Physical Responsibility Versus Financial Responsibility of Producers for E-Wastes

Extended producer responsibility (EPR) is a legislative mandate that requires a producer to be accountable for the whole life cycle of its product—from product design to final disposal. The EPR system is imposed to solve the problem of the growing e-waste in different areas of the world. Different countries have different system designs and approaches in EPR, depending on the country’s legislation, customer demand, incentives, and resources; it can either be a physical responsibility or a financial responsibility. Physical responsibility is when the producers are responsible for the physical movements of the e-wastes necessary, while financial responsibility is when the producers are financially supporting all the costs needed to successfully fulfil the EPR goals. In this study, we will determine which type of EPR system is better by doing a comparison on its social welfare value using a social welfare model. This study uses a notebook computer as an example, and based on our analysis, we conclude that the physical responsibility is better if and only if the rate of return of e-waste is equal to or greater than a certain percentage. Otherwise, the financial responsibility model outperforms the physical responsibility model. A sensitivity analysis is also carried for each parameter used in the two models for determining the significance.