    Electronic Waste: Strengthening the Role of the Federal
    Government in Encouraging Recycling and Reuse (10-NOV-05,
    GAO-06-47).

    Advances in technology have led to rapidly increasing sales of
    new electronic devices. With this increase comes the dilemma of
    managing these products at the end of their useful lives. Some
    research suggests that the disposal of used electronics could
    cause a number of environmental problems. Research also suggests
    that such problems are often exacerbated by the export of used
    electronics to countries without protective environmental
    regulations. Given that millions of used electronics become
    obsolete each year with only a fraction of them being recycled,
    GAO was asked to (1) summarize information on the volumes of, and
    problems associated with, used electronics; (2) examine the
    factors affecting their recycling and reuse; and (3) examine
    federal efforts to encourage recycling and reuse of these
    products.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-06-47
        ACCNO:   A43057
      TITLE:     Electronic Waste: Strengthening the Role of the Federal
    Government in Encouraging Recycling and Reuse
         DATE:   11/10/2005
      SUBJECT:   Computer monitors
    	     Electronic equipment
    	     Environmental monitoring
    	     Federal regulations
    	     Hazardous substances
    	     Recycling
    	     Television
    	     Toxic substances
    	     Waste disposal
    	     Waste management
    	     Solid waste management
    	     Strategic planning
    	     Environmental policies

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    GAO-06-47

         * Report to Congressional Requesters
              * November 2005
         * ELECTRONIC WASTE
              * Strengthening the Role of the Federal Government in Encouraging
                Recycling and Reuse
         * Contents
              * Results in Brief
              * Background
              * Growing Volume of Used Electronics May Pose Environmental and
                Health Problems If Not Managed Properly
              * Cost and Regulatory Factors Deter Recycling and Reuse of Used
                Electronics
                   * Cost and Consumer Inconvenience Discourage Recycling and
                     Reuse of Used Electronics
                   * Federal Regulatory Framework Governing Used Electronics
                     Provides Little Incentive for Recycling or Reuse
                        * Hazardous Used Electronics Are Allowed in Municipal
                          Landfills
                        * Experts Believe a National Financing System Is Needed
                          to Support Recycling
                        * Oversight of Exported Used Electronics Is Limited
              * Federal Efforts to Increase Recycling and Reuse of Used
                Electronics Can Be Strengthened
                   * Voluntary EPA Programs Show Promise
                   * Lack of EPA Authority for Requiring Federal Agency
                     Participation Limits Programs' Successes
              * Conclusions
              * Recommendations
              * Agency Comments and Our Evaluation
         * Scope and Methodology
         * Survey of Selected Stakeholders on Recycling Used Electronics
         * Comments from the Environmental Protection Agency
         * GAO Contact and Staff Acknowledgments

    Report to Congressional Requesters

    November 2005

    ELECTRONIC WASTE

    Strengthening the Role of the Federal Government in Encouraging Recycling
    and Reuse

    Contents

    Figure

    November 10, 2005Letter

    The Honorable James M. Jeffords Ranking Minority Member Committee on
    Environment and Public Works United States Senate

    The Honorable John Thune Chairman Subcommittee on Superfund and Waste
    Management Committee on Environment and Public Works United States Senate

    The Honorable Barbara Boxer Ranking Minority Member Subcommittee on
    Superfund and Waste Management Committee on Environment and Public Works
    United States Senate

    The Honorable Lincoln Chafee The Honorable Olympia Snowe The Honorable
    James Talent The Honorable Ron Wyden United States Senate

    Rapid advances 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 reach
    the end of their useful lives. The National Safety Council forecast that
    in 2003 alone, about 70 million existing computers became obsolete, but it
    also forecast that only 7 million were recycled.

    Disposal of used electronics poses a number of potential environmental
    problems.1 For example, concerns have been raised because toxic substances
    such as lead, which have well-documented adverse health effects, can
    potentially leach from these products, especially if disposed improperly.
    Concerns have also been raised over used electronics that are exported
    from the United States to countries with less stringent environmental
    regulations because disposal in these countries can more easily have
    adverse environmental and human health effects. In addition to toxic
    substances, computers contain precious metals, such as gold, silver, and
    platinum, which 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.

    Under the Resource Conservation and Recovery Act (RCRA), the Environmental
    Protection Agency's (EPA) Office of Solid Waste provides regulatory
    oversight of the disposal of certain hazardous used electronic products.
    The office tightly regulates hazardous waste from generation to disposal;
    but also under RCRA, for other solid wastes, it promotes waste reduction,
    recycling, and responsible disposal through national voluntary and
    educational programs. Individual states must meet minimum national
    standards for the management of municipal solid waste in landfills, but
    they operate their own waste management programs, develop their own
    recycling and reuse programs, and are free to implement more stringent
    waste management policies.

    Given the growing number of computers and other electronic products
    becoming obsolete, you asked that we (1) summarize existing information on
    the volumes of, and problems associated with, used electronics; (2)
    examine the factors affecting the nation's ability to recycle and reuse
    these products; and (3) examine federal efforts to encourage recycling and
    reuse of used electronics and determine what, if anything, can be done to
    improve them.

    To address these issues, we reviewed scientific studies and reports
    conducted by government agencies, nonprofits, trade organizations, and
    academics. We also interviewed federal, state, local, nonprofit, and
    industry officials, as well as academic and research organization experts.
    For studies that we cite in this report, we reviewed their methodology,
    assumptions, limitations, and conclusions to ensure that we properly
    represented the validity and reliability of their results and conclusions.
    To examine the factors that affect the nation's ability to recycle and
    reuse used electronics, we examined current federal laws, regulations, and
    guidance regarding solid and hazardous waste disposal as they relate to
    the disposal of used electronics. We also reviewed pertinent state and
    local laws, regulations, and guidance. In particular, we reviewed the
    electronic waste legislation passed in California, Maine, Maryland,
    Massachusetts, and Minnesota. We visited states and localities that have
    implemented programs or passed legislation to responsibly manage used
    electronics, including California, Maine, Massachusetts, Oregon, and
    Washington. Further, we examined EPA-sponsored federal, state, and local
    pilot programs that attempt to encourage recycling of electronic products.
    In addition, to obtain the views of informed stakeholders regarding the
    factors that affect the nation's ability to recycle and reuse used
    electronics, we conducted a survey of participants in the National
    Electronics Product Stewardship Initiative (NEPSI) and other key
    stakeholders. We received 42 responses from our survey population of 49.
    For additional information on our scope and methodology, see appendix I.
    Our work was conducted in accordance with generally accepted government
    auditing standards, which include an assessment of data reliability and
    internal controls.

    Results in Brief

    Available research suggests that the volume of used electronics is large
    and growing and, 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 recycled,
    reused, disposed of in landfills, or stored by users in places such as
    basements, garages, and company warehouses. Data we reviewed suggest that
    most used electronics are probably stored, and therefore have the
    potential to be recycled or reused, disposed of in landfills, or exported
    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. In addition to concerns over losing valuable
    resources, some research shows that certain 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 environmental regulations comparable
    to those in the United States. Finally, even with uncertainty surrounding
    the risks associated with toxic substances in used electronics, EPA has
    identified a number of these substances as priority toxic chemicals for
    reduction because they do not break down when released into the
    environment and can be dangerous even in small quantities.

    Despite the large volume of used electronics and the valuable resources
    contained within them, economic and regulatory factors discourage these
    products' recycling and reuse. Specifically:

    o 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 drop-off 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 average-sized 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 also provide little incentive for
    environmentally preferable management of used electronics. First, some
    used electronics are considered hazardous waste under RCRA, and RCRA bars
    entities that generate more than 220 pounds per month of hazardous waste
    (including some used electronics) from depositing it in landfills.
    However, RCRA does not bar households and entities that generate less than
    220 pounds of hazardous waste per month from this practice. Consequently,
    since only four states currently ban disposal of used electronics in
    landfills, 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, data we reviewed suggest that states and localities
    without landfill bans have dramatically lower levels of recycling than the
    four states that have enacted landfill bans. Second, federal law does not
    provide a financing system to recycle used electronics. Absent a
    consistent financing system to make recycling less costly and more
    convenient for consumers, a patchwork of potentially conflicting state
    requirements is emerging that may ultimately place a substantial burden on
    recyclers, retailers, and manufacturers. The lack of a national financing
    mechanism has also led to an array of legislative proposals that take very
    different approaches to address the problem. Third, federal regulations do
    not provide adequate oversight of these products when exported. This is a
    particular problem in the case of some developing countries, where risks
    to the environment and human health may be more likely because less
    stringent environmental regulations often do not ensure that exported used
    electronics-supposedly destined for reuse-are not instead being disposed
    of improperly. Together, these factors hinder EPA's ability to reach its
    stated goal that within 10 years, it will be as convenient for consumers
    to take a discarded television or computer for recycling or reuse as it is
    to purchase a new product.

    EPA has spent about $2 million on several voluntary programs to help
    overcome some of the factors discouraging recycling and reuse of used
    electronics. For example, the "Plug-In To eCycling" campaign sponsors
    partnerships with industry and state and local governments to make
    recycling used electronics less expensive and more convenient for
    consumers. In 2004, Plug-In To eCycling sponsored four pilot projects
    involving collection events at retailers such as Best Buy, Good Guys,
    Office Depot, and Staples, in which over 11 million pounds of used
    electronics were collected. Another program-the Federal Electronics
    Challenge-leverages U.S. government purchasing power to promote
    environmentally preferable management of used electronics throughout their
    life cycle: procurement, operation and maintenance, and end-of-life
    management. Through its participation in this program, the Bonneville
    Power Administration has already documented cost savings associated with
    longer life spans for the agency's computers and through purchases of
    computer monitors that contain less toxic substances and are therefore
    cheaper to recycle. To date, however, only 61 out of thousands of federal
    facilities participate in the Federal Electronics Challenge. A major
    reason for the limited federal participation in this and other EPA
    electronics recycling programs is that, unlike other successful federal
    procurement programs (such as EPA's and the Department of Energy's Energy
    Star program), participation is not required.

    We are recommending that the Administrator of EPA develop a legislative
    proposal that addresses some of the economic and regulatory factors
    discouraging recycling and reuse of used electronics. In addition, we are
    recommending that the agency take several administrative steps to (1)
    increase federal agency participation in promising EPA electronics
    recycling programs and (2) help ensure that used electronics exported
    overseas are destined for reuse, as intended, and not disposed of
    improperly.

    In responding to a draft of this report, EPA generally agreed with our
    findings but disagreed with our recommendations that it develop a
    legislative proposal, and that it take additional steps to engender wider
    federal agency participation in promising EPA electronics recycling
    programs. Regarding the first of these two recommendations, EPA commented
    that it does not believe it is appropriate for the agency to propose
    options for a nationwide financing system to overcome the barriers to
    recycling and reuse because there is no consensus among manufacturers as
    to the optimal solution. We disagree that this lack of consensus provides
    a compelling reason for EPA to abstain from acting because there are ample
    precedents for EPA's involvement in addressing complex financing issues
    affecting solutions to key environmental problems. Furthermore, our survey
    results show that there is overwhelming agreement that legislation will be
    needed to deal with used electronics and a national financing system must
    be a part of it.

    In commenting on the recommendation to engender wider federal agency
    participation in its electronics recycling programs, EPA disagreed with
    our view that participation in the Federal Electronics Challenge is
    limited, noting that the 12 federal agencies participating in the program
    to date "represent over 80 percent of the Information Technology
    purchasing in the government." The figure, however, overstates federal
    agency adherence to the goals of the program. Participation simply means
    these agencies have identified their current practices for managing
    electronic products and set goals to improve them. However, the
    participating agencies and facilities are not required to meet their
    goals. As a practical matter, 61 out of thousands of federal facilities
    participate in the program, and only 5 of these are meeting electronic
    product management criteria that the program's steering committee has
    asked them to attain. We continue to believe this track record falls short
    of EPA's own goal that the federal government "lead by example" in
    promoting recycling, reducing the use of toxic chemicals, and conserving
    energy and materials in its lifecycle management of electronic products.

    Background

    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 required federal agencies to procure items
    that are, to the maximum extent practicable, produced with recovered
    materials.

    The Pollution Prevention Act provided 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. The act specified
    that pollution prevention can include such practices as modifying
    equipment, technology, and processes; redesigning products; and
    substituting less-toxic raw materials. Executive Order 13101, issued
    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. The Federal
    Environmental Executive, who is appointed by and reports to the President,
    is responsible for recommending initiatives for government-wide
    procurement preference programs for environmentally preferable products.

    EPA's Office of Solid Waste regulates hazardous waste and nonhazardous
    waste, including discarded used electronics, under RCRA. RCRA established
    explicit hazardous waste management requirements overseen by the Office of
    Solid Waste, but for nonhazardous waste management, also under RCRA, the
    Office's policies rely heavily on national voluntary and education
    programs for waste reduction that emphasize materials recycling

    and reuse, toxic chemical reduction, and resource conservation.2 Several
    of these voluntary programs are tailored specifically for environmentally
    preferable management of used electronics. The Office of Solid Waste also
    collaborates with EPA's Office of Pollution Prevention and Toxics to
    conserve valuable resources and reduce wastes-particularly toxic
    wastes-before they are generated. These efforts are administered under the
    Resource Conservation Challenge, which is an institutional strategy
    combining the strengths of the two offices to ultimately minimize waste
    and toxic substances and conserve energy and resources. According to EPA,
    the overarching goal of the Resource Conservation Challenge is to move the
    nation from a waste-oriented to a life-cycle management way of thinking
    about resources.

    Growing Volume of Used Electronics May Pose Environmental and Health
    Problems If Not Managed Properly

    The information we reviewed 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 (70 million of which would be computers) would become obsolete in
    2003-a three-fold increase over the 33 million obsolete computers and
    monitors in 1997.3 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 cathode ray
    tube (CRT) technology4 is replaced by new technologies such as plasma
    screens.5

    Thus far, it appears that relatively few used electronics 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.6 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 used electronics that are obsolete
    (or becoming obsolete), and the quantity either in landfills or sent to
    recycling centers, suggests that most are still in storage-such as attics,
    basements, and garages, and that their ultimate fate is still uncertain-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. 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
    lower levels of harmful elements common to ores, such as arsenic, mercury,
    and sulfur.7 The research we 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 the life cycle of a computer, which
    includes manufacturing, can be saved through refurbishment and reuse
    instead of producing a new unit from raw materials.8

    Regarding the issue of toxicity, the research we reviewed is unclear on
    the extent to which toxic substances may leach from used electronics in
    landfills. According to a standard regulatory test RCRA requires to
    determine whether a solid waste is subject to federal hazardous waste
    regulations, lead (a substance with known adverse health affects) leaches
    from some used electronics under laboratory conditions. Some tests
    conducted at the University of Florida indicate that lead leachate from
    color computer monitors and televisions with CRTs exceeds the regulatory
    limit and, as a result could, according to EPA, be considered hazardous
    waste under RCRA.9 On the other hand, the author of this study told us
    that these findings are not necessarily predictive of what could occur in
    a modern landfill. A report by the Solid Waste Association of North
    America also 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.10

    Nonetheless, regardless of uncertainty surrounding the environmental risks
    associated with toxic substances commonly found in used electronics, EPA
    has identified lead, mercury, and cadmium (which are typically found in
    computers or monitors), as priority toxic chemicals for reduction under
    the agency's Resource Conservation Challenge. According to EPA, these
    toxic substances do not break down when released into the environment and
    can be dangerous, even in small quantities.

    Cost 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 locations that are often
    inconvenient 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. This easy and inexpensive alternative helps,
    in part, explain why so little recycling of used electronics has thus far
    taken place in the United States. Moreover, 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.11 For example, transfer stations in Snohomish County,
    Washington, charge consumers between $10 and $27 per unit for collecting
    and transporting used electronics to recyclers and, ultimately, paying the
    recycler to responsibly handle the products.

    Moreover, such transfer stations are generally not conveniently located,
    and rural residents, such as those in parts of Snohomish County, may need
    to drive more than an hour to get to the nearest drop-off station. Our
    survey respondents recognize this challenge for the recycling
    infrastructure-over 70 percent believe that existing collection options
    for recycling used electronics are inconvenient for households. However,
    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 consumers 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
    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. This point is further
    underscored by our interviews with eight electronics recyclers, who were
    unanimous in emphasizing that they could not cover costs without charging
    fees.

    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 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.12 A substantial majority of respondents to our survey agreed that
    the complexities of taking apart used electronics is a major hindrance
    that impedes the recycling of these products-over 60 percent said that
    recycling is discouraged because of the difficulty of disassembly.13

    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 and expensive machinery is being
    used to process the relatively limited supply of used electronics being
    recycled in the United States. Company officials noted that, by contrast,
    in some European countries where manufacturers are required to take
    financial responsibility for recycling their products, the increased
    supply of recyclable electronics has decreased the company's per-unit
    processing costs and increased the net revenue associated with recycling
    used electronics.

    Finally, recyclers incur additional expenses when handling and disposing
    of toxic components (such as batteries) and toxic substances (such as
    lead), which are commonly found in used electronics. These expenses
    include removing the toxic components and substances from the product, as
    well as handling and processing them as hazardous material.14 Once
    separated from the product, these wastes may be regulated as hazardous
    wastes and, thus, 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. Some recyclers, for example, send their CRT glass
    to a lead smelter in Missouri that charges 6.5 cents per pound. 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.15

    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 help minimize the cost and inconvenience of recycling used electronics,
    Office Depot and Hewlett-Packard partnered to provide free take-back of
    used electronics at Office Depot retail stores in 2004. Office Depot
    collected used electronics at their retail stores, and then sent them 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.

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

    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 not preclude electronic
    products generated in the United States from being exported and
    subsequently threatening human health and the environment overseas.

    Hazardous Used Electronics Are Allowed in Municipal Landfills

    Regulation at the federal level of used electronics identified as
    hazardous waste and disposed in landfills 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. Many
    computer monitors and televisions are considered hazardous waste under
    RCRA, and some materials from circuit boards might be hazardous waste as
    well. Federal regulations bar entities that generate more than 220 pounds
    of hazardous waste per month from sending hazardous waste to municipal
    solid waste landfills. However, households and entities that generate more
    than 220 pounds of hazardous waste per month are exempt from many RCRA
    regulations, thus allowing them to deposit their used electronics in
    municipal solid waste landfills-even though CRTs 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 its regulations do not require households
    and other entities that generate small quantities of hazardous waste to
    recycle or reuse used electronics, nor do its regulations require the
    office to establish a mandatory national approach, such as a disposal ban.

    In response to the RCRA regulatory exemption for household hazardous waste
    and the growing volume of obsolete electronics within their boundaries,
    four states-California, Maine, Massachusetts, and Minnesota-recently
    banned some used electronics from landfills.16 Such bans appear to 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 said that
    their states have seen substantial increases in used electronics
    recycling. One international electronics recycler, for instance, set up
    recycling facilities in the San Francisco area in 2003 because of the
    large volume of used electronics that was no longer being disposed of in
    landfills. In Massachusetts, an official with the Department of
    Environmental Protection said that six businesses dedicated to electronics
    recycling were created following the enactment of a landfill ban. Finally,
    over 95 percent (all but one) of survey respondents said that a national
    disposal ban should be enacted to overcome the factors that discourage
    recycling and reuse of used electronics.

    Recyclers we interviewed in California and Massachusetts said that a
    positive side effect of a ban is increased public awareness. In
    Massachusetts, for example, the Department of Environmental Protection
    conducted a survey in which over 60 percent of the respondents were aware
    that electronic products were banned from landfills. Of note, only 25
    percent of survey respondents believe that the public is aware of
    recycling options for used electronics on a national scale, and over 85
    percent believe that the overall lack of awareness of recycling options
    discourages recycling of these products.

    Experts Believe a National Financing System Is Needed to Support Recycling

    Given the inherent economic disincentives to recycling used electronics in
    the United States,  we also found widespread agreement among our survey
    respondents and others we contacted that establishing some type of
    financing system is critical to making recycling and reuse sufficiently
    inexpensive and convenient for consumers to attract their participation.
    Of particular note, over 90 percent of survey respondents support one of
    the two major proposals being discussed-an advanced recovery fee (ARF) or
    extended producer responsibility (EPR)-or, a hybrid of the two.17  Yet
    despite broad agreement in principle, participants in the EPA-sponsored
    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 had sufficient capacity to recycle large volumes of used
    electronics, consumers and businesses 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 to collectors 20 cents per pound 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
    boundaries, however, may prove difficult because the payout 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 through an EPR-like system. 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 end of life. 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 physically
    or financially 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. Additionally,
    consumers will still likely have to pay a fee at consolidation points.

    Several other states 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.18 For manufacturers that implement a computer take-back program
    in the prior year, the fee is only $500. 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 EPR-like programs.

    The differing financing systems of California and Maine, as well as those
    being considered by other states, suggest that in the absence of a
    national approach, a patchwork of potentially conflicting state
    requirements is developing. Further, this patchwork may be placing a
    substantial burden on manufacturers, retailers, and recyclers. 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. Hewlett-Packard
    serves as one example: in Maine, officials estimate they will spend almost
    $90,000 per year paying for the take-back and recycling of their products
    under the state's EPR system. In California, Hewlett-Packard incurred over
    $3 million in start-up costs and will spend an additional $250,000 per
    year because the state's ARF system requires them to track their products
    that have been distributed to various retailers, who then add a fee. A
    Hewlett-Packard official said implementing one financing system on a
    national scale would be more preferable than implementing numerous
    financing systems on a state-by-state basis that have different
    requirements and, thus, require additional costs. A Hewlett-Packard
    official also told us that these conflicting systems involve start-up
    costs, which could cost over $2 million dollars per state if a new state
    system differs from those currently in place.

    Similarly, a Seattle area recycler told us that because of the differing
    state requirements and the lack of a national approach, recyclers find it
    difficult to invest in developing a recycling infrastructure.
    Specifically, he noted that without certainty about the regulatory
    landscape, larger recyclers will not enter the industry and invest in
    technologies that can reduce costs, such as has been done in some European
    countries where recycling used electronics is more profitable. He added
    that until this problem is addressed, recycling will continue to be
    conducted primarily by small, niche companies.

    Not surprisingly, three major computer manufacturers we contacted said
    that while they have individual preferences for one financing mechanism or
    another (usually an ARF or EPR system), their main preference is to
    operate within a uniform national system that mandates a financing system
    preempting varying state requirements. Recyclers and state and local
    government officials generally agreed, noting that having a system in
    place that covers costs and is national in scope is more important to them
    than their preferences for a particular system. Our survey results
    substantiate these views, with over 95 percent of survey respondents
    indicating that national legislation should be enacted, and over 90
    percent of that group stating that one of the major proposals being
    discussed (or a hybrid of the two) should be included, such as an ARF or
    EPR system.

    Because of these challenges, EPA sponsored a major effort in this regard
    by providing the initial funding for the multistakeholder National
    Electronic Product Stewardship Initiative (NEPSI) process. NEPSI
    stakeholders met between 2001 and 2004, in part, to develop a financing
    system to facilitate

    recycling and reuse of used electronics. The process ultimately dissolved
    in 2005, however, in large part because EPA withdrew its participation and
    funding.19

    Notwithstanding EPA's withdrawal of its sponsorship of the NEPSI process,
    the agency still generally advocates financing systems for resource
    conservation that involve all stakeholders-consumers, manufacturers, and
    retailers-who benefit from resource use. Under the Resource Conservation
    Challenge, EPA seeks to have products designed with reuse and recycling in
    mind, the costs of reuse and recycling included in the price of the
    product, and improved mechanisms for collecting products for recovery.
    Further, in the Resource Conservation Challenge's strategic plan, EPA
    recognizes that for some products, such as electronics, recycling is not
    economically sustainable. For these products, EPA supports the
    consideration of financing approaches that have been implemented in Japan
    and some European nations, in which the cost of recovering products is
    incorporated into the cost of buying the product; and in which incentives
    are provided for environmentally preferable design.

    For example, Japan enacted the Home Appliances Recycling Law in 1998,
    which requires that retailers collect-and manufacturers and importers
    recycle-four types of household appliances, in which televisions are
    included. The law's inclusion of televisions has encouraged the
    development of a television and CRT recycling industry in Japan, where
    substantial research has gone into the development of television
    dismantling and recycling technologies. Since enactment of this law, Sony,
    for example, has cooperated with other companies to establish 190
    take-back sites and 15 recycling plants in Japan.

    In Europe, the European Union (EU) enacted the Waste Electrical and
    Electronic Equipment Directive, which established comprehensive take-back
    and recycling requirements for retailers, manufacturers, and importers of
    electrical and electronic products, including televisions, computers, and
    monitors. The directive requires that producers and importers finance the
    separate collection of waste electronics either on their own or through
    collective systems financed by themselves and other members of the
    industry. Ninety-three percent of our survey respondents believe that this
    directive will facilitate collection and recycling of used electronics in
    the EU. The EU also addressed the issue of hazardous substances in
    discarded used electronics by requiring that six hazardous substances,
    including substances such as lead, mercury, and cadmium, commonly found in
    used electronics, be replaced by other substances by July 1, 2006.

    Oversight of Exported Used Electronics Is Limited

    The lack of oversight over some exported used electronics also appears to
    be discouraging environmentally preferable management of such products and
    inhibiting the development of a domestic recycling infrastructure.
    Companies export used electronics because the largest markets for reused
    computers and televisions are overseas. One EPA official told us that
    consumers in developing countries are more willing to purchase older
    computer and television models than consumers in developed countries.

    Likewise, the largest markets are also overseas for commodities commonly
    found in used electronics, such as copper, aluminum, and shredded plastic.
    In many developing countries, commodities such as these can be obtained
    more cheaply by disassembling whole units, such as CRT televisions and
    monitors, under less stringent environmental requirements. As a result of
    this demand, many businesses, schools, government agencies, and recyclers
    in the United States receive e-mails from foreign brokers willing to pay
    them for their obsolete computers and televisions, even if the products
    cannot be reused. For example, we observed that at one e-commerce Web
    site, a broker sought to purchase 50,000 used monitors per month and did
    not require the monitors to be tested to determine whether they could be
    reused. Another broker in Pakistan sought to purchase 1 million nonworking
    monitors annually at a price of $2 to $3 per monitor. In another instance,
    another broker specifically requested nonworking monitors and wanted to
    fill at least 10 containers, which amounts to anywhere from 6,000 to
    11,000 units overall (depending on their size).

    Five electronics recyclers we interviewed, including two who export
    nonworking whole computers and televisions, agreed that brokers such as
    these are probably not handling nonworking units responsibly once the
    units reach their final overseas destination. According to these
    recyclers, it costs money to disassemble and recycle used electronics in
    such a way that protects human health and the environment from exposure to
    toxic substances. In many importing countries, they note, labor costs are
    far lower, in part because the regulatory standards needed to protect
    workers' health and the environment are far more lenient. One EPA official
    agreed, noting that it is safer and more protective of the environment if
    used electronics are disassembled (and their materials subsequently
    separated) in the United States under sound environmental standards before
    exporting recycled commodities. Even so, two Seattle area recyclers told
    us they regularly receive e-mails requesting these types of products, and
    they are aware of many other organizations, such as school districts, that
    sell their obsolete computers and televisions to foreign brokers because
    it costs too much to have them disassembled in the United States in a
    manner protective of human health and the environment.

    As the export of nonworking whole units continues, a growing body of
    evidence suggests that it is cause for concern in developing countries.
    Instances have been documented recently to confirm the assertions of some
    recyclers and environmental groups that human health and environmental
    threats have resulted from the less-regulated disassembly and disposal of
    many of these U.S.-generated used electronics overseas-products that were
    allegedly destined for reuse (See fig. 1.). 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.20 According to a
    report by these groups, most of the used electronics being handled in this
    manner were of North American origin.

    Figure 1: A Woman in Guiyu, China, Disassembling a CRT Monitor

    Additionally, it appears that nonworking whole electronic products are
    more frequently handled in an irresponsible manner. Specifically, seven
    recyclers we interviewed, along with a majority of survey respondents,
    told us that  nonworking whole products (CRT televisions and computer
    monitors in particular) are much more likely to pose environmental and
    human health risks if they are not disassembled in the United States prior
    to being exported. Accordingly, one survey respondent told us that the
    export of such products should be regulated more closely than the export
    of specific commodities, such as copper, because they still contain toxic
    substances likely to be handled improperly in countries without
    regulations to protect human health and the environment. Our survey
    respondents generally supported these views: while more than 75 percent
    believe that exports of working units should be allowed to help developing
    countries advance technologically, only about 20 percent said that export
    of nonworking whole products should be allowed.21

    Despite the additional risks posed by the export of nonworking whole CRT
    televisions and monitors, few legal safeguards are in place to ensure that
    these units are managed responsibly or indeed destined for reuse overseas,
    and one proposed rule by EPA aims to reduce the few safeguards that
    currently exist.22 Under U.S. law, hazardous electronic products that will
    be disassembled in another country are subject to a number of export
    regulations. Such products may only be exported with the consent of the
    government of the receiving country, and the Department of State must
    forward to that government a description of the federal regulations that
    would apply to the waste if it remained in the United States. The
    receiving government may specify the terms of its consent and, under U.S.
    law, the exporter must comply with these terms. In addition, the exporter
    must know the final destination of the wastes and must obtain verification
    that it reached the destination. The exporter must also make yearly
    reports to EPA detailing the type, quantity, frequency, and ultimate
    destination of exported hazardous waste.

    In practice, however, U.S. legal restrictions on the export of hazardous
    waste have had little apparent effect on exporters of used electronics,
    even if the units will be disassembled when they reach their final
    destination overseas. One reason for this is that EPA has long interpreted
    the definition of "waste" (and, thus, "hazardous waste") to exclude
    products that will be reused "as is" or after minor repairs. Therefore,
    although U.S. export regulations on hazardous waste apply to products that
    will not be reused at their destination, the regulations do not apply to
    products that are bound for reuse. Moreover, nothing in RCRA or its
    regulations requires exporters to demonstrate that their products will be
    reused. Exporters can simply assert that their exported used electronics
    are bound for reuse, even if the exports instead are completely
    disassembled when they reach their destination.

    Of additional concern is EPA's June 2002 proposed rule, which would, under
    most circumstances, exclude hazardous CRT televisions and computer
    monitors from RCRA's existing notification and consent regulations for
    hazardous waste exports. The purpose of the rule, as outlined in the
    Federal Register, is to encourage greater reuse and recycling of these
    products in the United States by streamlining the management requirements
    for used CRTs, while maintaining necessary environmental protection.23
    Many stakeholders support this rule, including recyclers and
    manufacturers, because it helps reduce the costs of recycling CRT
    televisions and computer monitors. However, under the proposed rule, EPA
    also proposed that CRT televisions and computer monitors, including broken
    units, be excluded from RCRA's export notification and consent laws and
    regulations. Thus, exporters would be excluded from having to obtain the
    consent of the receiving country before exporting the waste and from
    having to make yearly reports to EPA detailing the quantity and
    destination of used CRT exports. This provision is in stark contrast to
    recommendations developed by EPA's Common Sense Initiative between 1994
    and 1998, which recommended that entities exporting CRTs be subject to the
    same export regulations as other generators of hazardous waste.24

    According to one EPA official closely involved in this proposed rulemaking
    effort, EPA received numerous comments from individuals and organizations
    concerned that the rule would increase the export of eventual hazardous
    wastes to countries ill-equipped to manage them in a manner protective of
    human health and the environment. As a result, this and another EPA
    official told us that EPA is making changes to the final rule that address
    these stakeholders' concerns while, at the same time, helping the domestic
    recycling infrastructure. Currently, the rule-along with language
    addressing oversight of hazardous exports-is being reviewed by the Office
    of Management and Budget.

    In addition to the added health and environmental risks posed by
    nonworking whole electronic products, several recyclers who disassemble
    domestically told us they cannot compete with exporters of nonworking
    whole products because these exporters do not bear the costs of adherence
    to U.S. environmental regulations. In support of this view, 75 percent of
    survey respondents said that exports such as these reduce the viability of
    the U.S. recycling infrastructure. Additionally, concerned about potential
    environmental and human health risks resulting from U.S.-generated used
    electronics, over 70 percent of survey respondents said the U.S.
    government should place some restrictions on used electronics exports.

    Federal Efforts to Increase Recycling and Reuse of Used Electronics Can Be
    Strengthened

    EPA has implemented several promising voluntary programs to encourage
    recycling and reuse of used electronics. Without EPA authority to require
    recycling of these products or to require other federal agencies to
    participate, however, these programs' successes have been and will
    continue to be limited.

    Voluntary EPA Programs Show Promise

    In 2002, EPA organized its voluntary efforts for environmentally
    preferable management of used electronics under a broadly scoped program
    called the Resource Conservation Challenge. This program focuses EPA
    resource conservation efforts on four critical areas, two of which are
    directly related to used electronics: (1) promoting environmentally
    preferable management of used electronics, such as recycling, and (2)
    reducing toxic substances potentially entering the waste stream. This
    program also challenges the federal government to lead by example. Since
    2000, EPA has spent about $2 million on voluntary pilot programs,
    projects, and grants related to recycling used electronics. Three
    particularly promising projects under this program include (1) the Federal
    Electronics Challenge (FEC); (2) the Electronic Product Environmental
    Assessment Tool (EPEAT), both of which leverage U.S. government purchasing
    power to promote environmentally preferable management of electronic
    products from procurement through end of life; and (3) the "Plug-In To
    eCycling" campaign, which aims to minimize the economic factors that deter
    recycling.

    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 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 end of life. Currently, 12
    federal agencies and 61 individual federal facilities participate in the
    FEC to some extent. Of note, the Bonneville Power Administration (BPA)
    recently documented cost savings associated with its FEC participation.
    BPA noted, for example, that through the program, it 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
    said that 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 the life of each monitor.

    Relatedly, the EPEAT program promotes environmentally preferable
    management of electronics by helping large purchasers, such as government
    agencies, compare and select laptop computers, desktop computers, and
    monitors with environmentally preferable attributes. For example, using
    EPEAT, purchasers can evaluate the design of an electronic product 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. EPEAT was developed along
    the lines of EPA and DOE's Energy Star program, in which the federal
    government rewards manufacturers that offer businesses and consumers
    energy-efficient products that ultimately save money and protect the
    environment by providing them with the Energy Star label for their
    products. In fact, specific EPEAT procurement criteria are drawn heavily
    from Energy Star standards. EPA expects EPEAT to be instituted in 2006.

    Another promising program, the Plug-In To eCycling campaign, has led to
    the collection and recycling of over 45 million pounds of used consumer
    electronics in the United States, including computers, monitors, and
    televisions, since 2003. The "Plug-In To eCycling" campaign is partnering
    with over 20 industry affiliates and 27 state and local governments to
    provide the public with information about recycling and to establish pilot
    projects to test innovative approaches to collect and manage used
    electronics. In the pilot projects funded through Plug-In To eCycling,
    partnering organizations have reduced the cost and inconvenience of
    recycling used electronics. For example, manufacturers have helped pay the
    cost of recycling used electronics; retailers have helped provide
    collection opportunities; recyclers have helped provide lower costs for
    larger quantity, longer-term contracts that meet environmentally safe
    management guidelines; and consumers have taken their used electronics
    from storage to designated locations. In 2004, Plug-In To eCycling
    sponsored four pilot projects, which all involved holding collections
    events at retailers such as Best Buy, Good Guys, Office Depot, Staples,
    and Target. These pilot collection events lasted from a few weeks to a few
    months and collected over 11 million pounds of used electronics.

    Lack of EPA Authority for Requiring Federal Agency Participation Limits
    Programs' Successes

    While the voluntary EPA programs outlined above have produced tangible
    results, their ultimate potential is constrained by the lack of EPA
    authority to require broader participation. Currently, for example, only
    61 out of thousands of federal facilities are participating in the FEC.
    Requiring participation by private parties and state and local governments
    in these programs may be neither realistic nor desirable. However, as
    discussed below, there is ample precedent for actions that would engender
    greater federal participation in these types of programs. Wider federal
    participation would likely benefit both the environment and the
    development of the electronics recycling industry-federal agencies were
    expected to spend over $60 billion on televisions, computers, monitors,
    and other information technology products and services in fiscal year 2005
    alone.

    Perhaps the best precedent for requiring broader federal participation in
    electronics recycling is the Energy Star program, co-sponsored by EPA and
    the Department of Energy. 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. Also, in 2005, public awareness of Energy Star
    reached over 60 percent. Because of Energy Star's high profile, EPA
    officials told us that although manufacturers do not have to design their
    products to meet Energy Star criteria, many manufacturers view Energy Star
    as a de facto requirement for design of their products-suggesting that if
    their products do not have the Energy Star label then they are at a
    competitive disadvantage in the marketplace.

    According to an EPA official who has worked on the Energy Star program
    since its inception, part of Energy Star's success can be attributed to
    two executive orders that required federal agencies to purchase products
    equipped with Energy Star features. Specifically, Executive Order 12845,
    issued in 1993, required federal agencies to procure computers and
    monitors that meet Energy Star requirements for energy efficiency. This
    EPA official told us that the early success of Energy Star was enhanced by
    this executive order. Executive Order 13123, issued in 1999, directs
    federal agencies to select Energy Star products when procuring any
    energy-using product. For product groups where Energy Star labels are not
    yet available, agencies are directed to select products that are in the
    upper 25 percent of energy efficiency, as designated by the Federal Energy
    Management Program.

    In contrast, the potential success of the FEC and EPEAT programs is
    presently limited because, unlike the Energy Star program, federal
    agencies' participation is not required. The potential benefits from
    broader federal participation were illustrated by BPA's experience, which,
    as noted earlier, demonstrated significant cost and energy savings and
    greater environmental protection. They were also underscored by the
    results of our survey-almost 90 percent of respondents said that federal
    government procurement criteria along the lines of FEC and EPEAT should be
    required, and over 95 percent said that such procurement criteria would
    encourage environmentally preferable product design, and greater recycling
    and reuse.

    Conclusions

    Despite the significant environmental benefits of recycling and reusing
    used electronics, these environmentally preferable practices will likely
    remain underutilized unless concerted actions are taken. Two overarching
    factors contribute to this problem. First, consumers have the cheaper and
    more convenient option of simply throwing these products away in most
    states. Without a fundamental change in the incentive structure affecting
    their decisions, such as through the implementation of a consistent
    nationwide financing system, consumers will continue to choose disposal as
    the preferable option of dealing with used electronics in the overwhelming
    number of states where disposal is allowed. Also in the absence of federal
    action, states are taking measures to address their unique recycling
    challenges. This state-by-state approach, however, has the unintended
    consequence of increasing costs for manufacturers, retailers, and
    consumers, while discouraging recyclers from investing in a domestic
    recycling infrastructure. It has also led to an array of legislative
    proposals that take very different approaches to address the problem.

    Second, rather than paying for proper disassembly in the United States,
    some organizations discarding used electronics (and some recyclers) sell
    these units to overseas buyers with no guarantee that they will be
    properly handled. The problem is particularly serious in the case of
    nonworking whole products, such as CRT televisions and computer monitors,
    which are often handled in a manner that causes adverse environmental and
    human health effects in receiving countries. Current RCRA regulations
    require EPA to oversee the export of many used CRT televisions and
    computer monitors if such products will not be reused at their final
    destination. In practice, however, there has been little oversight over
    the export of these products because neither RCRA nor its regulations
    require exporters to demonstrate that exported electronic products will
    actually be reused. In addition to posing health and environmental risks
    in developing countries, this practice undermines the domestic recycling
    industry by providing a cheap alternative to domestic recycling, which is
    more protective of human health and the environment. Importantly, EPA's
    proposed CRT rule would further exacerbate the problem if adopted as
    presently worded because it would restrict EPA's regulatory authority to
    oversee the exportation of most used CRT televisions and computer
    monitors.

    These factors have prevented much recycling from occurring to date and, if
    not addressed, will continue to stymie recycling and reuse efforts. EPA
    has implemented several promising voluntary programs to encourage
    recycling and reuse of used electronics, but without the authority to
    require recycling of these products or to require other federal agencies
    to participate, the success of these programs is and will continue to be
    limited. In the past, the federal government has taken steps to encourage
    environmentally preferable choices by leveraging its substantial market
    power, but these actions required the participation of all federal
    agencies. Using the success of the Energy Star program as a precedent, the
    federal government has the opportunity to lead by example by building on
    existing EPA programs to (1) enhance the domestic recycling infrastructure
    for used electronics by ensuring a steady and substantial supply of used
    electronics; (2) stimulate markets for environmentally preferable
    electronic products by purchasing energy efficient, easily recyclable
    products with high recycled content and less toxic substances; and (3)
    save energy by extending the lifespan of used electronics.

    Recommendations

    Given the numerous and varying legislative proposals for nationwide
    financing systems, we recommend that the Administrator, EPA, direct the
    Offices of Solid Waste and Pollution Prevention and Toxics to bring its
    expertise to bear on the issue by drafting a legislative proposal
    including, but not limited to, recommendations for a consistent,
    nationwide financing system that addresses the barriers to recycling and
    reuse.

    As EPA finalizes its proposed rule regarding CRTs, we also recommend that
    the Administrator ensure that the final rule reflects the concerns of
    numerous commenters that it will not constrict EPA's regulatory authority
    to oversee the exportation of CRT televisions and monitors (many of which
    exhibit the traits of hazardous wastes currently regulated by EPA) to
    countries that do not have the environmental protections in place to
    ensure their safe disassembly.

    In addition, to establish a national recycling infrastructure and
    encourage environmentally preferable management of used electronics
    throughout their life-cycle, we also recommend that the Administrator
    direct the Office of Solid Waste to take necessary action (in
    collaboration with the Office of the Federal Environmental Executive) to
    require federal agencies to participate in the Federal Electronics
    Challenge and to procure electronic products that meet or exceed the
    minimum performance criteria set by the Electronic Product Environmental
    Assessment Tool.

    Agency Comments and Our Evaluation

    We provided a draft of this report to the Administrator of the
    Environmental Protection Agency for review and comment. In its October 14,
    2005 letter, EPA expressed agreement with most of the report's findings,
    noting further that agency reviewers found the report "to be very well
    written, carefully researched, and clearly argued." EPA disagreed,
    however, with our recommendations that the agency play a more active role
    in promoting electronic waste recycling and reuse by (1) developing a
    legislative proposal that would address key barriers to recycling and
    reuse and (2) taking additional steps to ensure broader implementation by
    federal agencies of EPA's initiatives to promote wider use of electronics
    recycling and reuse across the federal government.

    EPA commented that it does not believe it is appropriate for the agency to
    develop a proposal for establishing a nationwide financing system that
    addresses the barriers to recycling and reusing used electronics. EPA
    explained that since there is no consensus among manufacturers regarding
    the optimal financing solution to meet these ends, the agency is "not in
    the best position to choose between competing financing solutions, given
    that this decision is one that is fundamentally a business and economic
    issue, rather than an environmental issue." We acknowledge the lack of
    consensus among manufacturers cited by EPA, but disagree that this lack of
    consensus provides a compelling reason for EPA to abstain from acting on
    this recommendation.

    First, for the reasons cited in this report and those of other
    organizations, electronic waste is becoming an increasingly important
    environmental issue. As such, the fact that a key barrier involves
    disagreement over competing financing solutions should not preclude EPA
    from helping to resolve the problem. There are also ample precedents for
    EPA's active involvement in addressing complex financial issues affecting
    solutions to key environmental problems. EPA played a central role, for
    example, in developing the Clean Water State Revolving Fund and Drinking
    Water State Revolving Fund programs. These programs have become
    instrumental in helping communities address their water infrastructure
    needs efficiently and at lower cost to the federal government.

    Second, our survey results show that while there is disagreement on
    precisely what financing mechanism should be used to resolve the problem,
    there is an overwhelming consensus that (1) legislation will be needed to
    deal with the problem and (2) a uniform nationwide financing solution
    would be preferable to none at all. As we noted above, the manufacturers
    we contacted said that while they have individual preferences for one
    financing mechanism or another, their overriding goal is to operate within
    a uniform national system that mandates a financing system preempting
    varying state requirements. Our survey results substantiated these views,
    with over 95 percent of survey respondents indicating that some type of
    national legislation is needed to move electronics recycling forward.
    Additionally, over 90 percent of these respondents believe that a
    financing system should be included in national legislation. In essence,
    inaction itself is the choice that has the least support among
    stakeholders in dealing with electronics waste at the national level.

    Third, an active EPA role in proposing options to Congress for a
    nationwide financing system is consistent with the goals EPA has set forth
    in its own strategic plan for electronics recycling.25 In this plan, EPA
    commits to removing barriers to recycling and identifying opportunities to
    reduce wastes. The plan also says that sustainable funding systems must be
    available for recycling, particularly for products in which recycling is
    not economically viable. As noted earlier in our report, such is the case
    for used electronics. Finally, EPA's plan notes that within 5 years, the
    agency aims for "it to be as easy for consumers to recycle or find a
    re-user for their television or computer as it is for them to buy one."

    EPA's letter also disagreed with our recommendation that EPA take steps
    aimed at requiring federal agencies to participate in the Federal
    Electronics Challenge and Electronic Product Environmental Assessment Tool
    program. In particular, citing its specific technical comments provided to
    us under separate cover, EPA disagreed with our view that participation in
    the FEC is limited. Among other things, EPA's technical comments echoed
    often-cited data showing that the 12 federal agencies participating in the
    program to date "represent over 80 percent of the Information Technology
    purchasing in the government." The figure, however, overstates federal
    agency adherence to the goals of the FEC. Participation by these 12
    agencies, for example, does not mean that 80 percent of all Information
    Technology products are procured, operated, and recycled or reused at end
    of life in an environmentally preferable fashion. Instead, participation
    simply means these agencies have identified their current practices for
    managing electronic products and set goals to improve them. However,
    participating agencies and facilities are not required to meet these
    goals. As a practical matter, 61 out of thousands of federal facilities
    participate in the Federal Electronics Challenge, and only 5 are meeting
    electronic product management criteria that the Federal Electronics
    Challenge steering committee has asked them to attain.

    We believe this track record falls short of the goals of EPA's Resource
    Conservation Challenge, which asks the federal government to "lead by
    example" in promoting recycling, reducing the use of toxic chemicals, and
    conserving energy and materials in its life-cycle management of electronic
    products. Past experience with similar programs (such as the Energy Star
    program), together with EPA's experience to date with the FEC, suggests
    that merely encouraging participation in these programs will not meet
    these goals. Because the federal government will spend about $65 billion
    on information technology in fiscal year 2006 while discarding
    approximately 10,000 computers per week, we continue to believe that our
    recommendation on this matter is both practical and appropriate.
    Specifically, either through an executive order, changes to the Federal
    Acquisition Regulations, or through some other means, federal
    participation in the FEC and EPEAT programs should be required to help
    ensure environmentally preferable management of used electronics by the
    federal government.

    EPA also provided technical clarifications on the text of our draft
    report, which we have incorporated into the final report as appropriate.

    As agreed with your offices, unless you publicly announce the contents of
    this report earlier, we plan no further distribution of this report until
    30 days from the date of this letter. At that time, we will send copies of
    this report to interested congressional committees; the Administrator of
    the Environmental Protection Agency; and other interested parties. We will
    make copies available to others upon request. In addition, the report will
    be available at no charge on the GAO Web site at http://www.gao.gov.

    If you or your staff have any questions about this report, please contact
    me at (202) 512-3841 or stephensonj@gao.gov . Contact points for our
    Office of Congressional Relations and Public Affairs may be found on the
    last page of this report. Key contributors to this report are listed in
    appendix IV.

    John B. Stephenson Director, Natural Resources and Environment

    Scope and Methodology Appendix I

    To summarize existing research on the quantity of end-of-life electronics
    and the problems they may pose, we reviewed scientific studies and reports
    conducted by government agencies, nonprofits, trade organizations, and
    academics. We also consulted with federal, state, local, nonprofit, and
    industry officials, as well as academic and research organization experts.
    For studies estimating the volume of used electronics, we focused on those
    that generated original data analyses rather than summaries of existing
    literature. In addition, we limited our review to studies that provided
    nationwide estimates.1 For studies that we cited in this report, we
    reviewed their methodology, assumptions, limitations, and conclusions to
    ensure that we properly represented the validity and reliability of their
    results and conclusions. We also interviewed experts and study authors
    from government, industry, and academia to obtain their views on the
    quantity of used electronics and problems they may pose.

    To examine the factors that affect the nation's ability to recycle and
    reuse electronics, we examined current federal laws, regulations, and
    guidance regarding solid and hazardous waste disposal as they relate to
    the disposal of used electronics. We also reviewed pertinent state and
    local laws, regulations, and guidance. In particular, we reviewed the
    electronic waste legislation passed in Massachusetts, California, Maine,
    Minnesota, and Maryland. We visited states and localities that have
    implemented programs or passed legislation to responsibly manage used
    electronics, including California, Maine, Massachusetts, Oregon, and
    Washington. In addition we interviewed federal, state, local, government
    officials. We also interviewed officials from original equipment
    manufacturers, recyclers, trade organizations, nonprofit organizations,
    and environmental advocacy groups, as well as academic and research
    organization experts. Further, we examined EPA-sponsored federal, state,
    and local pilot programs that attempt to encourage recycling of electronic
    products. Finally, we also examined regulations that manage used
    electronics in Japan and the European Union.

    In addition, to obtain the views of informed stakeholders regarding the
    factors that affect the nation's ability to recycle and reuse used
    electronics, we conducted a survey of a nonprobability sample of
    participants in the National Electronics Product Stewardship Initiative
    (NEPSI) and other key stakeholders.2 The NEPSI stakeholders met in a
    series of meetings between 2001 and 2004 in an attempt to develop
    solutions to the issue of managing used electronics. NEPSI was comprised
    of 48 stakeholders, with 15 representing federal, state, and local
    governments; 16 representing equipment manufacturers; and 17 other
    stakeholders from environmental organizations, recyclers, retailers, and
    academics. We attempted to contact all the NEPSI stakeholders listed on
    NEPSI's Web site, but we could not obtain current contact information for
    4 of the 48 stakeholders or their alternates. We also sent surveys to 3
    alternate NEPSI stakeholders because we were told by other stakeholders
    that they were active participants in NEPSI deliberations and did not work
    in the same agency as the primary stakeholder. We sent another 7 surveys
    to non-NEPSI participants to provide more balance in our survey
    population. These 7 stakeholders included two retailers, two recyclers
    (one for profit and one nonprofit), a recycling trade organization, a
    retail trade organization, and an EPA consultant who is an expert on
    recycling issues. Finally, we excluded from our survey population 4
    stakeholders that did not respond to our survey who the coordinator of
    NEPSI characterized as "inactive" during the NEPSI deliberations, and 1
    stakeholder who now works for the same organization as another
    stakeholder. In total, our survey population comprised of 49 individuals,
    42 of which completed surveys and submitted them to us, yielding an 86
    percent response rate.

    To develop the questions for our survey, we identified key information to
    gain a general understanding of recycling and reuse issues for used
    electronics. In particular, the survey focused on areas such as public
    awareness, collections, exports, costs, historic and orphan waste, and
    hypothetical provisions in potential federal legislation. After initially
    developing, reviewing, and modifying the survey questions, we conducted a
    total of six pretests, two with GAO employees who were not associated with
    this review, and four non-GAO employees who were chosen on the basis of
    having characteristics similar to the NEPSI stakeholders. The final
    changes to the survey were made on the basis of the combined observations
    from the six pretests.

    We conducted our review from October 2004 to September 2005 in accordance
    with generally accepted government auditing standards, which include an
    assessment of data reliability and internal controls.

    Survey of Selected Stakeholders on Recycling Used Electronics Appendix II

    Comments from the Environmental Protection Agency Appendix III

    GAO Contact and Staff Acknowledgments Appendix IV

    John B. Stephenson (202) 512-3841

    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, Monica Wolford, and Arvin Wu.

    (360517)

    www.gao.gov/cgi-bin/getrpt? GAO-06-47 .

    To view the full product, including the scope

    and methodology, click on the link above.

    For more information, contact John Stephenson at (202) 512-3841 or
    Stephensonj@gao.gov.

    Highlights of GAO-06-47 , a report to congressional requesters

    November 2005

    ELECTRONIC WASTE

    Strengthening the Role of the Federal Government in Encouraging Recycling
    and Reuse

    Advances in technology have led to rapidly increasing sales of new
    electronic devices. With this increase comes the dilemma of managing these
    products at the end of their useful lives. Some research suggests that the
    disposal of used electronics could cause a number of environmental
    problems. Research also suggests that such problems are often exacerbated
    by the export of used electronics to countries without protective
    environmental regulations.

    Given that millions of used electronics become obsolete each year with
    only a fraction of them being recycled, GAO was asked to (1) summarize
    information on the volumes of, and problems associated with, used
    electronics; (2) examine the factors affecting their recycling and reuse;
    and (3) examine federal efforts to encourage recycling and reuse of these
    products.

    What GAO Recommends

    GAO recommends that EPA strengthen the federal role in encouraging
    recycling and reuse of used electronics by (1) proposing options to the
    Congress for overcoming the factors deterring recycling and reuse, (2)
    promoting wider federal agency participation in promising EPA programs,
    and (3) taking steps to ensure safe handling of these products if
    exported. EPA agreed with most of GAO's findings, but disagreed with the
    first and second recommendations.

    Available estimates suggest that over 100 million computers, monitors, and
    televisions become obsolete each year, and this number is growing. If
    improperly managed, these used electronics can harm the environment and
    human health. Available data suggest that most used electronics are
    probably stored in garages, attics, or warehouses, with the potential to
    be recycled, reused, or disposed of in landfills, either in the United
    States or overseas. If disposed of in landfills, valuable resources, such
    as copper, gold, and aluminum, are lost for future use. Additionally, some
    research shows that toxic substances with known adverse health effects,
    such as lead, have the potential to leach from discarded electronics in
    landfills. Although one study suggests that this leaching does not occur
    in modern U.S. landfills, it appears that many used electronics are
    exported to countries without modern landfills or with regulations less
    protective of human health and the environment.

    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. Recyclers and refurbishers charge these fees because their costs
    exceed the revenue they receive from selling recycled commodities or
    refurbishing units. In addition to these economic factors, federal
    regulatory requirements provide little incentive for environmentally
    preferable management of used electronics. First, the governing statute,
    the Resource Conservation and Recovery Act, allows individuals and
    households to dispose of hazardous waste, including many used electronics,
    in landfills. Second, federal regulations do not provide a financing
    system to overcome the economic factors deterring recycling and reuse.
    Third, federal regulations do not prevent the exportation of used
    electronics to countries where disassembly takes place at far lower cost,
    but where disassembly practices may threaten human health and the
    environment. In the absence of federal actions to address these concerns,
    an emerging patchwork of state requirements to encourage recycling and
    reuse may place a substantial burden on manufacturers, retailers, and
    recyclers, who incur additional costs and face an uncertain regulatory
    landscape as a result.

    In response to these challenges, EPA has spent about $2 million on several
    promising programs to encourage recycling and reuse of used electronics.
    Participation in one program-the Federal Electronics Challenge-has already
    led the Bonneville Power Administration to substantial cost savings
    through the procurement of environmentally friendly and energy efficient
    electronic products. To date, however, federal participation in this and
    other EPA electronics recycling programs has been minimal because-unlike
    other successful federal procurement programs (such as EPA's and the
    Department of Energy's Energy Star program)-participation is not required.
    *** End of document. ***