Costly Computer Casualties

SAN MATEO (04/06/2000) - In a move that observers say could be copied by other states, the Massachusetts Department of Environmental Protection on April 1 introduced regulations preventing Massachusetts transfer stations, landfills, and combustion facilities from receiving discarded computers or television sets. The move is designed to promote the recycling of electronic equipment and prevent hazardous materials from ending up on landfill sites.

The threat of new regulations will exacerbate what is already a growing problem for IT managers: how to find the most cost-effective way of dealing with the growing storehouse of aging computer equipment and software that is costing their companies money.

U.S. companies alone will retire over 11 million PCs this year. And the unrecovered value of this technology will cost these companies over $3 billion, according to IDC, in Framingham, Massachusetts.

"Whether you dispose of them correctly or incorrectly, there's a cost associated with retiring old computers," explains Kevin Burden, an analyst at IDC. "In many cases, if the company simply has no idea of what to do with the old systems, what ends up happening is the company continues paying software licenses to someone like Microsoft for PCs that have been decommissioned, when those licenses could be ended or transferred to another computer."

Ted Smith, executive director of the Silicon Valley Toxics Coalition (SVTC), in San Jose, California, understands why companies come up short on ideas about how to recycle old computers.

"More than three-quarters of all computers ever bought in the U.S. are stored in people's homes because they don't know what to do with them," Smith says.

"If everyone threw them out all at once, we would have a 1-mile-high waste mountain of junked computers the size of a football field. There is a clear lack of information given to North American consumers about recycling or disposal options for our obsolete computers."

Indeed, the National Safety Council (NSC), based in Itasca, Illinois, estimates that by 2004, more than 315 million obsolete computers from both homes and offices will be destined for U.S. landfills and incinerators.

In response to this issue, European agencies such as the Brussels, Belgium-based European Environmental Bureau are stepping up their efforts to make European manufacturers accountable for recovering some portion of the cost of recycling. Ideas from Europe include the Integrated Product Policy, where the entire life cycle of a computer is taken into consideration, promoting eco-design before the product reaches the assembly line.

A fine example of Integrated Product Policy at work was seen during the 1970s, when concern about the environmental impact of aluminum soda-can pull tabs moved manufacturers to re-evaluate and, ultimately, redesign the style of product we all use today.

Other industries, such as the U.S. auto industry, are also attempting to deal with the waste problem. But unlike parts of junked cars, those of junked computer pose the threat of depositing heavy metals, plastics, and toxins that, when combined, could create an even greater menace to the environment than if disposed of separately.

The fact that even the most basic printed circuit boards contain heavy metals such as zinc, chromium, silver, lead, tin, and copper has spawned action at the federal level. But efforts by the Environmental Protection Agency (EPA), such as the 1994 Common Sense Initiative (which closed just over a year ago), did little more than review the computer junk problem and bring industry leaders together for a group handshake.

"Out of the Common Sense Initiative came the need to amend hazardous waste regulations, mostly relating to monitors," says EPA representative Eddi Pines.

Since then, the EPA's Hazardous Waste Identification Division has acted to remove some barriers that existed in previous hazardous waste policies, such as regulations that made recycling computers and their peripherals "expensive and cumbersome," Pines says.

Streamlining recycling

Expensive and cumbersome, you bet. Just ask Steve Segal, owner of Paulsboro Scrap Recycling, in Paulsboro, New Jersey.

"We pull the wiring, the aluminum, and the copper. That's about the only thing I take out of the unit. Otherwise, the chassis, including the power supply, the fans, and the disk drives, stay together and get shipped overseas because breaking all the components apart is labor-intensive and our labor here is way too expensive," Segal says.

Cost considerations are also the impetus for sending most junked monitors overseas, according to Segal, except those few that are "resellable or fixable."

Once nearly run out of business, Paulsboro Scrap Recycling is now licensed by the EPA to accept and process the potential cocktail of hazardous waste found particularly in old mainframe computers.

"The state of New Jersey mandated so many different things about scrap content that they almost pushed me out," Segal says, laughing. But the 30-year veteran scrap recycler didn't lay down. Segal coordinated his overseas contacts, and now only 5 percent of the junk Segal takes in reaches a landfill.

"And that's just Styrofoam, packing material, and cardboard," Segal boasts. "If I tell somebody it's going to be disposed of in an environmentally sound manner, I stand behind my word."

In December 1999, the state of New Jersey granted Paulsboro Scrap Recycling a certificate of authority to operate a recycling demonstration project. Doing so authorized Segal to develop a Universal Waste Pilot Program for consumer electronic and electric equipment, which signifies that the facility can accept and process materials, and that the process employed by the site is state-approved and environmentally sound.

The success of operations such as Segal's, combined with the difficulty of properly disposing of obsolete computer equipment, keeps the calls coming in to the National Recycling Coalition, in Alexandria, Virginia.

"We get a lot of calls from companies trying to find out what questions to ask recycling companies, or where they can find recyclers in their company's area," says Dawn Amore, a spokeswoman for the National Recycling Coalition.

"And I've noticed more and more large companies starting their own internal recycling programs, or take-back programs for their large users," Amore says.

One of those large companies, St. Paul, Minnesota-based 3M, auctions off old computer equipment or donates the equipment to those in need.

"We have a specific department within our IT organization that determines when certain computer systems will become obsolete," says Gary Colgrove, a resource manager at 3M. "So we don't spend too much money maintaining systems that should be retired. We've compiled a support list, and when a certain computer no longer qualifies as supported, the drives get cleaned out of those systems and they go to a monthly auction we hold here, or we donate them to individuals we have on a waiting list."

But not everyone agrees that recycling is the answer, believing instead that more thought needs to be given to environmental issues during the design of computer products.

"If we can't push the discussion to the front, we've lost the battle," says the SVTC's Smith.

Smith wants computer designers and manufacturers to start shouldering some of the cost of waste management.

"In general, it costs 50 cents per pound to recycle electronic products right now, and that's a significant negative cost when it begins adding up," Smith says.

Track records

In a survey sent out last year to 20 major computer manufacturers, the SVTC asked what, if any, recycling policies were in place.

"Most didn't respond at all," claims Smith. "So we had to go to their Web sites to see if we could find any take-back programs [or] leasing arrangements."

From their findings, the SVTC graded each computer maker on a scale of one to five for its handling of hazardous materials, computer upgradeability, and take-back policies. High scorers earned a green "candy cane," while low scorers received a "lump of coal."

Only two companies, Apple and IBM, received candy canes for their scores of 4, whereas nine companies, including Packard-Bell and Acer, received lumps of coal for their respective scores of 1 and 0.

"What's troubling is that if computer manufacturers produced a green computer, consumers would buy the thing," Smith says. "Why, in a relatively short period of time, Americans have learned to recycle newspapers, plastic bottles, glass.

All this has happened quickly, and that's a positive road map the computer industry should learn from," Smith says.

Meanwhile, offices and garages across the United States are being cleared of computer junk on a daily basis. Over 20 million PCs went to pasture in 1998. Of those, only 11 percent were recycled, according to the NSC.

"Believe me, there are no sentries posted outside landfills to prevent junk computers from being buried with all our other trash," Smith says. "There's no way to tell how much damage may have already been done."

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Europe leads in moves to recycle

Much of the impetus for computer recycling is coming from Europe. "Europe is way ahead of us [the United States], and what happens in Europe will most likely set the standard for the rest of the world," said Ted Smith, executive director of the Silicon Valley Toxics Coalition. "They're already setting standards that are much tougher than we have here."

Current European Community computer industry initiatives include handing financial responsibility over to manufacturers to cover cost of collection, treatment, recovery, and environmentally sound disposal of computers and the phaseout of lead, cadmium, mercury, and other heavy metals from production by 2004.

"European restrictions are not necessarily stricter, but they enforce them more," comments Kevin Burden, an analyst at IDC. "Remember, European companies operate in a much smaller space than U.S. companies, so they have to police their disposal more thoroughly. Having all this room in the United States gives us this landfill mentality."

The high price of storage

From the IT perspective, companies that store older electronic equipment are essentially paying rent each month on non-income-producing assets. IDC estimates that most corporations store old computer equipment for up to three years at a cost of about $360 per machine, and then pay an additional $218 for its eventual disposal.

"The best way to dispose of old computers is, clearly, to resell them. That way you get something back," says Kevin Burden, an analyst at IDC.

IDC estimates that the cost of refurbishing computers for resale is $318 per machine, which is offset by an average wholesale price of $200, reducing net disposal cost to $118.

"Right now [computer manufacturers] don't care about that cost, as they don't pay it," says Ted Smith of the Silicon Valley Toxics Coalition. "But if they have to begin picking up some of that cost, then their CEOs will begin stepping in."

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