Environmental economics report proliferation of electronic waste in urban centers of southeast asia

Electronic waste e-waste is one of the fastest- growing pollution problems worldwide given the presence of a variety of toxic substances which can contaminate the environment and threate

Instructors : Dr Mai Nguyen Ngoc

: Dr Pham Huong Giang Group :

TABLE OF CONTENTS

1 The Extended Producer Responsibility Scheme for E-waste in Singapore

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2 Regulation on the Administration of the Recovery and Disposal of Waste

TABLE OF FIGURES Table 1 Policies related to E-waste Management in different Southeast Asian

@ U)1ì0¡61- 6 Table 2 Positive and negative externalities on economic efficlency - 9 Table 3 Definition of E-waste among different Southeast Asian Countries II Table 4 Life cycle of Electromic DevIces 1n Thailand ¿5 2¿ 522 + 252 *c5xsszcss 15 Table 5 ALBA PRS Overview 0 cccccccccecccccccneesseseeeesessseseeseesscssessesseesscnseensesseenenes 18 Table 6 Covered electronic devices Of RAW .ccccccccccccseccsseesesseeseensessesseeseeeteensens 20 Table 7 Analysis ofthe “China WEEE DirectIVe” ác 201120112112 111121 rey 20 Table 8 Administration and supervision system of RAWW c2 re 21 Table 9 Objects and responsibilities of LRHA - 2 2 22 222122111321 151 151251 xe 23 Table 10 Process of Recycling End-of-life Small Home Appliances 23 Table 11 Trend and total number of units collected in 22 years (Total number of used 200i 107 ccc ccc cceccsecceeesceesssessseseesseesesesesessceesesesesesssesssesssesessesssesesssesssees 24 Table 12 Waste Compact Rechargeable Batteries Collected 1n Japan 25 Table 13 Recycling Rates of Waste Compact Rechargeable Batteries in Japan 26

ABSTRACT

With the development of new technology and equipment, there has also been a growing concer on the issue of electronic waste (e-waste) E-waste, or end-of-life electrical equipment, can be mobile devices, vehicle parts, or even everyday life objects; and as the lifespan of such equipment decreases, the volume of e-waste has significantly risen Substandard e-waste management can be detrimental to the environment, human health and overall life quality, which calls for reasonable and applicable policies and legislation This study examines the current situation and previous efforts to improve the issue to suggest potential solutions for the problem of e-waste, specifically in Southeast Asia Our report suggests multiple policy implications that can be utilized in multiple countries, and determines potential business opportunities that governments can resort to

Keywords E-waste, Southeast Asia

INTRODUCTION

1 The rationale of the study

Electrical and electronic equipment (EEE) has become a necessity in modern life It allows the global population to enjoy a higher standard of living thanks to its vast range

of implications and accessibility However, the manner in which it is manufactured, utilised, and discarded is improper and causes electronic waste, or E-waste (Forti et al., 2020) E-waste can range from simple kitchen appliances to computers and smartphones These are also derived from transportation, security systems, energy supply, and healthcare facilities This apparatus is a feature of modern human society (Parajuly et al., 2019) The rapid growth of technology, the upgradation of technological innovation, and the growing rate of obsolescence in the electronic industry have led to the fastest generation of E-waste, which thus focuses on the Life Cycle Impact Assessment and End-of-Life solutions (Bhagat-Ganguly, 2021) Life cycle impact assessment (LCIA) is a qualitative and quantitative assessment of the environmental impact of a product based on the resource, energy consumption data, and various emission data provided after the inventory analysis

Technological developments have allowed the consolidation of a highly competitive industry that fuels consumers to keep up with the latest available technology, but at the expense of a significant decrease in the lifespan of electronic devices (Isildar et al., 2018) In Hanoi, Vietnam, the mean lifetime of a refrigerator dropped from 7.5 years in

2006 to 4.7 years in 2013, and the mean lifetime of an air conditioner fell from 10.5 years to 4.7 years in the same period of time (Yamasue et al., 2017) This drastic decrease results in a significant amount of extra e-waste, and it is reasonable to assume that this is not just the case in Vietnam Electronic waste (e-waste) is one of the fastest- growing pollution problems worldwide given the presence of a variety of toxic substances which can contaminate the environment and threaten human health, if disposal protocols are not meticulously managed (Kiddee, Naidu and Wong, 2013) Due

to the pressing need to raise incomes, as well as deficiencies in the legislation and its enforcement, both the e-waste stream from "advanced" countries and the business in emerging and transition countries are expanding at a rapid pace As a result, dangerous recycling and/or disposal procedures are used, with serious consequences for the health

of people, animals, and the environment (Frazzoli et al., 2010)

2 The objective and the scope of the study

Due to the growing significance of the problem, the purpose of this report is to thoroughly investigate the current electronic waste scenarios, acknowledge ongoing efforts and determine what can be done to further improve the situation Specifically, this report will look at the management of e-waste in Southeast Asia and provide recommendations for the regions based on past experiences elsewhere

3 Research method

The data and the conclusions in this report are collected via past literature, i.e related documents and scholarly articles The majority of documents cited in this report feature the efforts that various countries and regions have previously made in order to improve the situation The abstracts and introductions of related works are then screened to determine their compatibility, and those compatible are further investigated

4 Report content and structure

The report comprises of the following content:

II Literature review

IIL Theoretical framework and overview

IV Main contents

V Suggestion and policy implications

LITERATURE REVIEW

1 Current situation

Td The E-waste Crisis in Southeast Asia

According to recent data from the United Nations University, the e-waste conundrum

in Southeast Asia has taken on a gargantuan scale With an astounding 12.3 million metric tons of e-waste being generated in 2021 alone, the region’s environmental situation has escalated from a concern to an urgent crisis

A significant part of this challenge arises from the illegal importation and improper disposal of electronic waste, which has inadvertently turned countries like Thailand, Vietnam, and the Philippines into major hotspots This problem is not solely sourced from abroad but also stems from the domestic population within these nations This illicit activity exacerbates the existing problem, placing further strain on the already burdened environmental and public health infrastructures of these countries

Thailand serves as a glaring example According to the National Environmental Board's report, the country grappled with an overwhelming influx of around 435,000 tons of e- waste in 2020 Shockingly, only a mere 100,000 tons—less than a quarter—underwent proper management and disposal, leaving the vast majority of this hazardous material untreated, with the potential to wreak environmental havoc and trigger public health disasters

1.2 Current status of E-waste Management in Southeast Asia

Approximately one-third of the way into the provided text, it states that electronic waste movement in Southeast Asia saw a 171% increase from 2016 to 2018 after China's restriction on foreign waste, mainly from Western countries (Jain, 2020) This led to other Southeast Asian nations becoming a preferred option for disposing of unwanted e-waste (Fundafunda, 2021) Additionally, a significant portion of this waste consisted

of non-biodegradable materials like plastics Moreover, due to Southeast Asia's generally lax rules on garbage imports, e-waste continues to find its way into illegal

landfills

Given the concerning impact of e-waste on both the environment and human health, Southeast Asian nations have taken measures to align with international policies and guidelines for its management Additionally, many of these countries have independently formulated their own strategies Table 2, provided below, outlines the current legislation pertaining to e-waste management across various Southeast Asian

Brunei Hazardous Waste (Control of Export, Import and Transit) Order (2013)

Cambodia Sub-decree on E-waste Management (2016)

¥ Government Regulation 27 (2020) on Specific Waste Management that covered the e- waste reduction and handling for the producer, area administrator and local government (The Asian Network for Prevention of Illegal Transboundary Movement of Wastes,

2020)

¥ Government Regulation 101 (2014) on Hazardous Waste Management to regulate e-waste

Indonesia ¥ management Ministry of Environment and Forestry Regulation on Municipal Electronic Waste "

Management Act 18 (2008) on solid waste management

¥ Government Regulation 101 (2014) on Hazardous Waste Management to regulate e-waste

Laos ¥ Decision on Industrial and Handicraft Waste Management (2012)

¥ M*unisterial Instruction Hazardous Waste Management (2015) on the classification of hazardous waste based on Basel Convention definition

¥ Environmental Quality (Scheduled Wastes) Regulations (2005)

Malaysia ¥ Guidelines for the Classification of Used Electrical and Electronic Equipment in Malaysia

Philippines ¥ Toxic Substances and Hazardous and Nuclear Waste Control Act (1990) regulated to

prohibit the entry of hazardous and nuclear wastes and their disposal

¥ Ecological Solid Waste Management Act (2000) aims to protect human health by establishing ecologically-sound methods for managing solid waste (including liquid, semi-solid, or contained gaseous material, electronic and food waste)

¥ Hazardous Waste (Control of Export, Import and Transit) Act (1997) and with the revised : edition in 2020

Singapore ¥ Environmental Protection and Management (Hazardous Substances) Act (1999) and with ,

the revised edition in 2022

¥ E-waste management is governed by the Local Administrative Organization under the Ministry of Interior

¥ Under consideration to ratify Basel Ban Amendment (Pollution Control Department and Thailand Department of Industrial Works, 2021)

¥ Hazardous Substance Act (1992) and its amendment in 2013 (Chareonsong, 2014)

¥ Currently, still developing the draft Waste from Electrical and Electronic Equipment (WEEE) Integrated Management Action Plan B.E 2565 — 2569 (2022 — 2026) (Enviliance, n.d.)

Timor- Decree Law No 2 (2017) Urban Solid Waste Management System

Leste

Vietnam ¥ Circular 23 (2006) on hazardous waste

¥ Law on Environmental Protection No 55 (2014)

¥ Decree No 38 (2015) on the management of waste and scraps

¥ Circular No 36 (2015) on hazardous waste management

¥ Prime Minister's Decision No 50 (2013) on Prescribing Retrieval and Disposal of Discarded Products

¥ Decree No 187 (2013) on the ban of import of e-waste

¥ Decision No 16 (2015) on Retrieval and Disposal of Discarded Products

Source: E-waste Toolkit in Southeast Asia

Most of the previous research in the field, while recognising the potential of business opportunities in electronic waste management for developing economies, also acknowledged the adverse consequences this may cause to the environment in those nations, and advocated for regulations to limit waste trade from developed to developing countries There were, however, economists who were of the opinion that economic growth should be prioritised, even at the expense of the natural and living environment The most prominent example of this type of thinking was a memo signed

in 1991 by Lawrence Summers, who was then the Chief Economist of the World Bank Overall, the material suggested exporting toxic waste to third-world countries for perceived economic benefits Despite Lawrence claiming that it was signed under a lack

of consideration and was not purposed for policy recommendation (Committee on Finance, 1993), the memo was highly controversial and criticised by many other researchers (Swaney, 1994; Johnson, Pecquet and Taylor, 2005; Hausman & McPherson, 2006; Pellow, 2007)

2.2 In Southeast Asia

Reliable and accurate information on the exact value of the e-waste business in this region is scarce However, most researchers agree that Southeast Asian nations are offered many business opportunities from electronic waste recycling, similar to many other emerging economies A study conducted by Ismail and Hanafiah in 2021 estimated that the potential economic value of e-waste from mobile phones alone in ASEAN countries was valued at $2,019.06 million The authors also suggested that the value of the business can be increased by modernising the informal sector of e-waste recycling, and implementing effective e-waste regulation

THEORETICAL FRAMEWORK & OVERVIEW

Market

equilibrium

D, = private benefit equilibrium

consumption of goods and services imposes costs / benefits on others which are not reflected in the prices charged for the goods and services being provided (OECD)

broken into two different

measured as good or bad

as the side effects may enhance or be detrimental

to an external party These are referred to as positive

or negative externalities Second, externalities can

be defined by how they are created Most often, these are defined as a production

externality

Most externalities are negative Pollution is a well-known negative externality Externalities are negative when the social costs outweigh the private costs Electronic waste often contains dangerous substances such as lead, mercury and cadmium, which can harm the environment and people's health if improperly disposed of If e-waste is not recycled or disposed of properly, it can lead to soil and water pollution and affect air quality It is important that we are aware of how we manage e-waste and ensure it is recycled or disposed of responsibly to minimize these negative impacts

1.2 Positive Externalities

Some externalities are positive Positive externalities occur when there is a positive gain

on both the private level and social level Proper e-waste management helps prevent the release of hazardous substances into the environment, such as lead, mercury, and cadmium, which can contaminate soil, water, and air By reducing pollution and protecting ecosystems, e-waste management contributes to a cleaner and healthier environment for everyone, helps in conserving valuable resources and

2 Asymmetric information

The problem of information asymmetry occurs when this transmission lacks compatibility, in other words, the information that buyer and provider have about each other or about the product is different This is an inevitable phenomenon as a result of

a non-perfect competitive setting, leading to the existence of two concepts: adverse selections and moral hazard

2.1 Adverse selection

The cause of information asymmetry is due to the characteristics of the goods being hidden or actions being hidden without control Information asymmetry due to hidden characteristics will cause reverse selection Reverse selection is a phenomenon in which buyers do not know the characteristics or quality of a good, so they are only willing to pay a price lower than the actual value of that good to reduce the risk in the transaction, for example, avoid buying a lemon-car when buying a used car Since only selling at a low price, sellers are more likely to sell goods of poor quality (Pindyck and Rubinfeld, 1999) As a result, reverse selection will lead to a market with low-quality goods E- waste comes in various forms and conditions Some devices may be relatively new, while others may be outdated or damaged Recyclers typically aim to extract valuable materials from e-waste, such as precious metals or reusable components However, due

to asymmetric information, recyclers may not have sufficient knowledge about the true quality or functionality of the e-waste they collect or receive

2.2 Moral hazard

In the remaining case, symmetric information due to hidden actions will cause the phenomenon of moral hazard Moral hazard 1s a phenomenon in which well-informed people behave unethically in order to gain their own personal gain and thus harm the uninformed

When producers or collectors of e-waste are not held accountable for the proper disposal

of electronic devices, they may resort to environmentally harmful methods to minimize their costs This could include dumping e-waste in landfills, incinerating it without proper treatment, or exporting it to developing countries with lax environmental regulations

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Table 3 Definition of E-waste among different Southeast Asian Countries

Cambodia

All equipment that is not used anymore but still in the whole figure or broken (not functional) or separating/recycling of electrical and electronic equipment (EEE) (Eduljee & Harrison, 2019)

Indonesia Electronic goods that are not functioning and not used anymore, originating from

households, offices, commercial activities, and others (Eduljee & Harrison, 2019)

Lao PDR Toxic and hazardous waste whereby the government of Laos has issued the second

notification No 1855/PM dated on 17th November 2017 to ban the importation of E-waste

Malaysia Scheduled waste under the code SW110 (First Schedule Environmental Quality (Scheduled

Wastes) Regulations 2005)

Myanmar Items of all types of electrical and electronic equipment (EEE) and its parts that the owner

has discarded as waste without the intention of reuse

The product, electrical appliance and electronic device that is damaged or deteriorated and

no longer be used or are needed (Pollution Control Department, Department of Industrial Works, 2021) Only some of the used electrical and electronic appliances have been categorized on Hazardous Substance Act B.E 2535 (1992) and its amendment B.E 2556

Vietnam Also known as part of the hazardous waste whereby the hazardous waste management is

uniformly applied to e-waste (Nguyen, 2020)

Source: E-waste Toolkit in Southeast Asia

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1.2 General classification of E-waste products

Electronic waste, commonly referred to as e-waste, encompasses discarded electrical and electronic equipment (EEE) along with their components, comprising items powered by batteries or a power cord (Perkins et al., 2014) This diverse category of waste poses environmental and health risks due to the presence of both hazardous and non-hazardous materials A comprehensive understanding of e-waste is essential for effective management and sustainable practices This review synthesizes key findings from recent studies, shedding light on the classification and composition of e-waste across various regions

Internationally, three main categories have emerged: large household appliances, information technology and telecom equipment, and consumer electronics (Perkins et al., 2014) The UNU-KEYS framework further refines this classification by grouping

54 categories into 10 primary groups, aligning with the original EU Waste Electrical and Electronic Equipment Directive (Forti et al., 2018) Malaysia stands as an example

of a country that utilizes specific guidelines to categorize e-waste based on source of generation (Fatihah Suja, 2014) The six categories adopted by the European Union under the recent WEEE Directive serve as another noteworthy classification system, encompassing temperature exchange equipment, screens and monitors, lamps, large equipment, small equipment, and small IT and telecommunication equipment (Priyashantha AKH, 2022)

2 Negative externalities of E-waste

E-waste management includes collection, transportation and treatment However, every activity has impacts on the environment and public health, also known as negative externalities Collecting and transporting e-waste generates greenhouse gas emissions from transportation vehicles Waste treatment activities depending on different technologies have external effects on the air environment, water environment, and soil environment and thereby cause impacts on health and disease in the community Some

of these impacts include:

¥ Toxic Chemical Release: Many electronic devices contain hazardous materials such

as lead, mercury, cadmium, and brominated flame retardants When not properly managed, these substances can leach into soil and water, contaminating ecosystems and posing a threat to human health

¥ Soil and Water Pollution: Improper disposal of e-waste can lead to the contamination of soil and water sources Toxic chemicals can seep into the ground, affecting plant life and potentially entering the food chain Additionally, if e-waste

is incinerated, airborne pollutants can settle onto soil and water bodies

¥ Air Pollution: Incinerating e-waste releases harmful pollutants into the atmosphere, including dioxins, furans, and other volatile organic compounds These pollutants

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contribute to air pollution and have adverse effects on respiratory health and overall air quality

¥ Resource Depletion: Electronics contain valuable resources like metals (e.g., gold, silver, copper) and rare earth elements When not recycled properly, these resources

go to waste, leading to the unnecessary depletion of natural reserves and contributing to resource scarcity

¥ Energy Consumption: The production and disposal of electronic devices require significant energy inputs By extending the lifespan of electronic products through proper recycling and reuse, energy consumption associated with manufacturing new devices can be reduced

¥ Loss of Biodiversity: E-waste can indirectly impact biodiversity through the contamination of ecosystems and disruption of natural habitats Additionally, mining activities for raw materials used in electronics production can lead to habitat destruction and loss of biodiversity

¥ Climate Change: The improper handling of e-waste, particularly through incineration, contributes to greenhouse gas emissions Burning e-waste releases carbon dioxide and other harmful gases, contributing to climate change and global warming

¥ Health Risks to Humans: When e-waste is not managed properly, it poses significant health risks to those exposed to it, including informal recyclers and nearby communities Exposure to toxic chemicals and heavy metals can lead to a range of health problems, including respiratory issues, neurological disorders, and reproductive problems

3 Causes of E-waste

3.1 Informal recylcing and improper disposal methods

In developing countries, with a limited level of technology, many countries only apply informal recycling and improper disposal methods, such as open burning or dumping, release hazardous substances into the environment, causing pollution and health risks for surrounding communities

In Vietnam, waste collection and transportation methods in urban and rural areas basically include primary collection processes and secondary collection processes, which means they simply collect waste from households and transport them to landfills About the treatment methods, one of the current popular options for treatment in Vietnam 1s landfilling, of which about 30% of landfills are hygienic with high technical requirements such as having a bottom lining There is a surface coating, a landfill gas collection system, a leachate treatment system and the remaining 70% of landfills are unsanitary landfills As a result, tons of used electronic devices such as batteries,

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accumulators, cell phones are wasted freely in the environment and release a large amount of toxic chemicals, posing a serious risk to human health and environment Moreover, with the limited budgets, Southeast Asian people also prefer using second- hand electronic devices through some illegal trades, leading to higher chances of dumping those devices These Informal recycling situations typically happen in places that don’t have formal recycling systems They include scavenging, cluttering, and small-scale rural recycling However, these devices are not looked at as being recyclable materials because they don’t have a label on them that indicates they should go in the recycling bin They don’t always guarantee quality disposal and can put workers at risk for electrical shock, burns, and other injuries It can also put consumers at risk for injury

or exposure to toxins during the process as well as not being able to fully recover materials used in production that were taken out for e-waste recycling

3.2 Short-term Profit Incentives

Informal e-waste recycling methods may offer short-term economic benefits for individuals and businesses due to lower upfront costs and immediate gains from resource recovery However, these gains often come at the expense of long-term environmental and health consequences, which are not factored into their decision- making processes

3.3 Inadequate regulation of enforcement

In recent years, Southeast Asia has witnessed a burgeoning crisis in the form of electronic waste or e-waste Astonishingly, the region generated a staggering 12.3 million metric tons of e-waste in 2021, transforming what was once a concern into an urgent environmental crisis A significant factor contributing to this alarming surge is the lack of effective law enforcement and regulation

Southeast Asian countries with lax or poorly enforced regulations have become alluring destinations for illegal dumping of e-waste from more developed regions E-waste generators find it cost-effective to export their waste to countries with fewer regulations, circumventing expensive and eco-friendly disposal methods at home The absence of stringent regulations has also given rise to profitable informal e-waste recycling practices Local communities and individuals may engage in this sector, often extracting valuable materials from discarded electronics, especially when safety and environmental standards are not enforced

Furthermore, weak regulation means there are few penalties or consequences for improper disposal or illegal importation of e-waste This lack of deterrence encourages individuals and businesses to engage in these unsustainable practices The thriving market for used electronics in regions with weak regulation fosters the importation and sale of outdated or non-functional devices, further exacerbating the e-waste problem The problem of illegal e-waste importation and disposal has unintentionally turned countries like Thailand, Vietnam, and the Philippines into major hubs for this issue

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