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The rise of consumerism in India has invariably led to large quantities of waste being generated, especially in urban areas. Electronic waste or e-waste is estimated to grow at a compound annual growth rate of 10 per cent from 2017 to 2020 (Assocham-cKinetics, 2015). The problem is exacerbated by the complex composition of e-waste. Along with plastic, glass, iron, copper and other metals, it includes hazardous materials such as lead, brominated flame retardants, arsenic, cadmium, and mercury (Rajya Sabha, 2011). Proper disposal as well as recycling of e-waste is of utmost importance for preventing environmental hazards and loss of precious metals and minerals.

India lacks the adequate facilities for safe disposal or recycling of e-waste. 90% of e-waste recycling in India takes place in the informal sector (MAIT-GTZ, 2007). This sector is characterized by less access to technology, and unsafe recycling practices which degrade the quality of the environment. It affects the health of those involved in recycling as well as of others (Rajya Sabha, 2011).

E-waste recycling consists of 4 processes- collection, sorting and separation, dismantling, and recycling. Of these, the first 3 processes are labour-intensive processes (Toxics Link, 2013). The cost of recycling in India is Rs. 2800 per tonne while it is equivalent to Rs. 12,000 in UK (Rajya Sabha). Hence, developed countries engage in illegal trade with India and other developing countries for recycling.

Discussions on e-waste began in 2003 after a report by the NGO Toxics Link. The E-waste Management (EWM) Rules, 2011 was the first set of comprehensive rules regarding e-waste. It introduced the concepts of Extended Producer Responsibility (EPR) and held producers and manufacturers responsible for collection and recycling of e-waste. However, it did not set any definite targets for e-waste collection. This was corrected by the EWM Rules, 2016, which set a target of 30% in terms of collection in 2017-18 for each producer and manufacturer. However, due to lobbying by the Indian electronics industry, the targets were diluted. This is attributed to the lower profits of the electronics industry and the focus on Make in India, leaving little leeway for the government. Moreover, the rules made no mention of the informal sector.

The informal sector largely deals with e-waste. Due to the phenomenon of planned obsolescence where products are designed to become obsolete after a limited period, electronics are discarded even before they reach their end of life. Small dealers refurbish these and sell them in second-hand markets. Thus, they extend the life of the electronics and increase the resource use intensity preventing the goods from becoming waste earlier.

The informal sector has certain comparative advantages over the formal sector. The junk dealers engaged in collection are spread across the city and have a huge network which ensures that e-waste is properly collected. The reach of the formal sector is limited. On the cost side, the informal sector also has lower operational costs since it does not necessarily follow environmental, labour and safety regulations. However, the formal sector is more efficient than informal sector in material recovery from e-waste and should lead to higher revenues and overcome their cost disadvantage. But that is not the case as there are only about 10 recyclers in the world who can extract metals from e-waste. These recyclers, like Umicore and Dowa, wield oligopsonist power due to the high cost of investment and hence the revenues of the formal sector are not substantially greater than those in the informal sector. In addition, revenues of the formal sector are subjected to 5% GST. Hence, despite regulations, e-waste continues to the recycled in the informal sector.

EWM Rules, 2016 promote auctioning of e-waste by the consumers who account for 75% of its generation (Assocham-cKinetics, 2015). This increases competition in the formal sector along with raising costs. In India consumers consider electronics as an asset having material value and not as waste. Hence, they expect some money in return for the goods sold. In contrast to India, consumers in USA also pay money for transportation and recycling of waste.

There are some possible solutions for smart management of e-waste. The policy discussions in India should acknowledge the significance of the informal sector in terms of its comparative advantage and larger outreach. The government can incentivise for the transfer of e-waste from informal to the formal sector, by way of tax breaks to the formal sector. A Japanese model of e-waste management where certain players specialize in the logistics of e-waste collection while others specialize in the sorting, separation and recycling of e-waste would help is preventing waste entering into landfills (Honda et al, 2016). In such a case, the informal sector can be incentivised to formalise while still maintaining its advantage in collection.

The formal sector can be encouraged to conduct more research related to recycling technologies. Investments can be incentivised and healthy competition sustained to maintain low costs. For instance, a microfactory for extraction of metals from e-waste developed in New Zealand will help in reducing costs of recycling since it reaches profitability at scale (Press Trust of India, 2018). Finally, awareness must be spread among Indian consumers about the perils of e-waste and the damage caused to the environment. Combined efforts of customers, manufacturers, producers, scientists, and the government will help in effective management of e-waste.

References

Assocham-cKinetics (2015, February). VOW-Value Out of Waste- The Next USD 1.5 billion Opportunity for Indian Industry. New Delhi: Author.

Honda, S., Khetriwal, D.S., & Kuehr, R. (2016). Regional E-waste Monitor: East and South East Asia. Bonn: United Nations University ViE – SCYCLE.

Khattar, V., Kaur, J., Chaturvedi, A., & Arora, R. (2007, November). e-Waste Assessment in India: Specific Focus on Delhi. New Delhi: National Solid Waste Association of India.

Press Trust of India (2018, April 9). This new microfactory may help tackle e-waste hazard. The Hindu. Retrieved from http://www.thehindu.com/sci-tech/science/this-new-microfactory-may-help-tackle-e-waste-hazard/article23480460.ece

Rajya Sabha Secretariat (2011, June). E-waste in India (Working paper no. 6904). New Delhi: Author.

Header image source: https://i0.wp.com/www.indianweb2.com/wp-content/uploads/2015/04/e-waste.jpg?resize=700%2C340&ssl=1

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Written By Pranav Mayekar

Masters in Economics from TERI School of Advanced Studies

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