recycled

DEPOSIT
Government institute $25 deposit on each computer sold; fund managed by government
Industry institute $25 deposit on each computer sold; fund managed by industry

LABELING
Label material, energy, and toxic (MET) content of each computer (model: appliance efficiency labels)
Award "Eco-Star" to best 25% MET (model: Energy Star)

SELECTED STAKEHOLDER DISCUSSION OF EPR POLICY OPTIONS

Through discussions among the project's informal advisors, several program and policy needs and options were identified. These were then detailed and analyzed by project staff.

Karl Tiefert, Agilent Technologies, emphasizes that bans or phase-outs of specific chemical components of computers is an oversimplified approach that could achieve the opposite of the intended consequence. Lead solder substitutes, for example, would significantly increase the energy requirements in the already energy-intensive process of chip fabrication. He presented documentation that showed a significant overall increase in environmental costs for the substitutes. At the same time, he believes that it is unacceptable to dispose of computer components in landfills. A ban on landfill disposal, coupled with the development of infrastructure within the state to handle computer recovery, is the most viable solution.

In addition, Tiefert says, consumers must have a convenient and economically advantageous way to recycle their computers. IBM's system - under which consumers pay $30 to have their computers shipped to North Carolina for recycling - will not motivate most consumers to recycle. He notes that consumers often decline to recycle materials if it requires any additional effort whatsoever. To succeed, computer recycling must be both economically advantageous and convenient.

The infrastructure approach Tiefert prefers is the system instituted by Hewlett-Packard and Micrometallics in Roseville, California, under which computer components are sorted into broad categories and recovered or ground up for recycling to the extent possible. In addition, the state needs a facility where lead-containing CRT glass can be recycled.

Wayne Young, IBM, strongly agrees both with the need for infrastructure and for incentives to return computers. Infrastructure within California would cut processing costs as much as two-thirds, from $30 to $10, due to the very high transportation costs, he indicated.

To provide an incentive to keep computers out of the landfill, in Young's view, the only realistic approach is through the equivalent of the "core charge" system currently effective in recovering automobile batteries. Under a core charge system, consumers pay a deposit when they first buy a battery. They then trade in old batteries whenever they purchase a new one. If they do not have a battery to trade in, they pay another core charge deposit. This results in very high rates of recovery for automobile batteries, and keeps their highly toxic components out of landfills.

How can returned computers be most cost-effectively processed once they are returned? Dewey Pitts, at IBM, proposes that the model system for doing so is SWICO, which was developed by IBM engineer Bruno Oldani and instituted in partnership with government in Switzerland. Under SWICO, manufacturers share the costs of taking back and recycling used computers. SWICO's two staff members contract with independent firms for the actual take-back and processing.

In discussions with Ted Smith of Silicon Valley Toxics Coalition, he indicated that the export of computers for foreign processing opens a loophole that leads to, in effect, the unregulated dumping and burning of computers that should be processed for legitimate recycling. For that reason, Smith advises the inclusion of a proposed prohibition of export of computer waste to sites not certified to be recycling the computers by a state-approved certifying company. (SVTC will be conducting research into the overseas shipment of computers and CRTs in conjunction with phase two of our project.)

In addition to these suggestions, there were many innovative and practical ideas that were drafted as a part of the EPR2/SUMMIT in May 2001 in Arlington, VA. The format for this idea generation was breakout groups and a brief presentation on the current state of affairs in five key areas for potential collaboration:

• Collection Methodologies (Will Ferretti, National Recycling Coalition)
• Industry Initiatives (Holly Evans, EIA)
• Regulatory Interpretation and Support (Bob Tonetti, US/EPA)
• Recycling Technology Innovation (Peter Bennison, Waste Management and Recycling Products)
• Intergovernmental Collaboration (Clare Lindsay, US/EPS)

Breakout sessions were composed of constituency groups in the following categories:
Regulators, Recyclers, OEMs, Transporters/Logistics Providers (did not convene), NGOs, Charitable Organizations, Academic Institutions, Recycled Material Users/Resellers, Agencies.

Each constituency group met and brainstormed on the five content areas above. Notes for next steps were delivered to the content leaders (as noted above) for report back to the large group. Many of the ideas we will detail in subsequent analyses were proposed and discussed in these presentations. (The complete notes will be available at http://www.iaer.org/). Among them were the following:

• An advance disposal fee for computers or core charge similar to the system established for auto batteries
• A labeling system to assist with the identification of the many types of plastics and plastic resins now in use
• Further research on economic models for infrastructure build-out
• Increase support for design for environment principles

The six policy options that we have selected for further discussion seem to be those most commonly referred to as possible solutions in stakeholder meetings

SUMMARY OF PROVISIONS FOR SIX EPR POLICY OPTIONS

The cost estimates and assessments to follow assume the following provisions in the six policy options reviewed.

COST OF COMPUTER EPR POLICY OPTIONS

Extended product responsibility (EPR) policies are of little use if they are intended to be punitive. "Tough" policies that cost a lot of money are not necessarily better than well-designed policies that cost much less, or that stimulate net economic savings. As we have mentioned, a well-designed EPR system is intended to provide a feedback loop that accelerates cost reduction, product improvement, and overall performance improvement.

Computer E-waste Considerations/Qualifications for the Cost Analyses that Follow

• Overall the numbers selected are high end of both the figures collected nationally and of those generated in California. The numbers reflect the higher cost associated with recycling in California as reported in the San Jose Pilot project (July, 1998). For a more detailed break down please reference the EPA report
• Efforts to increase the supply of recycled computers and e-waste have lead to lower overall recycling costs
• The ratio of laptops to desktops is increasing and will most likely lower the cost of recycling computers overall as laptops are generally newer and have higher reuse value
• Recycling economics are dependant upon the quality of the material recycled. Costs range from upwards of $0.50 per pound of general e-waste collected to a net gain by companies that selectively recycle only higher quality equipment that may be refurbished and sold at a profit
• The decision to include other e-waste in economic projections significantly influences overall costs
• Pilot project estimates reflect the cost of collecting all e-waste. Computers often comprise less than 20% of total volume in collection projects and tend to be less costly to process than other parts of the e-waste stream.
• Transportation costs are significant and hard to estimate. Transportation costs included in the San Jose pilot project do not account for the cost consumers bear by transporting e-waste to collection centers. Nor do these figure reflect storage costs the collection centers bear. Curbside programs have their own set of considerations and problems.
• Laptop buyers would shoulder a disproportionate amount of disposal costs if laptops and desktops have the same deposit fee due to the lower cost of laptop disposal (because of the lower poundage).
• The cost of recycling a computer overseas is much less than in the U.S; however, there is limited data on the actual final disposal processes used overseas.
• Deposit scenarios would be more cost-effective if they were based only on computer waste generated from the present forward assuming that only relatively newer computer waste would be handled.
• Higher initial costs (to clean up historical e-waste) could dovetail nicely with an initial deposit surplus that could be used to develop infrastructure and increase the quantity of existing waste recycled.
• Designating E-waste accurately as hazardous waste could greatly increase recycling costs and complicate (and increase costs for) transportation and storage.
• More waste is generated during the fabrication of a computer than is embodied in the final product so more efficient production techniques should be prioritized from a pure waste minimization standpoint.
• All costs and markets are subject to rapid change due to a rapidly changing technology sector.

Enough factors significantly alter the economics of recycling computer waste that a strong argument could be made that any single economic scenario will be erroneous. Factors such as domestic vs. international processing, how the material is collected and transported, if publicity is accounted for, how and where the material is sorted, disposal costs, storage costs, revenue markets, quality of waste etc., are all, in effect, changeable variables.

[Figures were derived from the following studies: The San Jose Computer Collection and Recycling Pilot, US EPA Common Sense Initiative, Computers and Electronics "Overcoming Barriers" Workgroup, EPA Contract No. 7w-3901-TASA.]

Foundation Costs Used in Computing Economic Scenario Data

Figure #1 illustrates the foundational costs that were used in all recycling charts that follow. These are baseline costs for generalized disposal of computers and e-waste. (Please note data limitations above.)

Figure #1: Foundational Costs for Recycling

Figure #2 outlines a rough high/low cost comparison between our categories of computer recycling solutions. These are meant simply to give a range of costs based on the broadest assessments possible. More detailed analysis follows; particularly of the deposit systems with differing levels of return rates. (Some industry leaders call this deposit a CORE CHARGE, based on the name of the automobile battery return program.)

Disposal costs (low) are based on a tipping fee of $.04 /pound, and assuming a 50% return rate. Disposal costs (high) assumes a hazardous waste disposal fee of $1.00 /pound and 100% return rate. Sales based on 1997 California Statistical Abstract, US Dept. of Commerce, retail sales of $5,251,791,000.00.

Figure #2 Cost Comparison for Various Policy Options: High/Low

ADDITIONAL COST ANALYSIS DETAIL

 

.	Computers Sold	Average Weight	Total Weight	Disposal Cost (low)	Disposal Cost (high)
Desktop	2,211,280	50	110,564,000	$4,422,560	$110,564,000
Laptop	552,820	10	5,528,100	$221,124	$5,528,200
.	.	.	.	.	.
.	.	.	Total Combined	$4,643,684	$116,092,200

Figure #4 Advanced Disposal Fee for 50% Return Rate: High/Low Projection

Figure #5 Consumer Deposit Chart

Figure #6 Labeling Costs

The purpose of EPR is to trigger continuous reductions in the environmental and economic costs associated with computer use. The following table assesses the longer-term dynamics of the different policy options, in terms of their effects on economic costs, eco-efficiency, and DfE over time.

COST AND BENEFIT BY POLICY OPTIONS

Fee Payment for the Six Policy Options

The following chart maps out the possibilities for management of the funds in the various solution options we have been discussing. Note that the fees or program costs can be assumed by government, industry, consumers, or a combination of these. And any of these stakeholders could be responsible for establishing the program.

In our experience, in the next series of stakeholder discussions - as we draw toward a consensus solution - it is this level of detail that will begin to be debated.

Advantages and Disadvantages of the Six Policy Options

Again, as our stakeholder group begins to narrow the pool of possible solutions, the merits of each possibility will be analyzed in more detail. We have attempted here to make general assessments about the relative advantages and disadvantages by policy option.

NEXT STEPS - OVERVIEW

Western Electronic Product Stewardship Initiative WEPSI

In the course of creating this report and in response to this growing problem, a group of environmental organizations has come together with local government representatives to form the Western Electronic Product Stewardship Initiative (WEPSI). We are currently organized into two regional efforts, Northwest (Washington, Oregon, Idaho, Alaska) and Southwest (California, Arizona, Hawaii, and Nevada). Each of the WEPSI organizations will take on slightly different responsibilities during the planning process.

In the Northwest, the WEPSI project is being managed by Wayne Rifer, Recycling Advocates (Portland) and David Stizahl, Northwest Product Stewardship Council (Seattle). Cate Gable and Bill Shireman of Global Futures Foundation are coordinating the strategic planning efforts in the south. Additionally, Sheila Davis, Materials for the Future, will continue convening the large group stakeholder meetings and working groups. Ted Smith, Silicon Valley Toxics Coalition, is coordinating a research effort regarding what really happens to computers that are shipped overseas for recycling. (SVTC is also involved in a national Take It Back! campaign with other non-governmental organizations.)

WEPSI has one of 45 official seats at the table in the National Electronic Product Stewardship Initiative (NEPSI), a national dialogue (the word 'negotiation' has been carefully avoided). Members of the NEPSI dialogue represent a broad range of stakeholders including industry trade groups, original equipment manufacturers (OEMs), state and local government officials, NGOs, environmental activists, and recyclers. This process, as it now stands, will be conducted in a series of six meetings, held in different locations around the nation, and will be facilitated by Gary Davis, Director of the Center for Clean Products and Clean Technologies, University of Tennessee. We should also acknowledge that several of the component organizations of WEPSI have their own 'seats at the table' and, as we have mentioned, may be taking different positions than WEPSI as a whole. However, it is our intention to find common ground where or if it exists and to provide a unified WEPSI position for the NEPSI dialogue.

It is our hope that the NEPSI dialogue will be successful in finding common ground among its broad base of stakeholders. We intend to support Gary Davis wherever we can in his efforts with that process. Global Futures staff will continue in a leadership position in cooperation with our WEPSI partners in the west and coordinate the strategic planning/stakeholder process for WEPSI. (Details of our methodology for this process are included in the Addendum.)

We will continue to build membership in our WEPSI/CA advisory groups. Additionally, we have begun a WEPSI Communications Team to assist with the following:

• Coordinate & advise on WEPSI communications between regional efforts North and South via listserv, website, email updates, conference calls, etc.
• Facilitate the distribution of WEPSI Steering Committee info to WEPSI membership
• Supervise and advise on WEPSI website features and info/content updates
• Create ways to build awareness within WEPSI membership of the available communications vehicles
• Establish regular public relations contacts and a press function for major WEPSI announcements and events, North and South
• Create database of WEPSI members and establish guidelines for db use, security, and privacy issues etc.

Global Futures will continue to be involved in facilitating - with our WEPSI partners - the dialogue that has begun regarding these policy options.

SUMMARY AND CONCLUSIONS

Since the beginning of Global Futures involvement in the issue of computers and electronics, interest in the issue has built tremendous momentum. There is the feeling among stakeholders that the time is right for coordinated action nationally.

The current environment is characterized by the following:

• Pilot projects have taken place in many states (where learnings have been brought forward as the seeds for next steps) and are being planned for many others.
• In many states, legislative action is in the works to ban CRTs/computers from landfills.
• In general terms, industry agrees that computers and electronic products do not belong in landfills. There is a growing awareness in OEMs of the meaning and importance of product stewardship and design for environment.
• Recyclers are ready to assist if/when a steady volume of goods can be guaranteed.
• Municipalities are requesting, and receiving, legal clarification with respect to their liabilities regarding CRTs and electronic waste products. They are beginning to realize that they currently bear an unfair burden in the disposal of CRTs and electronic equipment waste.
• Retailers, like Best Buy, are aware of the issue and are proposing take-back programs for consumers in partnership with industry, partly as a green branding strategy.
• The one 'sleeping dragon' is the consumer, as yet primarily unaware of the problem

The awareness among most computer and electronics buyers as to the scope of the e-waste problem is low to none. Even most sophisticated technology users do not understand the nature of the waste problem, or the fact that many of the materials used in computer/CRT manufacturing are considered hazardous and need special disposal.

Based on our data, 2,764,100 computers (both desktops and laptop) were sold in California in 1997. If one assumes a two to three year useful life for these computers and monitors, that would indicate that over 7,500 computers a day should be coming back into the waste stream for disposal at municipal landfills or recycling centers in California alone. Since that is not happening, we assume that most computer users have stored old computers and CRTs in an attic or closet. The hope is that a system for disposal can be put into place before this 'historical waste' enters the waste stream.

The three major areas of concern that are being raised to the surface as the most critical to solving this problem are

• To catalyze market and infrastructure development for computer and electronics recycling
• To establish roles and financial responsibilities for stakeholders
• To encourage wider use of design for environment (DfE) principles

It is our ability to constructively address these three issues that will establish the success or failure of our stakeholder process in the months to come.

Report respectfully submitted,
Cate Gable
Bill Shireman
Steve Cassell
Tachi Kiuchi
May 1, 2001

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