When iPods die, some are relegated to basements or garages, but most end up in the trash. According to the EPA, Americans throw out more than 2 million tons of consumer electronics annually, making e-waste one of the fastest growing components of the municipal waste stream. When these electronics break down, they release mercury and other toxins.

But there is a silver lining: Out of the mounting pile of e-waste, a booming recycling market has emerged. The International Association of Electronics Recyclers, an industry trade group, says that more than 500 U.S. companies recycle 1.4 million tons of electronics annually, generating $1.5 billion in revenues. But recycling this equipment isn’t simple. First, the metals and plastics must be separated, then the circuit boards shredded to separate the aluminum, iron and copper from the valuable precious metals, such as silver. And sometimes, the plastics are impossible to reuse if they contain multiple resins.

It’s a labor-intensive and costly process — and the industry’s dark secret is that many “recycling” businesses just sell old electronics to brokers who ship them to developing countries with lax environmental standards and cheap labor. Generally, dismantling a computer in the U.S. costs about $35 per hour — versus 25 cents an hour abroad. Fifty to 80 percent of used U.S. electronics are shipped to India, China, and parts of Africa, according to the Basel Action Network (BAN), a nonprofit that monitors toxic waste. Often, the electronics aren’t recycled at all. After workers remove the most valuable parts, such as circuit boards, they dump the rest. “Some of the newer recycling companies are making a lot of money because they’re just moving materials — they’re not actually recycling them,” says Thomas Hogye, an electronics recycling consultant.

There are few economic incentives to recycle responsibly, but companies are making strides to do the right thing. More than 40 recyclers have signed the BAN pledge, vowing not to send hazardous e-waste to landfills, and to ensure that all the companies they hire to take apart old electronics — called demanufacturers — meet environmental regulations.

One BAN-endorsed recycler, Silicon Valley-based GreenCitizen, tracks the parts of the electronics they collect to make sure they are dismantled correctly. James Kao, GreenCitizen’s CEO, works exclusively with three demanufacturers that don’t ship materials abroad. This agreement, says Kao, assures his customers—who pay roughly 50 cents a pound to recycle — that their electronics will not end up in a landfill. “We spend a lot of time educating businesses and consumers about the e-waste crisis,” he says. “We have a very strong and loyal customer base, which is growing.”

Like GreenCitizen, California-based Onsite Electronics Recycling is expanding despite having to sacrifice financially, says Janice Oldemeyer, the company’s president. “We’re frequently solicited to sell both our e-waste and commodities to companies who don’t appear to be concerned with the final end destination of the product,” she says. “The prices these companies offer are often greater than what we are able to make through dismantling and shipping to responsible end outlets. But that doesn’t mean you can’t be profitable by being responsible.”

Story by Christine Cyr. This article originally appeared in Plenty in April 2007. The story was added to MNN.com in June 2009.

Copyright Environ Press 2007.