7 Reasons Why the Economics of E-waste Matters

Is electronics recycling a waste of money? Opponents of the process argue the current economic state of recycling leaves much to be desired. Costs tend to trend higher than profitability. That keeps recyclers dependent on manufacturer-based state laws which can hinder things.

However, the views in favor of electronics recycling are just as strong. Proponents of the process posit that e-waste is at astronomic proportions, and recycling is the best way to keep our growing mass of electronic waste firmly in check.

1. Costs of collection and processing can be greater than the profitability of the recycled end-product

Currently, electronics recycling has a prickly incentive problem, meaning much of the recycling that actually occurs is heavily reliant on a viable economic impetus. That means the economics of recycling is an issue for one reason and one reason only: costs.

The federal government has yet to enact national law mandating and regulating electronics recycling on a nationwide basis.  In the recycling mandate vacuum, costs and profitability are a major issue. If the costs trend higher than the actual end results, even less economic incentive exists to drive the electronics recycling process forward.

2. Statewide infrastructure is not always sufficient to support a healthy electronics recycling system

One may argue that even if the proximate costs of recycling outweigh bottom-line profits, recycling possesses inherent value in that it takes a large burden off the environment. Electronics recycling does, in fact, remove hazardous substances from the waste stream and is an excellent way to free up space in landfills. 

However, the current electronics system is heavily dependent on state governments. If states fail to establish a sufficient electronics recycling infrastructure, some of the inherent benefits of electronics recycling can be lost along the way.

The result – more and more recyclers begin to charge for e-waste recycling just to stay afloat in a business with high costs and low profitability – a significant disincentive for consumers.  Another not so positive outcome is that recyclers become dependent on manufacturers for the bulk of their business which has its drawbacks.

As manufacturers shoot solely for achieving state regulated targets rather than keeping recycling rates as high as possible overall, many state recycling programs fall short of the desired end result – an environmentally sustainable, cost-effective e-waste recycling program.

3. The economics of e-waste is greatly dependent on the recycled metal market and petroleum pricing

The demand for recycled materials lies at the heart of e-waste economics. Recycled materials produced as a result of the recycling process – things like glass and plastics – can be reused to cut manufacturing costs. For electronics, reusable metals are a key factor for industry viability.

When demand for recycled metals is low, however, the entire e-waste recycling system can suffer considerably.

Also relevant to e-waste economics is the cost of petrol. Recycling electronics can produce massive amounts of reusable, petroleum-based plastics. When oil prices are low or rock-bottom, so too is the demand for recycled plastics, which can deal heavy blows to the electronics recycling industry.

4. E-waste recycling costs less than a number of environmentally burdensome practices such as traditional mining

E-waste recycling may not come out as an all-out winner in a traditional cost-benefits analysis, but its relative economic charm remains viable. For instance, when compared to traditional mining methods, the e-waste recycling process is a definite winner.

Traditional mining is a cost burdensome process. Heavy equipment alone accounts for much of the expense, but the labor and specialized materials necessary for each mining project also rack up costs. Mining also heavily taxes the environment, spewing out tremendous amounts of air, soil and water pollution.

Electronics recycling however, can provide many of the same precious metals and elements as traditional mining, and in some cases at better quality. Even with e-waste recycling costs high, they’re still not even close to the mark when compared to costs of traditional mining.

Traditional mining is, of course, currently the way of choice for most extraction companies. However, electronics recycling offers a viable alternative that both costs less and is more beneficial to the environment.

5. Proper labeling can help improve profitability

From the consumer perspective, much about electronics recycling is covered in confusion. Consumers may be aware that electronics shouldn’t go in the trash, but may be at a loss when it comes to deciding exactly where they should go. 

Thus the aptly termed tech graveyard becomes a major hindrance to the recycling process when home basements, garages and company store rooms become the last stop for electronics that should be recycled.

When the recycling process is thus interrupted, profitability can be affected negatively. The recycling system benefits from clarity and reliable information concerning where and when electronics can be recycled as well as which types are acceptable.

Labels address this issue by providing clear instructions for consumers and companies in need of explicit guidance. In the current era of recycling, where a variety of programs exist, each with its own rules and regulations, labels are a key factor driving economic balance in the industry.

6. Producer Responsibility programs help keep collection and processing costs low

Even with all the negative criticism directed at stalled or ineffective state electronics recycling programs, some are still producing stellar results. The truth is that state producer responsibility programs do provide the benefit of keeping collection and processing costs low. 

This means less headache and hassle for recyclers in many cases. Though it is true that these systems should be under continuous regulatory scrutiny for effectiveness and to identify areas in need of improvement, state producer responsibility programs are yet another big reason why the economics of e-waste matters.

7. A mandatory government enforced manufacturers tax could improve the economics of electronics recycling

Finally, a manufacturer’s tax could solve the profitability problems associated with electronics recycling. Also known as an electronics waste recycling fee, this extra charge for retailers or consumers is usually imposed through state legislations or county ordinances. It pays for the future recycling costs of newly purchased electronics.

Currently, a few states like California, charge a point of sale fee for electronics recycling. While this does provide a source of revenue to fund costly e-waste recycling programs, it remains to be seen whether these programs can effectively resolve the profitability problems associated with e-waste recycling and reduce negative environmental impact to boot. Still, it’s a good start for the dynamic and still developing economics of e-waste.