Introduction Product Stewardship and How it Moves Costs from Local Governments to Consumers and Manufacturers Sego Jackson NW HW Conference June 2003 A.

Introduction

Product Stewardship and How it Moves Costs from Local Governments to Consumers and Manufacturers

Sego Jackson

NW HW ConferenceJune 2003

A presentation by the Northwest Product Stewardship Councilon Product Stewardship & Electronics

Toxic substances in electronics Toxicity in all phases of product life Production – mining and manufacturing Use – off-gassing of flame retardants Recycling and disassembly – potential for

worker exposure and toxic releases Disposal – lead, copper, mercury, etc.

TOXICITY

The Case for Product Stewardship

Electronics Product StewardshipElectronics Product Stewardship

Manufactured Globally

Manufactured Globally

No economic

incentive for

manufacturers to

minimize environmental

Impacts.

Product Management – The Old EditionManufactured Globally

Disposed LocallyDisposed Locally

GO DIRECTLY TO LANDFILL.

DO NOT PASS GO.

Product Management – The Old Edition

Disposed LocallyDisposed Locally

Should local governments

and rate payers cover the

costs of handling

electronic wastes?

Product Management – The Old Edition

Linear LifecycleThe Linear Lifecycle of Consumer Goods

Product Management – The Old Edition

The New Edition

Create Economic Incentives

Create economic

incentives for

manufacturers to

redesign products to make

them “greener.”

Closed Loop Lifecycle

The Closed Loop Lifecycle of Consumer Goods

Japanese Model

JAPANESE MODELMandated Responsibility

Manufacturers set front-end fees for end-of-life management

Retailers collect fees

Fees cover orphan & historic waste

Consumers return products to retailers or municipalities

Manufacturers compete to lower fees

Manufacturers and recyclers are financially linked

Old/New Editions

Local governments manage product end-of-life.

Rate payers and local government cover product end-of-life costs.

Manufacturers responsible for product take-back.

Costs of product end-of-life are included in price.

Old/New Editions

No incentives to alter current design.

Continuing toxic legacy.

Incentives to redesign products to make them “greener.”

Upstream thinking.

Review Goals:

Shift costs from Governments/Taxpayers to Manufacturers/Customers

IN A WAY that drives product and system design to be more environmentally sound

Government provides “free” collection

Manufacturer, retailer and customer have no role No design driver to reduce toxicity up or downstream, make more

recyclable. No driver for industry to develop markets for recovered materials No driver for industry to assist in making system function smoothly Every government is on its own - very inefficient

Government Charges End of Life Fee

Costs shifted to user instead of taxpayer. Stockpiling continues, illegal dumping increases All other problems remain, but funds are raised to

cover costs.

Manufacturer Charges End of Life Fee

Shift costs from Governments/Taxpayers to Customers Governments still stuck with illegal dumping Must be very convenient. Mail back programs aren’t. Manufacturer may have some incentive to reduce costs

of system

Visible Advance Recovery Fee(pay $10 when buy computer,

government collects)

Shift costs from Governments/Taxpayers to Customers

Manufacturers/retailers have no role No incentive for design or system efficiency

Invisible Advance Recovery Fee(fee is passed from manufacturer to

retailer, included in price, but not shown as stand-alone charge)

This begins to bring about design drivers due to price competition

Need to be alert to “cutting corners”

Full Cost Internalization (fee is incorporated into price by

manufacturer. Manufacturer pays for end of life management)

Can create strong design drivers Manufacturer concerned about functioning of entire system Need to be alert to “cutting corners”

Partial Cost Internalization (fee is incorporated into price by

manufacturer for portion of system, which manufacturer pays for.)

This brings about design drivers due to price competition Manufacturer doesn’t care about functionality of rest of system Rest of system costs return to governments/taxpayers

$$$ Scope of Issue

$200,000 per year = Snohomish County $210 million - National annual cost of collection,

consolidation, transport, processing of NEPSI electronics (not including education, etc.)

EOL vs Front-end Financing

Snohomish County television = $20 (losing $) 30,000,000 televisions sold annually $210,000,000 /30,000,000 = $7 fee on new televisions to pay for

entire system for recycling computers, monitors, tvs and more!

Instead of paying, governments and other collectors get paid!

Advanced Recovery Fee system includes collection cost payment to collector on per pound basis

Allows diverse and extensive collection infrastructure including repair shops, charities

What to watch out for...

Government pays all programs. “You don’t charge for HHW, why would you charge for

our electronic products!” “You don’t make other producers pay for their product

management. This is unfair!” Settling for any opportunity, no matter how

inconvenient, as good enough. “If one location in the county is good enough for really

hazardous things like pesticides, your politicians have decided that’s all that’s needed. Why do we need more convenient electronics drop-off!?”

“We already steward our products. We have a mail back system where the customer pays.”

What to watch out for...

Partial Cost Internalization (HP Model) “If you get full truck loads of our brand and transport it

to our recycler (in California), we’ll pay for the recycling.”

Agreements without measurable goals and without environmentally sound management requirements.

Customers and Citizens are the same. They are going to pay one way or the other so what’s the difference!?

Take the Money and Run. Cost shifting that provides funding to governments but

doesn’t provide design and system incentives.

Introduction

THAT’S ALL FOLKS!