United Solution to a Global Crisis: a New International Body

Perspectives

United Solution to a Global Crisis: a New International Body

By Emilie Anne Jóhannsdóttir Salvesen & Christopher Kane

Natural Resource Scarcity To humanity, Earth has been kind with its bounty. Looking up, down, or in any other direction, this notion becomes increasingly evident as the fact of the matter reveals itself: It is nearly impossible to find any piece of civilization which has not been builtupon the foundations that are Earth’s natural resources. However crucial to humanity, these foundations, which have thus far supported the weight of society, are beginning to crack beneath the stress of our ever-expanding use. In some cases, they have already begun to crumble. The scientific literature supports this, that human-extraction of resources is, and has been for many decades, exponentially increasing. All the while Earth’s limited resource pool depletes in an equally exponential fashion; Three out of the six most important metals: copper, zinc, and manganese as well as silver, indium, and lithium are estimated to become scarce in as little as 20-30 years.1 Even helium, a vital element to the cooling process for various technologies, and part of what allows the barcode scanner in your local grocery store to operate, will reach scarcity in just 9 years. This exponential exaction of the

Earth’s finite reserves threatens to dismantle the very foundations upon which humanity relies.

We, evidently, have indulged in Earth’s generosity beyond our means. If civilization stays this course, Earth will soon refuse to grant any more.

Overproduction, Consumption, and Waste by the OECD World While it is clear that the world must change its habits of exploiting natural resources, it can appear unclear how it should begin. The OECD, however, presents a promising place to start.

The member countries of the OECD are some of the most economically influential nations in the world and as such are some of the largest consumers of goods produced from raw materials.2 In 2010, OECD countries made up for about 18% of the global population while accounting for 74% of global GDP,2 a value which is coupled with materials usage. In the next 50 years, OECD materials usage is expected to almost double.3 This notable material consumption also comes with an increase in material waste. While rates of recycling for municipal waste admirably and steadily increase (as high as 68% in Germany), www.thesolutionsjournal.com | Spring 2020 | Solutions | 23

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recycling of waste electrical and electronic equipment (WEEE) remains far too low at just 20% with cell phones in particular estimated at even less.4 In fact, waste mobile devices are the undisputed fastest-growing component of WEEE globally.5 WEEE contains many significant elements including the aforementioned at-risk metals and various rare earth elements, yet 40 million tonnes of WEEE are landfilled, burned, or otherwise wasted every year. 6 The source of this issue is a multifaceted one involving a lack of knowledge for the consumer with regard to how they can recycle, worries concerning data security, unsatisfactory collection points, lack of producer responsibility, and exclusionary recycling plants where only precious elements are retrieved while the rest are wasted.5 For all the components of WEEE, they are nearly 100% recyclable and thus a more comprehensive recycling system is justified. As powerful OECD countries represent such a significant proportion of WEEE consumption and waste, OECD countries should be an opportune stage on which to set a global example and initiate change toward sustainable resource management.

The proposed solution in this article is one that not only incentivizes the participation of manufacturers in the WEEE recycling process, but also the distributors and consumers of these products to return their recyclable devices.”

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The Feasibility of Recycling Mobile Phones The proposed solution in this article concerns updates and innovation with regards to policy for recycling waste mobile electronics. While political changes will be the focus, it is important to note that recycling the majority of raw materials within mobile electronics is feasible technologically and potentially economically as well. Strides are being made in comprehensive recycling of waste mobile phones on a large scale.

For example, a recent study in Japan has concluded that the process of ‘remote recycling’, in which large-scale separation of recyclable materials is carried out by a human-operated machine, is a promising method of reducing the industrial costs of recycling while generating employment.7

Further Extending Producer Responsibility The proposed solution to combat resource depletion here is an expansion, or rather fulfillment, of a policy instrument already recommended by the OECD called extended producer responsibility. Extended producer responsibility (EPR has been presented as a solution to the rapid disposal and waste of consumer goods. It is a policy instrument through which manufacturers are given significant responsibility for not only the production of their goods, but also for the disposal and treatment of the product after it is done being used. An EPR policy should hold producers responsible, on both a physical and financial level, for the entirety of the product’s life cycle.8 In theory, an EPR policy should create the incentive for manufacturers to design the lifecycle of a product in such a way that its environmental and financial costs are minimized.9 In light of

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the facts; that current recycling rates of mobile devices are as little as 20%5; that, upon recycling, many usable materials are cast aside; and that the current OECD EPR framework has allowed for this, it is clear that this framework must be expanded. In this article, a recycling and remanufacturing framework is proposed which incentivises, on both a producer and consumer level, the recycling of mobile devices to be entirely remanufactured into similar devices. This guarantees that the maximum amount of recyclable material from a device is reused. The goal of this proposition being a complete and idealized recycling loop; from producer to consumer and back again. The proposed solution in this article is one that not only incentivises the participation of manufacturers in the WEEE recycling process, but also the distributors and consumers of these products to return their recyclable devices.

their ability, to create ‘green’ electronic devices in collaboration with the original manufacturers. In the long term, the IRU will be funded by a taxation process described in the latter sections of this article. It is imperative, though, that the

The following 4 steps of this solution complete a framework that achieves this.

1. The first and most important The benefit of the IRU is that it allows for the funding of recycling/ baseline step of this framework is to pioneer and establish an interremanufacturing facilities to be a collective effort, reflecting the nationally collaborative recycling global nature of resource scarcity.” body into which all member countries of the OECD enter, perhaps extending to other countries as well. This body will henceforth be referred to IRU be given substantial authority and funding as the International Recycling Union; the IRU. This by governments involved, especially for the initial union will drive the enactment of a comprehen- construction phase. The benefit of the IRU is that sive policy framework. This policy will affect all it allows for the funding of recycling/remanufacmanufacturers and distributors of mobile elec- turing facilities to be a collective effort, reflecting tronics who operate within the member-countries the global nature of resource scarcity. An equitable of the IRU. This Union will also preside over and funding process amongst IRU countries ensures be responsible for the construction, operation, and that facilities are constructed in all localities where monitoring of new mobile electronics recycling they are needed. Inclusive of areas which might not plants which shall be located within the member afford it otherwise. countries. All materials from mobile electron2. The proposed IRU policy framework ics collected in this framework shall be fully presents an option of contractual agreement to remanufactured in these facilities, to the best of any mobile device manufacturer selling within www.thesolutionsjournal.com | Spring 2020 | Solutions | 25

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member-countries of the IRU. Large-scale distributors of these manufacturer’s devices will also be subject to this agreement. The aforementioned policy will state that manufacturers and distributors who enter a contract with the IRU, henceforth referred to as IRU-aligned companies, will receive tax-subsidies or special corporate tax reliefs that exceed the benefits of non-participation. The sub-

This mechanism effectively renders companies who do not participate in sustainable resource management as less competitive, while it incentivizes and rewards companies who opt to contribute to the mitigation of resource depletion.” sidy may manifest in the form of income, sales and/or property tax subsidies. Once entered, the contract obligates the manufacturer to enter a partnership with IRU recycling/remanufacturing facilities to which collected waste mobile electronics will be transported. These facilities will then, in collaboration with the original manufacturer, create a similar product under the manufacturers brand name which re-enters the market. These remanufactured products will be sold as ‘green’ products by the irrespective brands.Should a

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manufacturer decide not to enter the agreement with the IRU they will be subject to a new kind of sales tax called a ‘resource tax’. This tax will be imposed on products sold by manufacturing companies who do not enter the partnership and it will be used to fund the IRU and its facilities. This mechanism effectively renders companies who do not participate in sustainable resource management as less competitive, while it incentivises and rewards companies who opt to contribute to the mitigation of resource depletion.

3. The policy states that any distributor who enters the agreement is obligated to act as a collection point for recyclable phones in-store as well. IRU-aligned manufacturers will receive their sales tax subsidies should they choose to sell to a distributor, while the aligned distributor will receive their subsidies on income tax. All IRU-aligned manufacturers who choose to sell directly to consumers via their own stores are obligated to provide their own collection point for recyclable mobile devices in-store also. The advantage of having in-store collection points is that the consumers will know exactly where they must go to recycle their devices. Thus, completing the consumer’s knowledge of their role in the issue.

All waste mobile devices are then to be transported to a local IRU recycling facility as local facilities can work to reduce costs, in both emissions and capital.

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4. Lastly, on devices sold to consumers by IRU-aligned companies, a robust deposit-refund system will be implemented. The definition of a deposit-refund system is that it combines a tax on product consumption with a rebate when the product is returned for recycling;10 the consumer pays a deposit when they purchase which they can receive back when they return the recyclable product. In the IRU framework, the deposit-refund system works by allowing the consumer, having purchased an IRU-aligned mobile device, to return to where they purchased it and offer the waste mobile device to be collected for recycling.A portion of this deposit will be used to fund the IRU and its facilities similar to the resource tax. The returning consumer can then choose to receive a portion of their deposit back as cash, or rather the full amount of the depositback as a ‘downpayment’ on a remanufactured, ‘green’ device. The deposit paid by the consumer on top of the retail price should be designed in consideration of the resource tax paid on non-IRU-aligned products. It should be designed so that the refund available on IRUaligned products appears to match the perceived value lost in paying for resource taxed products.

This final, crucial step of the framework is designed to incentivize the consumer to return their recyclable mobile devices, and to doubly participate in using remanufactured devices over new ones.

These facilities will then, in collaboration with the original manufacturer, create a similar product under the manufacturers brand name which re-enters the market. is designed in such a way that the financial benefits of buying remanufactured mobile devices outweigh those of buying new ones. This will ensure inclusivity as it will appeal to both the consumer’s financial motives as well as their environmental conscientiousness. The use of in-storecollection points will eliminate any confusion that might arise from how and where toreturn waste mobile devices. By providing manufacturers and distributors the option of tax subsidies or a resource tax, this plan is able to create a double incentive that should motivate companies to take responsibility for their product’s full life cycle. Most importantly, an international body such as the proposed IRU, starting with OECD countries, will work to set a fantastic example on a global scale while significantly decreasing the waste materials generated by the countries involved. With an International Recycling Union, Earth’s resources can be sustained; with an IRU, the foundations of civilization may be stabilized.

References 1. Sverdrup, H, Koca, D & Ragnarsdóttir, K. Peak metals, minerals,

Conclusions and Challenges The implementation of this large-scale policy will create significant challenges. The first and greatest barrier to overcome is in the establishment and logistics of the IRU. It will be a monumental challenge to unite so many nations who are willing to grant this body authority and funding. This is a task which must be met with vigor, responsibility, and decisiveness if the planet’s resources are to be sustained. Another challenge has to do with the fine-tuning and operation of the resource taxation system, as it is critical that each component is balanced appropriately. Lastly, the initial period of remanufacturing may prove quite difficult as such a technological feat has yet to be accomplished on such a large scale. Some amount of raw materials will need to be sourced and the problem of safely managing data security must be addressed further.

Even in the face of these challenges, this policy

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2. Steffen,Wetal. The trajectory of the anthropocene: the great acceleration. The Anthropocene Review 2, 81-98(2015).

3. www.oecd.org/environment/waste/highlights-global-materialresources-outlook-to-2060 4. worldatlas.com/articles/oecd-leading-countries-in-recycling.html 5. Gu,F,Summers,P&Hall,P. Recovering materials from waste mobile phones: recent technological developments. Journal of Cleaner Production 237(2019).

6. resource.co/article/weee-exports-under-spotlight-international-ewaste-day 7. Jun, O et al. A study on separating characteristics of metals towards remote recycling. 13th Global Conference on Sustainable Manufacturing- Decoupling Growth from Resource Use 40, 274-279 (2015).

8. OECD https://www.oecd.org/env/tools-evaluation/ extendedproducerresponsibility.htm 9. Chang, Wu, Li, Fang. The joint tax-system mechanism incorporating extended producer responsibilityinamanufacturingrecyclingsystem.JournalofCleanerProduction210,821-836 (2019).

10. Walls, M. Deposit-Refund Systems in Practice and Theory, 2(2011).

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