Thomas White Global Investing
Green Reports

September 15, 2010

The Green Report

E-Waste Requires a Global Solution


The Environmental Science and Technology Journal calculates that the amount of e-waste from developing countries will be twice as much as that from developed countries in the coming years. By 2030, the Journal foresees that these nations will discard 400 million to 700 million computers per year compared to 200 million to 300 million in developed countries.


What do you do when your old microwave goes bust? You try to repair it or if it’s beyond any redemption you simply toss it out. Most of our electronic appliances from mobiles to desktop computers to washing machines meet pretty much the same fate when they are no longer of use. But where do they end up after we relegate them to our trash cans?

Referred to as Waste Electrical and Electronic Equipment (WEEE) or more commonly known as electronic waste or e-waste, these discarded electronic items have given rise to a market all of their own. In 2009, the global market for e-waste materials was pegged at around $8.5 billion and it is expected to expand to $13 billion by 2014, according to a research report by BCC Research.

But what exactly constitutes the e-waste market? Electronic appliances contain various components made of several precious metals like gold, silver, platinum and copper. The e-waste market oversees the extraction, trading and recycling of these materials. BCC Research says that the recycled metals segment, valued at $7.5 billion in 2009, makes up the largest portion of the market and is projected to increase to $11.4 billion by 2014.

Discarded appliances follow various paths before they are dismantled for metal extraction, all of which are extremely hazardous to the environment as well as to humans. Much of this e-waste ends its journey in landfills or incinerators, which results in toxic chemicals being absorbed by the earth or released into the atmosphere. But many of these appliances are also recycled, which in developed countries is done in recycling plants under a controlled environment. Sadly, in many cases, these appliances are exported to developing countries mainly India, China and Africa, often illegally.

General estimates peg the amount of global e-waste at the annual rate
of 40 million tons, while the EPA approximates that e-waste grows
by 5% to 10% each year.

In these countries, where crude recycling techniques are employed, metals are extracted using rustic methods that are quite unsafe for the people involved as well as the environment. Extracting copper, for instance, involves pulling out the wires and burning them to peel away the insulation that sheaths the metal. The burning releases dioxins and other pollutants into the atmosphere. Similarly, people working with e-waste often handle highly potent chemicals like cyanide and other acids to extract gold.

Remarkably, though, the e-waste market is a relatively recent development. Trade in e-waste evolved in the 1990s when countries like Europe, the U.S. and Japan found that their recycling systems could not cope with the sheer amount of e-waste that was created. They began exporting the surplus to Asian countries where it is cheaper to recycle and where regulations were virtually non-existent. When these countries discovered that they could extract precious metals, demand for e-waste grew, and a trade was born.

E-waste began to be acknowledged as an active market with the birth of the Basel Convention, the authority that regulates the e-waste market. Established in 1989 to track the “movements of hazardous wastes and their disposal,” according to the United Nations Environment Program (UNEP), the Basel Convention today comprises 168 countries that have promised to follow standards that prevent e-waste related problems.

But sorely missing from the list is the United States, one of the biggest producers of e-waste. The U.S. has so far abstained from being part of the convention, which means it is still legal to export hazardous e-waste to other countries. Currently, the U.S. is said to export around 50% to 80% of its e-waste. Across the pond, in Europe, research by the British newspaper The Independent, estimates that more than 10,000 tons of abandoned televisions and 23,000 tons of computers are being illegally exported from Britain alone.

So far, the most common solution to solve e-waste related problems has been to ban its trade. But the results are patchy. Though officially, the import of e-waste was banned in China in 2000, the lure of precious metals remains and a thriving market continues to flourish under the shadows of the black market.

Lately, though, growing awareness, global pressure to protect the environment, and action by non-profit organizations and corporations, are all contributing to better handling of e-waste. While companies such as Apple are consciously educating their customers on how to recycle Apple products, the availability of wider recycling options thanks to innovative technologies are spurring effective e-waste management. Two years ago Coinstar, a U.S. based self-service kiosk manufacturer, unveiled the EcoATM, which recycles old electronic devices. When a customer drops off an electronic item, the machine assesses its value, and in exchange, instantly pays back in cash or coupons. Today, Coinstar CEO Gregg Kaplan foresees a lucrative business and plans to install 200 kiosks in the U.S. by the end of this year. Encouragingly, the U.S. Environmental Protection Agency (EPA) recently declared e-waste management as one of its five top priorities in 2010. With this focus, there is hope that e-waste exports will be finally banned in the United States.

But it is a two-way street, and efforts are being made to watch the importing of e-waste as well. Kenya is soon expected to be the first East African nation to introduce import regulations and strategies to deal with e-waste. India, on the other hand, is considering banning imports of e-waste altogether.

“The combined impact of the ongoing global economic recovery and strengthening e-waste recycling legislation worldwide will drive improved recycling/recovery rates in each of the next five years,” says a confident Larry Fisher, practice director of the firm ABI Research. Of course, the effort is up to the rest of us. And the decision we make the next time our old microwave breaks down.




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