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 [email protected] . 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
[email protected].

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.
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