Electronic Waste: Observation on the Role of the Federal	 
Government in Encouraging Recycling and Reuse (26-JUL-05,	 
GAO-05-937T).							 
                                                                 
Advances in technology have led to rapidly increasing sales of	 
new electronic devices, particularly televisions, computers, and 
computer monitors. With this increase comes the dilemma of how to
manage these products when they come to the end of their useful  
lives. Concerns have been increasingly expressed that while	 
millions of existing computers become obsolete each year, only a 
fraction of them are being recycled. Some have alleged that the  
disposal of used electronics causes a number of environmental	 
problems. They note, for example, that toxic substances such as  
lead can leach from used electronics. They have also noted that  
computers and other electronic equipment contain precious metals 
that require substantial amounts of energy and land to extract.  
These metals, they say, can often be extracted with less	 
environmental impact from used electronics than from the	 
environment. In this testimony, GAO summarizes existing 	 
information on the amounts of, and problems associated with, used
electronics. GAO also examines the factors affecting the nation's
ability to recycle and reuse electronics when such products have 
reached the end of their useful lives. This testimony discusses  
preliminary results of GAO's work. GAO will report in full at a  
later date.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-937T					        
    ACCNO:   A31377						        
  TITLE:     Electronic Waste: Observation on the Role of the Federal 
Government in Encouraging Recycling and Reuse			 
     DATE:   07/26/2005 
  SUBJECT:   Cost analysis					 
	     Electronic equipment				 
	     Environmental monitoring				 
	     Environmental policies				 
	     Recycling						 
	     Toxic substances					 
	     Waste disposal					 
	     Environmental protection				 
	     EPA Electronic Product Environmental		 
	     Assessment Tool					 
                                                                 

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GAO-05-937T

United States Government Accountability Office

GAO Testimony

Before the Subcommittee on Superfund and Waste Management, Committee on
Environment and Public Works, U.S. Senate

For Release on Delivery

Expected at 2:30 p.m. EDT ELECTRONIC WASTE

Tuesday, July 26, 2005

 Observation on the Role of the Federal Government in Encouraging Recycling and
                                     Reuse

Statement of John B. Stephenson, Director Natural Resources and Environment

GAO-05-937T

[IMG]

July 26, 2005

ELECTRONIC WASTE

Observations on the Role of the Federal Government in Encouraging Recycling and
Reuse

  What GAO Found

Available estimates suggest that the amount of used electronics is large
and growing, and that if improperly managed can harm the environment and
human health. While data and research are limited, some data suggest that
over 100 million computers, monitors, and televisions become obsolete each
year, and that this amount is growing. These obsolete products are either
recycled, reused, disposed of in landfills, or stored by users in places
such as basements, garages, and company warehouses. Available data suggest
that most used electronics are probably stored. The units still in storage
have the potential to be recycled and reused, or disposed in landfills;
or, they may be exported for recycling or reuse overseas. If disposed of
in landfills, valuable resources, such as copper, gold, and aluminum, are
lost for future use. Additionally, standard regulatory tests show that
some toxic substances with known adverse health effects, such as lead,
have the potential to leach from discarded electronics into landfills.
Although one study suggests that this leaching does not occur in modern
U.S. landfills, it appears that many used electronics end up in countries
without either modern landfills or with considerably less protective
environmental regulations.

Economic factors, such as cost, inhibit the recycling and reuse of used
electronics. Consumers generally have to pay fees and drop off their used
electronics at often inconvenient locations to have their used electronics
recycled or refurbished for reuse. Consumers in Snohomish County,
Washington, for instance, may have to travel more than an hour to the
nearest drop-off location, which then charges between $10 and $27 per
unit, depending on the type and size of the product. Recyclers and
refurbishers charge these fees because costs associated with their
processes outweigh the revenue received from recycled commodities or
refurbished units. In addition to the challenges posed by these economic
factors, federal regulatory requirements provide little incentive for
environmentally preferable management of used electronics. The governing
statute, the Resource Conservation and Recovery Act, regulates the
disposal practices of large generators of hazardous waste (including
electronic waste) but exempts individuals and households from these
requirements.

In the absence of a national framework for dealing with the problem, a
patchwork of potentially conflicting state requirements appears to be
emerging. Manufacturers in one state, for instance, may have an advance
recovery fee placed on their products, but the same manufacturers may have
to take back their products and pay for recycling in another. This
patchwork may be placing a substantial burden on recyclers, refurbishers,
and other stakeholders. As GAO concludes its work, it will examine the
implications of these findings for the ongoing efforts among the states to
deal with this growing problem, for the various legislative solutions that
have been proposed to create a uniform national approach, and for options
the federal government can pursue to encourage recycling and reuse of
electronics.

                 United States Government Accountability Office

Mr. Chairman and Members of the Subcommittee:

Thank you for the opportunity to discuss our work to date on the issues
surrounding the growing volume of used electronics accumulating in the
nation's basements, attics, and landfills. Rapid advancements in
technology have led to increasing sales of new electronic devices,
particularly televisions, computers, and computer monitors. Approximately
62 percent of U.S. households had computers in 2003, compared with only 37
percent just 6 years earlier. With this increase comes the dilemma of how
to manage these products when they come to the end of their useful lives.
The Environmental Protection Agency (EPA) has estimated that in 2003
alone, about 50 million existing computers became obsolete, but one
estimate forecast that less than 6 million were recycled.

Disposal of used electronics creates potential problems that can be
averted through recycling or reuse. For example, concerns have been raised
because toxic substances such as lead, which have welldocumented adverse
health effects, can potentially leach from used electronics. Concerns have
also been raised over used electronics that are exported from the United
States to countries with less stringent environmental regulations. In
addition, computers contain precious metals, such as gold, silver, and
platinum, that require substantial amounts of energy and land to extract.
These metals can often be extracted with less environmental impact from
used electronics than from the environment. The U.S. Geological Survey,
for instance, reports that 1 metric ton of computer scrap contains more
gold than 17 tons of ore and much lower levels of harmful elements common
to ores, such as arsenic, mercury, and sulfur.

In this context, you and several other Members of the Congress asked that
we address a number of issues surrounding this problem. Specifically, we
were asked to (1) summarize existing information on the volumes of, and
problems associated with, used electronics and (2) examine the factors
affecting the nation's ability to recycle and reuse electronics when such
products have reached the end of their useful lives.

To address these issues, we are examining studies that provide nationwide
estimates on the amount of used electronics,1 as well as federal and state

1For the purposes of our study, used electronics includes computers,
computer monitors, and televisions that have reached the end of their
original useful life.

government studies (including those by EPA and task forces in Oregon and
Washington), industry and interest group studies, and local studies
(including municipal solid waste characterization studies) that discuss
the problems associated with used electronics. We are also visiting states
and localities that have implemented programs or passed legislation to
responsibly manage used electronics, including California, Maine,
Maryland, Massachusetts, Oregon, and Washington. In addition, we are
surveying participants in the National Electronics Product Stewardship
Initiative and other key stakeholders, which include key stakeholders from
federal, state, and local governments, environmental organizations,
recyclers, retailers, equipment manufacturers, and academicians. To date,
we have received responses from 41 of the 53 survey participants. We are
also comparing current government and industry practices with existing
practices for promoting recycling in other industries, such as bottle- and
can-recycling programs and the Rechargeable Battery Recycling Corporation
program. Further, we are examining EPA-sponsored federal, state, and local
pilot programs that attempt to encourage recycling of electronic products.
Our work is being done in accordance with generally accepted government
auditing standards, which include an assessment of data reliability and
internal controls.

We are here to present our preliminary observations on these issues. We
will report the final results of our study and any recommendations we may
develop at a later date. In summary:

o  	Available estimates suggest that the volume of used electronics is
large and growing and that if improperly managed can harm the environment
and human health. While data and research are limited, some data suggest
that over 100 million computers, monitors, and televisions become obsolete
each year and that this amount is growing. These obsolete products can be
either recycled, reused, disposed of in landfills, or stored by users in
places such as basements, garages, and company warehouses. Available data
suggest that most used electronics are probably stored. These units have
the potential to be recycled and reused, disposed of in landfills, or
exported for recycling and reuse overseas. If ultimately disposed in
landfills, either in the United States or overseas, valuable resources,
such as copper, gold, and aluminum, are lost for future use. Additionally,
standard regulatory tests show that some toxic substances with known
adverse health effects, such as lead, have the potential to leach into
landfills. Although one study suggests that leaching is not a concern in
modern U.S. landfills, it appears that many of these products end up in
countries without modern landfills or the environmental regulations
comparable to the U.S.

o  	Both economic and regulatory factors discourage recycling and reuse of
used electronics:

o  	Economic factors inhibit the recycling and reuse of used electronics.
Consumers generally have to pay fees and drop off their used electronics
at often inconvenient locations to have them recycled or refurbished for
reuse. Consumers in Snohomish County, Washington, for instance, may have
to travel more than an hour to the nearest dropoff location, which then
charges between $10 and $27 per unit depending on the type and size of the
product. Consumers in the Portland, Oregon area, pay one local recycler 50
cents per pound to have their used computers recycled, which is about $28
for an averagesized desktop computer. Recyclers and refurbishers charge
these fees because costs associated with recycling and refurbishing
outweigh the revenue received from recycled commodities or refurbished
units. This point was underscored by the International Association of
Electronics Recyclers, which reported that the value of commodities
recovered from computer equipment (such as shredded plastic, copper, and
aluminum) is only between $1.50 and $2.00 per unit. It was further
underscored by our interviews with eight electronics recyclers, who were
unanimous in emphasizing that they could not cover costs without charging
fees.

o  	Federal regulatory requirements provide little incentive for
environmentally preferable management of used electronics. The governing
statute, the Resource Conservation and Recovery Act, bars entities that
dispose of more than 220 pounds of hazardous waste per month from
depositing hazardous waste (including some used electronics) in landfills.
However, RCRA does not prohibit households and entities that generate less
than 220 pounds of hazardous waste per month from sending hazardous waste
to municipal landfills. Consequently, since only four states currently ban
disposal of used electronics in their trash or local landfill, most
consumers in the remaining 46 states (and the District of Columbia) are
allowed to do so-and have little incentive to do otherwise. Not
surprisingly, available data suggest that states and localities that do
not have landfill bans have dramatically lower levels of recycling than
the four states that have enacted landfill bans. In addition, federal
regulations provide for neither a financing system for responsible
management of used electronics, nor oversight of these products when
exported-a particular problem in the case of some developing countries,
where risks to the environment and human health may be more likely because
of less stringent environmental regulations.

Background

In the absence of a national approach, a patchwork of potentially
conflicting state requirements is developing. This patchwork may be
placing a substantial burden on recyclers, refurbishers, and other
stakeholders. As we conclude our work, we will be examining the
implications of our findings for the ongoing efforts among the states to
deal with the problem, for the various legislative solutions that have
been proposed to create a uniform national approach, and for options the
federal government can pursue to encourage recycling and reuse of used
electronics.

Few people are aware of recycling options for their old televisions and
personal computers. Because of the perceived value of used electronics,
some pass their used equipment to family members or friends before
eventually storing these units in their attics, basements, or garages.
Eventually, though, consumers need to dispose of these units in some
manner. By choosing to have these products recycled, consumers ensure the
recovery of resources like copper, iron, aluminum, and gold, which would
otherwise be procured through less environmentally friendly practices such
as mining. Likewise, consumers who choose to recycle also reduce the
amount of waste entering the nation's landfills and incinerators. Since
used electronics typically contain toxic substances like lead, mercury,
and cadmium, recycling or refurbishing will prevent or delay such toxic
substances from entering landfills.

The Congress affirmed its commitment to reducing waste and encouraging
recycling, first through enactment of the Resource Conservation and
Recovery Act (RCRA) of 1976, and then again with passage of the Pollution
Prevention Act of 1990. Both RCRA and the Pollution Prevention Act address
alternatives to waste disposal. RCRA promotes the use of resource
recovery, either through facilities that convert waste to energy or
through recycling. To promote recycling, RCRA required EPA to develop
guidelines for identifying products that are or can be produced with
recovered materials. RCRA also requires federal agencies to procure items
that are, to the maximum extent practicable, produced with recovered
materials. The Pollution Prevention Act provides that pollution that
cannot be prevented should be recycled or treated in a safe manner, and
disposal or other releases should be used only as a last resort. It
specified that pollution prevention can include such practices as
modifying equipment, technology, and processes; redesigning products; and
substituting lesstoxic raw materials. Executive Order 13101, issued on
September 14, 1998, also affirmed the federal government's commitment to
encourage recycling by directing federal agencies to consider procuring
products

that, among other things, use recovered materials, can be reused,
facilitate recycling, and include fewer toxic substances.

Nonetheless, while large-quantity generators, such as businesses, schools,
and government agencies, must treat some used electronics as hazardous
waste due to the relatively high level of toxic substances, it is not
illegal for households or for small quantity generators-non-household
entities disposing of less than 220 pounds per month-to dispose of used
electronics in landfills in most states. Under RCRA, household hazardous
wastes, including used electronics, may be disposed of at municipal solid
waste landfills. However, some states have begun imposing more stringent
disposal requirements for used electronics. For example, because of
concerns regarding the potential environmental and health effects of
leaded glass in cathode ray tubes (CRTs), California, Maine,
Massachusetts, and Minnesota recently banned them from disposal in
municipal landfills.

As national awareness of potential problems associated with the disposal
of used electronics has grown, EPA has taken steps to encourage recycling
of used electronics. For instance, EPA, together with electronics
manufacturers, retailers, and recyclers, sponsored several pilot programs
in 2004 to measure the success of convenient collection options for used
electronics. Other recent EPA efforts, such as the Federal Electronics
Challenge and the Electronic Product Environmental Assessment Tool (EPEAT)
program, attempt to leverage U.S. government procurement power to drive
environmentally preferable design for electronic products. Finally,
through the establishment of the National Electronic Product Stewardship
Initiative (NEPSI) in 2001, EPA established a voluntary, multistakeholder
initiative to reach consensus on a national approach to encourage
recycling of used electronics. This voluntary effort ultimately dissolved
in 2005 without agreement, however, because stakeholders could not reach
consensus on a nationwide financing system.

  Volume of Used Electronics and the Problems They Pose

The information we have reviewed to date suggests strongly that the volume
of used electronics is large and growing. For example, in a 1999 study,
the National Safety Council forecast that almost 100 million computers and
monitors would become obsolete in 2003-a three-fold increase over the 33
million obsolete computers and monitors in 1997.2 Additionally, a 2003
International Association of Electronics Recyclers report estimated that
20 million televisions become obsolete each year-a number that is expected
to increase as CRT technology is replaced by new technologies such as
plasma screens.3

Thus far, it appears that relatively few units have found their way into
either landfills or recycling centers. Available EPA data indicate that
less than 4 million monitors and 8 million televisions are disposed of
annually in U.S. landfills-only a fraction of the amount estimated to
become obsolete annually, according to EPA. Additionally, the 1999
National Safety Council report forecast that only 19 million computers,
monitors, and televisions would be recycled in 2005. Hence, the gap
between the enormous quantity of units that are obsolete (or becoming
obsolete), and the quantity either in landfills or sent to recycling
centers, suggests that most used electronics are still in storage-such as
attics, basements, and garages-and that their ultimate fate is still not
certain, or have been exported for recycling and reuse overseas.

Conventional disposal of used electronics in landfills raises two primary
concerns, according to research we reviewed: the loss of natural resources
and the potential release of toxic substances in the environment. By
disposing of these products in landfills or incinerators, valuable
resources are lost for future use. For example, computers typically
contain precious metals, such as gold, silver, palladium, and platinum, as
well as other useful metals like aluminum and copper. Further, the U.S.
Geological Survey reports that one metric ton of computer circuit boards
contains between 40 and 800 times the concentration of gold contained in
gold ore and 30 to 40 times the concentration of copper, while containing
much

2National Safety Council, Electronic Product Recovery and Recycling
Baseline Report, May 1999. These estimates are based on major assumptions,
as well as responses from only 38 percent of sampled companies. Although
the study supports the existence of a large and growing problem, the
precise estimates should be used with caution.

3International Association of Electronics Recyclers, IAER Electronics
Recycling Industry Report, 2003. These estimates are based on major
assumptions, as well as responses from only 20 percent of sampled
companies. Although the study supports the existence of a large and
growing problem, the precise estimates should be used with caution.

lower levels of harmful elements common to ores, such as arsenic, mercury,
and sulfur.4 The research we have thus far reviewed also suggests that the
energy saved by recycling and reusing used electronics is significant-the
author of one report by the United Nations University states that perhaps
as much as 80 percent of the energy used in a computer's life can be saved
through reuse instead of producing a new unit from raw materials.5

Regarding the issue of toxicity, the research we have reviewed to date is
unclear on the extent to which toxic substances may leach from used
electronics in landfills. On one hand, according to a standard regulatory
test RCRA requires to determine whether a solid waste is hazardous and
subject to federal regulation, lead (a substance with known adverse health
affects) leaches from some used electronics under laboratory conditions.
Tests conducted at the University of Florida indicate that lead leachate
from computer monitors and televisions with cathode ray tubes exceeds the
regulatory limit and, as a result, could be considered hazardous waste
under RCRA.6 On the other hand, the study's author told us that these
findings are not necessarily predictive of what could occur in a modern
landfill. Furthermore, a report by the Solid Waste Association of North
America suggests that while the amount of lead from used electronics
appears to be increasing in municipal solid waste landfills, these
landfills provide safe management of used electronics without exceeding
toxicity limits that have been established to protect human health and the
environment.7

4Bleiwas, Donald and Kelly, Thomas, Obsolete Computers, "Gold Mines," or
High-Tech Trash? Resource Recovery From Recycling (Washington, D.C.: U.S.
Geological Survey, 2001). Because we have not yet reviewed this study,
this data should be used with caution.

5The United Nations University is a think tank for the United Nations and
is not a degree granting university.

6Townsend, Timothy, et al, Characterization of Lead Leachability from
Cathode Ray Tubes Using the Toxicity Characteristic Leaching Procedure.
(University of Florida, Department of Environmental Engineering Sciences:
2000). Because we have not yet reviewed this study, these estimates should
be used with caution.

7Solid Waste Association of North America, The Effectiveness of Municipal
Solid Waste Landfills in Controlling Releases of Heavy Metals to the
Environment (2004). Because we have not yet reviewed this study, this data
should be used with caution.

  Economic and Regulatory Factors Deter Recycling and Reuse of Used Electronics

The costs associated with recycling and reuse, along with limited
regulatory requirements or incentives, discourage environmentally
preferable management of used electronics. Generally, consumers have to
pay fees and take their used electronics to often inconvenient locations
to have them recycled or refurbished for reuse. Recyclers and refurbishers
charge fees to cover the costs of their operations. In most states,
consumers have an easier and cheaper alternative-they can take them to the
local landfill. These easy and inexpensive alternatives help explain why
so little recycling of used electronics has thus far taken place in the
United States. This economic reality, together with federal regulations
that do little to preclude disposal of used electronics along with other
wastes, have led a growing number of states to enact their own laws to
encourage environmentally preferable management of these products.

Cost and Consumer Inconvenience Discourage Recycling and Reuse of Used
Electronics

Consumers who seek to recycle or donate their used electronics for reuse
generally pay a fee and face inconvenient drop-off locations. Unlike their
efforts for other solid waste management and recycling programs, most
local governments do not provide curbside collection for recycling of used
electronics because it is too expensive. Instead, some localities offer
used electronics collection services, for a fee, at local waste transfer
stations. These localities send consumers' used electronics to recyclers
for processing. For example, transfer stations in Snohomish County,
Washington, charge consumers between $10 and $27 per unit for collecting
used electronics and transporting them to recyclers. Moreover, such
transfer stations are generally not conveniently located, and rural
residents, such as those in Snohomish County, may need to drive more than
an hour to get to the nearest drop-off station.8 In some localities,
consumers can also take their used electronics directly to a recycler,
where they are typically charged a fee. In the Portland, Oregon area, for
instance, one recycler charges consumers 50 cents per pound to recycle
computers, monitors, and televisions, which means it costs the consumer
about $28 to recycle an average-sized desktop computer system.

Recyclers charge these fees to cover the costs they incur when
disassembling used electronics, processing the components, and refining
the commodities for resale. As noted in a 2003 report by the International
Association of Electronics Recyclers, most recyclers and refurbishers in

8Over 70 percent of the survey respondents felt that existing collection
options for recycling used electronics were inconvenient for households.

the United States cannot recoup their expenses from the resale of recycled
commodities or refurbished units. The report, which compiled data from
more than 60 recyclers in North America, stated that the costs associated
with recycling are greater than the revenue received from reselling
recycled commodities, and that fees are needed to cover the difference.
Furthermore, the report states that the value of commodities recovered
from computer equipment, such as shredded plastic, copper, and aluminum,
is only between $1.50 and $2.00 per unit.9

The costs associated with recycling make it unprofitable (without charging
fees) for several reasons. First, recycling used electronics is labor
intensive-the equipment must be separated into its component parts,
including the plastic housing, copper wires, metals (e.g., gold, silver,
and aluminum), and circuit boards, as well as parts that can be easily
reused or resold, like hard drives and CD-ROM drives. Officials with
Noranda Recycling Inc., which recycles used electronics for
Hewlett-Packard, told us that over 50 percent of their total costs for
recycling are labor costs involved in disassembly, even though they
operate some of the most technologically advanced equipment available.
Labor costs are high, in part, because electronic products are not always
designed to facilitate recycling at their end of life. For instance, a
Hewlett-Packard official told us 30 different screws must be removed to
take out one lithium battery when disassembling a Hewlett-Packard computer
for recycling. According to this official, if Hewlett-Packard spent $1 in
added design costs to reduce the number of different screws in each
computer, it would save Noranda approximately $4 in its disassembly costs.

Second, to obtain sellable commodities, the resulting metal and plastic
"scrap" must be further processed to obtain shredded plastic, aluminum,
copper, gold, and other recyclable materials. Processing in this fashion
typically involves multimillion-dollar machinery. According to officials
with one international electronics recycling company, processing costs are
high, in part, because this sophisticated machinery is being used to
process the relatively limited supply of used electronics being recycled
in the United States. The firm's officials noted that in Europe, by
contrast, where manufacturers are required to take financial
responsibility for the disposal of their products, the increased supply of
recyclable electronics

9This point is further underscored by our interviews with 8 electronics
recyclers, who were unanimous in emphasizing that they could not cover
costs without charging fees.

has decreased the firm's per-unit processing costs and increased the
profitability of recycling used electronics.

Finally, recyclers incur additional expenses when handling and disposing
of toxic components (such as batteries) and toxic constituents (such as
lead), which are all commonly found in used electronics. These expenses
include removing the toxic components and constituents from the product,
as well as handling and processing them as hazardous material. Once
separated from the product, these wastes are considered hazardous wastes
and are subject to more stringent RCRA requirements governing their
transportation, storage, and disposal. CRTs from computer monitors and
televisions are particularly expensive to dispose of because they contain
large volumes of leaded glass, which must be handled and disposed of as a
hazardous waste. Since CRT manufacturing is declining in the United
States, some recyclers send their CRT glass to a lead smelter in Missouri
that charges recyclers for their CRT glass. A study on the economics of
recycling personal computers found that the cost associated with disposing
of CRT monitors substantially reduces a recycler's net revenue.10

Refurbishers charge similar fees to cover the costs involved in
guaranteeing data security by "wiping" hard drives, upgrading systems,
installing software, and testing equipment. A program manager for a
nonprofit technology assistance provider told us that it generally costs
about $100 to refurbish a Pentium III computer system, plus an additional
licensing fee of about $80 for an operating system.

To encourage used electronics recycling, EPA sponsored pilot programs that
addressed the cost and inconvenience issues. Office Depot and
Hewlett-Packard, for example, partnered to provide free take-back of used
electronics at Office Depot retail stores. Collected used electronics were
sent to Hewlett-Packard facilities for recycling. Over a 3-month period,
nearly 215,000 computers, monitors, and televisions were collected and
recycled. EPA officials told us that the pilot program showed the extent
to which recycling can be encouraged by making it inexpensive and
convenient to the consumer.

10Boon, J.E., Isaacs, J.A., and Gupta, S.M. "Economic Sensitivity for End
of Life Planning and Processing of Personal Computers." Journal of
Electronics Manufacturing (Vol. 11, 81-93, 2002). Because we have not yet
reviewed this study, this data should be used with caution.

Federal Regulatory Framework Governing Used Electronics Provides Little
Incentive for Recycling or Reuse

Hazardous Used Electronics Are Allowed in Municipal Landfills

The lack of economic incentives promoting recycling and reuse of
electronics is compounded by the absence of federal provisions that either
encourage recycling, or preclude their disposal in landfills.
Specifically, current federal laws and regulations (1) allow hazardous
used electronics in municipal landfills, (2) do not provide for a
financing system to support recycling, and (3) do little to preclude
electronic products generated in the United States from being exported and
subsequently threatening human health and the environment overseas. While
several promising federal initiatives supporting electronics recycling
have been launched, their voluntary nature makes their success uncertain.

Regulation of used electronics at the federal level falls under RCRA
Subtitle C, which was established to ensure that hazardous waste is
managed in a manner that is protective of human health and the
environment. However, households and small quantity generators are exempt
from many RCRA regulations, thus allowing them to deposit their used
electronics in municipal solid waste landfills-even though cathode ray
tubes in computer monitors and televisions, and potentially circuit boards
in computers, exhibit characteristics of hazardous waste. EPA's Office of
Solid Waste regulates hazardous waste under RCRA, but it lacks the
authority to require environmentally preferable management of used
electronics through recycling and reuse or to establish a mandatory
national approach, such as a disposal ban. As a result, all of the
office's efforts with regard to the recycling of used electronics are
voluntary.

In response to RCRA's exemption for household hazardous waste and the
growing volume of obsolete electronics within their boundaries, four
states-California, Maine, Massachusetts, and Minnesota-recently banned
from landfills some used electronics.11 Our preliminary work suggests that
such bans have contributed to a higher degree of recycling than in states
where disposal in solid waste landfills is allowed. In San Ramon,
California, for instance, a 1-day collection event for television monitors
yielded 24,000 units. In contrast, in Richmond, Virginia, a metropolitan
area 4 times the size of San Ramon but without a landfill ban, a similar
collection event (organized by the same electronics recycler as in San
Ramon) only yielded about 6,000 monitors. This difference in yield is
consistent with assessments of California and Massachusetts officials, who
all told us that their states have seen substantial increases in used
electronics recycling. One international electronics recycler, for
instance,

11The landfill bans in Maine and Minnesota take full effect in 2006.

Experts Believe a National Financing System is Needed to Support Recycling

set up recycling facilities in the San Francisco area in 2003 because of
the large volume of used electronics that were no longer being disposed of
in landfills. In Massachusetts, an official with the Department of
Environmental Protection told us that six businesses dedicated to
electronics recycling were created following the enactment of a landfill
ban. Finally, about 75 percent of the survey respondents to date said that
a national disposal ban should be enacted to overcome the economic and
regulatory factors that discourage recycling and reuse of used
electronics.

Given the inherent economic disincentives to recycle used electronics, we
found widespread agreement among our survey respondents and others we
contacted that the establishment of some type of financing system is
critical to making recycling and reuse sufficiently inexpensive and
convenient to attract the participation of consumers. For instance, almost
90 percent of survey respondents believe that either an advanced recycling
fee (ARF), extended producer responsibility (EPR), or a hybrid of the two
should be implemented if national solution is instituted. Yet despite
broad agreement in principle, participants in the recent multi-stakeholder
NEPSI process, particularly those in the computer and television
industries, did not reach agreement on a uniform, nationwide financing
system after several years of meetings.

In the absence of a national system, several states have enacted their own
financing systems through legislation to help ensure environmentally
preferable management of used electronics. For example, in 2005,
California implemented an ARF on all new video display devices, such as
televisions and computer monitors, sold within the state. The fee is
charged to consumers at the time and location of purchase, and can range
between $6 and $10. According to an official with the California
Department of Toxic Substance Control, the revenues generated from the fee
are intended to deal with a key concern-used electronics in storage, or
"legacy waste." The officials explained that while California's recycling
industry for used electronics had sufficient capacity to recycle large
volumes, consumers and large-quantity generators had little incentive to
take products out of their basements or warehouses to have them recycled.
The state uses revenues from the fees to reimburse electronics recyclers
at the rate of 48 cents per pound of used electronics recycled. The
recyclers, in turn, pass on 20 cents per pound to collectors of used
electronics, thereby providing an incentive for entities to make
collection free and convenient for households.

The state is still in the preliminary stages of program implementation,
and state officials acknowledge that they face a number of challenges.
Some of

these challenges underscore the difficulty of dealing with the electronic
waste problem on a state-by-state basis. The officials noted, for
instance, that the ARF applies only to electronics purchased in
California, and that the fees are intended only for used electronics
originating in the state. Implementing the program within the state's
boundary, however, may prove difficult because the payout for used
electronics may attract units originating in other states. Preventing this
problem, they say, requires substantial documentation for each unit, and
may require a substantial enforcement effort.

While California's ARF focuses on consumers of electronics, Maine's
approach focuses on producers. In 2004, the state passed legislation
requiring computer and television manufacturers who sell products in Maine
to pay for the take back and recycling of their products at their end of
life-a strategy referred to as EPR. Under this plan, consumers are to take
their used electronics to a consolidation point, such as a transfer
station, where they are sorted by original manufacturer. Each manufacturer
is responsible for transporting and recycling its products, along with a
share of the products whose original manufacturer no longer exists.
According to one official with Maine's State Planning Office, a key
challenge of its EPR system is the lack of a financial incentive for
consumers to take their used electronics out of storage: they must still
take their products to a consolidation point, and will still likely have
to pay a fee.

Several other states, as well as some countries, have implemented or are
considering implementing financing systems for used electronics. Earlier
this year, Maryland passed legislation requiring all computer
manufacturers that sell computers in the state to pay $5,000 into a fund
to help implement local recycling programs.12 Other states, such as
Arkansas, Colorado, Florida, and Massachusetts have allocated grants to
help pay for the recycling of used electronics, and New York, Rhode
Island, and Vermont are considering enacting manufacturer take-back
programs. In Europe, the European Union implemented the Waste Electrical
and Electronic Equipment Management Regulations in July 2004, which
requires producers of electronic products to be financially responsible
for the recycling or reuse of their products at end of life. In our final
report,

12An official with the Maryland Department of Environment estimated that
anywhere from 40 to 200 computer manufacturers might be required to pay
the fee. He cited one estimate that the fee will provide the state with
about $400,000 to use toward recycling used electronics.

Oversight of Exported Used Electronics Is Limited

we will provide a more complete examination of various strategies for
financing environmentally preferable management of used electronics.

The lack of oversight over exports of used electronics could also
discourage environmentally preferable management of used electronics. In
the United States, businesses, schools, government agencies, and other
organizations, as well as households, face multiple options for their used
electronics. In some instances, organizations and recyclers receive
e-mails from brokers, who typically have partners in Asia, willing to pay
them for their used electronics, regardless of whether they can be reused.
For example, one broker requests up to 50,000 used monitors per month and
does not require the monitors to be tested. Another broker specifically
requests nonworking monitors and wanted to fill at least 10 containers,
which equals anywhere from 6,000 to 11,000 units, depending on their size.
One Seattle area recycler said that brokers such as these are probably not
handling the units in environmentally preferable ways once the units are
exported. Even so, one business we contacted said it regularly receives
email requests such as these.

Companies export used electronics because the largest markets for reused
computers and computer parts are overseas, according to an EPA official.
Likewise, demand is high for recycled commodities, which can be processed
more cheaply due, in part, to lower wages and less stringent environmental
requirements. Also, unlike their counterparts in some other developed
countries, the United States officials have permitted the export of
hazardous used electronics, such as CRT monitors and televisions, if the
exporter asserts that the equipment is destined for reuse. While some
environmental groups have called for a ban on exports of used electronics,
the Congressional Research Service noted that such a ban would cut
recyclers off from many of the markets able to reuse the materials.13

However, few safeguards are in place to ensure that exported used
electronics are indeed destined for reuse.14 Used electronics that are
destined for reuse are not considered to be waste subject to RCRA export
regulations. Instead, such electronics are considered to be commodities,

13Congressional Research Service, Recycling Computers and Electronic
Equipment: Legislative and Regulatory Approaches for "E-Waste,"
(Washington, D.C.: 2003).

14The following are generally not classified as solid wastes under RCRA:
Used electronics for reuse, whole circuit boards, shredded circuit boards,
if free of certain hazardous materials, metal from used electronics, and
scrap metal.

which means that they can be exported with little or no documentation,
notification, and oversight. Nonetheless, instances have been recently
documented in which environmental and human health threats have resulted
from the less-regulated disassembly and disposal of U.S.generated used
electronics overseas. For example, a 2002 documentary by the Basel Action
Network and Silicon Valley Toxics Coalition videotaped egregious
disassembly practices in China that involved open burning of wire to
recover copper, open acid baths for separating precious metals, and human
exposure to lead and other hazardous materials.15 Without the ability to
track the exported units to importing countries, or to audit companies
exporting used electronics, it is difficult to verify that exported used
electronics are actually destined for reuse, or that they are ultimately
managed responsibly once they leave U.S. shores. As our work continues, we
will further examine the extent of the problems associated with
irresponsible management of used electronics overseas.

The federal government has taken some steps to affirm its commitment to
encourage recycling of used electronics through the implementation of two
voluntary programs sponsored by EPA. The Federal Electronics Challenge
(FEC) and the Electronic Product Environmental Assessment Tool (EPEAT)
both leverage U.S. government purchasing power to promote environmentally
preferable management of electronic products from procurement through end
of life. For example:

Opportunities Exist for Federal Initiatives to Enhance Electronics
Recycling

o  	The FEC program challenges federal agencies and facilities to procure
environmentally preferable electronic products, extend the lifespan of
these products, and expand markets for recycling and recovered materials
by recycling them at their end of life. The FEC provides guidance on
environmentally preferable attributes of electronic products information,
on operating and maintaining them in an energy-efficient manner, and on
options for recycling or reusing them at the end of their useful lives. To
date, 11 federal agencies and 26 individual federal facilities participate
in the FEC to some extent. The Bonneville Power Administration (BPA)
recently documented cost savings associated with its FEC participation.
BPA noted, for example, that the program extended the lifespan of its
personal computers from 3 to 4 years. With over 500 computers procured
each year at an annual cost of more than $500,000, a BPA official told us

15The Basel Action Network is an environmental group that works to prevent
the trade of toxic wastes from developed countries to developing
countries. The Silicon Valley Toxics Coalition is an environmental group
that works to prevent environmental and human health problems caused by
the electronics industry.

extending computer life spans could generate substantial savings.
Additionally, BPA decided to procure new flat-screen monitors instead of
CRT monitors, reducing both hazardous waste tonnage and end of life
recycling costs. According to BPA, it expects to save at least $153 per
monitor over each monitor's life.

o  	The EPEAT program promotes environmentally preferable management of
electronics by allowing large purchasers, such as government agencies, to
compare and select laptop computers, desktop computers, and monitors with
environmentally preferable attributes. For example, EPEAT evaluates an
electronic product's design for energy conservation, reduced toxicity,
extended lifespan, and end of life recycling, among other things. EPEAT's
three-tier system-bronze, silver, and gold-provides purchasers with the
flexibility to select equipment that meets the minimum performance
criteria, or to give preference to products with more environmental
attributes. For manufacturers, EPEAT provides flexibility to choose which
optional criteria they would like to meet to achieve higher levels of
EPEAT qualification. EPA expects EPEAT to be instituted in 2006, and
products with higher environmental ratings could receive preferred
consideration in federal procurement decisions.

While we will continue to examine the FEC and EPEAT programs in greater
detail, including how stakeholders say they might be improved, our
preliminary work suggests that the federal government can build on these
initiatives by using its purchasing power to lead markets for electronic
products in environmentally friendly directions. In fact, there is ample
precedent for such a strategy, perhaps most notably in EPA's and the
Department of Energy's Energy Star program. In that program, the federal
government partners with industry to offer businesses and consumers
energy-efficient products that ultimately save money and protect the
environment. According to EPA, in 2004 alone, Energy Star products helped
save approximately $10 billion in energy costs and reduced greenhouse gas
emissions by an amount equivalent to that produced by 20 million
automobiles. Part of Energy Star's success can be attributed to federal
actions, particularly those outlined in two executive orders that required
federal agencies to purchase products equipped with Energy Star features.
Since the federal government will spend over $60 billion on information
technology products in fiscal year 2005, including televisions, computers,
and computer monitors, it could go beyond the voluntary and limited FEC
and EPEAT programs by broadening the programs' scope and requiring agency
participation in, or adherence to, some of the programs' key practices. As
with the Energy Star program, such actions may lead to cost savings and
greater environmental protection. Of particular note, over

  Observations on Federal Actions to Encourage Recycling and Reuse of Used
  Electronics

80 percent of the survey respondents to date said that federal government
procurement criteria along the lines of FEC and EPEAT should be required,
and about 95 percent of the survey respondents to date said that such
procurement criteria would encourage environmentally preferable product
design, as well as recycling and reuse.

In our future work, we will continue to examine factors affecting
recycling in greater detail, and the diverse efforts by individual states
and others to deal with these issues. It is becoming clear, though, that
in the absence of a national approach, a patchwork of potentially
conflicting state requirements is developing, and that this patchwork may
be placing a substantial burden on recyclers, refurbishers, and other
stakeholders. A manufacturer in one state, for example, may have an
advance recovery fee placed on its products, whereas in another state, the
same manufacturer may have to take back its products and pay for
recycling. Further, a retailer may have to set up a system in one state to
collect fees on specific products and, at the same time, set up a
different system in another state to take back a particular manufacturer's
product. Hence, manufacturers we contacted said that while they had their
preferences regarding, for instance, an ARF or EPR system, their main
preference is to operate within a uniform national system that mandates a
financing mechanism that preempts varying state requirements. Our
preliminary survey results substantiate these views, with over 90 percent
of survey respondents indicating that national legislation should be
enacted and, if so, almost 90 percent believe a financing mechanism should
be included.

Our future work will also discuss some of the options-both legislative and
administrative-being considered to encourage environmentally preferable
management of used electronics at a national level. Frequently cited
options include disposal bans, consumer education programs, a variety of
financing systems, export restrictions, and federal government procurement
requirements. These options may offer suggestions for a uniform national
approach and what aspects should be considered. Additionally, an
examination of EPA's voluntary programs-the FEC and EPEAT-may shed light
on other, more effective options available to the federal government that
can save money over electronic products' life cycle; enhance environmental
protection; drive markets for environmentally preferable product design;
and establish a recycling infrastructure and markets for recycled
commodities.

Finally, with rapid advances in technology, particularly in consumer
electronics, new products are reaching the marketplace with remarkable

speed. Consequently, our future work will also examine the implications of
these newer generations of electronics entering the nation's waste stream.

  Contact and Acknowledgments

(360517)

Mr. Chairman, this completes my prepared statement. I would be happy to
respond to any questions you or other Members of this Subcommittee may
have at this time.

For further information, please contact John B. Stephenson at (202)
5123841 or [email protected]. Individuals making key contributions to
this report included Nathan Anderson, Charles Bausell, Virginia Chanley,
Bernice Dawson, Steve Elstein, Omari Norman, Alison O'Neill, Judy Pagano,
Carol Herrnstadt Shulman, and Arvin Wu.

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