Recycling and/or reusing: when product innovation meets the recast of WEEE direct

Abstract

ABSTRACT To deal with the growing amount of e-waste propelled by introduction of new products, increasing governments are considering amending take-back regulations to impose more stringent collection targets. Motivated by this trend, this study focuses on the reuse policy for e-waste with three factors: product innovation degrees, collection targets, and reuse decisions. We first confirm the traditional wisdom that a higher innovation degree often results in a higher profitability but hurts the environment. As such, we agree with the suggestion that the environmental agencies need to impose more stringent collection targets to deal with the growing amount of e-waste propelled by new product introduction. Moreover, our analysis further indicates that the more stringent collection target results in an inverted U-shaped curve for profitability and lower environmental impact. Therefore, besides confirming the intuitive expectation, we also add a word of caution on the recast of WEEE Direct: although tightening the overall collection target for the OEM is a powerful tool, we still call for the governments and environmental agencies, rather proceeding from the entire industry, should amend take-back regulations to set detailed collection targets based on the specific products characterised by the rate of innovation.