Solid Waste & Recycling

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FEE Fi Fo Fum!

To fee or not to fee, that is the question!...


To fee or not to fee, that is the question!

Visible versus non-visible consumer fees for product stewardship programs is emerging in Canada, as elsewhere, as a white-hot topic. Programs for used electronics equipment or “e-waste” neatly illustrate the conundrum.

Microchips have the lifespan of a gnat and piles of obsolete IT equipment are growing. The used computer in a landfill has arguably replaced the soft drink container as the ultimate symbol of the wasteful consumer society. So, environment ministers across the country are designating old computers, monitors, TVs, cell phones, and so on as materials requiring special programs to keep them out of landfills. Certain hazardous contents such as lead and cadmium may pose a contamination threat, landfill space is valuable and, let’s face it, even without the toxins it seems a waste of resources to just chuck it all out. But the design and implementation of the programs, and especially who pays (and how), is the subject of rancorous and even acrimonious debate. (See past letters pages of this magazine).

Where you stand on fees relates to how you view the initial problem.

If you view e-waste simply as a disposal problem, you’ll only worry (as they did in Alberta) about contriving a scheme to get manufacturers (sometimes referred to as “brand owners and first importers”) and/or retailers to pay for its collection and recycling. They’ll inevitably set up one sort of monopoly organization or another (e.g., in Ontario an industry funding organization or IFO) and a system via which consumers bring their e-waste to depots or other collection points for shredding and recycling. Touted as the simplest method is one where net system costs are paid by the IFO from funds collected by way of a visible fee — i.e., an amount that appears as a separate line item on cash register receipts.

It’s argued that such a simple system will divert most e-waste away from tax-funded municipal collection and disposal systems. Politicians and industry can hold a joint press conference and proclaim — Ta Da! — “mission accomplished.”

There’s a wrinkle, though, as politicians don’t like visible fees; they look like a “tax.” This is one reason why Nova Scotia’s new regulation calls for non-visible fees. (See article, page 17.) Industry likes visible fees for precisely the same reason; they imply that companies are being “up front” about an eco fee that government has obliged them to pass along to customers.

But if you’re a proponent of extended producer responsibility (EPR), price competition and consumer protection, you’ll view such a system with disdain, and you’ll disagree with the fees whether they’re visible or not.

Why?

EPR proponents are interested in achieving a lot more than a mere alternative collection and recycling system for e-waste. Their goal is the reduction and eventual elimination of waste in the first place, and they trust companies to do a better job of it than bureaucrats (of either the government or corporate kind). Ultimately this means design-for-disassembly and the re-engineering by businesses of their products and the systems via which they are delivered to, and eventually retrieved from, the marketplace.

European EPR requirements have caused some computer companies to reduce from more than a dozen to just a few the number of different plastics in their laptop computers (as just one example); only a small number of screws need to removed for the equipment to come apart, where once there were many. When the CPU of some new computers becomes obsolete, designs allow them to be popped out and replaced with more powerful ones; this extends the lifespan of other components that don’t age so quickly. Think of it as the IT version of a refillable bottle.

The most effective way to motivate companies to innovate in terms of product design and drive recycling system efficiency (and thereby reduce consumer costs) is to saddle them with the true costs of managing their products at the end of their useful lives. This “cost internalization” is completely undermined by consumer fees (sometimes called “advance disposal fees”). In an IFO, the lower costs and greater efficiencies of an innovator are blended and dissipated with the other member companies. The competitive advantage accrues to the “free riders” who conduct business as usual. Fees are set by IFOs, not the discipline of market competition, and can sometimes be disproportionately large because, in the end, who cares? The poor consumer is stuck with them, and the fees drag on the economy while the programs may do little or nothing for the environment. (See article, pg. 16.)

Electronic Products Stewardship Canada, which represents the brand owners nationally, understands these issues and appears to be open to the no fee concept, although EPSC suggests “sunset” fees are necessary in the beginning to clear up old stockpiles. Fees are also opposed by the Consumer Electronics Retailers Coalition (CERC), which includes such well-known chains as Radio Shack, Best Buy and Wal-Mart.

It’s strange that with electronics brand owners open to no-fee systems and retailers actively campaigning against fees, in Canada we still run the risk of establishing a hodge-podge of totally different provincial schemes, with myriad different fees. This would be a disaster for this important economic sector, consumers and the environment. We call upon the Canadian Council of Ministers for the Environment (CCME) to work with EPSC and CERC in creating consistent “no fee” electronics product stewardship programs across the country.

Email Guy at gcrittenden@solidwastemag.com


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