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China-Sustainable Electronics and Electrical Equipment

China’s importance as both a supplier and consumer of electronic goods and equipment (or eproducts) has grown at an unprecedented pace over the course of the past decade. Since its entry into the World Trade Organization (WTO) in 2001, China’s e-product manufacturing sector has entirely reoriented itself from an industry driven primarily by domestic markets, to a fundamentally export-driven sector and the world’s most important supplier of many, if not most, major eproducts on the market today.

The e-product sector now accounts for 10.2 per cent of the country’s total industrial output value and 6.3 per cent of national industrial profits. While the rapid transition towards global market leadership in the e-product sector has produced significant economic benefits at both the national and community levels, it has also placed increasing pressures on the local and global environments.

Perhaps not surprisingly, the single most important environmental impact arising from e-products are those impacts associated with energy use. Both the manufacturing and use phases of e-products are highly energy intensive. The growth of e-products can, therefore, be directly linked to growing demands for energy globally and corresponding growth in air pollution and greenhouse gas production. At a more local level, the manufacture, recycling and disposal of e-products presents serious threats to personal and community safety through the heavy metals and chemicals used in processing and production.

China’s special role as the world’s leading destination for foreign e-waste, combined with its vast system of informal e-waste recycling and disposal, presents both an environmental challenge and opportunity. The current absence of information and management infrastructure related to the ewaste sector within China gives rise to serious pollution problems. At the same time, the efficiency of China’s informal collection of e-products places it in a strong position to reap significant benefits through e-waste recycling with the adoption of the appropriate management techniques.

Based on our analysis of the social and environmental impacts of e-products, both within China and abroad, three basic areas for improvement can be identified that provide a baseline set of objectives for any policy action aimed at attaining improved sustainability across the sector:

1. Improved management and handling during e-product manufacture;

2. Improved management and handling during e-waste collection, dismantling and disposal;

3. Improved design for the reduction of energy and resource use (both during production and use phases) and the maximization of recyclability (eco-design).

The main challenge facing Chinese (and international) policy-makers in this context is the identification of effective mechanisms for stimulating the efficient adoption of such improvements without jeopardizing the economic growth needed to maintain economic development. Building on the existing policy framework and related private initiatives both nationally and internationally, this report proposes policy action along two complementary trajectories: the reinforcement of regulatory measures and the expansion of market-based measures.

Regulatory reinforcement

As essential mechanisms for creating a common baseline for business activity within China, regulatory measures provide the foundation for all other activity. As such, it is critical that regulatorymeasures receive the institutional and resource support for effective implementation. Towards this end, this report proposes a number of recommendations:

Recommendation 1: National sustainable e-product growth strategy

 

The Chinese government should launch a National Sustainable E-Product Growth Strategy explicitly aimed at stimulating ―green‖ economic growth in the e-product sector through investment and innovation for sustainable e-product design and production practices.

Recommendation 1.1: Fortify national eco-design legislation: The Chinese government should improve the consistency, and strengthen the implementation infrastructure, of its existing eproduct eco-design legislation using the EU Directive Establishing a Framework for the setting of Eco-design Requirements for Energy-using Products (EuP)  as a possible model. The government should also establish detailed guidelines and targets for its existing eco-design legislation. A comprehensive review of existing legislation should form the basis of further legislative efforts.

Recommendation 1.2: Fiscal support for eco-design and eco-production: The Chinese government should provide preferential tax rates to products that comply with internationally recognized eco-design standards. Industry coalitions and associations within the Special Export Zones should be given targeted support to stimulate sustainable e-product design and production.

Recommendation 1.3: Investment support for eco-design: The Chinese government should establish a fund dedicate to eco-design research and development. The Chinese government should establish and sponsor a ―national institute‖ for eco-design.

Recommendation 1.4: Building the market for eco-design products: The Chinese government should strengthen the implementation of the Chinese energy label by expanding product coverage and by linking requirements to the international Energy Star labelling system

Recommendation 1.5: Building the market for preferable production practices: The Chinese government should expand and strengthen the implementation of its Procurement of Environmentally Labelled Products Policy by setting and monitoring mandatory percentagebased targets for sustainable e-product procurement.

Recommendation 2: National e-waste strategy

The Chinese government should implement a comprehensive National Strategy for the Responsible Collection and Treatment of E-Waste based on increased transparency and coherence across existing e-waste management legislation and programs as well as the drafting of new legislation to fill existing e-waste management gaps.

Recommendation 2.1: The Chinese government should facilitate and support the set-up of a legal framework for e-waste management and define the role of all stakeholders, in particular the role of the e-product manufacturers, importers, distributors and consumers, and of e-waste collectors, dismantlers and recyclers.

Recommendation 2.2: The Chinese government should facilitate the establishment of a secure financing scheme for managing and maintaining a sound and safe end-of-life system for e-waste.

Recommendation 2.3: E-waste treatment quality assurance scheme: The Chinese government should implement a comprehensive e-waste treatment quality assurance scheme. The scheme should consist of a licensing and auditing system that builds on international e-waste collection and treatment standards. Licensing under the scheme should be made dependent upon regular reporting as well as a demonstration of safe and sustainable handling and treatment practices. Employment of low skilled workers in the currently informal, but highly efficient, e-waste collection scheme should be maintained as much as possible.

Recommendation 2.4: Improve clarity and impact of existing e-waste import rules: The Chinese government should establish a set of national guidelines for the identification of e-waste imports. This should be complemented with additional technical assistance resources for customs officials in the implementation of China’s official ban on e-waste imports. The Chinese government should also revise its existing rules for related (non-prohibited) e-waste and e-waste fractions imports to take better account of actual product make-up and toxicity levels.

Recommendation 2.5: Building an information base for improved management of e-waste: The Chinese government should implement a national system for gathering and compiling data on the quantities and sources of domestic and imported (both legal and illegal) e-waste.

Recommendation 3: International action plan for sustainable e-waste management:

The Chinese government should work with the international community toward the establishment of an International Action Plan for the Responsible Trade and Disposal of E-Waste.

Recommendation 3.1: International dialogue: The Chinese government, in collaboration with the United Nations Environment Program and the Basel Convention Secretariat, should  support a major international conference to launch a global dialogue on an International EWaste Action Plan with a view to improving compliance rates with the Basel Convention guidelines and obligations.

Recommendation 3.2: International e-waste treatment standard: As a starting point for enabling improved private sector management of e-waste, the Chinese government should work with the international community to establish an international standard for the environmentally sound management of e-waste.

Recommendation 3.3: Harmonized implementation of e-product treatment legislation: The Chinese government should launch an international process aimed at harmonizing the implementation procedures for diverse Waste from Electrical and Electronic Equipment  (WEEE) and Restriction of Certain Hazardous Substances (RoHS) regulations in order to reduce Chinese compliance costs and improve overall supply chain efficiency.

Recommendation 3.4: Global private sector partnership: Building on, and working with, existing multi-stakeholder e-waste partnerships, such as The Mobile Phone Partnership Initiative, The Global Knowledge Partnerships in E-waste Recycling, The Global Computer Refurbishment and Recycling Partnership and Solving the E-waste Problem: A Synthetic Approach Initiative, the Chinese government, in collaboration with the United Nations Environment Program, should facilitate a global multi-stakeholder, supply chain-based approach to monitoring and managing trade in e-waste.

Given the depth and breadth of the various policy options open to the Chinese government, as well as the international nature of the responsibilities associated with the responsible management of the e-product chain, it is clear that a comprehensive plan towards sustainable e-product policy should, fundamentally, be built upon a basis of international cooperation and shared responsibility. Therefore, this report, through its analysis and recommendations, aims, more than anything, to provide an objective and constructive foundation for the strengthening of such cooperation.