Monday, 6 August 2012

Marginal decision making in electronic waste

Yesterday's blog marginal thinking and waste referred to the lost opportunity in e-waste, with billions of dollars worth of precious metals going to landfill each year. That seems a bit flippant on reflection, and I'd like to explore a bit more on the cascading decisions that bring this to pass.

The first decision maker is the consumer who has a dead piece of electronics. There is simply not enough precious metal in the unit for it to be financially worthwhile to recycle themselves, through e-scrap is certainly valuable. They can decide to throw it in their bin, take it to the nearby waste facility, or take it to an e-waste recycler.



I don't know the proportions, but I think most will take it to a recycler if it is convenient. This is because they remember what it was worth (once), and so psychologically the material has sufficient emotional value to invest the time. This is pretty unique to e-waste.

By and large, most waste facilities do not charge the public for e-waste recycling. This seems to be because they believe that e-waste recycling needs to be free for it to happen. I tend to disagree, and think people making the effort to drive to the waste facility suggests that they would be prepared to pay a small fee.

The next decision point is the waste facility. Let's say that e-waste is collected separately. The operator then has to decide what to do with it. Landfilling e-waste in Perth costs $100/tonne. Recycling it costs $650/tonne. So the natural decision is to take the e-waste to landfill. Unless there is another driver, which there often is.

Once in the landfill, the costs to reverse the decision are higher again, perhaps a further $1,000/tonne to recover the e-waste from the landfill before it is then recycled at $650/tonne. These costs might differ a little if the precious metals were recovered from incinerator ash through some sort of metallurgical extraction process. I don't know.

Each of these drivers could be reversed at each decision point.

The consumer could receive some sort of incentive to recycle the e-waste. Most thinking seems to be around "product stewardship" driven by government. As evidenced by the Australian approach, this requires all sorts of laws and rules. Hopefully it will work. Other approaches might be a trade-in, or even some sort of gamification where consumers get non-financial rewards for behaviour that incurs some small cost (financial and inconvenience).



The facility operator could remove the cost problem by charging for e-waste. How much might such a charge be? For a 5kg computer, the $650/tonne recycling charge is just $3.25 per computer (or an additional $2.75 about the landfill charge). A laptop might be $2.00. Charged transparently and with an assurance that the material is being recycled, most consumers could bear this.


Motherboards
E-scrap - motherboards from Everything Scrap Metal

Or there might even be a new business model to achieving this. Maybe an entrepreneur could gather credits from sponsors that can be provided to consumers for each kg of e-waste delivered (or type, printers vs laptops vs desktops). The sponsors get highly targeted, low cost promotion to people who have self-identified as upgrading their computers and, at that point in time, are thinking about their computer and the environment. The entrepreneur has the costs of recycling covered. The consumer gets the credit plus the good feeling around recycling.

Just one potential business model among what are sure to be many. The point is, we don't have to chalk the current failure up to an inevitable consequence of marginal thinking. It can be turned around with thought and a good business model.