Laying Waste

E-waste is the world’s fastest-growing solid waste stream, and companies are struggling with a deluge of waste produced by their manufacturing processes and products. Some have been illegally exporting their e-waste—which may contain hazardous substances that need special treatment—or illegally dumping it closer to home.

In 2021, for example, Amazon was caught trashing some 130,000 unsold or returned items in a U.K. warehouse—including laptops, smart TVs, and other electronic devices—in one week. The company acted in line with financial incentives: Destroying these goods was cheaper than storing, repurposing, or recycling them.

These clashing incentives are causing waste processing systems to fall far short of best practices, according to research co-authored by Assistant Professor Sytske Wijnsma. The paper offers recommendations to help regulators improve ineffective laws.

Simulating waste streams

It’s estimated that 75% of e-waste globally is exported, typically from the EU or U.S. to developing countries, where disposal is less regulated. Only slightly over a third of the EU’s e-waste is properly handled.

Wijnsma and her colleagues constructed a model to simulate where waste typically leaks from the waste disposal chain, incorporating two key actors: a manufacturer producing waste and a treatment operator responsible for treating waste within a country.

Waste producers either generate high-quality waste—with resale value from its component parts—or low-quality waste, which is more hazardous and less valuable post-treatment.

Clashing incentives are causing waste processing systems to fall far short of best practices.

Typically, a treatment operator sets a price to manage a batch of waste without knowing whether it’s high or low quality.

The waste producer decides whether to contract with the treatment operator or to export it—legally or illegally, in which case it leaks from the system, often landing in developing countries where environmental regulations are spotty. Many countries prohibit low-quality waste export, while higher-quality waste export often remains legal.

Even if a producer contracts a local operator, proper treatment is not guaranteed. The operator might still opt to dump it illegally rather than disassemble it, immobilize hazardous substances, and recycle it for revenue. “If an operator thinks there’s a very high probability of only getting bad waste, then they might be more inclined to dump it.”

Addressing system breakdowns

The model highlights two key reasons the e-waste treatment chain breaks down. First, there are few if any consequences for waste producers when their contracted treatment operators violate regulations.

Second, current export policy focuses solely on prohibiting the export of low-quality waste. As such, waste with low post-treatment value is increasingly retained locally, causing treatment operators to raise the price of treatment. That, in turn, drives the more valuable waste to be sent abroad where treatment costs are lower. Consequently, local operators are left with primarily low-quality, unprofitable waste and have more incentive to dump it.

When it comes to policymaking, Wijnsma and her colleagues say that regulations that treat high- and low-quality waste dramatically differently create perverse incentives and are likely to backfire. The researchers also recommend holding waste producers partially responsible when their downstream waste is disposed of improperly.