28 January 2009

Recycle This Plan

From the grabby pen of Jenniffer "Gluttonny" González comes a proposed law to create a recycle, reuse and recovery industry centered on electronic goods.

Pros: Electronic products are loaded with plastics, toxic metals, precious metals and glass that needs to be processed for proper disposal and to make use of key components. We don't do that now. Safer landfills, less waste and an economic incentive from entry (collecting the waste products) to exit (raw materials and inert trash) are good things that benefits Us all.

Cons: Oh, hell, where to begin?

1) "Gluttonny" wants to charge every company that makes, imports, distributes and/or sells electronic goods at least $5,000 for "a registration fee" to "help pay for the recycling and disposal plan." Which hasn't been defined yet and won't be until 6 months after the bill becomes law.

2) "Gluttonny" wants to charge each company in the computer, TV/monitor and cell phone industries a "market participation fee," adjusted annually and equivalent to 0.5% of the total volume of sales. This "fee" also includes cable TV and satellite TV companies, the kind of grubby-greedy grasp that makes a cardinal sin look ugly, you know what I mean?

3) "Gluttonny" specifies in the proposed bill that companies are "forbidden" to pass on the "fees" to their customers in monthly billings or contracts, most especially they are barred from stating that they are charging "to cover a goverment-imposed fee." Heeheehee. Is it Me or am I hearing "Gluttonny" say "You can't blame the government for tacking on extra charges by law to your business?" Okay, "Gluttonny," I'll bite: Who the hell do We blame?

4) "Gluttonny"'s proposed bill would have each business that deals with electronic products have (a) space to receive discarded electronic products; (b) a plan to deal with discarded electronic products approved by the government; (c) an up-to-date log of what happended to each discarded product handled by the company (reused, recycled, sent for recovery or processed for disposal) and (d) offer all that free of charge to their customers.

5) And to top it all off, if after the bill becomes law you want to open a new business dealing with electronic products, "Gluttonny" wants you to pay $5,000 non-refundable fee up front and have your Recovery and Disposal Plan written, reviewed and approved by the government at least 30 days before you open your brand spanking new digs. 

Do We need some reuse, recycling, recovery and disposal system for electronic products in Puerto Rico? Of course We do. According to industry statistics, only about 15% of electronic category units are recovered in some methodical fashion (mostly cell phones.) There's a huge opportunity for developing a local industry with excellent export prospects, local sales of raw materials and top-notch positive environmental impact. But you can't do that by throttling the opportunity under stupid fees and government bullshit.

Any fee--any fucking fee--the government throws on businesses and industries is going to end up being paid by the customer. That's simply basic economics. By making the disposal of an electronic good a crime if not done "under the law," "Gluttonny" is imposing a series of "cascade costs" that range from bookkeeping to man-hours to taxes to extra gas for that throw-the-damn-thing-in-the-right-place effort. 

Is a recycling and disposal plan expensive? Yes it is. But just because it is doesn't mean that the government should be running the show. In fact, the government is the last entity that should be running this show.

Why? Because the whole process only benefits private businesses and industries, with the only public benefit being "cleaner" landfills. Therefore, the government's only task--it's ONLY task, "Gluttonny"--is to establish the standards for "clean" landfills and the punishment for not achieving those standards. Then it should back off and let the private entities come up with their own plan.

The environmental standards are already set. What We really want to achieve--those of Us who are looking at the practical, valuable end result--is a significant or even complete reduction of electronic products in Our dumps and landfills. To do that, We simply have to create a system that rewards collection and proper processing of electronic goods. If We start from that point of view, We can see every party benefitting without need of any moronic "market participation fee," a lengthy empty phrase that can be abbreviated as "tax."

Here's how a private entity-based plan would work at the different levels:

Consumer: A discount for handing in electronic products upon sale or rental of a new one or cash for bringing in large amounts, such as We do with aluminum.

Retailer/Distributor: Collected units can be sold to a recycler/processor for extra revenue, or if still useful, reused in a donation program for tax breaks.

Importer: Tax breaks for finding "green" electronic products to import and export sales of discarded units for added revenue.

Manufacturer: Big tax breaks for "green facilities and products," as well as tax breaks for developing processing or proper disposal facilities.

New businesses: Appearing in the form of collection, transport, storage, reusing/donation, recovery of raw materials, processing and final disposal companies or even non-profit organizations. Some would be extensions or divisions of current industry players. Tax breaks for setting up the businesses according to standards and continued tax breaks only if standards are met every quarter. Government support for private financing would be useful.

Notice I'm saying tax breaks. Tax breaks, "Gluttonny." Why? Because adding layers of costs and red tape is what's killing Our economy and has been for the past 40 years. To put the goverment in charge of this program, as you so greedily lust for, will make the whole thing a Byzantine boondoggle where We'd be lucky to see a 30% recovery rate of electronic products by 2012, but We will see a 6-8% impact on Our cost of cell phones, cable TV subscriptions and new doodad purchases.

Think I'm joking? Here's the breakdown: A 0.5% tax on each company means roughly a 1.0-1.5% increase in price/rate for consumers, as shown in hundreds of tax studies around the world. The administrative cost of the tax and fees to established businesses will amount to 2-3% of current expenses, which in turn means a 3-5% increase passed on to consumers. (We've seen this with Our own sales tax, that actually added costs to almost all items.)

Add to this mess the "friction" of doing business with new companies (in recycling and disposal) and the lost opportunities due to red tape and fines and compliance (estimated as averaging 1% per company) and you can double that before a final tally: about 6% at the low end; as much as 8.5% on the high end. 

What "Gluttonny" wants is money. What We want, albeit as a minority, is cleaner environs. If We let "Gluttonny" slap fees and taxes on many of Our best businesses while unleashing the empty-headed "hounds of hell no" on something as complex--and valuable--as a recycling and disposal plan, We can only expect an expensive chaos ending in abject failure.

A failure We continue to pay into "Gluttonny"'s grubby hands day after day after sucking day.

The Jenius Has Spoken.


Anonymous said...

Time for the people to put a stop to this. I want to see a day where we hold our politicians truly accountable for BS like this. Soon enough, they'd all get their act together if they wanted to continue in office.

But that's the problem... too many are becoming politicians for the wrong reasons.

The Insider said...

They had better raise the rate from 0.5% to 2.0% if they want to ensure they can truly handle *cellphone* recycling in Puerto Rico. ;) Let's just skip a generation with the next iPhone, and design it to be embedded directly into the mandible.

Thanks Gil. You are a watchdog... with a razor sharp eye for detail. Thank goodness we have someone out their staying on top of it all... and possessing the abilities to break it down. Great analysis.

The big irony I see here is that they seem to be "skipping a generation" with this plan. Specifically, can't we clean up the damn streets first... before fiddling with the economy to attack electronic recyclables? Why would this work when the country is a garbage dump? I'll post some pictures on my blog soon of a street right off the 100 (on the beautiful West Coast) that locals designated as their own personal landfill.

In summary: Puerto Rico is the dirtiest Paradise I can imagine, and I could not have possibly imagined it until I arrived here and finally left the beach. And, before anyone even starts typing, please don't start comparing yourselves to Haiti (et al) as an example of a worse situation.

If the government can't handle the basics, then they have no right trying to pretend they have the capability to handle a more complex recycling issue.

Solution: Government declares themselves idiots. Passes a bill outsourcing all decision making and programs to US states that have handled it well already.