How production-theory can support the analysis of recycling systems in the electronic waste sector

Abstract

The question surrounding "greener" products has always been, "at what cost?" Several decades ago, it was assumed that the product that was easier on the environment would cost more to produce, yet would not command a higher price. Regulations, such as the European WEEE directive, and emissions trading are ways in which governments have changed the market paradigm, rewarding lower polluting manufacturers. With complex issues at stake within a production system, it becomes more difficult to measure the trade-offs between environmental benefit and economics. A modern approach in production theory of business and management economics enables this complex calculation by valuing everything in the system. This approach proposes that objects (e.g. materials) are defined as good, bad, or neutral. In transformation processes in production or recycling systems this makes it possible to distinguish stringently between the economic revenue of a process and the economic and ecological expenditures for it. Materials and energy classified as good are considered as an expense if they are used by the system and a product or revenue, if they are created by the system. This approach can be transferred to entire systems of processes in order to determine the system revenue and the system expenditure. The process can be more easily understood using material flow networks or graphs. In complex material flow systems, it becomes possible to calculate not only the costs, but also the direct and indirect environmental impacts of an individual process or system revenue (for example a product or the elimination of waste) consistently. The approach permits a stringent analysis as well as different analysis perspectives of a material and energy flow system. It is particularly suitable for closed-loop economic systems in which material backflows occur. This paper outlines how this approach can be employed in the field of e-waste management