GREEN ECONOMY AND THE REVERSE
LOGISTICS OF WASTE ELECTRICAL AND ELECTRONIC EQUIPMENT IN THE WORLD
Marcus Vinicius Faria de Araujo
Sao Paulo State University, Brazil
E-mail: marcusvinicius@vwa.com.br
Fernando Augusto Silva Marins
Sao Paulo State University, Brazil
E-mail: fmarins@feg.unesp.br
Submission: 19/08/2015
Revision: 31/08/2015
Accept: 15/09/2015
ABSTRACT
The way globally accepted for the representation of
economic growth, and the evolution of a country, does not take into accounts
the environmental assets and liabilities. This article suggests a shift this
paradigm by implementing green economy concept and environmental goals to
achieve an appropriate level in terms of pollution at a lower cost to society.
The focus of the study is given to the management of waste electrical and
electronic equipment (WEEE), particularly in the reverse logistics of WEEE as a
potential tool for economic growth maintenance condition with sustainability. A
diagnosis on the use of reverse logistics of WEEE in the world is also
presented based on research conducted in countries on five continents. At the
end of the study it was concluded that the application of reverse logistics in
the world is still incipient with no evidence of the use of economic
instruments that give opportunity for growth and sustainability. Accordingly,
it is emphasized that the management of WEEE practiced in most countries has
shown motivation solely on financial profit based on the export/import of waste
in a kind of ruse coated green taking into account the environmental and health
risks of the population in developing or in development countries, which are
the main final destination of WEEE.
Keywords:
Reverse
logistics; Green Economy; Electronics Waste; Economic Instruments; Sustainability.
1. INTRODUCTION
Although
the growth models and development historically used by nations consider the
economic process as a cycle involving production and consumption (HEUTEL;
FISCHER, 2013), it is necessary to realize that it cannot be considered a
closed, mechanistic cycle; but dependent on factors such as environmental
conservation and preservation, is including in this regard the social and
cultural context, because human beings are part of the environment (AZIZ et
al., 2015).
Jackson (2003)
suggests that the maintaining economic growth must lead to the admission that
we live a crisis of perception when not inserted and practice the use of
environmental assets and liabilities in the calculations that measure the
occupation of economics, translated by the Gross Domestic Product (GDP).
Facing this
scenario, this paper presents a diagnosis of the WEEE management in countries
across five continents identifying integration opportunities of real aspects of
sustainability as a contribution to economic growth through conservation and
environmental preservation actions. Therefore, it is suggested, as a first
approximation, the application of reverse logistics and waste management tool
for electronic equipment (WEEE).
The relevance of
this proposal lies in the fact that reverse logistics has the potential to
achieve environmental goals at a lower cost to society since it benefits from
economies of scale. Thereby reverse logistics becomes a virtual tool for the
practice of a Green Economy, which has the strong contribution to growth and
development from a systemic view and high entropy, with respect to greater
diversity in the composition of inducing tools of economic growth.
From the
aforementioned proposal follows a verification of WEEE management forms in
countries on five continents under certain characteristics described throughout
the work. Finally it is concluded that except for a few countries in the
European continent the practice of reverse logistics has been little or almost
completely disregarded in the WEEE management in the world. Although there is a
world market established for recycling of WEEE, it is noticed that often the
banner of sustainability has been used to cover only practices to revenue, and
export / import of environmental problems.
This paper is
organized as follows. The second section is a discussion of the model of
economic growth with their interactions in relation to the consumption of
natural resources. The third section is an approach on the implementation of
reverse logistics of WEEE as contribution tool to establish a green economy has
the potential to induce economic growth. The fourth section includes the status
quo of reverse logistics in five continents from the study of the practices of
leading countries from every continent due to characteristics related to
occupation of the economy of each of these clusters. The fifth section presents
the conclusions of the work followed by the last section containing the
references.
2. ECONOMIC GROWTH AND STOCKS OF NATURAL RESOURCES
Friedman (2006) from
exhaustively reviewed in the trajectory of economic growth in the world says
that social stability would be a corollary of the need for infinite growth.
Bouder (2008) and Rutherford (2008) suggest that economic growth be rooted in
innovation processes and not just in cost savings.
Furthermore, it
is essential to consider the irresistible impetus for consumption at facilities
and to have things in a kind of extended self, as stated Ahuvia (2005) and
Hamilton (2010). Such consumer goods and services whether from government or
people’s expenses is part of the economic variable known as Gross Domestic
Product (GDP), which measures the occupation of the economy, in this case,
through the demand (or willingness to spend/invest) aggregated. Such
expenditures imply an earlier generation of income, which, along with the
production, form aggregated supplies (willingness to sell). Costa, Silva and Lima
(2014) highlight the relationship between GDP and economic growth.
Jackson (2009),
however, proposes a change in the government accounts system in GDP in order to
also incorporate the environmental assets and liabilities when considering the
continuing need for economic growth. Such a change in the government system of
accounts is justified by the existence of market failure in that processes are
not 100% efficient, nor 100% effective (BERKEL, 2007), generating residual
emissions to the environment which increase the extent that the consumption
increases in a vicious cycle generator external environmental factors as shown
in Figure 1.
Figure 1: Vicious cycle generated by society.
The
transformation of the vicious cycle proposed in Figure 1 in a virtuous cycle
maintaining the occupation of the economy; i.e. keeping the idea of permanent
economic growth, implies the pricing of environmental externalities (ORSATO,
2009; PERERA et al., 2013). Considering the relationship between capital (K)
and natural resources (R), the non-exhaustion of natural resources depends on
two conditions (PALMER, 2012; HOCHSTETLER, 2002):
1st) When the
stock of natural resources is zero, production must be zero:
2nd) When the
use of natural resources in production tends to zero, marginal productivity
tends to infinity:
Thus, pricing of
environmental externalities is not looking for the end of the exploitation of
natural resources, but confirms the indispensability of natural resources to
the status of great economic growth providing opportunities to strengthen the
green economy (UNEP, 2011).
3. THE REVERSE LOGISTICS OF ELECTRONICS WASTE AS THE
GREEN ECONOMY TOOL
Assuming
a low trade-off between economic growth and natural resources, new economic
stimulus strategies have gradually been emerging and reaching influence
directly or indirectly in the design of products as stated Rowley et al. (2012). The United Nations
Environment Programme defines green economy as an economic model that brings
together the scope of social welfare, in a fair and efficient use of natural
resources (UNEP, 2011).
Kirkland (2014) suggests that the green
economy moves to be a tutor of economic growth in the world relying on three
main pillars of support: use of economic instruments (pigouvian taxes and
pollution markets); improvements in environmental laws and public investments
in conservation/environmental preservation.
The
Reverse Logistics that, according to Hazen, Hall and Hanna (2012), brings
together the aspect of innovation in the supply chain, emerges as a facilitator
instrument of the green economy implementation, as it presupposes the bias of
sustainability in business strategies (PRZYCHODZEN; PRZYCHODZEN, 2013)
accompanied by changes in environmental legislation, reduction of use of
command and control instruments, introduction of economic instruments in the
management of the environment and incentives, to a greater or lesser extent, by
government.
In
light of the potential for transactions of waste electrical and electronic
equipment (WEEE) because they have in their constitution some components of
high economic value (DWIVEDY; MITTAL, 2015), is very promising the possibility
of WEEE reverse logistics occupy a prominent place in global green economy.
4. DIAGNOSTIC OF THE APPLICATION OF REVERSE LOGISTICS IN
THE WORLD
Ratifying
what was mentioned in the previous section, there has been the increasing use
of WEEE Reverse Logistics as a tool for sustainable occupation of the economy
in the whole world, and in the sequence are highlighted some countries and
their strategies related to that.
In
the USA the WEEE is not considered hazardous waste, a fact that, according to
Wagner (2009), explains the absence of a policy at the federal level for such
waste. Lepawsky (2012) indicates that not all states of the country have
specific legislation, and that, by 2010, 24 states were counted with
legislation on WEEE management considering to blame the consumer electronics
producers of "cradle to grave" by waste generated after consumption.
Townsend (2011) points to the lack
of uniformity of laws in the states of that country, existing from rates to the
consumer (the system used in California) - embedded in the final price of the
new product and form a fund managed by the state for future collection and
recycling - until the imposition of WEEE collection and recycling costs borne
by the retailers.
The asymmetry of
legislation on WEEE management induces consumers to seek a situation of lower
cost in the post consumption stage, which can make them have direct contact
with hazardous components of WEEE causing health damage thereof (WAGNER, 2009).
Between 2000 and 2011, the percentage of WEEE recycling in the US rose from 10%
to 24.9% showing improvement in the management of such waste but still lacking
a proportionate boost to the fact that the US is the largest WEEE generators on
the planet Kyle (2013).
Unlike what happens in the US,
Brazil has a national policy for solid waste management where obviously WEEE is
contemplated. However, such policy, even though it was proposed in the form of
draft law in 1991, only in 2010 was its regulation.
Law 12,305/2010 becomes the
regulatory framework in Brazil on solid waste management giving meaning and
managerial viability because of its interface with Law 9.795/1999 (National
Environmental Education Policy – PNEA, acronym in Portuguese) and the Law 11,445/2007
(National Basic Sanitation Policy – PNSB, acronym in Portuguese).
There is also an important
integration with the Brazilian Environmental Licensing System that is regulated
by the National Council of Environment (CONAMA, acronym in Portuguese), Law
237/1997, and by Complementary Law 140/2011 establishing the need for
cooperation and division of powers between the federal, state and municipal
levels. About the WEEEs, in Brazil it becomes mandatory the practice of reverse
logistics operations, and the producers are responsible for collecting and
recycling originated from post consumption of its products.
Demajorovic and Migliano (2013), however,
punctuate that after four years of regulation of Law 12,305/2010, the implementation
of reverse logistics in Brazil to WEEE practically has not occurred yet. The
same authors attribute this fact to the lack of political acceptability of
electronic producers and other stakeholders, lack of tax incentives and
difficulties regarding the aspect of administrative feasibility.
Considering, in particular, the
aspect of administrative feasibility is important to note that the slowness in
implementing reverse logistics for WEEE in Brazil can be explained, at least
partly, by the complexity of the Brazilian environmental licensing system
requiring electronics manufacturers to hire or possess additional environmental
licenses. This is the fact that an environmental license for the production and
transportation of electronic products is not valid for the collection and
transport of WEEE.
Similarly, to
the extent that such manufacturers become WEEE receptors, their environmental
licenses have to be at least legally registered, because not only they have
their activities in order to produce consumer electronics, but also to recycle
them. These difficulties have a direct impact on the costs and benefits of
electronics producers in Brazil leading to insecurities regarding the
competitiveness and business success in the industry, as suggested by
Hernández, Marins and Castro (2010), besides highlighting the lack of use of
reverse logistics as a tool for strengthening Green Economy.
Reverse logistics of WEEE and even
from other waste on the African continent, as Marchi (2011), is not yet a
reality, either as part of any environmental policy, whether in terms of
legislation or even any practice in the area. Despite the existence of
Environmental Policy formalized in some countries like South Africa and Ghana,
the main concern of those countries is even greater in dealing with WEEE
imported from those produced on that continent (AMOYAW-OSEI, 2011).
The issue of
importing WEEE from the other continents is part, in a similar context, of the
anthropogenic cynicism (OELSCHLAEGER, 2014) given the existence of the Basel
Convention which deals with the regulation of cross-border traffic of hazardous
waste In contrast to the desire for countries that generate WEEE in take
advantage of poverty of others to reduce their own costs, not just exporting
WEEE but indirectly, diseases and their treatment costs of these diseases.
In
Asia it stands out here China by the fact of occupying, according to UNEP
(2015), the second position in the global generation of WEEE, and India by the
growing potential of WEEE generation due to strong rates of electronics
industry growth that country (HERAT; AGAMUTHU; 2012).
The starting point of reverse
logistics application of the concept of WEEE in China took place in 2009 from
the government's actions in this country in order to create formal market of
WEEE return to their respective manufacturers. Through economic incentives,
consumers taking their electronics used in stores receive 10% discount on the
purchase of new appliances (ONGONDO; WILLIAMS; CHERRET, 2011).
Qu et al. (2013) reported the
existence of an alternative form of management of WEEE being the same carried
through municipal collection and recycling programs. In this case Chinese
municipalities have central receiving and WEEE recycling not setting the
concept of extended responsibility present in countries like USA and Brazil.
Wang et al.
(2013) highlight the absence of a government agency of management of WEEE as responsible
for the prevalence of informality in WEEE recycling in China and also in charge
of the private sector by isolated initiatives regulated by established
practices in corporate environmental policies of companies like Nokia, LG,
Lenovo and Motorola. Such informality turns out to corroborate the import of
WEEE to China evidencing the large gap between economic growth and green
economy in that country.
Similarly to China, India has an
informal market of WEEE formed by collectors, dealers and recyclers (DWIVEDY;
MITTAL, 2015). The practice of reverse logistics in the country is quite
incipient giving ample room for amateur recycling techniques and therefore with
high potential for direct and indirect environmental contamination.
Manhart (2010) states that the
recycling techniques employed in India have relevant constituents’ recovery
efficiency of lower economic value to 20%. The same author cites the use of
products based cyanide leaching for the printed circuit boards in order to
extract gold as high-risk practice for human health and air pollution, water
and soil. Dwivedy and Mittal (2015) indicate that about 70% of WEEE from
computers is marketed informally and the second hand market and the remainder
(30%) sold to recycling companies.
It is noteworthy
that in India there are some companies authorized by the government to develop
the process of collection, transportation and partial recycling of WEEE
exporting crushed components containing heavy metals to Belgium (E-PARISARAA
PRIVATE LIMITED, 2015). Also according Dwivedy and Mittal (2015) exists in
India the practice of WEEE import helping to create mismatched economic growth
sustainability.
On the European
continent were selected countries like Germany, Switzerland and the Nordic
countries due to the uniqueness in responsible waste management in general and
WEEE, respectively.
The formalization of a policy for
solid waste took place in Germany in 1986, with the Law of Minimization and
Waste Disposal (GERSTMAYR et al., 2011), and from this law, specific
regulations have emerged in the country for the responsible management of used
oils (1987), organic solvents (1989), containers and packaging in general
(1991).
In 1994 arises the issue of the Law
of Integral Cycle Economy and Waste, which replaced the Act of 1986 and
expanded this being focused on non-generation of waste, reduction and recycling
of the same. In parallel, there is the establishment, by the government, of the
doctrine of consumer products with less waste and therefore less likely to
cause significant environmental impacts. Therefore, reference is to the reverse
logistics practice all-inclusive as manufacturers and distributors of products
- including electronics - have responsibility over their entire life cycle.
There is also the forecast of
development of waste management plans by the competent authorities (government
and private) and that they should minimally contain the characterization of
waste and the handling, transport and environmentally sound disposal. German
law also determines a waste movement tracking system to be contained to the
same specification, quantity, generator data, the carrier and the recipient
thereof, including in transactions involving reverse logistics.
Such reverse
logistics occurs in this country in centralized management and nonprofit
inspired by the cooperation between manufacturers and distributors. Such an
organization called "Duales System Deutschland GmbH - DSD" performs
the reverse logistics being maintained through membership fees, by its members
(GERSTMAYR et al., 2011).
Switzerland, in terms of solid
waste management is considered a market benchmark since the market is 100%
formal, articulated and regulated, particularly for reverse chain of WEEE (LIFSET;
LINDHQVIST, 2008). Khetriwal, Kraeuchi and Widmer (2009) state that the reverse
logistics in Switzerland began with the good practices of electronics producers
in a kind of voluntary work for the preservation of the environment. It was
precisely in this scenario that the government formalized what was already
practice.
As occurs in some US states already
mentioned above, in Switzerland, in all its territory, consumers pay a rate
that is embedded in the price of electronic products allocated to finance in
part the reverse logistics. Another strong point of reverse logistics in
Switzerland is the aspect of cooperation between state, civil society and
research centers; and such cooperation through Swiss research centers, reaches
even interact with other nations like the US and India, sharing his expertise
in the management of WEEE.
Among the Nordic
countries, it is worthy to highlight Sweden, Denmark and Norway, for working
with the concept of Extended Producer Responsibility (REP), as claimed Lifset and
Lindhqvist (2008). This concept emphasizes a strategy focused on cleaner
production where electrical and electronic products exert lower environmental
impacts at all stages of their life cycle including removing the burden of WEEE
management is of citizens, whether governments, in direct application of the
polluter pays as cited by the European Commission (2011). The incidence in
these countries of WEEE management costs on producers and importers gives
opportunity to innovation in the development of electronic products.
On
the continent of Oceania, it was selected Australia and New Zealand for being
the countries with the highest Gross Domestic Product (GDP) according to Index
Mundi (2015) and this fact, for such results, makes their respective economies
generate larger amounts of WEEE that continent.
Australia until 2012 did not have
regulations for the management of WEEE and according to Dave and Dave (2013)
and Yousefpour, Barraket and Furneaux (2012), of the 25,000 tonnes of WEEE
generated at the time, only 10% were recycled and the remainder is exported or
disposed landfills.
It is emphasized that in this
country there is the ever-increasing practice of WEEE export for the recovery
of metals due to the high cost of direct labor for recycling WEEE. For lack of
a formalized government policy there are two main routes used in WEEE
management in Australia.
The first is sending, by consumers,
the landfill through waste collection system. The duplicate is sending, from
consumers and merchants, WEEE to the recyclers. By 2010, there were 14 WEEE
recycling operating stations in Australia, which are responsible for recycling
or trade in the form of export of WEEE to other countries.
According to
Yousefpour, Barraket and Furneaux (2012) there is no evidence that such export
operations comply with the provisions of the Basel Convention. Thereby the WEEE
management in Australia, as suggested by Przychodzen and Przychodzen (2013),
does not have the bias of sustainability and not a formal, unified system that
can contribute to the achievement of environmental goals at a lower cost to
society.
The first evidence of government
action from New Zealand towards sustainability is the Resource Management Act
validated in 1991. This law formalized the determination of the government of
that country for the management of natural resources, but only in 2002, New
Zealand started working a strategy for solid waste management. However, Clough
(2012) indicates that, similar to what happens in Australia, costs of recycling
and disposal in this country are high making it more attractive to export WEEE
practice for countries like India.
There are also
records of implementing the concept of post-consumer where local councils try,
still little integrated, to create minimum conditions of scale to reduce
contamination of the local environment and enable an increase for WEEE for
sale. Thus, the experience of New Zealand with reverse logistics processes is
virtually nonexistent not using the same as a tool that provides an opportunity
for economic growth.
5. CONCLUSION
Even considering the good
practices, intramural, of European countries, the reality of the WEEE
management in the world has relied heavily on imports and exports of the same,
excluding the socio-environmental damage caused by the countries that are predominantly
receptors of these waste.
From this diagnosis, it is
concluded that for the establishment of a Green Economy, inducing growth and
economic development, it is necessary a paradigm shift with the inclusion of
environmental assets and liabilities in determining the GDP of the countries
and their consequent pricing.
The potential negotiations revealed
through the economic value of WEEE constituents, provides conditions for the
practice of WEEE reverse logistics as a contribution instrument for a Green
Economy internalizing external costs and reducing socio-environmental damage.
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