NEPSI TO CONSIDER 2 E-WASTE FINANCING MODELS AT JUNE MEETING

Of 4 models under consideration, subgroup decided to recommend for full group consideration: (1) Advanced recycling fee (ARF) model under which fee would be included in purchase price of product. Proceeds from fee would be passed on to fund to finance collection and recycling infrastructure. (2) Hybrid model that would start with ARF, then transition to partial cost internalization at some point when most of historic waste was removed from system. Despite HP’s stance, govts. were cautiously optimistic that a preferred model would emerge from June 12 meeting in Seattle. There has been no feedback yet on working group’s decision, said Sego Jackson, principal planner for Snohomish County (Wash.) and local govt. representative on NEPSI. But he said it was expected that NEPSI would come out with preferred model in June and begin work on drafting written agreement. “I suspect we will have the draft of an agreement by September and something that will be signed by October or November. So at this point, I am thinking that there would be an agreement signed that will have quite a bit of detail attached to it.”

Pointing out that it was only IT company on working group, HP Public Policy Dir. David Isaacs said company supported partial cost internalization (PCI) model under which manufacturers would internalize part of recycling and transportation costs into their cost of doing business and local govts. could pick up the rest of costs to pay for collection and transportation. “We are disappointed by the lack of progress in the [NEPSI] process to date, but we recognize this is a complex, difficult issue and it takes time to work out a comprehensive solution,” he said. HP would have “preferred to work with NEPSI” to achieve a consensus, Isaacs said, but “HP is actively working in a constructive manner with California and other states to develop state recycling laws that promote the efficient, environmentally sound management of used electronics. We will continue that work whether or not NEPSI continues to move forward.” Sources told us that HP and Sony, which prefer PCI model, were split from other companies in industry group that were more comfortable with ARF. One reason for HP’s preference for PCI could be that it had processing plant, they said, and it could be competitive advantage to take back its own products.

Both models recommended by working group would need considerable fleshing out of details, but “they showed the most promise of getting an agreement,” said Scott Cassel, dir. of Product Stewardship Institute (PSI) and representative of states on NEPSI. Concern of govts. about PCI model was that “what is being offered would leave them with too large a cost to be picked up without the full range of financing mechanisms available to them,” he said: “It is still unclear what HP or others were offering under the [PCI] system.” Hybrid system is attractive to govts., Cassel said, because it offers “greater certainty” in beginning with ARF that covers basic service costs and then moves toward PCI, which offers greater design incentives. Asked how he rated chances for agreement in June, he said there was “opportunity for basic agreement” but that depended on degree to which manufacturers could coalesce around one system. “It is unclear now how many, or what market share, is represented by the EIA and so it’s unclear what chances of success we may have.” Besides EIA, companies represented at working group meeting Mon. were JVC, Panasonic, Philips and Sharp, Cassel said.

Referring to HP’s statement that it would continue to work with states, Cassel said that even if NEPSI came to basic agreement, states would continue to move forward with legislation that would work for them until details of national agreement were finalized. “If national legislation is needed and if it takes time to have it, some states may think they don’t have the luxury to wait for a national solution,” he said. States can have their own solutions first and let them be preempted later by similar comprehensive national legislation, Cassel said. Jackson agreed: “State legislation is the only way the heat will be kept on the parties to bring about national legislation.”

Both Cassel and Jackson agreed that EPA’s ultimatum was timely and contributed to working group’s agreeing on 2 financial options for full group’s consideration. “It was a very well- timed statement by the EPA because there was great deal of distraught on part of governments that NEPSI wasn’t moving along and also was being used as an excuse why state legislation shouldn’t be passed,” Jackson said. At hearing on state bills, industry has been touting “growing success” of NEPSI to oppose legislation, he said: “The EPA statement helped do the trick.” Mon. working group meeting was one of most successful in more than year, he said.

EPA has been funding NEPSI dialog for more than 2 years and “we are just feeling like with all the budget pressures… we all have to try to bring this process to a close,” said Claire Lindsey, EPA’s representative on NEPSI. “It is really that we are trying to encourage everyone to come to a conclusion or develop an exit strategy.” Asked about the prospects of an agreement’s emerging in June, she said: “I honestly can’t say.” She said problem was that all stakeholders had had difficulty coming to agreement among themselves: “Government has struggled for a while in trying to decide what they like best, the NGOs have a lot of problems with a lot of approaches and industry has struggled because some of these models are advantageous for some in industry and disadvantageous for others and vice versa.” So there isn’t one solution that will make all happy, she said.