Strategic Policy Option for Sound Material Cycle Society in Asia

Conference on Resource Efficiency

MODULE 2
From waste to
resources

Waste IGES | http://www.iges.or.jp Final Workshop, 26-28 March 2008, Yokohama

Institute for Global Environmental Strategies

Strategic options for sound

material cycle society in Asia
1. Internationalization of waste and recycling-related
issues
2. Modeling analysis of impact of regional economic
integration (2001-2020)
3. Four strategic options
4. Regional recycling mechanism as a strategic
option

Yasuhiko Hotta, PhD

Mark Elder, PhD
Institute for Global Environmental Strategies
OECD-UNEP Conference on Resource Efficiency
23-25 April 2008, Paris
Strategic Policy Option for Sound Material Cycle Society in Asia

1-1. Internationalization of waste and recycling –related issues in Asia

Waste and recycling issues have been internationalized; they can no longer
be addressed by domestic measures alone
A. Problems from economic integration
• Increased waste generation (quantity and complexity)
• Increased illegal waste trade, trade in recyclables, improper recycling
• Environmental damage from improper recycling and illegal and open
dumping
– Especially air, water, & soil contamination
– Especially toxic and hard to manage materials from e-waste
B. Opportunities from economic integration
• Opportunity for increased efficiency and specialization in recycling
(increased efficiency of resource utilisation)
• Increasing needs for regional policy response
See more detailed argument in Hotta and Elder et. al. (2008), “Policy Considerations for Establishing an
Environmentally-Sound Regional Material Flow in East Asia.” The Journal of Environment &
Development., March 2008 3
Waste IGES | http://www.iges.or.jp Final Workshop, 26-28 March 2008, Yokohama 3
1-2. Internationalization of waste and recycling-related issues in Asia
Developing countries
•Waste-related 1.Increased
•Increased volume of
•Increase in waste environmental issues Waste
production and
•Change in quality and •Improper recycling in Generation in
consumption
type of waste developing Asia
•Change in lifestyle Asia
(especially in
developing
Increase in resource
demand in developing
countries)
Asia

Internationalizati International
on of product Rising trade of 2.Illegal trade
Further life-cycle
international recyclables and and improper
economic price of reusables treatment of
Further
integratio resources (including illegal
international
trade) reusables and
n division of recyclables
labor

Hollowing out Damage to 3.Internationali

Lower domestic Outflow of domestic
（Especially materials zation of
demand for recyclables and recycling
and component
recyclables reusbales industry waste and
industry）
recycling-
Incentive to related issues
•Recycling- recover cost of
Accumulation of collection and
Rising related legislation
recyclables and transportation
Disposal •Governmental
reusables through
cost support for
legislation
recycling industry
Developed countries
Domestic issues mainly Domestic issues mainly
International issues
related to developing related to developed
countries countries
Direction of
Group of issues
influences among
issues
Source: Hotta, Elder et al. (2008)
 Strategic Policy Option for Sound Material Cycle Society in Asia

2-1. Example of Analysis of Impact of Prospective Regional Economic

Integration (2001-2020): Demand of metal materials (import and domestic)
Electronics sector's demand for imports Electronics sector's demand for domestic
(percentage change 2001-2020) product (percentage change 2001-2020)
500.0 800.0

450.0 700.0
400.0 600.0
percentaa ge cha nge

350.0

Percenttage change
500.0
300.0
400 0
400.0
250.0
300.0
200.0
200.0
150.0
100.0 100.0

50.0 0.0

0.0 -100.0
China Japan Korea Indonesia Thailand Viet Nam China Japan Korea Indonesia Thailand Viet Nam

Metals nec BL Metals nec MEI Metals nec DEI Metals nec BL Metals nec MEI Metals nec DEI

- Huge increase in electronics industry's demand and trade of metals (also

consumption of electronic goods) =>
- Huge increase in potentially hazardous e-waste
WMR IGES | http://www.iges.or.jp OECD-UNEP Conference on Resource Efficiency, 23-25 April 2008, Paris 5
 Strategic Policy Option for Sound Material Cycle Society in Asia

2-2. Analysis of Impact of Regional Economic Integration (2001-2020)

1. The above result is to get some indirect suggestions on how economic

integration drives increasing demands in potentially hazardous recyclables.

2. It assumes that metal demands in electronic sectors may drive more trade in mixed
and potentially risky materials including non-ferrous/rare metals such as e-waste.

3. Metal needs for electronics will increase much higher than needs for construction
sector.

4. Thus, the result can conclude demand for imports of potentially hazardous
recyclables which includes metals will be significantly increased in developing Asia.

5. However, domestic consumption of materials continues to increase. Thus, trade

measure may not be enough for proper management of used products with
hazardous substances.

6. Modeling analysis does not directly reflect “resource availability” and “trade in
recyclables”. Thus, reflecting these aspects would be a potential future task.
WMR IGES | http://www.iges.or.jp OECD-UNEP Conference on Resource Efficiency, 23-25 April 2008, Paris 6
3-1 Four Strategic Options for Sound Material Cycle Society in Asia
Strategic option Characteristics Pros Cons

A. Status-quo •No significant effort •Requires no additional •Environmental problems from

since 2005.
•Waste trade is regulated,
but not well enforced
•No regional coordination
for capacity and
infrastructure building
effort improper management, etc.↑
•Effectiveness of domestic policy ↓
•Political pressure from non-OECD
to OECD countries↑
•Incentive for illegal trade ↑
•Outflow of materials from OECD
countries

B. Basel ban •Regional ban of export of •Illegal trade ↓ •Difficult to enforce

amendment hazardous waste for
recycling purpose from
OECD to non-OECD
countries
•Political pressure from •Efficient use of resources ↓
non-OECD to OECD •No regulation for south-south trade
countries ↓
•Obstacle to companies efforts ↑
•Outflow of materials from •Consumption of virgin materials ↑
OECD countries ↓
•Incentive for technology transfer↓
•Resource prices ↑

C. Free trade of •Reduction of trade barrier •Optimization of material •Environmental problems↑

waste and •Market forces determines supply↑ •Difficult to enforce regulations
recyclables environmental impacts •Reduction of trade barrier •Political pressure↑
from recycling and waste •Vulnerability of domestic recycling
trade mechanism to price change↑

D. Regional •Stronger management of •National capacity↑ •Transaction cost without central

recycling trade in recyclables by
introducing incentive
mechanism
mechanism
•Promotion of sound and
efficient trade under Basel
framework
•Technology transfer↑ authority in the region↑
•Needs for cost sharing
•CD of recyclers↑
mechanism↑
•Improper recycling ↓
•Effectiveness without 7
•Builds on existing policy
framework enforcement?
3-2 Lessons from Japan’s experience
Policy Lessons

Eco-town (subsidized •Needs constant, stable and large supply of recyclables. Eco-
development of towns constructed near large cities tend to be more successful.
recycling industries) •Needs materials industry as well as manufacturing industry.
•Successful in developing nation-wide role sharing for recycling as
well as technical and technological capacity
•Back-up from product-specific recycling legislation is necessary.
•Location and transportation are very important for cost
effectiveness.
•To stabilize periodic supply distortions, networking of these
facilities can be one option.
EPR-based obligatory •Does not directly contribute to prevention of pollution
recycling scheme •Needs to identify producer and importers.
•Needs many supporting mechanisms
•Cost effective for increasing recycling capacity
•Trade of secondary materials as loophole
•Some kind of regional cooperation, other than EPR-based
recycling policy, are necessary to prevent loopholes.
•EPR from cost sharing to information sharing
Certification scheme •Different type of certifications are possible: formal/obligatory
for good recyclers and registration, quasi-formal and voluntary.
traders •Need to identify who pays cost
•Burden may be higher for small recyclers; easier for larger ones
•Major cost may be transaction costs
•Needs information sharing mechanism
4. Regional recycling mechanism as a strategic option
Institutional Infrastructure Information and
development development knowledge
development
Overall regional Regional Recycling Mechanism
policy option

Regional Policy •International burden •Networking of eco- •Information sharing

sharing for difficult to towns/eco-industrial between upstream and
manage materials park through recycling downstream on
•International financial port valuables and
support for domestic hazardous substances
infrastructure/ in the products
information •Certification for good
development recyclers/traders

National Policy •EPR-based obligatory •Promote development •Statistical information

recycling mechanism of domestic recycling •Development of
capacity through eco- inventory
towns/eco industrial •MFA
parks policy

Both regional and national policies are necessary, in Asia 9

Conference on Resource Efficiency

MODULE 2
From waste to
resources