Time to take new approach to recycling of electronic goods

Date: 09/10/1997

ONCE it has reached the end of its useful life, electronic equipment constitutes waste. While everyone is 'for' the environment and accepts that we must properly manage the disposal of these 'deceased' machines, all developed societies face a major challenge in disposing of huge numbers of refrigerators, cars, photocopiers and television sets.

Traditionally, local authorities have managed the disposal of waste generated by households and small businesses. But the volume of used machines is becoming enormous, putting financial and technical pressure on the public sector.

In many countries, the finger of responsibility is being pointed at the manufacturers, who are ordered to take back their products (as in Germany) or bear a portion of the cost of recycling (being studied in Japan).

We need a fresh approach. This challenge cannot be left only to experts on environmental questions. All sectors of society must accept responsibility for finding an integrated solution.

Consumers/users can no longer be regarded as mere observers, consuming polluting goods pumped into the market by 'guilty' manufacturers.

The principle that the polluter pays is not in dispute. The firms which operates a factory must be liable for controlling all the adverse environmental effects that it generates (noise, smoke, dust, splinters, gas emissions, drainage, solid waste).

However, once products have been launched on the market, buyers should bear a social responsibility to match the economic advantage derived from owning and using them. They are not 'guilty' because they have bought something, but they should be responsible and play a role in disposal when the equipment reaches the end of its useful life.

Current analysis of how to handle the disposal of consumer durables is incomplete because no role - and no economic incentive - is given to the user/consumer, particularly at the moment of purchase.

Consumer choice can reflect environmental considerations and contribute to reducing disposal costs. Currently, however, prospective buyers have little or no information on which products are more easily disposed of.

If a refrigerator contains gases which will damage the ozone layer, does the consumer know? If a fax machine has been built for easy recycling, is there any economic incentive to purchase that model? Information about the environmental costs must be made more widely available.

Of course, manufacturers must bear their share of responsibility for waste production and disposal. But an approach which assigns responsibility wholly to manufacturers, or wholly to end users or local authorities, cannot in the long term be adequate.

It is crucial for a successful waste management policy that manufacturers play an active role and cooperate with the aims of the policy. Indeed, they have an ethical duty to show a positive commitment to environmental issues. Industry must be less defensive and should come forward with constructive ideas on how to meet these obligations.

However, policy-makers must also explore how responsibility for a product's environmental cost can best be allocated.

The first step should be to determine that cost. For proper choices to be made in selecting products, comparisons must be possible between various items. This can only be achieved if environmental costs are expressed clearly and accurately, and by ensuring a product's negative environmental value throughout its life cycle is built into its price.

The 'real' cost of used electronic consumer items should cover the net cost of the ultimate disposal of the used product (disassembly, recuperation of usable parts, shredding, dumping in a landfill site and any government levies for using such sites), plus transportation and sorting. It should be compulsory to display the accurate disposal cost of a particular model on the label.

Market forces must also be given a bigger role. A successful waste management industry, which is essential for a successful waste management policy, needs the help of a market economy.

A waste control industry is beginning to develop, following regulatory initiatives to encourage reuse and recycling of waste (particularly in Germany, the UK and Japan). An efficient waste processing industry will increase efficiency in waste disposal and lower costs.

However, well-meant intervention can lead to unexpected distortions, anomalies and environmental set-backs. In Japan, there is a hugely elaborate regulatory system, but it is failing because it is insufficiently attuned to market forces.

Some rules are required. The German scheme tries to tackle the problem by regulation and has much to commend it. But it has a major drawback: it does not take into account that end users/consumers are one of the major sources of pollution and does not offer any financial incentive to solve the problem.

Regulation could be used to introduce a manufacturers' 'self-declaration system'. Makers of electronic appliances could calculate and display the average disposal cost for each region in the world where their products are sold and will be discarded.

The stated disposal costs - verified by an independent third-party organisation - would be valid for the average lifetime of the product. If costs increased the manufacturer would not be wholly responsible.

This would require changes to current procedures. Manufacturers would have to redesign their products and production plants, develop effective disposal methods for their merchandise and establish objective cost data on disposal. Some of us are already doing so. Certification schemes and certifiers would also have to be developed.

Regulation could also be used to impose an obligation on businesses to declare the cost of disposal on product labels and on retailers to display this alongside the purchase price. To gain competitive advantage, it would be in the manufacturers' interests to help ensure that a properly functioning, efficient, low-cost waste disposal industry existed.

I have a further, radical idea. The purchaser should be given a clear financial incentive for preferring a 'greener' product, through having to bear some part of the cost of disposal.

IN a growing number of countries, the disposal of equipment is no longer carried out free of charge by local authorities. If buyers know that at the end of the appliance's life they must spend some money, they will want to keep this to a minimum.

For example, the purchaser could pay a deposit at the time of purchase, equivalent to the cost of transporting and sorting the product. This deposit would be retained in trust by the manufacturer, or by the relevant industry association. Thus, the cost of recycling would have been partially prepaid by the buyer. The maker would be responsible for ultimate disposal with no further cost to the user. The consumer could alternatively give the product to an independent waste processor, who would recover the deposit from the manufacturer.

This would create a market-driven incentive to handle waste efficiently. Waste processors would compete for used appliances which could be recycled at a cost below the refund available from the producer. If the price of disposal dropped below the deposit paid, manufacturers might compete for the return of their products by offering to reimburse a portion of the deposit to the consumer. Rogue dumping of used machines should thus disappear. The cost of the item to the purchaser at the outset would indeed be increased, but in many countries consumers already have to pay towards disposal by public authorities and market forces could result in buyers being partly reimbursed.

Consumers might object to this scheme, arguing that disposal is the obligation of the local authority, or even of the producer.

The solution is education: consumer acceptance of part of the price of disposal is a world-wide trend and is essential in achieving a better waste disposal policy. This might be accompanied by a reduction in the level of local taxes, as local authority disposal costs were diminished.

In contrast, manufacturers are today faced with divergent approaches in different countries which will increase costs (and therefore retail prices).

The German system, which requires manufacturers to take back products they made many years ago, treats them as solely responsible for the problem. Such well-meant ideas are inadequate. It is time for a fresh look.

Yukata Wada is corporate management adviser of Sharp Corporation, one of Japan's leading manufacturers of photocopiers, microwave ovens, printers and calculators. He is also chairman of the Japanese Electrical Machinery Association's appliance policy committee. This article expresses his personal views.