Greener BeeGreen ElectronicsCommentary: Do waste management and free trade conflict?

Spanning more than 40 years, waste management has grown to become a nearly $100 billion per year industry in the United States. According to the U.S. Environmental Protection Agency (EPA), municipal solid waste recycling rates have grown from less than six per cent in 1960 to nearly 35 per cent in 2013.

But while this growth is impressive, the industry nonetheless faces several technological, financial and political headwinds.


One is the expanding electronic waste sector. Products such as cell phones, televisions, computers, hybrid and electric vehicles, etc. require specialty metals like lithium, refractory metals (e.g. tantalum, rhenium, niobium, and tungsten), and rare earths (e.g. dysprosium, neodymium, europium, and samarium).


While these materials have unique physiochemical properties, their recycling rate is less than five per cent because they are very difficult to recycle and frequently end up in landfills with resulting environmental risks. This is in contrast to the economically-efficient recycling of lead-acid batteries (which are 99 per cent recycled), steel (more than 90 per cent), and aluminum (more than 60 per cent).

Another challenge is how the recent collapse of worldwide commodity prices has sharply reduced the sale of recycled materials at a price sufficient not only to support labor and overhead to reprocess them from waste (or “scrap”) materials, but to do so profitably.


Still another is the ability of U.S. recyclers to compete with industry players in other countries who can operate with lower overhead because, among other things, they do not have to comply with expensive environmental regulations like those in the U.S.


This “pollution haven” effect can give foreign players a distinct advantage in competing with U.S. firms. Already, several U.S. recyclers have had to curtail operations or even shut down because of the commodity price collapse and loss of business to foreign competition. How can U.S. recyclers cope with these headwinds?


Several approaches have been considered, including increased research funding and investment incentives. Another approach that has been particularly controversial, however, is to restrict hazardous waste exports to firms outside the U.S. that have lower overhead expenses because of cheap labor and inferior environmental standards. This has caused an intense debate within the solid waste management community itself.


Some recyclers and environmentalists during the past 15 years, who say they are taking a “progressive” approach to the issue, have tried to persuade Congress to ratify and implement the Basel Convention on Hazardous Wastes, which would have banned waste shipments to underdeveloped countries. They contend the Basel restrictions would help prevent a “race to the bottom” in which companies look to maximize profits by exporting waste to countries with lower environmental and safety standards.


But, Congress never implemented Basel because others in the solid waste management business said it would violate such free-trade measures as the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT). It is also an issue in the Trans Pacific Partnership (TPP) debate.


When the effort to implement Basel failed, the “progressive” recyclers tried to persuade Congress to restrict exports of electronic waste, but were opposed by other waste management firms, and Congress never acted on the issue.


Here is one way to explain the debate over toxic waste exports: From the progressive recycler perspective, export restrictions can help assure a stable domestic source of scrap to feed into facilities that use state-of-the-art technologies to minimize pollution while producing energy or recycled materials that will be just as good as materials produced from primary – or “virgin” – resources. Why should clean, innovative companies be undermined by trade agreements that do not take such sustainability considerations into account?


Other U.S. companies, however, acknowledge that while some foreign companies operate with low environmental and safety standards, they maintain that the same cannot be said of every company. Such export restrictions, therefore, would discriminate against foreign companies that do operate at high standards. Besides, they say, the U.S. shouldn’t dictate environmental policies for other countries. In addition, electronic waste accounts for about five per cent of the market, which should mean there is enough time to get it right. Progressives counter that is no excuse for ignoring the problem now.


Neither Congress nor EPA has been able to unravel, much less resolve, this dispute between those concerned about a race to the bottom and advocates of free trade. In the meantime, a worldwide movement to foster a more circular economy in which resource efficiency programs can help protect Earth’s natural resources is gaining momentum.


One of the most important issues is the need for total life cycle cost data. Merely calculating the cost of materials and labor to put a product on the shelf is insufficient. Data to show the total life cycle impact of disposal costs on society – not just the U.S, but internationally – are urgently needed.


What can EPA do? One option is to look at some of the privately funded information exchange organizations that seek to apply “sunshine” on products that meet high life cycle management standards and those that do not. The Green Electronics Council, for example, operates the Electronic Product Environmental Assessment Tool (EPEAT), a “scorecard” guide designed to help government agencies and other worldwide institutions evaluate how electronic goods meet high standards for life cycle management, worker safety and positive environmental impact.


Other organizations with international scope include the Suppliers Partnership for the Environment and the U.S. Business Council for Sustainable Development, who offer product information exchange and business networking services.


EPA has been working with its counterparts in other G7 countries to organize meetings among these organizations, recyclers, manufacturers and various government agencies to put such resource efficiency, environmental and safety issues under a policy microscope. (Perhaps a bipartisan commission also may be warranted.)


Doing this – rather than trying to force a resolution over issues like scrap exports – may ultimately result in those who disagree on such issues coming together on a regulatory pathway to greater product sustainability.


To say such discussions are difficult is an understatement. But, the need is apparent.


John Howes is Principal of the Redland Energy Group, Washington, D.C. Roger Feldman is of counsel at Andrews Kurth, Washington, D.C.


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