The waste from old electronic gadgets and appliances has reached severe levels in East Asia, posing a growing threat to health and the environment unless safe disposal becomes the norm.
A customer browses a web page showing a fire-damaged Samsung Note 7 mobile phone, on a similar device, at a Samsung store. Photo: AFP
China was the biggest culprit with its electronic waste more than doubling, according to a new study by the United Nations University. But nearly every country in the region had massive increases between 2010 and 2015, including those least equipped to deal with the growing mountain of discarded smartphones, computers, TVs, air conditioners and other goods.
On average, electronic waste in the 12 countries in the study had increased by nearly two thirds in the five years, totaling 12.3 million tonnes in 2015 alone.
Second-hand electronics sold on a street in Bangkok. Photo: AP
Rising incomes in Asia, burgeoning populations of young adults, rapid obsolescence of products due to technological innovation and changes in fashion, on top of illegal global trade in waste, are among factors driving the increases.
“Consumers in Asia now replace their gadgets more frequently. In addition, many products are designed for low cost production, but not necessarily repair, refurbishment or easy recycling,” said the study. It urges governments to enact specific laws for management of electronic waste or rigorously enforce existing legislation.
Only South Korea, Taiwan and Japan have long established recycling systems based on laws introduced in the 1990s. Open dumping of lead- and mercury-laden components, open burning of plastics to release encased copper and unsafe backyard operations to extract precious metals are the norm in most countries including Indonesia, Thailand and Cambodia, which also lack laws governing the treatment of electronic and electrical waste.
A worker repairs used electronic equipment at a shop in Kuala Lumpur. Photo: AP
The study said open burning and unsafe recycling is associated with a slew of health problems for workers and communities near recycling operations They include infertility, childhood development problems, impaired lung function, liver and kidney damage, inheritable genetic damage and mental health problems.
Backyard recyclers are after gold, silver, palladium and copper, mainly from printed circuit boards, but the crude acid bath extraction process releases toxic fumes and is also inefficient, recovering only a portion of the valuable material.
Asia as a whole is the biggest market for electronics and appliances, accounting for nearly half of global sales by volume, and produces the most waste.
Guiyu, a heavily-polluted rural town in China that specialises in dismantling consumer electronics, some of it exported from rich countries, has become synonymous with the costs of a throwaway high-tech world.
Second-hand electronics for sale in Bangkok. Photo: AP
China has cleaned up Guiyu and other centres like it but the Basel Action Network, which brought Guiyu to international attention, said most of the dangerous practices continue in Guiyu albeit concentrated within a new industrial park on its outskirts.
Ruediger Kuehr, one of the study’s authors, said the amount of waste being generated is higher than governments estimate, partly because of their narrower definitions, and should be a wake-up call to policymakers and consumers.
“We are all benefiting from the luxury of these electrical and electronic products to a certain extent, it makes our lives easier, sometimes more complicated,” he said. “However if we want to continue like this we must be reusing the resources contained in electronic and electrical equipment.”
A smartphone, for example, uses more than half the elements in the periodic table, some of which are very rare, and in the longer-run will be exhausted without recycling, said Kuehr.
New Jersey Governor Chris Christie has signed a bill to revamp the state's current e-waste recycling program, which safely disposes old televisions, computers and other electronic equipment. With the new bill, electronic manufacturers will be responsible for the cost and obligation of recycling e-waste.
In the past, towns and counties across the state would cover the cost to recycle e-waste in the event that manufacturers stopped paying for the disposal. But now, towns and counties won't have to worry about coming up with additional funds for e-waste disposal.
NJ Spotlight has more details:
Gov. Chris Christie yesterday signed a bill to overhaul the state's e-waste recycling program, a step advocates say will ensure the safe disposal of old televisions, computers, and other electronic equipment.
The legislation (S-981) is designed to put the onus on electronic manufacturers to bear the cost and obligation of recycling e-waste, which includes in many cases toxic materials such as lead.
You could say gold miners struck gold in 2016. The group, as measured by the NYSE Arca Gold Miners Index, finished the year up an amazing 55 percent, handily beating all other asset classes shown below.
Miners were followed by commodities at 25 percent and silver at 15 percent. Gold finished up 8.6 percent, its first positive year since 2012, when it gained 7.1 percent. (Keep your eyes peeled for our forthcoming annual periodic table of commodity returns, one of our perennially popular pieces!)
I find it curious that many in the financial media continue to have a bias against gold, even though it generated better returns in 2016 than 10-year Treasuries and the U.S. dollar, which performed half as well. And when it was up as much as 28 percent in the summer, they still didn’t have anything positive to say, arguing it had gone up too much.
(Gold traders, on the other hand, have a much different opinion about the metal right now. A group of traders recently surveyed by Bloomberg revealed they are the most bullish on gold since the end of 2015, soon before it rallied in its best first half of the year since 1974. The traders cited geopolitical concerns, both in the U.S. and Europe, as well as stronger demand in 2017.)
And isn’t it interesting that the same media figures who are biased against gold are usually the same ones who seem to have only disparaging things to say about Brexit and President-elect Donald Trump? What they don’t realize is that if Brexit and Trump succeed, so too do the U.K. and the U.S. Are they hoping Brexit and Trump will fail so they can be proved right?
The smart people realize personal politics must be put aside. Despite supporting Hillary Clinton during the primaries, Warren Buffett now says he is behind the president-elect—because he knows that if the U.S. does well, he does well too. Despite campaigning hard against Trump, President Barack Obama says now we should all be rooting for Trump, regardless of our politics.
Negative Real Rates Should Drive Gold Prices
But back to gold. Coming up on January 28, we have the Chinese New Year, when demand for the yellow metal historically has risen, along with prices. This will be the year of the fire rooster, one of whose lucky colors is gold.
Throughout 2017, the precious metal should be supported by even deeper negative real rates, which could fall to their lowest level in two years as inflation outpaces nominal interest rate increases, according to UBS. In October, Federal Reserve Chair Janet Yellen suggested there might be some benefit in allowing inflation to exceed the central bank’s target rate of 2 percent before another hike is considered, which is good news for gold. Numerous times in the past I’ve shown that the yellow metal has tended to rise when real rates—what you get when you subtract inflation from the federal funds rate—fell into negative territory.
“Federal Reserve interest rate hikes could weigh on gold prices in the near term,” according to UBS’s house view. “But as real rates fall more deeply into negative territory through the next year, we expect prices to rise toward $1,350 an ounce.”
Gold Extremely Undervalued
Since Election Day, domestic stocks have rallied 6.5 percent while gold has dropped as much as 7.6 percent. What this means is gold is looking extremely undervalued compared to the S&P 500, which should appeal to value investors.
Look at the gold-to-S&P 500 ratio below. The lower the ratio, the more undervalued the metal is compared to blue-chip stocks. In fact, gold is at its most undervalued in at least 10 years right now.
Technically, gold still appears oversold, down almost one standard deviation now. As you can see, it’s moving back to its mean for the 60-day period, but there’s still time to capture potential growth.
Commodities Show Resilience Despite Strengthening U.S. Dollar
Commodities were the second-best asset class last year because manufacturers and trade are showing improvement.
Global manufacturing expanded for the fourth straight month in December, reaching 52.7, its highest reading since February 2014. The individual U.S., Germany, Japan, and eurozone PMIs all hit their highest posts in at least a year, building on a strengthening uptrend that’s been in place since September. International trade volume expansion hit a 27-month high, according to Markit. And despite the “negative” consequence of Brexit, the U.K. Manufacturing PMI posted an amazing 56.1, up from 53.4 in November.
As for commodities, I’m pleased they’ve shown resilience in the face of a strengthening U.S. dollar. CLSA analyst Christopher Wood touched on this very topic in his recent edition of “GREED and fear,” writing that “the renewed dollar strength post Trump’s victory has not been accompanied by renewed commodity weakness. Rather the reverse has happened, with copper rallying, for example, on presumed hopes of increased demand triggered by Trump’s infrastructure policies.”
China’s commodities trading volume has also been impressive, maintaining its rank as the world’s heaviest for the seventh consecutive year.
Of course, price appreciation for commodities and natural resources is inflationary for consumer goods. Because of possibly rising gasoline prices, U.S. drivers are expected to spend about $52 billion more at the gas pump this year compared to 2016, according to GasBuddy’s 2017 Fuel Price Outlook. Three-dollar gas will likely become a reality again in several large cities, including New York, Los Angeles, Chicago and Seattle.
Whatever you end up paying, make it a point this year to stay optimistic. Not only does being optimistic help you stay healthy, both mentally and physically, but it also allows you to see the opportunities that others might not.
The NYSE Arca Gold Miners Index is a modified market capitalization weighted index comprised of publicly traded companies involved primarily in the mining for gold and silver. The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Dow Jones Commodity Index is a broad measure of the commodity futures market that emphasizes diversification and liquidity through a simple, straightforward, equal-weighted approach.The MSCI Emerging Markets Index is an index created by Morgan Stanley Capital International (MSCI) designed to measure equity market performance in global emerging markets. It is a float-adjusted market capitalization index that consists of indices in 23 emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and the United Arab Emirates.
Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is also known as historical volatility.
The J.P. Morgan Global Purchasing Manager’s Index is an indicator of the economic health of the global manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every invest. Some links above may be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content.
There are few tech-related gigs where getting pelted with rocks is an expected workplace hazard. Seattle's Jim Puckett holds one of those jobs.
Twenty years ago - when consumers were falling in love with iMac's candy colors and most computers had CD-ROM drives - Puckett began raising the alarm about the hazards of dumping electronic waste that can contain mercury, lead, cadmium and flame retardants.
Puckett is the founder of the nonprofit Basel Action Network, or BAN. For decades he's waged an often lonely battle to stop the U.S. and other wealthy countries from using poor countries as toxic e-waste junkyards.
Americans are tossing or recycling more than 142,000 computers and 416,000 mobile devices every day, according to federal data from 2010. Last year, Washington state alone collected more than 37 million pounds of discarded TVs, computers and monitors through its E-Cycle program.
Jim Puckett, founder of BAN, stands before a photo of a tiny fraction of the cell phones discarded each year. (GeekWire Photo / Lisa Stiffler)
"It is still a tremendous issue," Puckett said.
Only half of U.S. states have programs requiring e-waste to be recycled instead of landfilled. In a program like Washington state's, the products are processed to recover and recycle metals and plastics. Some of the working items that are not yet obsolete can be reused. Roughly 40 percent of the unusable waste is recycled, based on BAN's estimates, while the rest is incinerated or sent to a landfill.
America is the only developed country that has not ratified an agreement known as the Basel Convention, which says it's illegal to export hazardous electronic waste. That allows U.S. handlers to ship the trash, but it's still unlawful for developing nations to import it. Most American e-waste is sent to Asia, according to investigations by BAN. The countries receiving the outdated or broken electronics often lack regulations and enforcement to protect workers trying to extract metals from the waste, exposing themselves to toxic chemicals and poisoning drinking water and the environment.
The fight to control e-waste has sent Puckett around the globe, most recently to Hong Kong and Taiwan, peering over fences to discover where our gadgets are going to die - and drawing the attention of angry rock throwers along the way.
Videos and photos collected by BAN over the years show workers picking through landfills piled high with e-waste and crouched over open fires or acid baths, trying to extract and recapture minute metal components from the debris. Thanks in large part to BAN's scrutiny, those practices are less uncommon now in many areas - but in some cases the dangerous work has just relocated.
Workers in developing countries will melt circuit boards and collect the metals, but expose themselves to deadly chemicals. (BAN Photo)
The town of Guiyu in mainland China was once a hot spot for e-waste exports, but after government crackdowns the hazardous business shifted to the New Territories area of Hong Kong. Current threats in the new locations include junkyard fires and workers' exposure to mercury, flame retardants and other pollutants as they dismantle the waste in primitive conditions.
The need for controls keeps growing as electronics permeate every facet of our lives - just look at this year's CES show in Las Vegas where companies were pitching the newest e-gadgets, some of questionable utility, including a "smart" mirror and a toothbrush endowed with artificial intelligence.
BAN's investigations into e-waste exports are making the news in Hong Kong, a new hotbed for junkyards. (GeekWire Photo / Lisa Stiffler)
At the same time, many environmentalists - and nonprofit donors - have shifted their attention to fighting the massive threat posed by climate change. BAN's staff has shrunk from 12 people to nine employees a year ago to its current five, housed in a modest office in Seattle's Pioneer Square neighborhood.
There has been progress in combating the unsafe disposal of electronic waste. Washington launched an E-Cycle program eight years ago, and BAN runs the e-Stewards program to certify responsible recyclers. But recent reports from BAN show that vigilance is needed.
BAN teamed up with researchers at Massachusetts Institute of Technology's Senseable City Lab to track e-waste using GPS devices. They hid trackers in flat-screen monitors with mercury backlights, lead-containing computer monitors and printers that were delivered to recycling companies on the West Coast, the Midwest and Northeast.
The trackers worked great, reliably mapping the path of the trashed electronics. Unfortunately, they showed that even certified recycling companies were shipping to developing countries - including Seattle's Total Reclaim, a company long viewed a recycling leader in Washington.
One of the places that the trackers led BAN was to "Mr. Lai's Farm" - an electronic junkyard in Hong Kong's New Territories. (BAN Photo)
"I was totally crushed," Puckett said, to learn that Total Reclaim was shipping waste abroad. The company and its founder, Craig Lorch, were early supporters of BAN's rigorous e-Stewards certification. "He was an iconic recycler that started this program."
The trackers, which were planted in 205 waste electronics, revealed that at least 40 percent of the items dropped at U.S. recyclers were being exported - most likely illegally, at least for the importing country. Puckett guesses the real number is probably closer to 50 percent, given that some of the transponders might have stopped signaling before reaching foreign ports.
"People used to be able to hide and lie," he said. The trackers have changed that. "They're like little lie detectors, they report every 24 hours, 'Here I am. Here I am.'"
As a result of the investigation by BAN and MIT, this fall the Washington Department of Ecology fined Total Reclaim $444,000 for shipping defunct TVs and computer monitors to Hong Kong.
The penalty is under appeal and Lorch declined to comment for this story. But Andrew Wineke, a spokesman for Ecology's e-waste program, said that Total Reclaim is now in compliance. Their fixes included installing processing equipment to grind some of the electronic parts and capture the mercury they contain.
BAN and a Hong Kong media outlet used a drone to peer into Mr. Lai's Farm. (BAN Photo)
"This was a serious blow and Total Reclaim was the largest single processor (in Washington)," Wineke said. "It's serious, but the program as a whole is working."
The tracking devices also showed that Goodwill Industries was exporting e-waste, including computers that Dell had contracted with the group to dispose of safely.
"It was a stab in the eye of those who were saying the (e-waste export) problem is solved," Puckett said.
Part of the challenge, said Puckett, is that the electronics industry creates products intending for them to become obsolete and frequently replaced. To reduce the harm caused by e-waste, he encourages people to choose greener products, as rated by the EPA's Electronic Product Environmental Assessment Tool (EPEAT), and to recycle them with e-Stewards certified companies. He would also like products, particularly those used by businesses, to be offered through lease programs to incentivize the production of longer-lasting items.
As one would expect, you would not have seen Puckett cruising the aisles of CES searching for the next hot electronic device. He owned his last computer, a MacBook Pro, for 10 years.
"It finally melted down," he said.