Environmental Economics

E-Waste – Economic and Environmental Burden

E-waste impact on economy and the environment

Lucie Krivanek & Timothy Crowell

Fall 2014

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Table of Contents

I. Introduction……………………………………………………………….3

II. Literature Review………………………………………………………...4

III. Analysis……………………………………………………………………9

IV. Conclusion………………………………………………………………14

V. Bibliography……………………………………………………………..15

I. Introduction

We hear a lot these days about how we can help and keep our environment at top

notch quality; meaning emitting less harmful gas, pollution, and chemicals to our air,

land, and water. We help solve many pollution and chemical problems such as leaking

into the land and into underground water sources by recycling and composting. In this

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day and age, we know exactly what to do with our empty soda cans, newspapers, and

milk cartons, but what about electronics? What do we do with juiced-out batteries, out of

date televisions, broken gaming systems, or old-news computers? Do they go with our

other recycling materials such as our soda cans and newspapers or do they just go straight

into our normal trash to be sent to a dump?

Today, we have learned that electronic waste, e-waste, deserves its own method of

recycling because of the types of chemicals and materials that make up that said

electronic system. The dumping and/or recycling of e-waste also really takes a toll on the

environment of the country that the electronics are being sent to; huge dump sites overrun

with toxic pollution from the overhaul of electronic materials. This causes that country’s

water, land, and air to become polluted and then raises economic questions on how to

solve the e-waste pollution problem around the world.

Through this article, we will address the economic and environmental issues that

arise due to e-waste around the world. We will also take a look into what different

countries and their governments are doing to solve the growing problem of e-waste

pollution. This will help us understand the impact of electronic materials on the world;

both environmentally and economically.

II. Literature Review

The environmental impacts of electronic waste are numerous and devastating.

There are nearly 40 million tons of e-waste produced each year, and only around 13% of

that is properly recycled (Mcallister, 2013). These are not the only staggering numbers

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that come to the foreground when we talk about e-waste. “The mountain of e-waste is

expected to grow from 48.9 million metric tons worldwide in 2012 to 65.4 million metric

tons in 2017; the weight equivalent of 200 Empire State Buildings or 11 Great Pyramids

of Giza” (Bidwell, 2013). Much of that which is not properly reused is burned in the

open air in order to retrieve valuable metals such as gold. The chemicals which are

burned into the air, such as lead, create a fine dust which when inhaled can cause serious

problems of the heart and lungs. Lead poisoning has become a huge problem in cities

such as Guiyu, China, which are the most prominent e-waste “recycling” cities. The e-

waste which is not burned often ends up in a landfill, which creates a host of other

environmental problems.

While the Environmental Protection Agency (EPA) insists that throwing e-waste

into modern municipal waste landfills does not threaten human health (EPA, 2012),

several studies on landfill leachate have found that the liquid that seeps through the

landfill to the groundwater and surface water can be toxic (Raghab, Meguid, & Hegazi,

2013). In spite of these contradictory positions, the EPA still recommends that e-waste

be recycled in order to reuse metals which will reduce the demand for mining, which can

be detrimental to the environment. But in some cases, like the one listed in Laura

Bradley’s article, E-Waste in Developing Countries Endangers Environment, Locals,

“when a person recycles a television, there’s a chance it could end up exported to a

country like China, India or Nigeria, where workers at informal recycling operations

often use crude, hazardous techniques to extract valuable metals from the equipment and

then burn what’s left” (Bradley, 2014).

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The nature of e-waste is ever-changing. The chemical composition of a given

discarded item depends on when it was made, because as technology becomes more

advanced, manufacturers are finding ways to utilize different metals and chemicals and

constantly change the materials from which their products are made. This is usually a

good thing, because these innovations are often driven by pressure from environmental

organizations to utilize less harmful materials.

Similarly, the mass of e-waste produced is also constantly changing. Technology

is changing faster than ever, and as such, the lifespan of devices is constantly decreasing.

For example, the lifespan of CPUs in computers dropped from 4-6 years in 1997 to 2005

(Babu, Paranade, & Basha, 2007). This problem, however, is being somewhat offset by

the miniaturization of products that has been seen in recent years. A major factor in the

advancement of technology is being able to make devices smaller and smaller. This

means that the mass of chemicals that will one day be discarded per device is also

decreasing.

The biggest problem regarding e-waste right now is that most electronics are not

disposed of properly. While there are numerous places to properly dispose of electronics,

a majority of e-waste is thrown in with standard household waste and never receives the

opportunity to be properly recycled. This waste is then put into a landfill, where it will

leak chemicals into the earth and groundwater.

The simplest solution to avoiding this problem is to take all discarded electronics

to a proper e-waste drop off facility. In theory, all waste can be recycled from there

which will result in a massive drop in the amount of toxic chemicals and precious metals

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entering the environment. By mechanically separating the components of an electronic

device, it is estimated that we can reuse 95% of useful materials from a computer and

45% of materials from CRT monitors (Ladou & Lovegrove, 2008). The main problem

today is that 80% of the electronics disposed of in this way in America are not sent to be

recycled, but rather sent overseas to be dealt with by poorer countries.

Unfortunately, environmental regulation in developing countries with cheap labor

costs is often too poor to effectively implement, resulting in poor management of e-waste

(Breivik, Armitage, Wania, & Jones, 2014). Since most of the waste in more affluent

countries is sent to the poor countries who are unable to deal with it, it is those countries

who bear the risks associated with living in a toxic environment. In 1992, an

international treaty known as the Basel Convention attempted to rectify this by putting in

place laws that would prevent the shipment of e-waste to third world countries, however

it was never ratified in the United States. While there are somewhat similar laws in place

in the U.S., they are poorly enforced. Similarly, lax enforcement of the Basel Convention

in Europe has resulted in an abundance of illegal e-waste trafficking, and as such the

developing world is being crushed under a pile of e-waste.

In the past, organizations have been formed in order to fight the e-waste epidemic.

The Basel Action Network is a group dedicated to preventing the export of toxic waste

and toxic technology from wealthier nations to poorer nations. They also strive to help

countries develop self-sufficient means of waste management. They hope to accomplish

these goals by providing a source of information on the crisis, by campaigning for better

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governmental regulation of toxic trade, and funding research into the problems associated

with e-waste as well as potential solutions.

Fortunately, legislation worldwide has been started to help fight e-waste. In the

European Union and China, laws have been passed that force manufacturers to change

how they make electronics. For example, Europe follows the Restriction of Hazardous

Substances directive which limits the level of toxic materials in electronic devices. The

EU also passed the WEEE Directive in February 2003 which created methods for

consumers to return their electronic waste to manufacturers for free, with the assumption

that the waste would then be properly taken care of by the company that created them.

Legislation such as this is an important step in reducing the amount of toxicity in

electronics as well as the prevention of irresponsible e-waste disposal.

Third world countries are not the only places that electronic waste is being sent.

Booming economies such as those of China and India also import e-waste, while

simultaneously being two of the largest producers of it. In fact, China is by far the largest

importer and producer of e-waste, with some estimates suggesting that around 70% of e-

waste worldwide ends up in China (China.org, 2012). It is becoming a huge

environmental hazard because the cities that are taking in all of the waste for recycling

are unequipped to handle it properly, and most of the waste ends up being informally

burned in order to extract the valuable metals at great cost to the air quality of the area. It

has remained a problem, however, due to the high profitability of the secondary

electronics market. Recycled appliances that are still functional are picked out and sold,

while the rest are burned. Due to the abundance of cheap labor and high demand for used

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electronics and electronic parts, these areas of Southeast China believe that they are

gaining more utility from the money being earned, than the decrease in utility from the

decline in the quality of life, and so until a change is made, they will continue to import

e-waste.

In an article from LiveScience.com, Tanya Lewis points to the above map, created

by the “Solving the E-Waste Problem (StEP) Initiative” that shows each country’s e-

waste production. This data is crucial to finding the source of the problem and very hard

to come by because different countries list different types of e-waste very differently.

“For example, the United States only includes consumer electronics such as TVs and

computers, whereas European nations include everything that has a battery or power cord

in the e-waste category”

(Lewis, 2013).

Ruediger Kuehr of

United Nations University

in Germany and executive

secretary of the StEP

Initiative says later in

Lewis’s article, “This is

why we have developed

this e-waste map. It’s the

first time we’re

introducing really comparable data… In addition, it gives magnitude to the issue on a

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national level, so policymakers are aware of the issue in order to take action” (Lewis,

2013). In Laura Bradley’s article about e-waste in developing countries, she states that

“the developed world has in the past exported and estimated 23 percent of its electronic

waste to seven developing countries” (Bradley, 2014). This information was based off of

a study done by the journal Environmental Science and Technology in June of the same

year. So, this map is a step closer at helping to find a solution to the problem of e-waste

by first seeing who the main causes/characters are in the world.

III. Analysis

So what are our options in regards to cleaning up the e-waste epidemic? Many

different policies have been enacted in different parts of the world, but it seems that no

one can quite agree on the best way to clean up our act.

In the European Union, California, Washington, and Ontario, governments have

instituted an electronic waste recycling fee. This means that when you purchase an

electronic device that is known to contain materials which, if not properly disposed of,

can be harmful to human health, you must pay a small tax which then goes towards the

proper recycling of e-waste. This is a viable strategy to increase the percentage of

electronics which become recycled by providing funds to the recycling company as well

as reducing the initial demand for the product. Reducing demand for the electronic

increases the lifespan of the electronics the consumer already owns, which in turn reduces

the amount of improperly disposed of electronics. The problem with this system,

however, is that it may be difficult to pass a bill requiring a tax to be put on electronics,

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because many citizens may not feel that the environmental impact of such a fee is worth

its cost.

Another option that has been exercised in some states is to create a barrier to entry

for some electronics manufacturers. This can include a one-time or annual fee that must

be paid in order to be allowed to produce electronic goods. In some states that have

implemented this fee, the company is also required to submit a plan as to how they are

going to minimize their environmental impact while manufacturing the goods. By

preventing some companies from adding to the supply of electronics, the total quantity of

electronics will decrease and thus the turnover rate for devices will decrease, creating a

decline in overall e-waste. While an annual fee is easy enough to implement, it may

become difficult to regulate whether or not companies are following the approved

environmentally friendly plan.

Reverse supply chains could also be an integral part of the reduction of e-waste

globally. A reverse supply chain is the process through which a manufacturer retrieves a

product from the consumer after it has reached the end of its life. These are effective for

a few reasons. First, they address the biggest problem regarding e-waste, which is the

tendency of consumers to throw out their electronics with the rest of their trash. By

providing people with an outlet through which to recycle their used devices, they are

preventing them from being crushed and burned in a landfill and emitting chemicals into

the ecosystem. Reverse supply chains will also sometimes benefit the manufacturer by

providing them with a cheaper source of materials with which they can create new

products or refurbish old ones, and subsequently sell those back to the customer for a

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profit. This way, the consumer, the producer, and the environment all benefit and we can

see pareto improvement through reverse supply chains.

In order to make sure that e-waste is being collected for recycling rather than

simply thrown away, it has been suggested that imposing a fine on those who throw

electronics in with the trash to be dumped in a municipal landfill. This is a good idea in

that it strongly discourages the mishandling of e-waste and promotes awareness of the

problem, however it may be overly hard to implement. While it is easy to track large

electronics such as TVs and computer monitors rumbling through the trash, it would be

difficult to track things such as phones and iPods which pose a similar environmental

threat. If a reasonable way to implement this fine were found, it could serve an added

bonus of funding e-waste recycling plants as well.

One option that is available to more wealthy countries to effectively recycle e-

waste is bio-metallurgical processing. This requires the electronic device being recycled

to be melted down and then separated, also known as smelting, in order to retrieve

specific metals for reuse. This option should only be used in countries that can afford to

perform the process using the best resources possible, because doing it with inferior

resources can result in toxic chemicals entering the environment by accident. Under the

right circumstances, a controlled smelt is an environmentally safe way to retrieve raw

materials, but if not properly controlled, it becomes functionally similar to open-air

burning as is so often done in developing countries. Those countries which have the

capital to invest more in the process and do it safely, however, will find that the precious

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metals retained through this process may one day pay off the investment by itself, and

certainly provide many positive externalities as well.

Another problem with recycling e-waste is how difficult it is to disassemble some

electronics. As companies strive to make their products more durable, it reduces the ease

with which recyclers can salvage the precious metals. It may be beneficial to reward

manufacturers in some way for investing in technology that would make their products

easier to recycle at the end of their lifespan while retaining the same durability. As it

stands today, little is being done to accomplish this. Perhaps a stipend or a fee remission

would encourage electronics manufacturers to put more effort into more recyclable

electronics.

So what can the poorer, less developed countries who have been saddled with our

electronic trash do to improve their own well-being? It turns out that for countries whose

main export is precious metals, it may be lucrative for them to invest in some forms of

affordable e-waste metal sorting technology. Since many of the areas that are importing

electronic waste are also those whose main exports are precious metals, retrieving metals

from gadgets which have been deemed obsolete may reduce the demand for mining in

those areas (Breivik, Armitage, Wania, & Jones, 2014). This serves the dual purpose of

preventing chemicals from leaching into the earth and water supply while simultaneously

providing safer job alternatives to the local workforce.

For those areas which are unlikely to benefit from metal-sorting technology, it

may be up to the government to pass legislation to prevent the import of e-waste. If a

country does not have the means to enforce a regulatory policy on safe recycling

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procedures, they may need to outright ban e-waste from entering the area in order to save

the lives of its inhabitants. Unfortunately, if a place is unable to enforce regulation

regarding the recycling industry, it is also unlikely to be able to enforce a tariff or ban of

an import. This is also unlikely because they would be entirely leaving a market that is

currently too lucrative for its own good.

IV. Conclusions

It is clear to see that e-waste is a problem to our environment and, more

importantly, to ourselves. We have looked and discussed about the many health issues

that come hand-in-hand with e-waste; lung and heart conditions developing overtime due

to exposure to the harmful chemicals in the electronics. We also examined how these

harmful chemicals, caused by the burning of the electronic waste, cause terrible air

pollution in the countries the waste is sent to.

When considering options for safely taking care of e-waste, we must be cautious

to make sure that it is done in an economically positive fashion. Economics play a major

role in deciding where the waste gets sent as well as the appropriate or less than

appropriate method for discarding the waste. We have provided a number of

economically positive, or at least neutral, alternatives to the current way of doing things.

Taxes on discarding of electronics is becoming a popular way for governments to handle

their e-waste; set a tax so that less electronic waste is disposed of, which, in the end,

reduces the amount of e-waste accrued in total.

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We are a culture and a generation that enjoy electronics and, since they are more

prevalent than ever, we must recognize the risks associated with them. With a larger

population than ever and a more substantial environmental impact, we are also coming

into an age where there are more environmental movements. So, we have to consider

which we find more important; our latest iPhone or the environment we live in that

provides us with so much more. Let’s just hope that we make the right choice for the

sake of not just our own health, but for our future generations.

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