As readers of this magazine are no doubt aware, electronics recycling has garnered much recent regulatory and press attention. This is due to the vast number of computers, televisions, cell phones and other electronic gadgets produced to satisfy consumer demand, and the shorter and shorter product cycles which speed up their obsolescence.
Now let’s compare how New York is dealing with the problem with Alberta’s approach.
With a population of eight million, New York City is comparable in size to a whole province, and it has significant waste management and recycling capacity issues. Long famous for its massive and aptly named Fresh Kills landfill, the “city so nice they named it twice” (even the name is recycled!) is setting its sights on electronics producers.
A bill introduced in late May by New York City council sent a powerful message to manufacturers, making them responsible for the management of their products once those products are at the end of their useful life. The proposed program would require electronics producers to take back and recycle their products, thereby avoiding the landfilling or incineration of the toxic substances contained within.
In addressing New York’s new approach, the Georgia-based Product Policy Institute indicated that recent research found New York City’s waste (like that of other cities) 100 years ago contained only eight per cent consumer products and packaging compared to a current rate of 75 per cent. (See editorial, page 4.) New York City obviously understands the significance of such a shift and is moving to address problem.
Various provinces are developing electronics product stewardship programs of varying descriptions. Alberta was first out of the gate. Its Alberta Recycling Management Authority (ARMA) has approached the issue by implementing an advanced disposal fee (ADF) scheme to pay for recycling electronics products. An element that has attracted criticism is that the ADF program increases costs for new electronic products in order to pay for the recycling of old electronic products already in the marketplace.
After launching the program on February 1, 2005, ARMA has apparently found that it isn’t generating adequate revenue from the fees to cover the costs of recycling the electronics being collected. While it’s unclear why this is the case, some in the industry have suggested that ARMA didn’t undertake a proper analysis when it designed its program. The fee schedule may have actually been based on an outdated study prepared for the Ontario marketplace.
Faced with the shortfall, ARMA could have simply increased the fees. However, (perhaps to avoid public scrutiny?) ARMA instead redefined product categories in such a way as to snare a greater number of smaller electronics appliances in categories originally comprised of larger equipment. An example of this “category creep” was the redefinition by ARMA of PC monitors that accept TV signals to be considered in the same category as regular TVs. This change in definition resulted in a $12 monitor fee jumping to between $15 and $45 based on its size.
Several people close to the industry have raised the alarm that this is simply a cash grab and that ARMA may be imposing (and indeed increasing) fees improperly. By making these changes outside the process considered in the regulations, opportunities for notice and comment by the public and stakeholders have been reduced.
More fundamentally from a legal point of view, the policy change and its impact on fees paid may be considered a tax rather than a fee and thus could be arguably unconstitutional. ARMA is not a legislative body with the power to impose taxes. This is notable as the Supreme Court of Canada, in its 1998 “Eurig” decision held, among other things, that a “nexus” must exist between the fee charged and the cost of service provided in order for the fee to be valid. A tax, meanwhile, does not require such a connection; it can only be levied by parliament or a legislature. As ARMA is neither a legislature nor parliament, it can only impose fees which by the terms of the Eurig decision must be reasonably connected to the cost of service provision.
It’s problematic that the fees are being applied against newer more environmentally benign products such as plasma TVs in order to pay for the expensive recycling of older televisions and computers and the significant amount of dangerous material that they contain.
This is patently unfair to the producers of new electronics equipment that were not involved in the manufacture or sale of older, less environmentally friendly products. Notably, environmentally superior LCD displays are subject to the same significant fees as TVs. However, such fees pay for the recycling of old TVs, which typically contained approximately four pounds of lead per picture tube.
Large variations are emerging in different jurisdictions with respect to their electronics product stewardship programs. While this may also be the case in other areas of product stewardship, the rapid pace of product evolution and the substantial volume of “replacement” electronics entering the market makes this sector particularly complex and challenging for consumers and manufacturers alike. It will be interesting to evaluate the effectiveness of New York City’s approach, as well as the response of companies and consumers compared to Alberta’s approach.
My guess is that New York’s direct approach has a better chance of becoming the role model.
Adam Chamberlain is a certified specialist in environmental law with Aird & Berlis in Toronto, Ontario. Contact Adam at firstname.lastname@example.org