SB20 - Legacy of Government

I have written in the past about the "cancellation" rule under California's E-Waste bill, which required computer monitors to be ruined in return for a big subsidy (between 35-48 cents per pound, 3-5 times the market rate in the rest of the country).   It starved the Asia refurbishing market from 2002-2008, when India, China, and others hungry for affordable internet were creating a secondary and refurbishing economy which was actually larger than the USA market for new computers in the 1990s.   The market insisted on being fed, and when California removed good monitors from the system, the demand was filled by recyclers in the East, too many of whom mixed junk CRTs into the loads, like the load filmed by CBS 60 Minutes in the "Wasteland" segment in November 2008.

What is the other legacy of SB20?

There is a massive CRT glass pile in Yuma, Arizona.  But that pile is smaller than most mining piles and certainly less hazardous.   There is not that much of the 48 cents per pound that went into the raw material accumulation.

Where the money went is into processing.  California SB20 Processors like ECS and ERI had plenty of subsidy to destroy CRTs and no incentive to visit or meet with refurbishers in Asia.  They became E-Steward champions... living in a state which had virtually no exporting, and with no market incentives for exporters, they were friendly the the BAN vision of zero exports.  It fit the business model they already have.

Meanwhile, CRTs are a finite resource, and in my visit to California and CRT processors last month, I learned a dirty secret... There are not enough CRTs being collected in California to feed the beast.  California created a massive shred-and-destroy infrastructure, and now that business is hungry for CRTs.

They are getting them from Arizona, Nevada, and Oregon.  That destroys the markets in those states, and bankrupts California (the California Integrated Waste Management Board, which administered SB20, was dissolved and downsized last year).  With less management oversight from CIWMB, the CRTs collected from programs in Arizona have fewer people to spot the fraud, and California loses more money.

This hits our Arizona and Mexico refurbishing investments.   I think the CRT business will be all over in the next 3 years.  But this blog will tell a story about well meaning environmentalists and unintended consequences.

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