Fees on horizon for electronics recycling

The debate over electronics recycling will grow a little more heated with meetings of a legislative committee in California and a government-industry group in Minnesota.

8 min read
The debate over electronics recycling will grow a little more heated Monday with meetings of a legislative committee in California and a government-industry group in Minnesota.

The upshot for companies is that, sooner or later, consumers are likely to bear some of the financial burden of cleaning up after their electronics habits. What everyone's trying to figure out now is how and when.

The prospect of those charges has the electronics industry up in arms, worried that extra dollars on the price tag of PCs, televisions and other gadgets will spell fewer sales and therefore less revenue. But even as computer makers and others lobby against what they see as unfair impositions, many have been working at recycling schemes of their own.

Meanwhile, state and local governments--which have their own set of revenue worries--are aghast at the amount of electronic waste heading their way. If the industry won't pitch in with sufficient resources, they say, then legislation might be the only alternative.

In California, the homeland of the U.S. high-tech industry, two bills on Monday go before the state Assembly's Natural Resources Committee that would impose a point-of-purchase fee of as much as $30 on each CRT (cathode ray tube) monitor sold in the state. The money collected would go to establishing a program to encourage recovery, reuse and recycling of the devices when consumers are ready to toss them out.

And on the same day in Minnesota, participants in the National Electronics Product Stewardship Initiative, or NEPSI, will be gathering for a key meeting en route to what many hope will be a nationwide electronics recycling system that has the support of both government and industry. The group's last meeting two months ago produced a draft document proposing a "front-end fee"--that is, a few more dollars on the price tag of a PC or television set.

While it's not guaranteed that either measure will ultimately take effect, both have momentum behind them. And they are a sign of things to come.

States target recycling
Several states have legislation pending that would create recycling systems for electronics products.

State Bills Products covered Fee
  California     SB 1523, SB 1619

    cathode ray tubes (CRTs)     $30  
  Massachusetts     House No. 4716

    CRTs     none  
  Minnesota     HB 2815, SF 2979     TVs, computer monitors, laptop computers, CPUs, printers

  New Jersey     A 607     computers     none  
  New York     A 10146     CRTs     $5  
  North Carolina     S 1255     CRTs     $10  
Source: Product Stewardship Institute, state legislatures
"Management of these products costs money," said Scott Cassel, director of the Product Stewardship Institute at the University of Massachusetts at Lowell. "You're either going to get it through increased taxes from government programs, or end-of-life fees from consumers or front-end fees from consumers."

The problem starts with the modern world's infatuation with all things electronic. The buying binge of computers through the 1990s, for instance, is contributing to an e-waste mess in the first decade of the 21st century. Electronic goods including PCs and TVs are the fastest-growing portion of the waste stream in the United States, accounting for 2 million tons of trash annually, according to the U.S. Environmental Protection Agency.

Residents of California alone have stockpiled more than 6 million obsolete monitors and TV sets in their homes, according to the state's Integrated Waste Management Board. That agency also foresees a worrisome gap between the volume of discarded CRT monitors and the state's capacity for processing them.

E-waste has raised a red flag for public health officials because electronic devices use a variety of potentially toxic materials such as mercury, cadmium and especially lead, which they don't want to see leaching into groundwater from landfills or getting airborne via incinerator smokestacks. Environmentalists earlier this year called attention to what they called the "high-tech trashing" of several Asian countries.

What price recycling?
The question of how to get more people to participate in electronics recycling is at the heart of the debate over fees. Governments are looking toward manufacturers, manufacturers are looking toward government, and both have their eyes on consumers.

Electronics makers are in no hurry to see state governments tacking costs onto the products they're trying to sell, and they're keeping an especially close watch on the bills in California.

"Anything that creates a competitive disadvantage to the seller or manufacturer is just not appropriate for the state to be advocating," said Heather Bowman, director of environmental policy for the Electronic Industries Alliance.

The EIA has been disparaging the legislation as a "tech tax" that would discourage consumers from buying electronic goods and hurt the state's economy.

California isn't alone in proposing legislation aimed at electronics--especially at CRTs, each of which might contain as much as 8 pounds of lead. Similar bills are active in other states, including Massachusetts, Minnesota, New Jersey and New York. Governmental action is also afoot in Japan and the European Union.

Lawmakers have been getting involved because state and local revenue is hard-pressed to cover the rising expense of handling cast-off electronic devices. They're looking for a more equitable distribution of responsibility, or at least less of a drain on their coffers.

"The costs are not necessarily being borne by those buying these systems," said Gina McCarthy, assistant secretary for environmental affairs in Massachusetts. "The main cost of this is being borne by states and increasingly by local communities."

"They can't keep going back to the taxpayers," said Scott Mouw, chief of the recycling section in the North Carolina Division of Pollution Prevention and Environmental Assistance. "Processors charge local governments to take the materials, and that's a huge barrier."

It's cities and towns, after all, that by and large collect household trash and administer landfills. Over the past three fiscal years, McCarthy said, Massachusetts has spent about $1.67 million to encourage the start of CRT collection programs among the state's municipalities. Florida has spent almost as much--$1.17 million--over the same period in much the same pursuit, with the money going mostly to counties with existing household hazardous waste programs because they know how to work with the public.

"Reaching the population has not come cheap," McCarthy said.

Eye on NEPSI
The states are keeping a close watch on NEPSI and its "dialogue" among various interested parties: state and federal agencies, PC and consumer electronics manufacturers, and environmental groups. The meeting that starts Monday is the penultimate; the group hopes to have the cornerstone of a nationwide recycling system put in place by its final meeting in September. An agreement reached through this process could knock the wind out of legislative efforts.

"There's an interplay between the two," said North Carolina's Mouw. As NEPSI develops its plan, he said, "we'll have to evaluate how well that accomplishes our state goals when it comes to electronics. We're hoping consumers and businesses find legitimate outlets for their materials and we wouldn't need a state system."

That would be just fine with Hewlett-Packard.

"It seems like it's premature for states to be setting up state-specific things before we see if the NEPSI process is working," said Renee St. Denis, HP's environmental business unit manager. In addition, she said, the California legislation has been "defocusing" the work they want to do through the product stewardship group.

But others say NEPSI hasn't yet gone far enough.

"We keep inching forward on agreements, but we're not at something we can say is an alternative to legislation," said Mark Kennedy, a technical adviser to the California waste management board.

Not all of the legislation would prove as pricey as California's might turn out to be. The North Carolina bill, for instance, would impose a flat fee of $10--which it refers to as an "electronics recycling tax"--on each CRT sold at retail. As with other bills, the money collected would go toward educating the public, assisting local governments, and developing private recycling businesses.

But many state officials, like their industry counterparts, argue that the problem really is a national one, so for any program to be most effective, it would have to apply equally across the country. A nationwide program, they say, would share the responsibility among the greatest number of parties, create greater efficiencies and avoid sticky issues such as Internet sales.

No one, though, is in a hurry to advocate for federal legislation. That's why the NEPSI process is seen as vital.

"Some progress has been made, and the industry does seem to be engaged," said McCarthy, the Massachusetts environmental officer. "The question is, can we get something done, and done on a broad enough base nationally, to basically convince the states and counties and municipalities that they don't need to take action at those levels."

The electronics industry, including both manufacturers and retailers, has been "engaged" in several ways.

HP, IBM, Sony and Best Buy have been running a variety of programs to collect consumers' high-tech castoffs and either refurbish them for further use or send them to recycling facilities to be mined for glass, plastics, metals and other useful materials. Dell Computer recently announced it would be setting up a similar mechanism this fall. Last fall, the EIA set aside about $100,000 to fund a yearlong study involving a number of states and companies about the best way to collect used household electronics.

Still, industry members say they need more time to assess the best ways to get consumers to bring their CRTs and other devices in for recycling, and then to transport and handle it all.

"We just don't have those answers yet," said the EIA's Bowman. "One legislative session just doesn't do it."

Pay now or pay later
The debate in some ways comes down to a question of front end versus back end, though in either case there's a fee involved.

The existing recycling programs are designed to handle the electronic devices consumers already own. HP, for instance, charges between $13 and $34 to take a PC off someone's hands, while IBM charges $29.99, and Dell says people should expect to pay between $15 and $25. Consumers only pay, of course, if they participate--if they haven't found some other way to get rid of an older system, such as donating it to a charity.

The front-end fees would hit everyone who buys a computer, TV or other designated device. In the case of the California bills, only people buying electronic goods at brick-and-mortar stores in the state would be affected. NEPSI's plan might end up imposing the surcharge across the country.

The EIA is staunchly opposed to front-end fees, which seem to have the momentum behind them, but some electronics makers offer a more moderate outlook.

"To the extent that we have to do something to regulate or legislate, a front-end fee, if enacted fairly, is as good an option as any other one," said HP's St. Denis.

And others say those affected would have time to prepare for it.

"If a front-end fee ever gets established, it's going to be a few years down the road," said Raoul Clarke, environmental administrator for special waste projects in Florida's Department of Environmental Protection. "It's not going to happen tomorrow. There's going to be time for it to come into effect."

Coming into Monday's NEPSI meeting, with the California bills casting a long shadow, the various sides have been staking out their ground--the electronics industry looking for the states to back off, and the states and environmentalists looking for companies to pony up.

"There's a great opportunity for government, industry and environmental groups to reach a cooperative solution to a major environmental issue," said Cassel, of the Product Stewardship Institute. "But there's also the potential for inaction to result in the need for government or the environmental community to slip back into the same old regulatory framework. The ball is in the industry's court as to whether they need active legislation to be introduced all over the country before they will...engage in a way which not only protects their own interests but satisfies the interests of the other stakeholders."