GOVT. GROUPS TO PUSH FOR INTERIM FINANCING SYSTEM AT NEPSI

Majority of stakeholders had embraced hybrid model at last meeting in June after being served with ultimatum by EPA either to come up with acceptable financing model or close shop. But meeting also brought to fore split in industry group between computer manufacturers and TV makers. Leading computer makers Hewlett-Packard and Dell didn’t support hybrid model that would start out with advanced recovery fee (ARF) and then transition at some point to partial cost internalization system. For different reasons, model didn’t also find acceptance from environmental groups.

In effort to rope in HP and Dell, NEPSI stakeholders have since July meeting been considering possibility of opt-out provision whereby a company could take individual responsibility for its own product and escape fee system. Companies such as HP and Dell have developed their own recovery and recycling systems and maintain that they could perform better than govt.-mandated schemes. “But the problem there is that there is historic waste [products already in the market] and there is also orphan waste [accessories],” said Scott Cassel, dir. of Product Stewardship Institute (PSI) and representative of state govts. on NEPSI. “We need to have some way to address that.” Proposals to address those concerns from HP, Dell and EIA have not “satisfied the interests of all the industry,” he said: “The government group would welcome a proposal from the industry that would satisfy the concerns of various manufacturers. We have not yet seen anything.”

HP Public Policy Dir. David Isaacs said it was going to be difficult for NEPSI to come up with model that satisfies needs of all participants. There had been some preliminary ideas discussed about opt-out system, he said: “But I don’t think we are near finalizing anything and we have to see whether we succeed in something next week.” Although majority of stakeholders are supportive of some sort of fee-based approach, Isaacs said, HP disagreed with that approach. Opt-out idea was effort to address concerns of HP and others, he said, but it was difficult to achieve that goal. “I'm not sure we can have all the elements of a mandatory fee while at the same time some participants are not paying a fee. I am just not sure we can really achieve that goal, although we are looking forward to trying.”

Opt-out was one of key issues for Chicago meeting, said Jason Linnell, EIA’s mgr. for environmental affairs. That has been one of “more difficult issues” that NEPSI’s financing subgroup has been working on, he said: “The main sticking point right now is how do you address an opt-out and still make it fair for everyone who does not wish to opt out.” As for how historic waste would be tackled in opt out system, Linnell said that some of advanced recovery fee that significant number of companies would choose to pay could be used to clear some of the historic waste.

Sego Jackson, principal planner, Snohomish County (Wash.), accused HP and Dell of not assisting while “a lot of people worked very hard” on opt-out system. NEPSI would definitely be looking at opt-out provisions at next week’s meeting, he said, but warned that “the clock is ticking at this point in terms of them [HP and Dell] coming up with viable options that meet the needs of the various stakeholders.”

Both Cassel and Jackson, who represents local govts. on NEPSI, said the govt. groups would want to move forward with drafting agreement to pursue hybrid system irrespective of outcome of opt-out efforts. Cassel said govt. group would like to move step forward and get agreement on interim system and formation of national coordinating entity. “It will take some time until a piece of legislation is passed, so right now we can agree on how to move forward with an interim system,” he said. Interim system will set structure for management entity that will assist in collecting and disbursing funds, evaluating and ensuring that recycling goals were being met and contracting with recyclers and collectors, Cassel said.

Jackson rejected claims that systems like those of HP or Dell could do better than govt. mandated programs. “Their systems are not even relevant at this point in terms of the scale of materials that they are taking compared to what’s out there,” he said. For example, he said, with some of mail back programs of these companies it would take consumer hour and half to make transaction and still pay $50 to get system recycled. “That is not a viable recycling system.” He said TV producers, including Sony, Sharp and Panasonic, have pledged to try to develop recycling program for Australia within 18 months with recycling costs internalized in price of products. “These would be viable conversations we would be having here.”

In addition to EPA’s threat to terminate funding for NEPSI, there was strong drive among participants to wrap up the process by end of year, Jackson said. Once agreement is signed on hybrid system there would be need for draft legislation. Also, agreement would be taken out to different stakeholder groups to get buy-ins on it, he said. A prospective NEPSI agreement has been used by some not to pursue state legislation, he said: “Once it’s apparent what is laid out there, there would be a strong push for it to be brought into law at one level or another. The states would push forward really strongly and that would probably drive the national process.” EIA’s Linnell was also optimistic that some form of agreement would emerge by end of year, although it wasn’t certain what form it would take. It was also possible, he said, that NEPSI would be extended for a short period into 2004 if “there really is momentum still going on within the group.”

Asked whether an agreement that wasn’t endorsed by major computer manufactures would be effective, Jackson said not signing agreement would only show that “they [manufacturers] have been ineffective. It doesn’t mean the agreement has been ineffective.” However, it would be unfortunate that a situation may arise where there isn’t full industry support for how to proceed with NEPSI agreement, he said: “But it’s not like these folks haven’t had a chance to present their case and work on the committees and shape how this is going to turn out.”