July 31, 2005
Senator Carl Marcellino, Co-Chair
Rep. James Marzilli, Co-Chair
Council of State Governments
The Energy & Environment Committee
40 Broad Street, Suite 2050
New York , NY 10004-2317
Dear Committee Co-Chairmen:
Thank you for the opportunity to submit testimony on model
regional legislation introduced by the Council of State Governments/
Eastern Regional Conference pertaining to the management of electronic
waste products.
The Product Stewardship Institute, Inc. (PSI) is a national nonprofit membership organization comprised of 31 state governments and
27 local governments that have pledged to work together to reduce the
health and environmental impacts from consumer products. These
agencies work cooperatively with industry and other stakeholders,
through PSI, to develop and implement “product stewardship” solutions
that share responsibility for safely managing consumer products across
their entire life cycle, from design to reuse, recycling, and disposal. PSI
coordinated the participation from state and local governments in the
four-year National Electronics Product Stewardship Initiative (NEPSI)
process facilitated by the U.S. Environmental Protection Agency (EPA).
State government officials identified electronic wastes as one of
their top waste management problems at the country’s first-ever Product
Stewardship Forum coordinated by PSI in December 2000. PSI’s
comments on the proposed model legislation are two-fold – broad in
relation to NEPSI and specific to the proposed model legislation.
PSI generally supports the model legislation proposed by the Council of State
Governments/Eastern Regional Conference. The model legislation has clearly benefited from the
NEPSI “hybrid” model that was agreed to by a vast majority of NEPSI participants. In addition,
every component of the CSG/ERC model was significantly debated in the NEPSI dialogue.
Therefore, none of the concepts proposed should be new to those entities that participated in NEPSI.
Since PSI has worked with state officials in the CSG/ERC region for the past five years on
electronics legislation, we hope to have the opportunity to work with your Committee to implement
model legislation in the states. It is inevitable that national discussions will look to regional efforts,
such as this, for guidance. To the extent that PSI’s members, particularly those in the northeast, can
coordinate with the CSG/ERC, our chances of successful legislation will only be enhanced.
Comments Related to NEPSI
Since the first multi-stakeholder NEPSI discussions in April 2001, significant progress has
been made. PSI believes that the results of this multi-stakeholder dialogue, involving numerous
meetings and conference calls, should be acknowledged and built upon, as even more stakeholders
have become interested since NEPSI. PSI would like to emphasize that NEPSI participants agreed
on the following:
1. Electronic wastes present an environmental problem. None of the participants –
including manufacturers and government officials – considered landfilling and
incinerating these products as viable management solutions. Participants understood that
we do not want to bury lead and other heavy metals for future generations to dig up, that
the disposal of electronic equipment is akin to throwing jobs, resources, and economic
value into the garbage can, and that environmental problems can result from improper
management. In addition, much solid waste disposal is accomplished through
incineration in waste-to-energy plants; the inclusion of electronic waste in the feedstock
increases the emissions of toxics into our air.
2. NEPSI’s goal should be to develop a national solution. In the February 26, 2004,
NEPSI Compromise Resolution, which PSI helped negotiate, participants agreed to the
following: “…it is the desire of the NEPSI group to establish a national system to
collect, transport and process consumer electronics in a manner that is protective of
human health and the environment, and one that is economically sustainable and market
driven.” State governments have been forced to develop their own legislation primarily
because the electronics manufacturers have been split on the type of system needed to
finance and manage electronic wastes.
3. The cost of managing electronic wastes should be included in the purchase price of
a new product. At the start of the NEPSI dialogue, manufacturers argued that all
taxpayers should cover the cost of managing electronic wastes, and that government
programs, funded by taxes, should be increased to pay for waste management programs.
This was a non-starter for government agency officials. Industry officials then proposed
that consumers be charged “end-of-life” fees to be assessed when a consumer returned
an item for recycling. Again, government agency officials considered this solution a
non-starter, since fees discourage recycling and encourage illegal dumping. Finally,
industry officials agreed to some type of “front-end financing system” that would
include the cost to manage the product at its end-of-life in the purchase price of the
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4.
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product. It is on this single point – the type of front-end financing system – that
manufacturers have been unable to agree.
The Scope of Products to be covered by an agreement was agreed to as follows:
o TV/TV Monitors (cathode ray tubes [CRTs] and flat panels).
o Stand-alone computer CRT and flat panel monitors greater than 9 inches.
o Laptop/notebook computers.
o Computer Processing Units (CPUs).
o Small peripherals (mice, keyboards, cables, speakers)
o Consumer desktop devices (printers and multifunction devices).
The financing system should be a “hybrid” – starting with an “advanced recycling
fee” (ARF) and transitioning to a type of “cost internalization,” in which the end-oflife management costs are included in the product purchase price, but invisible to the
consumer (e.g., not a specified and visible fee). While all government NEPSI
participants supported this system as a compromise to their preferred system, there were
several other stakeholders who dissented. Government officials believe there is great
merit in a system that internalizes all the system costs. However, recognizing that such a
proposal was a non-starter for industry in NEPSI, agencies agreed to start with an ARF
to pump quick funds into the development of badly needed infrastructure, then transition
to an internalized financing system based on set criteria.
The Hybrid system should allow for an equivalent alternative system. The NEPSI
resolution allows for a flexible alternative system that would permit individual
manufacturer responsibility if a company could provide a level of service that is
equivalent to the “base level of service” that the NEPSI group believed was needed for
an effective collection and processing infrastructure.
Standards are needed for electronics recyclers. The NEPSI group supported the
creation of recycling standards to ensure the “environmentally sound management” of
electronic wastes.
In addition to the above agreements among the multi-stakeholder NEPSI group, PSI was
able to develop a consensus among the state and local government participants as to their legislative
preferences on several other issues.
 Use a non-profit entity to manage system finances. Government officials supported
the development of an industry-led non-profit that would collect and disburse funds to
pay for the collection, reuse, and recycling of electronic equipment. This organization
could also contract for collection and recycling services, submit reports on system
performance, and perform other administrative functions. These non-profit entities
already operate in Canada and Europe to enhance the efficiency of product management
systems. In addition, government agencies researched legal precedents that allowed
private entities to manage funds created by a government program.
 Develop performance measures for collection and recycling. Agencies believe that
the group’s focus should be on system performance, and that the logistics should be the
role of the private sector, which has greater incentive to reduce costs. Government
agencies believe that its role should be to establish performance goals, with multistakeholder input.
 Disposal bans should be preceded by a recycling infrastructure. While disposal bans
will help to create a market for recycling, they will create consumer frustration and
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enforcement concerns if there is no alternative to disposal. Disposal bans, however, work
well when a recycling infrastructure is in place.
Comments Related to the Proposed Regional Legislation
Provisions in the model bill that PSI considers valuable include:
 Requiring that no fees be charged to consumers for the collection, reuse, and recycling of
electronic products.
 Payment of the fee from manufacturers directly into a fund rather than through the retailer.
(This concept was first promoted by government agencies in NEPSI [borrowing from
systems in place in Europe], but was strongly opposed by manufacturers. The support it has
today is indicative of the changed positions of many of the manufacturers.)
 Differential fees based on product size as an approximation of the differential cost to
manage electronic products at the end of their life. (This concept was also proposed in
NEPSI as a way to acknowledge the differential costs of managing various electronic
products.)
 Allowing for manufacturers that have their own collection, reuse, and recycling systems to
be reimbursed if those systems are found to be equivalent to systems required of other
manufacturers. Also, requiring all manufacturers to contribute to the “…educational,
administrative, operational, and enforcement costs of the program, including…those for the
management of orphan and historic products” acknowledges that there are some system
costs that no manufacturers should be able to escape.
 Preference for a non-profit management entity, but also allowing states the ability to manage
the fund themselves.
 Integration and promotion of reuse.
 Scope of products that mirrors the NEPSI scope, but allowing states to add to these items at
their discretion.
 Providing government funding for enforcement and administration.
 Labeling requirement.
 Reporting by manufacturers and the management entity.
 Retailer educational requirements.
 Environmentally sound management requirements that reuse and recycling companies must
meet.
 Disposal ban after two years to allow a reuse and recycling infrastructure to take shape.
 Allowing for federal preemption only when expressly stated in federal legislation.
Provisions that PSI believes require additional consideration include the following:
 Goal setting and responsibility. In model electronics legislation that PSI developed in 2003
through consensus with its government members, PSI’s members believed that requiring
manufacturers to meet performance goals was an important element of model legislation.
The goals would be set according to the best programs around the country, and then
“stretched” over time to provide incentive for continual progress. PSI would like to see a
greater emphasis on goals in the model legislation.
 Cost internalization. As part of the NEPSI Hybrid, government participants were in general
agreement that the ARF system should switch to one in which costs are internalized by the
manufacturer. This switch would not occur until the management entity made a
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determination that certain pre-established criteria were met. Such a provision was important
to those agencies that preferred greater manufacturer responsibility, which they believe will
give greater incentive to manufacturers to change product design to reduce end-of-life
management costs. PSI would encourage the Committee to include such a provision in the
model legislation.
Let me again express PSI’s appreciation to the Committee for spending the time necessary
to understand this complex environmental issue, and to take action toward resolving electronics
waste management issues. PSI looks forward to working with the Committee to establish
electronics recycling legislation in the northeast, and to develop a national law that will integrate
northeastern programs into a strong national electronics management system.
Sincerely,
Scott Cassel
Executive Director
Product Stewardship Institute, Inc.
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