Dumping Electronic Waste: The Summers Memo Lives

As the result of mandated recyling policies, plus laws that forbid the export of electronic waste, there is now a black market that exports this waste from Europe to developing countries:

Exporting waste illegally to poor countries has become a vast and growing international business, as companies try to minimize the costs of new environmental laws, like those here, that tax waste or require that it be recycled or otherwise disposed of in an environmentally responsible way.

This situation brings back memories of a famous memo involving Larry Summers, former Treasury Secretary and Harvard President, who is now one of President Obama's chief economic advisers:

The Summers memo was a 1991 memo on trade liberalization that was written by Lant Pritchett and signed by Lawrence Summers while the latter was Chief Economist of the World Bank. It included a section that both Summers and Pritchett say was sarcastic that suggested dumping toxic waste in third-world countries.

After the material was leaked, Pritchett stated that he had written the memo and Summers had only signed it. According to Pritchett, the memo as leaked was doctored to remove context and intended irony, and was "a deliberate fraud and forgery to discredit Larry and the World Bank."

Now, the suggestion that rich countries unload their toxic waste on poor countries, against the wishes of those countries, is patently offensive. That is not what Summers / Pritchett were suggesting, even in jest, but that is how the memo got characterized in popular discussions.

Consider, however, a milder form of their suggestion: allow waste disposal firms in rich countries to pay poor countries to accept their waste. The poor countires can choose whether to engage in such transactions and can regulate exactly what precautions are required for the waste to be disposed of in their countries.

This approach is infinitely reasonable: it benefits both rich and poor countries. The mandates for recycling, and the ban on exports, are wrong-headed; they inevitably generate the kind of black markets described in the article, with all the attendant negatives.