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A Framework for Evaluating theEconomic Performance of RecyclingSystems: A Case Study of NorthAmerican Electronics Recycling

SystemsJ E R E M Y R . G R E G O R Y * , A N DR A N D O L P H E . K I R C H A I N ,

MIT Energy Initiative, Department of Materials Science andEngineering, and Engineering Systems Division, MassachusettsInstitute of Technology, Cambridge, Massachusetts 02139

Received October 22, 2007. Revised manuscript receivedJune 4, 2008. Accepted June 12, 2008.

A framework for evaluating the economic performance of arecycling system is proposed, and data from four electronicsrecycling systems in North America (Alberta, California, Maine,and Maryland) that use different operating models are usedas a preliminary test of the framework. The framework is builtaround a hierarchy of descriptors that clarify the function of

the system components under consideration and the activities,cash flow elements, and resources within those functions;costs are incurred by specific stakeholders. Data from eachsystem on fee and mass collection amounts and collection,processing, and management costs are used to create a matrixof several net costs for stakeholders within each system.Although all four systems are relatively new, thereby makingdata collection a challenge, some preliminary insights can be

gleaned from comparing the systems. Processing costs varysignificantlyin thefoursystems,with Alberta andCaliforniahaving

the highest reimbursement rates for processing. Alberta andCalifornia also have relatively high system management costs,but processors are generally quite satisfied with the systems.Maine has an additional cost for consolidation that is an implicitmanagement cost because of the need to count incomingproducts by manufacturer.

Introduction

Theenvironmentalvirtues of recycling havebeen thoroughlyextolled:reductionsin landfilling, primary extraction,energyconsumption, and environmental burden. As such, the

controversy around recycling rarely includes these benefits(with a few exceptions, e.g., refs 14); rather, it focuses onwhether the benefits outweigh any costs and the charac-teristics of an effective system.

Despite this ongoing debate, municipal recycling pro-grams are broadly viewed by the public as beneficial (5) andcontinue to expand(6). This popularity hasled policy-makersto turn their attention to the end-of-life of more complexand durable goods (CDGs). These products, including

automobiles, white goods, and electrical and electronicequipment (EEE), present a greater challenge for materialrecovery because they contain a diversity of highly com-mingled materials, including potentially toxic materials andprecious metals.

Contemporaneous with the attention to CDG recycling,theprincipalsof Extended ProducerResponsibility(EPR) have

reachedpopular(or at least policymaker) consciousness. Theconfluence of these issues has led to the implementation ofregulation that requires the recycling of CDGs and placesthe responsibility, material and/or financial, on originalequipment manufacturers(OEMs). Ultimately, policymakersconfrontthe challenging question: Whatis the best systemarchitecture? However, to answer this question they mustfirst be able to effectively evaluate the performance of anygiven system instance. Clearly, there is a need for amethodology to compare and evaluate the performance ofcurrent and prospective recycling systems for CDGs thatinvolve OEMs.

A number of performance evaluationsof recycling systemscan be found within the economics literature (7) andpopularmedia (8, 9). These evaluations typically take the form of

cost-benefit analyses and comprehend three majorbenefits:(a) increased materials recovery, (b) reduced landfilling orincineration, and (c) reduced solid waste collection; and twomajor costs: (a) recyclable collection and (b) reprocessing(10). Someanalyses incorporate environmentalexternalities(11) or indirect socio-economic implications (12, 13). Thescope of the literature is such that several reviews exist thatsummarize the debate (7, 10, 1416). Notably, these studieshave focused almost exclusively on municipal waste, pre-dominantly packagingand paper. Studies on theeconomicsof CDGrecyclingsystems do exist,particularly on automobile(1719) and EEE recycling (2026), but these have focusedon the costs associated with specific recycling activities orevents without resolving system-wide costs. Notable excep-tions include a framework proposed by the OECD forevaluating EPR systems (27), Bohrs evaluation of a hypo-thetical EEE recyclingsystem (28), and a recentreview oftheEUs WEEE directive (29), the latter of which represents themostcomprehensiveand detailed compilationof informationon CDG recycling systems to date.

Characteristics of current studies and methods make itchallenging to apply them to guide the design of CDGrecycling systems with intensive producer involvement.First,the complexity of CDG recycling and the involvement ofOEMs mean that both the scope, in terms of stakeholdersand operations, and number of possible configurations ofCDG recycling systems are considerably larger than thosefor municipal recycling systems (30, 31), making municipal-based conclusions not necessarily applicable for CDG cases.

Second, existingframeworks either address systemsof broadscope but do not resolve the impacts on individual stake-holders (15,2729), orare detailed aboutthe impactof specificgeographic or operational characteristics on specific stake-holders but do not comprehend the cash flows within theentire system (2024). Third, it is often difficult to comparecosts among studies because of inconsistent terminologyand scope and ambiguous mapping of stakeholders to costsincurred. Finally, the conclusions of many studies are basedon hypothetical data and assumptions. Even if these as-sumptions have borne out for municipal recycling, theirvalidity may not be generalizable to CDG systems.

In lightof the pressingneedand the limitationsof existinginformation and methods, the primary objective of thisresearch has been to begin to understand how to effectively

* Corresponding author phone: +1 617 324 5639; fax: +1 617 2587471; e-mail: [email protected]; address: 77 Massachusetts Ave.,Rm.E40-417, Cambridge, MA, 02139.

MIT Energy Initiative. Department of Materials Science and Engineering. Engineering Systems Division.

Environ. Sci. Technol. XXXX, xxx, 000000

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and consistently evaluate the performance of current andprospective architecturesof recycling systems for CDGs thatinvolve OEMs and are mandated by public entities.

As the authors began to attempt to evaluate the perfor-mance of existing systems, it became clear that a moredetailed framework for comparing systems was needed toinform future architectural design. Therefore, a secondaryobjective emerged to develop such a framework. The firstattempt at thisframework, limitedto economic performance,is presented in this paper and it is tested against data on thecosts associated with actual recycling systems. Analogousbenefit data in the form of materials recovered was alsocollected. (The authors would like to emphasize that eco-nomic and mass performance are not the only relevantmeasures of system performance. The health and safety ofprocessors and the environmental efficacy of materialrecovery systems are critical aspects of performance, butquantitative assessment of these issueswas beyondthe scopeof this study.) The exercise serves as a means to exploreeconomic metrics that emergefrom the framework. Althoughthis represents a key step toward guiding future design, it is,

only part of the decision-making picture. Such information,ultimately, must be complemented with an understandingof a societys willingness-to-pay for the benefits of recycling.

Specifically, this paper presents a snapshot of the eco-nomic performance of novel recyclingsystemsfor electronic

waste (e-waste) in four North American jurisdictions: theU.S. states of California, Maine, and Maryland and theCanadianprovince of Alberta.Each of these systems operatesunder a differentmodel and, as such, provides insight on thespectrum of possible CDG system architectures.

Recycling of e-waste is used as a test case because it isa timely, global issue. In the United States alone more than25 states introduced over 60 e-waste bills in 2005 and over50 bills in 2006 (32). Numerous approaches have beenproposed includinglandfillbans, EPR, and advanced recovery

fee (ARF)funded recycling systems.Althoughthere has beendiscussion on the merits of several such approaches(30, 31, 33), little quantitative analysis of their performanceexists.

It is important to note that allfourof the systems studiedare new. As such, data may not reflect long-term costs.Therefore, the analyses presented should be not be used tomake a final assessment of the merits of CDG recycling norof any specific operational model. Nevertheless, the analysespresented herein serve to (1) identify trends that warrantfurther observation and study and (2) highlight data gapsthat hamper such long-term evaluations for such CDGsystems.

The proposed framework for evaluating the economic

performance of recycling systems is described in the next

section, followed by overviews and evaluations of eachsystem. The paper concludes with some overarching ob-servations on the four systems and the implementation ofthe evaluation framework.

Evaluation Framework

The primary objective of the proposed framework is to addtransparency to any discussion on the merits of systemarchitecture. It seeks to answer twoquestions related to costs

within the system: Costs to whom? and Costs of what?In addition, the framework delineates what elements areincluded in a cost, thereby facilitating comparability acrossassessments. Analogous information on the benefits andcorresponding stakeholder beneficiaries could also be de-veloped. In the interest of concision, analysis of benefit islimited to recovered material which is only examined in theaggregate.

The framework is built around a hierarchy of descriptorsthat clarify the function of system components underconsideration and the activities, modes, cash flow elements,and resourcesthat are comprised within those functions; all

costs are incurred by specific stakeholders. This hierarchy isdepicted in Figure 1. The designation of a stakeholder helpsto answerthe question, Costs to whom? andthe definitionof the elements within the triangle answer the question,Costs of what?

The top level of the hierarchy is function and includescollection, processing, and system management. Thesedesignations refer to specific goals of the program and allviable systems comprehend all of these functions.

The activities that effect a function include collection,consolidation, processing, management, and transportation;the same activity may occur within multiple functions.

Activities are realized through one or several modes. Forexample,collection may occur in theform of one-day events,permanent collection facilities, retailer collection, etc. Pro-cessing may occur as manual dismantling, automatedshredding and sorting, etc. Management may includemonitoring, auditing, and fee collection. The decision of

whether to define processesas activities or modes within theframework is related to a preference of how to aggregatecosts; it does not influence total costs.

The cashflow elementsthatare associated withan activitymay include material costs and revenues, direct labor,equipment, maintenance, energy, building, overhead (sepa-rate from management), advertising, education, and rev-enues. These elements derive from the consumption ofresources, which would also include items such as labor,equipment, and energy, but would refer to nonmonetaryquantities such as number of workers, pieces of equipment,

or kilowatt-hours of energy.

FIGURE 1. Descriptors for evaluation framework.

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The stakeholdersinvolved in a recycling system will varydepending on the types of materials and products in thesystem. The subsequent set of analyses specifically com-prehends the following stakeholders (roles are listed inparenthesis): electronics consumers (purchase electronicsproducts), e-waste generators (dispose of end-of-life (EoL)electronics), municipalities/collection agencies (collect e-

waste), haulers (transport e-waste), consolidators (consoli-date e-waste collected from various sources into one streamprior to shipment to processors), processors (transforme-waste products into scrap commodities), government/

system managing body (oversee recycling system), retailers(may collect fees and/or EoL products), OEMS (may collectEoL productsand/or fundrecyclingsystem),and society (mayfund recycling system through taxes). Across every level ofthe hierarchy, stakeholders may be directly involved inmultipleactivities or provide a source of revenuefor multipleactivities. Furthermore,the revenuefor one stakeholder maybe the costs for another stakeholder (e.g, OEMs payingprocessors or processors paying haulers).

At the detailed level, even this list of stakeholders couldbe expanded to delineate specialized actors. This is par-ticularly true regarding the processorscategory which couldbe broken down to include the large number of specializedmaterials processors who transform specificsubcomponentsof e-waste back to useful materials or products. Whileconceptually the proposed framework could accommodateany number of stakeholders, the question being addressedshould dictate a finite scope. For subsequent analyses, thatscope is truncatedat those processors whotransforme-wasteto salable commodities (materials or components). Thisboundary waschosen as onewheresubsequent actors, acrossthe systems investigated, are no longer directly governed bye-waste recycling policies and where material streams areno longer transacted as e-waste (i.e., as opposed to somematerial for recycling or component for reuse).

The ultimate evaluation of the economic performance ofthe recycling system is accomplished by examining the netcosts of all the stakeholders in the system. The outcome ofthis process can be effectively summarized by a matrix

comparing costs and revenues to each stakeholder withineach function. This net cost matrixas developed here (e.g.,Tables 1-3) lists stakeholders on the vertical axis and costsandrevenues foreach of thethreefunctionson thehorizontalaxis; net costs for each stakeholder are tabulated from all ofthecostsand revenues acrossthe functions(net cost matricesfor each of the systems are presented in following sections).Notably, notall stakeholderswill be involvedin every system.Revenues listed include net amounts transacted within thesystem. Costs include both expendituresby that stakeholderand revenues transacted outside of the system (e.g., proces-sors reselling materials or reusable products). As such, costsshould be viewed as net excluding system-internal revenues.For comparisons among several systems it is important thateach cell withinthe matrixhas a description of theactivities,

modes, and cash flow elements (those that are known) thatmake up thecost. This enables a true assessment of whethersystems are comparing the same costs.

The detailed nature of this framework was created forfour reasons. First, to address the lack of consistent no-menclature usedto describe recyclingsystems; theframeworkis first and foremost a proposed taxonomy to help resolvethis issue. Second, detailed data collection resolves whichstakeholdersbear whatcosts, which alsolimitsthe possibilityof double-counting cash flows internal to the system in anyoverall cost assessment. Third, the framework can accom-modate data collectedby numerous methods and at variouslevels of resolution. Finally, if fully populated, this dataframework would providethe informationneeded to develop

generative models of system performance.

Economic Evaluation of North American ElectronicsRecycling Systems

A preliminarycomparisonof four NorthAmericanelectronicsrecycling systemswas completed using observeddata. Thesesystems represent a range of operational models, includingadvanced recovery fee(ARF) andEPR financingmechanisms,and thus, an analysis can illuminate unique characteristicsof each model. Given the challenges associated with datacollection for nascent systems, information was rarelyavailable below the activitieslevel. Nevertheless, the exercise

accomplishes the research goals of testing the ability of theevaluation framework and associated metrics to resolveperformance differences across system architectures andcharacterizing information (and information gaps) thatenable effective system comparisons. Sources of data werelimited to publishedliterature and interviews withmanagersof each of the systems. Obviously, this leaves data gaps thatcould have been filled with more intensive data collectionmethods (e.g., interviews with other stakeholders), but wassufficient for the goals of this study. An overview of eachsystem is outlined, followed by fee and mass collectionamounts, collectionand processingcosts, management costs,and a stakeholder-function net cost matrix for that system.

Alberta. System Overview. Albertas program started

collectinge-waste October 1, 2004 (34,35).An ARF thatrangesfrom $4-38, depending on the product, is used to fundcollection and processing; collection of the ARF began onFebruary 1, 2005. (All currency figures in this document arein USD.Conversionsfrom Canadiancurrency usean averageexchange rate over the approximate time period related tothe costs (4/1/05-3/31/06), when 1 USD ) 1.194 CAD.) Theprogram is run by a quasi-governmental agency, ElectronicsRecycling Alberta(ERA),whichis part of theAlberta RecyclingManagement Authority (ARMA); ARMA also manages tirerecycling in Alberta. The scope of products covered in thesystem (andcharged an ARF)includesthefollowing: monitors(cathoderay tubes (CRTs) and liquid crystal displays(LCDs)),TVs (CRTs and LCDs), laptops, central processing units(CPUs), and peripherals. This is the most extensive scope of

the four systems. The system also accepts e-waste fromcommercial generators.

Processors must meet a set of qualification requirementsto participate in the system. They must have an environ-mental management system (EMS), including occupationalhealth and safety and hazardous material managementsystems. Auditsof processors maybe conductedat anytime.

Additionally, processors may not send e-waste to landfills ornon-OECD nations and may not use prison labor; docu-mentation must be provided on all downstream materialdestinations. There werefour qualifiedprocessors andnearly120 collection sites in Alberta at the end of 2006.

Fee and Mass Collection Amounts. ARF collection byretailers in the first full fiscal year (FY) of the program, FY2005-2006 (beginning April 1) was approximately $19.6M,

over three times the expected $6.1M (36). Mass collectionduring the first year of the program (10/1/04-9/30/05) was2.9 M kg (6.4 M lb) (37), which is 0.88 kg/capita/yr (1.93lb/capita/yr). Mass collection during the second year of theprogram (10/1/05-9/30/06) more than doubled to 6.3 M kg(13.9 M lb) (38), which is 1.91 kg/capita/yr (4.19 lb/capita/

yr).Collection andProcessingCosts. Costdata fromcollectors,

haulers, and processors within the Alberta system were notavailable, but reimbursement rates for collection, transpor-tation, and processing are $0.04/kg ($0.02/lb), $0.04/kg($0.02/lb), and $0.57/kg ($0.27/lb), respectively (39). The$0.04/kg transportation cost covers 75% of the population.The remainingareas of theprovince havetransportationcosts

of $0.13/kg ($0.06/lb) and $0.17/kg ($0.08/lb).

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System Management Costs. ERA spent a total of $2.84Mon system management costs in its first fiscal year (FY2005-2006), which includes $0.58M for fee collection com-pliance program delivery, $0.94M for recycling programdelivery, $0.46M for administration, and $0.87M for publicinformation (36). This is a system managementcostof $0.86/capita/yr.

Net Cost Matrix. The net cost matrix for Alberta duringFY 2005-2006 is shown in Table 1. Stakeholders that are notdirectly involved in the economics of the system are showninplaintext(i.e., not bold). A questionmark ina cell indicatesa cost is unknown. Each cell contains a reference to adescription below the table of the activities that incur the

cost or provide the revenue. It is important to note that apositive netrevenue forthe systemmanager is notnecessarilyindicative of an excessively high ARF. It is possible thatrecycling expenses will exceed ARF revenue in future yearsbased on an influx of e-waste entering thecollection system.Net revenue from previous years would be used in such acircumstance to meet recycling expenses.

The primary area of uncertainty in the data is related tocosts incurred by collectors, haulers, and processors relativeto the reimbursement they receive from ERA. Although notall figures are available, the matrix serves as a usefulillustration of the manner in which stakeholders interact ina recycling system, the types of costs they incur, and theactivities that drive those costs.

California. System Overview. Californiasprogram startedJanuary 1, 2005 (40). Collection and recycling of e-waste arefunded by an ARF that ranges from $6 to $10; collectors maycharge e-waste generators a fee to help cover their costs.There are three agencies involved in managing Californiassystem: the California Integrated Waste Management Board(CIWMB), the Department of Toxic Substances Control(DTSC), and the Board of Equalization (BOE). CIWMB isresponsible for recycling reimbursement and public educa-tion, DTSC is responsible for recycling oversight and en-forcement, and BOE is responsible for fee collection. Thescope of products covered in the system (and charged an

ARF) is centered on displaydevicesincluding monitors (CRTsand LCDs), TVs (all types, including CRTs and LCDs), andlaptops. The system accepts e-waste from commercial

generators.

Approved processorsmust meetstandardssimilar to thosein Albertas program (an EMS in place, regular audits,documentation of downstream material destinations), butprocessors are allowed to export collected products if theynotify DTSC in advance of the destination and the means ofrecyclingthere. By theend of 2006 there were approximately50 approved processors and nearly 450 approved collectors.

Fee and Mass Collection Amounts. ARF collection in thefirst full calendar year (CY) of the program (2005) was $73M(41) and for the second calendar year (2006) was $79M ( 42).Retailers collect and remit the ARF. Claims made by proces-sors and collectors for reimbursement of expenses during2005 were approved by the CIWMB for 27.6 M kg (60.6 M lb)

at a cost of $29.1M (this reflects an approval rate of about93%; not all claimsmet CIWMBs requirements) (41). Claimsapproved for 2006 more than doubled to a total of 55.3 Mkg (121.6 M lb) at a cost of $58.4M (approval rate of 97.7%)(42). These collection amounts represent 0.76 kg/capita/yr(1.68 lb/capita/yr) for 2005 and 1.53 kg/capita/yr (3.37 lb/capita/yr) for 2006.

Collection and Processing Costs. CIWMB reimbursescollection at a rate of $0.44/kg ($0.20/lb), which includestransportation to the processor, and processing at a rate of$0.62/kg ($0.28/lb) (41). An analysis of 2005 reported costs(excluding profit) froma sample of collectors and processorsshoweda weighted average (bymass collectedand processed)of $0.37/kg ($0.17/lb) for collection and $0.55/kg ($0.25/lb)forprocessing (43); there wassignificantvariationin reportedcosts.

System Management Costs. CIWMB,DTSC,and BOEwerecollectively authorized to spend $6.9M in FY 2004-2005(beginning July first; they actually spent $5.4M with abreakdown of 32% for CIWMB, 11% for DTSC, and 58% forBOE (41)). They were authorized to spend $8.3M in FY2005-2006 and actually spent $6.2M with a breakdown of27% for CIWMB, 11% for DTSC, and 61% for BOE (41). Anadditional management cost is a reimbursement of 3% of

ARF collection amounts paid to retailers; this amounted to$2.2M for CY 2005 and $2.4M for CY 2006.

Net Cost Matrix. Thenet cost matrix for California duringCY 2005 is shown in Table 2; the net cost matrix for CY 2006is listed in the Supporting Information (Table SI-S1). It is

important to note that costs for collectors in this matrix

TABLE 1. Alberta Net Cost Matrix for FY 2005-2006 (Footnotes Contain Description of Activities in the Form Stakeholder/Function: Activity)

collection processing system management

stakeholder cost revenue cost revenue cost revenue net cost

electronics consumers $19.6Ma $19.6Mnet cost

e-waste generators

collectors ?b

$0.10M [$0.04 /kg]haulers ?c $0.27M [$0.04-0.17 /kg]

consolidators

processors ?d $2.7M [$0.59 /kg]

system manager $0.37Me $2.7Mf $2.8Mg $19.6M [ARF] ($13.6M)net revenue

retailers ?h

OEMs

societya Electronics Consumers/System Management: ARF Payment. b Collectors/Collection: Collection. c Haulers/Collection:

Transport. d Processors/Processing: Processing. e System Manager/Collection: Reimbursement for collection and transport.fSystem Manager/Processing: Reimbursement for processing. g System Manager/System Management: Management,education. h Retailers/System Management: Fee collection and remittance.

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include collection and transport. Furthermore, systemmanagement costs are based on fiscal years. The paths ofmonetary flowsare quite similar to those in Albertassystem.

Maine.SystemOverview. Mainesprogramstarted January18, 2006, but recycling was not required (due to a ban onlandfill disposal of covered products)untilJuly 20, 2006 (44).Municipalities are responsible for collecting e-waste andtransporting it to a consolidation facility. Consolidatorsdocument the manufacturer of each collected product andthen transport the products to a processor. Municipalities

payfor collection costs(which maybe passedalongto e-wastegenerators through a recycling fee) and OEMs are billed forconsolidation, transportation, and processing costs. Alter-natively, OEMs can opt to take responsibility for their unitsor share of units. The Maine Department of EnvironmentalProtection(DEP) monitors theprogram by settingprocessingstandards, checking compliance, and educating the publicabout the program. The scope of products covered in thesystem includes monitors (CRTs and LCDs), TVs (all types,including CRTs and LCDs), and laptops. The system doesnot accept e-waste from commercial generators.

Recycling standards for Maine processors are similar toCalifornias (an EMS in place, regular audits, due diligencein selecting downstream material destinations), includingdocumenting export destinations. There were five approvedconsolidator/processors and approximately 160 collectionpoints in Maine in 2006.

Fee and Mass Collection Amounts. 1.75 M kg (3.85 M lb)of approved electronic devices were collected in the first

year of Maines program (45), which represents a rate of 1.32kg/capita/yr(2.91 lb/capita/yr). Approvedconsolidators andprocessors billed OEMs $0.75M to consolidate, transport,and process these devices (45).

Consolidation and Processing Costs. Approved consolida-tors must submit quotes for consolidation, processing, andtransportation to the DEP each year. (Even if consolidatorsdo not also do processing, they are responsible for billingOEMs for all costs.) Five consolidators received approval forparticipation in the program from the DEP in 2006; six were

approved for 2007. Quotes for consolidation in 2006 ranged

from$0.09 to 0.26/kg ($0.04-$0.12/lb), transportation pricesranged from $0.07 to 0.29/kg ($0.03-0.13/lb), which weredependenton distance in some cases,and processing pricesranged from $0.26 to 0.48/kg ($0.12-0.22/lb) (45). Themajority of consolidation and processing in the first year

was done by one consolidator; weighted average prices were$0.09/kg ($0.04/lb) for consolidation, $0.07/kg ($0.03/lb) fortransportation, and$0.26/kg ($0.12/lb)for processing. Quotedconsolidation prices in 2007 were approximatelydoublethe2006 rates (45). Transportation rates were also generally

higher, whereas processing prices were about the same asor less than 2006 rates.

System Management Costs. No specific cost informationforsystemmanagement wasavailable, butthe DEPestimatedthat two full-time employees (FTEs) were needed to run theprogram (45). Including fringe benefits, overhead, andexpenses for public education, it is estimated that systemmanagement costs are $0.2M. Retailers are also involved insystem management to a certain extent because they mustimplement a sales ban against OEMs who do not comply

with the regulations in the system.Net Cost Matrix. The net cost matrix for Maine during CY

2006 is shown in Table 3. Allof thestakeholders in thematrixwith the exception of electronics consumers have costs inthe system. The stakeholder society is meant to representthesourceof fundsfor the government topay forDEP systemmanagement; this is most likely taxpayers.

Maryland. System Overview. Marylands program beganJanuary 1, 2006 (46). OEMs arechargedan initial registrationfee of $5,000 per year to take part in the system, whichessentially means they are allowed to sell their products inthe state (this initial feeincreased to $10,000starting October1, 2007). OEMs are subsequently charged $5,000 per year totake part in the program unless they set up their owncollection and processing system for their own products, in

which case they pay $500 per year. The revenues from theOEMs are used to assist counties in the collection andprocessing efforts that the counties currently pay for out oftheir own budgets. The Maryland Department of the Envi-

ronment (MDE) administers the program. The scope of

TABLE 2. California Net Cost Matrix for CY 2005 (Footnotes Contain Description of Activities in the Form Stakeholder/Function:Activity)



electronics consumers $73.0Ma $73.0Mnet cost

e-waste generators ?b

collectors ?c $12.1M[$0.44 /kg]

+ ?[fees]

haulers

consolidatorsprocessors ?d $17.0M [$0.62 /kg]

system manager $12.1Me $17.0Mf $7.6Mg $73.0M [ARF] ($36.3M)net revenue

retailers ?h $2.2M [3% ARF]

OEMs

societya Electronics Consumers/System Management: ARF Payment. b E-Waste Generators/Collection: Recycling fees (some

locations). c Collectors/Collection: Collection, transport. d Processors/Processing: Processing. e System Manager/Collection:

Reimbursement for collection and transpor. fSystem Manager/Processing: Reimbursement for processing. g SystemManager/System Management: Management (FY 2004-2005), reimbursement for fee collection (CY 2005). h Retailers/System Management: Fee collection and remittance.

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products covered in the system includesmonitors (CRTsandLCDs), laptops, and CPUs (this was expanded to includetelevisions starting October 1, 2007). It is important to notethat this scope determines the OEMs that must participatein the system; the e-waste collected depends on the countydoing the collection. The counties do not generally accepte-waste from commercial generators.

Currently,there areno system-widestandards fore-wasteprocessors in the Maryland system. Funds are provided tothe counties, which select a processor. Hence, MDE doesnot interact with processors directly. There were sixteencollection sites in Maryland in 2006.

FeeandMassCollectionAmounts. Thirty-seven OEMspaid

the $5,000 fee in the programs first year for a total feecollection of $0.19M (47). These fees were used exclusivelyforeducation efforts forthe first year of theprogram, butwillbe used to support local recycling efforts in future years.Masscollected during thefirst yearof theprogram amountedto 2.85 M kg (6.27 M lb), compared to 1.59 M kg (3.49 M lb)in 2005, the year before the formal statewide program wasimplemented (47); both amounts contain an unknowncomposition of e-waste (accepted devices vary by collectionlocation).These amounts translateto 0.51 kg/capita/yr (1.12lb/capita) for 2006 and 0.28/kg/capita (0.62 lb/capita) for2005.

Collection and Processing Costs. Costs for collection andprocessing since the program has started were not availableand may not provide much meaning because the feescollected from OEMs were not used to support recyclingefforts. However, data provided by MDE on collection andprocessing costs for previous years provide insight intoMarylands costs. Total recycling costs for municipalities(including collection, transportation, and processing) gener-allyranged from free to $0.44/kg ($0.20/lb), butaverage values(depending on type of collection mechanismand year) werein the range of $0.11-0.24/kg ($0.05-0.11/lb) (47). Averagetotal recycling costs for Maryland during a 2001-2002 EPAstudy were $0.44/kg ($0.20/lb) (23). A processorin that sameEPA study charged $0.13/kg ($0.06/lb) for collection, $0.09/kg ($0.04/lb) for transportation, and $0.31/kg ($0.14/lb) forprocessing (23).

System Management Costs. No specific cost information

for system management was available, buttheMDE estimated

that two full-time employees (FTEs) were needed to run theprogram (47). Including fringe benefits, overhead, andexpenses for public education, it is estimated that systemmanagement costs are $0.22M (assuming higher labor andeducation costs than Maine). Retailers are also involved insystem management to a certain extent because they mustenforce a sales ban against OEMs who do not comply withthe regulations in the system.

Net Cost Matrix. A generic net cost matrix for Marylandis provided in the Supporting Information (TableSI-S2). Thematrix is generic because of the atypical situation thatoccurred in the first year of the program when all of the feescollected from OEMs were used to fund public education.

Fees in future years will be used to fund recycling efforts,whichis the situation depicted in thematrix. (Theassumptionin the table is that the collected fees will be similar to 2006levels: $0.19M. This is likely to be true for 2007, but fees willincrease in future years when televisions are included ascovered devices.) The system manager is listed as paying afraction of the collected fees to collectors, haulers, andprocessors. In actuality, the grantswould likely be bestowedupon collectors who would pass along monies to haulersand processors. However, the representation in the matrixreflects the participation of all stakeholders.

Observations

First,it is importantto note that allsystemsare new. As such,it is difficult to draw substantive conclusions about certainaspects of system performance, particularly masscollection,becausethesewill change in thenext few years. Nevertheless,the comparison of the systems is still an important exerciseat this juncture because it can delineate which trends inperformance warrant further and future study and whatinformation gaps exist to make those studies effective.

Masscollected is oneof themost commonmetricstrackedin recycling systems. Despite the nascent nature of thecollection programs, the prevalence of this metric warrantsfurther investigation. Annual per capita mass collectionamounts forall four programs areplotted in Figure2. Albertaand California both have data for two years and it is clearthat both programs realized significant increases in masscollection; each program collected over double its first year

amounts during its second year.

TABLE 3. Maine Net Cost Matrix for CY 2006 (Footnotes Contain Description of Activities in the Form Stakeholder/Function:Activity)



electronics consumers

e-waste generators ?a

collectors ?b ? [fees]

haulers ?c

$0.12Mconsolidators ?d $0.16M

processors ?e $0.47M

system manager $0.2Mf $0.2M --

retailers ?g

OEMs $0.28Mh $0.47Mi$0.75Mnet cost

society $0.2Mj$0.2Mnet cost

a E-Waste Generators/Collection: Recycling fees (some locations). b Collectors/Collection: Collection and transport toconsolidator. c Haulers/Collection: Transport from consolidator to processor. d Consolidator/Collection: Consolidation.e Processors/Processing: Processing. fSystem Manager/System Management: Management. g Retailers/SystemManagement: Management (enforcement of sales ban). h OEMs/Collection: Payment for consolidation, transportation to

processor.i

OEMs/Processing: Payment for processing.j

Society/System Management: Payment for system management.

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While it is tempting to compare first year per capitacollection amounts across all four programs, this wouldoverlookan important issue thatdifferentiatesthe programs:product scope. The product scope for the four programs issummarized in Figure 2. There are significant differencesacross systems, particularlyin thetypes of products acceptedand whether or not e-waste is collected from commercialgenerators. An objective of future research is to developmetrics that accurately reflect themass collectedin a systemnormalized by the mass available and within the productscope (48). In themeantime, thefirst yearcollectionamountsfor Maine are remarkable in comparison with the other

systems given that they have a more limited number ofproducts within their systems scope and they do notaccepte-waste from commercial generators.

As a point of reference, the European Unions WEEEdirective has set an annual collection target of 4 kg/capitafor each member state. This collection target includes alltypes of e-waste, but an analysis of Category 3 waste (anEU-defined category, whichincludes informationtechnologyand telecommunications equipment, but not televisions)indicates that systems that have been operational for several

years are collecting 1-4 kg/capita/year (48). Although theNorth American systems are new and their collectionamounts include Category 4 waste (i.e., televisions), theircollection amounts are slightly below the lower end of

the more established European systems and are similar to

the amounts collected by the European systems when theEuropean systems were new (48).

It is also illustrative to compare costs of differentsystemsthat share the same function, activities, and stakeholders.Two such candidates are processing costs (function: pro-cessing, activity: processing, stakeholder: processor) andsystem management costs (function: system management,activity: management, stakeholder: system manager). Eventhough thecosts incurred by processors are unknown forallsystems, reimbursement rates for processors may be used asan imperfect proxy. Management costs can be normalizedby population for comparison.

System management and processing costs for the foursystems are shown in Figure 3 (Maines processing cost isthe weighted average processing price; Marylands is anestimated average). There are a wide variety of processingcosts, which can be affected by location (e.g., labor andtransportation rates), product scope (e.g., higher valueproducts, commercial e-waste generators), and systemstructure (e.g., competitive bidding process). However, noneof these factors alone explain why the rates set by themanagers in Alberta and Californias systems are higher.

The system management costs in the ARF systems arehigher than the observed costs in the other two systems.This is partly out of necessity. In addition to managingrecycling efforts they are also charged with managing

collection of the ARF (Californias system management costs

FIGURE 2. Annual mass collected per capita and the associated product scope for all four systems.

FIGURE 3. A. Processing costs (function: processing, activity: processing, stakeholder: processor) and B. system management costs

(function: system management, activity: management, stakeholder: system manager) for all four systems.

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include the cost of reimbursing retailers for expensesassociatedwith fee collection). Furthermore, Albertas systemhas a larger infrastructure costburdenthan its governmentalcounterparts because it is run by an agency separate fromthe government and hence must pay for items such as aboard of directors and larger fractions of office space and ITservices. Across all systems, added management costs maybe worthwhileif highercollection amounts or loweroperatingcosts can be achieved. Moreover, some stakeholders maybelieve the higher costs are worthwhile. For instance, themajorityof processorsin Albertaand California supporttheir

system as a national model (49).Maine has an implicit management cost unique to its

system in theformof thecostfor consolidation, which fundsthe tracking of incoming products by manufacturer andbilling of OEMs. Furthermore, there is an added transporta-tion step after collection that consists of sending collectedproducts to a consolidation facility. If it were possible tobreak down costs for all four systems from collection toprocessing (collection costs in Maine are unknown and thebreakdownof costs in California and Maryland is unknown),the inclusion of the consolidation and added transportationcosts would most likely make Maines total recycling costsmore than Albertas and perhaps close to Californias totalcost.

Notably, economics and mass collection are not the onlyimportant characteristics of system performance. Concernsover worker safety and environmental damage, particularlyassociatedwith shipmentsof e-waste to developingcountries,are not addressed by these metrics. To address this, somesystems have enacted recycling standards that must be metby approved processors. Such standards have the potentialto increase processingcosts, but attempt to prevent otherwiseunacceptable outcomes. (It is interesting to note thatMaryland had the lowest reportedprocessing costs and doesnot have any statewide processing standards; it is unclear

whether these two factors are related.) Similarly, there is abelief among some stakeholders that it is prudent to buildup sufficientfundsto guarantee that thecostof futuree-wastecollection will be covered. Systems that are pursuing such

a strategy will have higher cash flows until the fund reachessteady state, compared to equally efficient systems that arenot amassing reserve funds.

An important lesson from this work is that data scarcitymakes performance comparisons of various operationalmodels challenging. Thisscarcityof information derives partlyfrom the nascent nature of the systems studied, but moredirectlyfrom a lackof datacollection.To addressthis, systemmanagers need to develop processes to collect more infor-mation, particularly by stakeholder. Nearly all of the moremature systems within the EU require some form ofinformation sharingwith theregulating agencyas a conditionfor participation. Each of the North American systemsrequires some form of stakeholder certification; such cer-tification could include necessary performance and cost

reporting. Competitively sensitive information on the per-formance of private firms (e.g., processors) may have to be

withheld for jurisdictions with too few firms to obfuscateindividual responses. Even with this limitation, there shouldbe more than enough information to enable effectiveassessment of operational practices and to support thedevelopment of prospective models of system costs. Anattractive feature of modeling is thatit can resolvethe impactof contextual characteristics (e.g., labor rates or populationdensity) that may be driving the cost.

In theend,understanding thedriversof systemeconomicsand collection performance is critical for designing new andimproving existing recycling systems. To that end, theframework and data presented in this paper provide a start,

but will have to be built upon with additional and more

detailed data and modeling synthesis. Nevertheless, suchinformation will always be only part of the decision process.The correct system for a jurisdiction ultimately will dependalso on that societys willingness to pay for the benefits ofeffective recycling.Some willwant resourcesdirectedto otherissues, whilesome willvalueincreased recoveryeven at highercosts (50).

AcknowledgmentsThe active participation of representatives from each of thefoursystems madethiseffortpossible.We thank Doug Wright

from Alberta, Shirley Willd-Wagner and Matthew Mc-CarronfromCalifornia, CaroleCifrino from Maine,and HilaryMiller fromMaryland. Furthermore, Walter Alcorn and JasonLinnell from the National Center for Electronics Recyclingprovided valuable data and feedback.

Supporting Information AvailableTwo tables: Californias net cost matrix for CY 2006 andMarylandsgenericnet costmatrix. Thismaterialis availablefree of charge via the Internet at http://pubs.acs.org.

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